Nikki Johnston

TRANSCRIPT OF PODCAST – SIMON HOYLE INTERVIEWING
NIKKI JOHNSON
Welcome to Telstra’s innovation podcasts. A series of conversations with business leaders around innovation in a connected world. You are listening to the Leaders Speak podcast. My name is Simon Hoyle, I’m a finance journalist for the Sydney Morning Herald and editor of a financial planning publication, Professional Planner. Every episode I'll be talking to the thought leaders in our community and business world. People whose actions or opinions put them at the forefront of their respective fields. Nikki Johnston is National Director of the Children’s Hospital Foundations Australia; a national partnership of 5 of Australia's leading hospital foundations. Nikki has worked for the not for profit sector for 8 years and has been in her current position as National Director for 2 years. Nikki has also worked as development manager for the Royal North Shore Children’s Hospital Foundation and for the Abused Child Trust. Her community experience includes facilitating and managing corporate sponsorships and partnerships, community events, general appeals and awareness campaigns, cause related marketing, workplace giving and direct mail but more recently Nikki has been instrumental in the development in the new direction in corporate giving a dividend donation program called Investing in Hope. This program enables shareholders in listed companies to elect to have their dividend payments directed to the foundation. It’s the latest example of how the charitable sector is developing new ways to work alongside corporate Australia to make fundraising as effective and as efficient as possible.
Simon Hoyle: Hi Nikki, and thanks for joining us
Nikki Johnson: Hi Simon, thank you for having me it’s a pleasure
Simon Hoyle: Now the Investing in Hope Program, what was the genesis of that idea?
Nikki Johnson: It’s been a long time coming I guess and it’s a number of different people contributing to the idea through the years but primarily the driving force was a gentleman who noticed the number of cheques, tiny little dividend cheques that were being sent out to shareholders each year and the amount that it was costing companies in terms of administration, it was also an indication that if all these little cheques were going out and a lot of them weren’t being cashed which was the case that there was probably something better that people could be doing with their dividends.
Simon Hoyle: Where was this gentleman? Where was he that he was able to notice these dividend cheques going out?
Nikki Johnson: He was working with a mailing house so that was a very front row place to see all the cheques literally going out at the same time AMP had released a media release that said that they had something like 50 million dollars worth of uncashed dividend cheques just sitting there and of course because there is huge administration tied up with that, it meant that it was costing the company money but it also meant that it was money that wasn’t doing anything and as a charity we can think of a lot of good things that that money can do.
Simon Hoyle: So who did he take the idea to in the first instance?
Nikki Johnson: He took it to children’s wards at that stage it was the Royal Children’s Hospital foundation in Queensland, we have now since that initial time have started a national partnership with 5 of the Children’s hospitals around Australia called Children’s Hospital Foundations Australia, so initially the first approach was to the Royal Children’s Hospital Foundation in Queensland, they absolutely saw the benefit and the potential of doing something like this but realised that it needed to be a national charity because shareholders obviously want to be able to donate to something that’s going to affect children locally, but companies want the donations to be coming through a single national gateway
Simon Hoyle: Okay and so how did the idea, what sort of development stages did this idea go through before it was ready to go?
Nikki Johnson: Lots and lots and lots of third party reviews so we spoke to a number of the corporates that we already had on board and corporate support for charities as you know is very important, but in terms of supporting Children’s Health, is done at a state based level so we certainly did have a lot of corporates who were supporting each state based hospital but they couldn’t do anything nationally. So we approached them and mentioned that this was the idea they all just thought it was a brilliant idea and didn’t understand why it couldn’t work and indeed it obviously can work. We needed to do a little bit more work; probably the biggest step was getting all of the hospital foundations working together and in over a hundred years of hospital or children’s hospital history that has never successfully happened.
Simon Hoyle: So why had the foundations grown up independently is it because they were established by individual hospitals in the first place?
Nikki Johnson: That’s right, individual state based hospitals have their own foundations and hospital fundraising is very, very local and traditionally has been that way because people know the hospitals they know the children, or the stories of the children who are involved in that hospital so there is very strong local support for children’s hospitals, and the foundations have made sure that work is very targeted to the local area. But we had never worked together on national initiatives and obviously the fundraising world is changing, corporates want to be able to give through a single gateway they don't want to be saying you know well Brisbane office gives to this group, our Sydney office gives to this group but if they are able to say that they are giving to the one group that it then benefits the people in each of those local areas. That’s the way to go
Simon Hoyle: So did the State foundations cotton on quite quickly to the idea that they were going to have cooperate for this to work?
