Operating principles

The Thomas Foundation embraces the philanthropy principles advocated by Professors Michael Porter and Mark Kramer in their paper “Philanthropy’s New Agenda: Creating Value” in the Harvard Business Review, 1999.

Porter and Kramer recommend that philanthropists follow four steps:

  1. Select only high-performing organisations to receive grants.
  2. Help recipients develop stronger capabilities.
  3. Help them to attract other funds.
  4. Help them develop and disseminate knowledge in the fields in which they work.

Porter and Kramer define economically efficient philanthropy as that which does more good than the government could have done with the tax it could have collected on the philanthropist’s endowment. Conscious of our tax-exempt status, David Thomas wants the Foundation “to create more value for society”.

Following the recommendations of Porter and Kramer, the Thomas Foundation:

  • Aims for superior performance in a chosen area, including measuring our own performance.
  • Supports only those organisations that perform consistently better than average.
  • Has a unique positioning, which may include limiting the number of social challenges we address.
  • Pursues unique activities, including doing things differently from others.
  • Accepts that every positioning requires trade-offs, and that may include deciding what not to do.

In 2004 some 13 million individual Australians, 87% of the population, gave $5.7bn to philanthropic causes.

The accounting firm JB Were says the Howard Government’s establishment of PAFs was arguably the single most important boost for philanthropy in Australia. In 2014 there were 1240 PAFs with total capital of more than $3bn. Their cumulative distributions now totalled $1.7bn.

The Thomas Foundation’s support of the Australian Environmental Grantmakers’ Network (AEGN) is another expression of our commitment to strategic philanthropy