Boardroom Report (BR): Having had a long and successful career as a corporate CEO and as a non-executive director of not-for-profits (NFPs), what attracted you to making the switch to being an executive at UNICEF Australia?
Tony Stuart (TS): You can be so passionate about profits but after a while that’s not as fulfilling as working in the social purpose sector. This sector is where you really can share your passion because you're making a difference. You're making a difference helping people. At UNICEF, it's about helping children, it's about making a difference to their lives.
It's still very early days for me but UNICEF is an incredible organisation and a very highly respected and trusted brand. It's got a great track record of working all over the world to improve the lives of children through programs that make a real difference, so that motivated me. The moment there's an emergency, UNICEF is also out there responding straightaway.
BR: What can corporate executives learn from coming across to work on boards in the NFP sector?
TS: I think it's a wonderful transition for executives in the investor-owned economy to look at taking NFP non-executive director positions. It allows you to bring governance and experience onto boards. It also allows you to understand what a board is like. It's a big transition even for myself as a CEO one day and on a board the next. One day you have authority, the next day you have no authority. It teaches you to be a very good listener, to respect your colleagues and to make sure you can get a consensus across a whole board.
I tend to think that all organisations, all charities, need to make a profit. But that profit is then spent back into the cause.
BR: You talk about organisations like UNICEF operating in the social purpose sector. What do you mean by this?
TS: We're all brought up learning that companies are there to make a profit. And there's nothing wrong with this. But there's also another part of the economy that doesn't exist for making a profit. It has a stronger purpose, it has a social purpose. Our sector is there really to help others, whether it's through medical research, whether it's through helping children, but it does not mean that it's against profit.
The term NFP sometimes makes people think the sector is less commercial. I tend to think that all organisations, all charities, they all need to make a profit. But that profit is then spent back into the cause. Overall we're not there to create capital, or create shareholder value, but we are going to make a difference to our beneficiaries. And I like the word social purpose because I feel people get out of bed thinking that they're going to make a difference in their sector.
You know Americans give 2% of their net income to charitable purposes, Australians give less than half a percent.
BR: You work on the Prime Minister's Community Business Partnership, which promotes charitable giving. What is the current state of philanthropy in Australia?
TS: In Australia, we're very very good at giving our time. It's part of our ethos. We help in our community. We help our neighbours. We help our family. When it comes to giving cash, we're not as generous. Maybe that's because there's a bit of a psyche in Australia that if we can't help, don't worry the government will help.
When it comes to good causes, it will make a huge difference for us if we can convince more Australians to give part of their net income to helping others. You know Americans give 2 percent of their net income to charitable purposes, Australians give less than half a percent. We're not asking should we be giving ten percent or 20 percent of what we earn. If we could move Australia from giving half a percent of net income to 1 percent, that would have a huge impact on our sector.
BR: You work to promote good governance as a board member of the Australian Charities and Not-for-profits Commission. Why is governance particularly important in this sector?
TS: Well if you think of charities as slightly different from companies in that companies have customers who purchase a service or a good. In the case of charities the closest there is to the customer is the donor. The donor gives money believing that the money will be spent to make an impact. Therefore there's a huge level of trust required. They want to feel that that money is trusted. They can be confident that it's going to be spent as they believe it's going to be spent. So it's so important that our industry has good governance. That people can feel that it's a trusted charity, a trusted industry. To do that we do need to have compliance. We need to have accountability. We need to have transparency.