Nikki Johnson: Absolutely, particularly when we could look at some figures, the gentleman who brought the idea to us originally, had worked out that if .1% of the top 200 company shareholders donated, we could be raising over 100 million dollars a year, and when you think that that’s roughly around the amount that the hospital foundations raised each year at the moment through an awful lot of hard work, means of community events, charity events, corporate fundraising initiatives. If you combine all of the fundraising that goes on at the moment in the community for our children’s hospitals we could virtually equal that through the dividend donation programs.
Simon Hoyle: In one go?
Nikki Johnson: In one go. In one year and that’s you know and that a small percent of the top 200 companies giving.
Simon Hoyle: Did you approach companies while you were going through this development phase and bounce the idea off them to see what they needed to you to do to it to make it work for them?
Nikki Johnson: We certainly did, we had a very strong relationship with Bank of Queensland and they were the first company that we spoke with to see if they thought the idea would float, certainly it’s one of those things since we have been doing it and we were the first charity to get it out there and get it happening it’s one of those things that people have said,  ‘you know we have been talking about this for the last you know 20 years,’ but there’s a difference between talking about it and actually making it happen. To make it happen we needed a couple of things, we needed a company brave enough to put up their hand and say we'll give it a go, we needed one of the share registries to be brave enough and say yes we'll give it a go it can work, the other thing we really were very keen to do from the very beginning was contact the relevant associations and make sure it was something they thought its members would be interested in. So we’ve got endorsements from the Australian Shareholders Association and also AIRA- the Australasian Investor Relations Association.
Simon Hoyle: And you had to involve share registry companies in this process as well I guess?
Nikki Johnson:  We did. Computer Share was first cab off the rank I guess because they were looking after the bank of Queensland but since then Link have also worked how they can do it, Advanced Share registry have worked out how they can do it and really when we talk about working out how they can do it, it isn’t a difficult process it works along the same sort of lines as administering a dividend reinvestment program. So it’s really a matter that, it’s the shareholders decision, they choose whether they would like to donate or not and it’s a simple matter of ticking a box on the dividend election form and then the share registry just processes it the same way that they would process a dividend reinvestment notice.
Simon Hoyle: And is it an election that a shareholder has to make for each individual dividend payment or can they tick a box and say I’d like all dividends in future to go to this charity?
Nikki Johnson: Absolutely, it’s certainly it’s in future and it’s until the shareholder changes his or her mind so it’s one tick one box and that continues until the shareholder wishes to advise otherwise or the shareholder obviously sells their shares. That was probably one the trickiest things to work out I guess with the share registry because there is a number of different options that we could have and it works best if you can make it as open as possible. So we are now at the point where the share registry can make the option that you can donate all or part of your shares and it can be a percentage rather than a dollar amount so that means that if the share holder's investments grows and the dividend is obviously growing the revenue that is coming into the children’s hospitals will also grow. And one of the real difficulties with fundraising is that it has to happen again and again and again each year, you know if you’re doing an event you need to repeat that event each year. But if we can build in processes that create ongoing revenue streams it means the hospitals can begin to plan a whole lot more about what they can do with that money. They know that last year so much came in from that program and next year with an increase they can budget really, for as much money as is going to come in.
Simon Hoyle: Okay, when you had the final model ready to go and you started taking it to companies to ask them if they were interested in participating outside of Bank of Queensland who I understand have been pretty enthusiastic supporters the whole way through. What sort of reaction have you had from the broader corporate community?
Nikki Johnson: I guess it’s a little bit like anything overall reaction has been that it’s a brilliant idea and it’s a win, win for everyone and it’s a great thing to do. The problem with introducing a new idea is that you obviously need to educate people we also needed to let people know that Children’s Hospital Foundations Australia wasn’t a new kid on the block it was actually 5 of our oldest Children's Hospital charities working together. So we're undergoing that sort of awareness raising process at the same time, so that people know well we have been supporting Princess Margaret in WA for a number of years, now this is a way that your company and your shareholders can support all of Children's Hospitals, all of the Children's Hospital Foundations Australia, partners including Princess Margaret in WA. So there was the education process there was also the, we know companies are very, very busy and they have a lot on their plates and this process doesn’t actually go through the traditional avenues that corporate fund raising would go through, which is the community department or their marketing or their PR department it’s actually going through their Investor Relations.
Simon Hoyle: Oh because of the tie in with the shareholder base.
Nikki Johnson: Absolutely.
Simon Hoyle: Yeah.
