Anthony Starkins, founder and executive director of First Samuel, provides financial advice to many high-net-worth clients. Many are generous philanthropists and some have their own private ancillary funds. He is also an ambassador for a micro-financing organisation called Opportunity International (OI) and a recent field trip to India has changed his approach to both his own giving and to advising on philanthropy.
“I was asked to go on an insight tour to India,” Starkins said. “I saw the local lending institutions and I saw their borrowers in the slums and out in the rural villages where they would lend money to the women to start a business. They buy a cow and sell the milk or buy a weaving loom and start producing fabric and they use the money to educate their children.”
As a consequence, Starkins declared that he would probably never give to charities who work in Australia again, and that from now on all his own family’s giving will be channelled to micro-financing projects.
Starkins explained that micro-financing organisations have been operating in developing countries for at least 40 years, and Australian organisations are active in Indonesia, India, the Philippines, Latin America, and Sub-Saharan countries. The finance is primarily provided to women, not necessarily by design but because they are in the best position to run a business within their community. Many of the men have to travel away from their communities to find paid work.
The micro-financing provider works with a bank to get leverage and donations can be leveraged several times. In India, loans to women can be as low as $50 and they have to be paid back at a commercial interest rate, which is, according to Starkins, still much lower than the rates available from money lenders. Programs are usually targeted at regions where people are earning less than $2 a day and have no government assistance.
Starkins said he is aware of many financial planners who are actively involved in giving to micro-finance organisations. Although he chooses not to direct First Samuel clients to OI, he does put micro-financing forward as a possible philanthropic strategy.
He said he believes that advisers will need to increase their awareness of the many philanthropic strategies and opportunities available today if they wish to engage younger clients. “When I was younger people who wanted to make a difference got into politics. Today, young people raise money for charities and when those young people get older and wealthier it is likely that they will be prepared to pay for advice about the best ways to give,” he said.