How to bring purpose through philanthropy and manage intergenerational wealth
With their sights set on social good, these second generation family company executives discuss succession plans and using prosperity to drive sustainability, innovation and philanthropy.
The lessons learned in building and managing intergenerational wealth, and how families bring purpose to it through their philanthropic endeavours, are many. Members of the second generation of four of the most private family offices in the country joined Damon Kitney and John Stensholt for a roundtable forum, hosted by private equity firm Straight Bat, to discuss the important role of legacy, purpose and wealth in society.
The panel
Brad Harris, Harris Capital – son of Flight Centre co-founder Geoff Harris
Hayley Morris, director of Morris Group of Companies and Morris Family Foundation – daughter of Computershare founder Chris Morris
Jackie Haintz, director of PGA Group and Rae & Peter Gunn Family Foundation – daughter of PGA Group owner Peter Gunn
Steve Buxton, B&B Property, Avenir, Corsair, Michael and Janet Buxton Foundation – son of MAB Corporation co-founder Michael Buxton
Tabitha Lovett, CEO, Besen Family Foundation
Steve Gledden, CEO, Straight Bat
Key lessons for building and managing intergenerational wealth?
Brad Harris:
“My old man was very successful in business but was terrible at having any sort of sophistication or structure behind him. So, for me, as a member of Gen 2, I’m looking forward to Gen 3 and beyond. Certain structure, governance, sophistication and processes were obviously needed to not only manage the status quo currently, but to grow and manage it through future generations. So that was the evidence for us to really lean into a family office setup.
“Dad and Mum have been really supportive. Dad was really successful at how he built wealth, and he probably just didn’t see anything different. But when Gen 2 was looking at it going, ‘At some stage we are going to have to grapple with this,’ I think he could see the bigger picture. That we needed to get some structure. Now I know, looking back, he says, ‘This is miles better than where we were.’”
Hayley Morris:
“I would say we have had a similar experience, only that my father has come to the conclusion himself that structure was needed.
“The thing that I will always credit him for, is he is very good at reinventing himself. When he decided to leave Computershare, he was still in his prime, he still had lots of time, but he said, ‘No, this business needs somebody else now.’
“Structure and process is certainly not the first thing super-entrepreneurial people go for, so we still do things intuitively. You have a good idea, you go for it.
“On the question of how my father and I work together, I feel like this has been a journey of it not working, to get to a place where I feel like it works. For me, that has been going into all our conversations without judgment.
“I think I came to a time where I felt like he thought I was trying to control him, and I thought he was trying to control me. We were both trying to get to a certain outcome. When I took judgment out of it and stopped thinking, ‘I need you to be here,’ I found that we often wanted to be in the same place. We were just maybe looking at it from a different angle.”
Jackie Haintz:
“My dad, with a transport and logistics background, was always very structured about the way he did things. So forming the family office was probably easier for him. It was also probably forced upon him. He sold out to Mayne Nickless back in 1999 and then was diagnosed with a brain tumour. I think facing that sort of life-or-death situation, plus a more substantial shift from operator to investor, forced him to realise, ‘I have to fix this for the family.’ So he formed the family office.
“But the thing that probably Dad struggled with the most was succession and handing over the reins.
The key lessons we learned from intergenerational wealth transfer were the importance of aligned values, establishing and maintaining communication lines, and making hard decisions quicker. Each family member needs to hold themselves accountable to their decisions, their actions and their impact on family unity and trust.”
Steve Buxton:
“In the timeline of things, we are probably the youngest family office here. Dad is still involved in MAB, and prior to that, he ran Becton. None of Gen 2 have been involved for a long time in either business.
“My siblings and I all run our own businesses, but we are also getting caught up in the gravity that is becoming the family office.
“Dad bounced the ball on that about five years ago, and I think we spent about three years talking about strategy and values, and felt like we were progressing slowly.
“We recently employed a chief investment officer running the equity side of things and also a head of real estate running property, where we were going through a lot of growing pains. Dad is now 80 and is still very much the big bull in the paddock. He’s been extremely successful in property, so that’s where he gravitates to in the business. He’s also a very good planner. He saw things unfolding before most of his peers in the past.
“I guess he’s still hanging on to that success and learning not just to trust his children, but also to recognise their talents. I think that’s the big step for us to get through.
“We are organised and we know where we are heading, but we have just got to get to the point where there are more bulls in the paddock and Dad can let go a little bit. That’s our challenge.
“We are currently advertising for a position we call the growth and engagement manager. Their brief is super broad. It is education, wellness and growth for Gen 3, and what opportunities we can find for them around the world that can make them 20 per cent better than they would be on their own.
“We are also building a database around Gen 3 and their needs, and what we can do to supplement what they’re doing, and helping them understand investment and property and all the bits and pieces that make up what is the family office.”