Nikki Johnson: So it’s a slightly different tack to sort of take, one of the funny things that we have noticed is that we will if we're approaching an Investor Relations Officer or Manager, it will sometimes be flicked back into the community sector part of the company without sort of understanding that this isn’t just a simple request for a donation, it’s actually a request for a company to be involved in making that opportunity available to their shareholders to choose to make the donation. So the idea is really gaining a lot of traction at the moment. Australasian Investor Relations Association, have been involved with us now for two years, so I think the awareness is growing there, and the understanding that the idea really literally is so simple, we can make it happen, we just need those companies to offer it to their share holders.
Simon Hoyle: In general when you’re approaching companies not just for programs like the one we’ve been talking about but for perhaps outright donations, how receptive generally do you find they are?
Nikki Johnson: Companies are very receptive, but particularly over the last decade I guess there’s been huge growth in terms of corporate social responsibility and companies' awareness of where they fit, in the community, the public perception of how they fit into the community, companies are becoming a lot more strategic as well about how they give, and who they give to, and are very careful now to align their values to the values of the charity or community partner that they’re lining up with. Prior to sort of the last decade or so, there used to be the jokes about the Chairman's wife which was that’s where the donations would come from, you know, a company would make a donation based on really, the personal alliance of somebody and that can’t happen anymore. Particularly public companies are responsible for so many other people’s money as well, it really needs to be seen that it’s a donation or it’s a contribution that is good for the community, good for the sector that it’s benefiting, but it’s also good for the company in a way, and it’s a cliché, but a healthy community, does mean a healthy company, particularly if those values are strongly aligned.
Simon Hoyle: Are charities becoming more sophisticated in the way that they approach companies as well and able to offer, I mean investing in hope is a great example of that, but more generally are they able to offer more engagement and more of a say in what’s going on?
Nikki Johnson: I think so, you do need to be very targeted and you can unless you know where a company is going and what its challenges are, and what a company's direction is. There is no point in approaching them because you really need to make sure there’s a lot synergy between the two organisations. Particularly you don’t want a company to just be involved from a point of just handing over a cheque at the end of each year and companies don’t want that sort of involvement anymore either. Companies really want to feel that their staff, their shareholders if they are a listed company, their customers are benefiting from that relationship as well. And we’ve seen a huge growth in corporate volunteering also you know quite often a company will be very interested in financially supporting a community group, but they want their staff to be able to get out there and to have some hands on experience about the work that’s going on, and it’s a very rewarding time for the volunteers or the staff as well I mean the staff retention and team morale is number one, on the list for most companies and it’s something that if the team is working together on a more sort of altruistic project that’s where you can really do some great team building and build some pride from the staff in the work of the company, and the fact that the company is supporting some fantastic community initiatives and there certainly are so many fantastic community initiatives, you know, who are calling out for support financially and also in terms of volunteers.
Simon Hoyle: Now I read somewhere, I don’t know how accurate the number is but there’s something like 40,000 registered charities in Australia, does that-?
Nikki Johnson: I think and I’ll have to check on that number but I think it’s quite a lot more than that.
Simon Hoyle: Quite a lot more than that?
Nikki Johnson: Yeah, I think it’s something like 700,000 community groups and in terms of registered charities, there’s a number of different charitable statuses, so, of course the hospitals have deductible gift recipient status as well as, most of them have public benevolent and institution status as well, so there’s a number of different levels of charitable statuses that a charity can have so it would just depend where that 40,000 might have come from.
Simon Hoyle: You don’t think of the charitable sector as being competitive, but it sounds like it’s hugely competitive, there’s presumably a limited amount of finite resources in terms of available donations and lots of entities competing for them.
Nikki Johnson: Absolutely, and it is an interesting scenario, because charities by nature want to do the best for their communities you know people and a lot of people, most people working in charities are also working in charities for that reason, quite often charities will, or new charities will notice that there's a missing sector in the mix and that’s why they will be interested in starting up their own sort of foundation or group. Quite often charities, will start because people have had personal experiences and they really want to do something in honour or in tribute to the experience that they’ve had, but there’s also a lot more on the flip side of the coin there’s a lot more charities recognising the need to work together. And we don’t want to confuse the issue we want to make sure that we can maximise the return that’s coming in to the charity so the charities can do the greatest amount of work. If you’ve got a hundred little charities you’ve also got a hundred little pockets of administration that need to be taken care of, and rent and everything else. But if you can combine some of those charities, so you’re working together, you can save on the resources that are needed and you can share certain resources and really maximise the impact of the dollar that you’re bringing in. And that’s where Children’s Hospital Foundations Australia has gone we certainly don’t reinvent the wheel in terms of work that can be done in the states, so the traditional state based fundraising things like events, raffles, corporate donations as in terms of straight donations all happen within the state body, but by working together on National initiatives like the dividend donation program, workplace giving and also cause related marketing, which is another area that has seen huge growth in the last ten years; we can do that together. We can save on the resources that it takes to actually establish those programs so we’re not duplicating administration costs and then we can split the money between us so it becomes a more cost effective way, I guess, to raise funds.
