It’s early morning in Perth and Nicola Forrest is ferrying her son to school and her mining magnate husband to a board meeting at Fortescue Metals Group. Andrew Forrest’s phone rings. It’s Microsoft founder Bill Gates. The Fortescue founder and chairman had been wanting to talk to Gates about a few things, starting with the Starlight Children’s Foundation.
“Look there’s a dying kid here, Bill, and his last wish in life is to meet you. It’s obviously impossible for him to travel. Can you do a five- or 10-minute Skype?”
Then, in the next breath, Andrew launches into a discussion on how to get cancer researchers to share more of their data, part of a project under way at the Forrests’ philanthropic endeavour, Minderoo Foundation. “They don’t take an attitude to put the universal patient first,” Andrew tells Gates. “They are, in fact, being selfish.” It’s classic Forrest; a lofty ambition (to eradicate cancer, no less) and a take-no-prisoners approach.
In the three decades since that Saturday morning, Andrew and Nicola have formed a formidable partnership. They have known unparalleled success in business: Fortescue Metals Group, dreamed up around their kitchen table in 2003, is one of Australia’s 30-biggest listed companies with a market value of more than $13 billion. They have known controversy and court battles. And they have become one of the nation’s most powerful and generous couples.
A year has passed since they made the biggest donation by a living Australian in history. Flanked by Prime Minister Malcolm Turnbull, Opposition Leader Bill Shorten, screen legends Russell Crowe and Jack Thompson, as well as heavy hitters from the global medical field, Andrew and Nicola Forrest announced they would move $400 million into their Minderoo Foundation. It was the biggest declaration yet that they are serious about their commitment to The Giving Pledge, a campaign started by Gates and Warren Buffett calling on the rich to give away most of their wealth to philanthropic causes.
Yet it turns out giving away a fortune is not as easy as it may seem. The Australian Financial Review Magazine’s Philanthropy 50 list shows that Minderoo Foundation gave away $18.7 million in 2016-17, on top of the $21.7 million given away in 2015-16. For the Forrests, this is par for the course. While intent on giving away most of their wealth, each dollar will be on their terms. It must have impact. Their philanthropy is guided by the mantra of giving a hand up, not a handout. Both are fond of the saying: “Give a person a fish, and you feed them for a day; give them a fishing rod and you can feed them for a lifetime.”
Sitting next to his wife in an office at Minderoo Foundation, which funded the renovation of a section of the former Sunset Hospital site overlooking Perth’s Swan River, Andrew jumps up to a whiteboard to explain his approach. He draws an arch: it’s the horizon of a round world. “You can’t see the target [over the horizon],” he says. “My job is to explain to everyone that that target absolutely exists.”
Along his arc he draws a series of rectangles connected to each other. It looks like an aerial shot of an iron ore train. Each compartment is necessary to realising the dream. “What are the steps to get us back to where we are today? What do those steps look like? Who do we need on board to make those steps happen?” he asks. “Once I have these people on board – it takes all different people and skills – and we agree to these steps … the focus is absolute. You no longer have a dream or a vision. You have a strategy. I leave the detail in the boxes to others but I set the target in each box.”
A ‘tough few years’
It was 1998. Nicola’s third child, a girl named Matilda, was stillborn. That same year, Andrew’s father was forced to sell the sprawling family cattle station Minderoo – a property that had been in the family for more than 120 years. It had been established by his great-grandfather David and his brothers Alexander and John, a well-known explorer who would also serve as Western Australia’s first premier.
Andrew’s business aspirations would soon be crushed. He had been ambitiously building a West Australian nickel company called Anaconda. But, in 2001, he was unceremoniously dumped as Anaconda chief executive, forced out by trading titan Glencore and mining powerhouse Anglo American. “They were a pretty tough few years,” Andrew says. “I rang Nic and I said ‘this is a disaster, we are about to lose our company’.”
Defeat a certainty, his mind shifted course. He remembers telling Nicola that they would “clutch victory from the jaws of defeat somehow”. He fought for a payout, arguing he was being unfairly dismissed. Glencore coughed up $3.5 million. The same year they used the money to set up The Australian Children’s Trust – the precursor to Minderoo.
In a moment of serendipity, John Newnham, a Perth obstetrician, sought a meeting with the mining entrepreneur to pitch for funding of research to prevent pre-term births. He had no idea the Forrests had lost a child just a few years earlier. “Had they told me I would have not have pursued them,” Newnham says. “I would have felt dreadful.”
The couple committed $500,000 over five years, the funds kick-starting the Women & Infants Research Foundation. In 2014 the foundation’s Whole Nine Months program was rolled out across Western Australia. Pre-term births dropped 8 per cent in the first full year following the initiative, meaning about 200 babies that would have been born early were delivered full-term.
Controversy is never far from Andrew Forrest and the creation of the Children’s Trust was no different. He had claimed a tax deduction for the $3.5 million donation, but the Australian Tax Office took him to court, arguing that it was a termination payment and hence subject to income tax. The Tax Office claim was upheld on appeal, although penalties ordered against Forrest were wiped.
Tax deduction criticism
Still today, wherever the Forrests’ philanthropy goes, chatter about tax follows. “Perhaps Andrew Forrest’s companies could have just paid more tax,” former NSW premier Kristina Keneally wrote for The Guardian last year after the announcement that they would give away $400 million. Philanthropy from the wealthy was inherently undemocratic, she wrote. “It vests massive power in the hands of the giver to determine how much money is available and what causes merit support.”
John Poynton, a prominent West Australian businessman, philanthropist and friend of the Forrests, says accusations the wealthy give money to minimise tax is nonsense. “No one has to give their money away. At the end of the day, even though someone is getting a tax deduction, they are still losing a percentage of their money and they are not expecting a return from it,” he says, adding that the criticism seems especially common in Australia. “I have never heard someone say Warren Buffett gives his money away to get a tax deduction. It’s just a nonsense.”
When asked if she finds the criticism around tax frustrating, Nicola says philanthropy means funds can be deployed with greater flexibility than taxpayers’ funds. “It can be high-risk money that shows leadership and examines innovative ways of tackling problems, while giving government some breathing space and helping them distribute money more effectively. If we all want to improve Australia this is a vital ingredient.”
Minderoo Foundation, the third-biggest giver in 2016-17, according to AFR Magazine’s list of top private givers, has six objectives: ending slavery, eliminating cancer, improving the development of young kids, ending Indigenous disadvantage, supporting the arts, and boosting research and innovation by providing grants to attract scholars and academics to West Australian universities.
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