Lessons for investing family wealth when compared to operating family businesses?
Morris:
“There is not a lot of strategy yet on the investment side. It’s generally a really intuitive piece. If I think about the operational businesses that we have now, they are like a retirement investment plan. There are resorts, pubs, a craft brewing operation and a helicopter business.
“But then there’s the whole other piece, which is just the investment side, and that’s the bit that I think we are still on a journey for, because all the attention has been on the operational businesses. So the investment piece is a lot more unstructured.
“We’ve got a division that does all the shared accounting and marketing, and there’s a whole kind of plan around that with people and offices. But with the investing, there is one person, and then all of us dip in and get a little bit involved. So I feel like there is an evolution for us on that.
“At 77, my father is certainly still the man making all the decisions.”
Harris:
“We’ve built a lot of businesses from the ground up over the journey and you take quite a lot of risk when you do that. Like Flight Centre, Boost Juice and others. We have quite a big network of hospitality brands.
“But for us, operationally, we are focused more on the family office side now, which has a wealth preservation and investment lens.
“The operational focus going forward for us is funds management, and obviously Straight Bat is one of those partners. We have another funds management business called Mosaic.
“That is where we want to lean into as a family – on the operating side. But it is certainly very different going from growing big operating businesses to more of an investment lens.
“I drive all of the family office side. I’m CEO of the family office and chairman of the investment committee. Geoff’s only formal role is on the investment committee with Straight Bat. But otherwise, it is a pretty full handover to Gen 2 in terms of what we are doing now, family office-wise.”
Haintz:
“At PGA, we have sold most of the industrial legacy assets from transport and logistics, but we still have a transport business in FBT-Transwest. My brother, Richard Gunn, is now PGA CEO and there are three divisions.
“In property, we’ve got commercial, industrial, rural and shopping centres. Then in commerce, headed up by my husband, Mike Haintz, we invest both directly into private businesses, and also indirectly via funds. In the direct equity space, as well as transport, we have a focus on tourism and leisure with Arthurs Seat Eagle and Bounce, and aquaculture where we have an investment in a barramundi business called Mainstream Aquaculture. We also have my brother’s passion, property development. On the investment side, we hold Australian and international listed equities.
“We all work well together because we have strong communication lines, trust and respect. The key for us is holding yourself accountable to your decisions and your actions. If you make a mistake, own it, but then work together to solve it.
“I think that is fundamental to making a family office work and maintaining that trust and loyalty.”
Buxton:
“We’ve broken the business into various silos. I stole at one point – with Brad’s permission – his org chart, and we duplicated some of that. So we’ve got the property silo, the investment silo, the non-financial stuff, and then we’ve got governance and admin. Each of my siblings and I kind of sit above that to some extent, actively involved or in a spectator-type capacity.
“We’ve also got to monitor our investment in MAB, which is substantial, so we’ve kind of broken a supervisory role down, such that if we lose staff or Dad, we all know between the four of us what’s going on. That’s just part of the preparation for what comes down the track when that big bull slowly walks out of the paddock.”
Steve Gledden:
“There are three families in the room that have invested in Straight Bat. To what degree has investing in things like private equity informed you with your own direct investing?”
Haintz:
“The advantage of a private equity fund for PGA is that it gives us exposure to broader opportunities in the asset class, where we may not have the expertise or passion to pursue directly.”
Harris:
“One of the things we learned very early in the family office was that being a good entrepreneur or business builder does not necessarily make you a good investor in businesses. Geoff and I had a few misfires in early-stage businesses and things that failed. It taught us that while we probably thought we knew a lot from being reasonably good at building operating businesses, actually investing in private equity and venture capital is a very nuanced skill. You need very capable experts to really get into that space and do it properly. Straight Bat gave us that sophistication; the team and everything else that a fund can deliver.”
Buxton:
“Straight Bat is a different model for us, being an income-producing private equity fund. That is very different to traditional private equity. Personally, that was kind of what I was chasing because I was personally getting out of real estate and trying to find investments that were generating cash flow.”
Role of philanthropy within family generations?
Tabitha Lovett:
“We can sense from what has been shared [here] that there is great rapport and respect between the patriarchs and the matriarchs and the generations coming through.
“One of the things I most enjoy in working with the Besen Family Foundation, and helping the Harris family with their philanthropy, has been watching that willingness on the part of the first generation to empower the next generation and to see how they do that with both respect and love. I think that philanthropy plays a significant role in that, because it adds another dimension to family discussions about purpose and values and another way of bringing the family to the table to talk about things that are important. It does give wealth a different perspective.”
Haintz:
“I think philanthropy does play a positive bonding role within families, particularly if you really get involved in the project that you’re funding or have a personal connection.
“My parents were traditionally very hush-hush with philanthropy; they would never attach their name to their philanthropic actions. It has only been in Dad’s latter years that he has started to loosen up a little bit about that.
“Our family philanthropy is now run more by Gen 2, but every family member can have input into the projects or charities that we are funding. We are now also trying to bring Gen 3 into that with their time, and not just money.
“I have a form of blood cancer called amyloidosis. My kids have been exposed to my medical journey of 26 rounds of chemo, and eight operations or bone marrow procedures. By investing their time into helping with charity events for one of the charities that we support called the Snowdome Foundation, which undertakes blood cancer research, they felt like they were helping the situation.
“My two older kids, who are 19 and 21, are also becoming or considering becoming stem-cell donors. I guess that’s their way of thinking they can help. If it’s not myself, then there may be someone else they can help.”
Morris:
“My mother passed from a blood cancer, so we were actually one of the very first funders to get Snowdome started.
“My sister, on the other hand, is very much into natural health. She studies Ayurveda, which is Indian natural medicine. And so she’s very interested in the avoidance and the prevention of cancer. So even though we are very conscious and aware, and cancer is still an issue that’s close to our heart, it is trying to get further down the line about, ‘How do we actually prevent it?’
“On the broader subject of our philanthropy, for us it was like, ‘OK, we’ve reached a certain point. We’re setting up a family office. We need philanthropy.’ That was the amount of strategy that went into it initially.
“So the journey of trying to get more sophisticated with how we are giving or what we are doing, really did require someone – which ended up being me – to get very heavily involved and strategic about it.
“But also to acknowledge that you think it’s so easy to give money away, but when the money has been earned with blood, sweat and tears, you still really need to run it and have good processes and due diligence around what you are doing with the giving. You want to be trusting that the gift is going to have a return in impact, in something.”
Buxton:
“My sister and sister-in-law run the philanthropic side of the business with four pillars. There is culture, which picks up Dad’s passion for the arts, including having a gallery near the Victorian Arts Centre and the big collection that Dad handed over to Melbourne University. Then there is medical research, the environment and youth.
“They are at the point of trying to put a strategy together around how it works and where they take it over the next five years. I’d love to see it go toward our property skillset around homelessness and the housing crisis. This is a piece that I’d love to see more wealth move into. Rather than saying, ‘Oh, that’s the money-making, and then here’s the do-good,’ I’d like to look at how you bridge those worlds.”
Harris:
“We think about philanthropy in three channels. The first is grants. The second is how we use real estate for philanthropy. For example, with the not-for-profit Streat, we purchase the property for them and give it to them for one dollar a year for 50 years to run their programs from. Also, nearly a third of our Gate 8 building in East Melbourne, which houses our family office, is given to charities and community groups to use free of charge.
“Then the third channel is, how do we give our time? For example, our family office team is all giving 10 per cent of their paid time to go and work in the community for causes that they are personally passionate about.
“Mum and Dad have been quite active philanthropically for a few decades now, but it was always done off-balance sheet. So the Harris Family Foundation was set up in 2019 to professionalise and centralise our giving, rather than having different family members going off and doing all sorts of things separately.”
Unsung causes that don’t get enough profile and spotlight here in Australia and globally?
Haintz:
“Blood cancer is a prime example. By 2035 they are predicting it is going to be the number one cancer in Australia. It has now grown to the stage where every 27 minutes, someone is diagnosed with blood cancer in Australia. Unlike other cancers, there are no screening programs available or lifestyle changes you can make to reduce your chance of being diagnosed. So clearly, blood cancer research and clinical trials is an area that needs major funding.”
Morris:
“The environment, which is only two or three per cent of philanthropic funding. Then there are food systems, which is an area I’m mostly involved in, that wouldn’t even rate as a percentage.
“Dad’s first job was as a tomato farmer, so he has a passion for farming, and Dad’s brother was also a farmer. We’ve even got hessian bags with CJ Morris Potatoes on them, hanging on the wall at our house.
“We have a property at Cape Schanck on the Mornington Peninsula where we are opening a restaurant called Barragunda Dining, which will be owned by our family foundation. It’s an extension of the farm shed on the property, so it will be the purest farm-to-table restaurant.”
Lovett:
“The environment and climate change, as causes to support, only really came on the philanthropic radar this century. The thousands of charitable trusts that were established through wills and estates before that, and which now operate in perpetuity, don’t tend to include the environment as a pillar that they can fund.
They favour more traditional causes like medical research, health, education and religion. So, it’s really the family foundations that took on the responsibility of funding and advocating for greater environmental protections and climate research, which have shifted that needle and seen an increase in funding for the environment. However, it is still a small percentage in total.”
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