Simon Hoyle: So efficiency, if I can use that term, is as important in the charitable sector as it is in the broader corporate world?
Nikki Johnson: More so, most charities have to operate at an efficiency of 20% cost of fundraising and there aren’t too many corporates who can operate under those sorts of efficiencies. So we’re under a lot more scrutiny and so we should be I mean the money that comes in is coming in as donations because it’s to go to the cause and that’s where we want to see it go so 20%, 25% is probably the benchmark of where most charities try to keep the cost of fundraising. It will depend on differing fundraising methods, so some are not as cost effective as others but that was the other thing that really got the 5 hospitals working together; the Dividend Donation Program, once it’s up and running, administration is very, very tiny, because it’s something that just happens automatically, you know, and it’s not labour intensive, it’s not going to cost a lot in terms of resources to raise the dollars and then the money just continues to just tick over and to grow which is even better each year.
Simon Hoyle: When you talk about the more traditional avenues that charities use to raise money when you’re going down those lines. How do you cut through and make sure that your message is the one that’s getting through and the one that’s being listened to, not only by corporates but by the individuals as well?
Nikki Johnson: It’s the same as getting your message through in any sort of commercial sense; you have to be aware of your target market if you like to use that sort of term. Not every cause is going to appeal to every individual or to every charity, so we really need to be aware of the sorts of people who want to give to us, and how they want to give, which is the other thing because it’s not only a matter of a person with certain values but it depends on certain age of life as well. So quite often people who have, it’s when people start having their own children that they realise the value of our children’s hospitals. Up until that sort of stage they probably don’t think too much about sick kids or what that means, but once you’ve had your own children, child’s health becomes everything and the thought of having a child who is ill or injured or sick and not having the absolute best medical care, is something that really rings home with a lot of people. So we certainly find for us it’s people in that age bracket where they’re having children or they’ve had children and they’re onto grand children in terms of the dividend donation program, a lot of the share holders are of that older age group so they’ve been fortunate enough to make a little money in their lives hopefully had a family and got their family through in whatever way, and they want to give back to either ensure that other families receive the same sort of benefits or to give back, because unfortunately they have had a sick child or they have had a tragedy and they realise that with research or the right amount of resources that are in the hospitals we can actually; we can do something about that, so we can make life better for future generations.
Simon Hoyle:   Mmhmm, now under the dividend donation program would classify the money coming in as corporate donations, or donations from individuals?
Nikki Johnson: No it’s definitely donations from individuals but it’s the corporate that making that donation possible so we certainly recognise the corporates’ generosity in raising awareness of the program, raising awareness of our charity and making the whole situation possible, but the actual donation comes from the individual shareholder and it’s usually, and it is mum and dad shareholders in general who are making the donation, so they’re the ones who receive the tax deductible receipt. They also still maintain the imputation credits so, depending on their individual tax situation, but from our end, the tax deductible receipt goes to the individual shareholder. It’s probably similar to workplace giving. Workplace giving has had a huge growth in that decade period that I’m talking about, where staff can contribute directly from their pay. And in about the last five years that’s been made a pre tax situation, so rather than hanging onto your receipts until the end of the year and claiming your tax deduction, if you make your donation directly from your pay you get an instant or an automatic tax deduction. So again while it’s the company whose facilitating the workplace-giving program for a charity, it’s the individual staff member who’s making the donation, so they receive the acknowledgement and the tax-deductible receipt.
Simon Hoyle: I see that’s a similar principle yeah.
Nikki Johnson: It is yeah.
Simon Hoyle: Now in an international context, do you have any idea for how generous, that’s an odd term to use I suppose, and how generous the corporate sector is in Australia?
Nikki Johnson: It’s growing, we certainly have been a long way behind I mean, it’s a very different situation to the history of giving in the states and the history of giving in the UK and workplace giving has been established in the States and the UK for many, many years and that’s a very strong tradition there and I think the proportion that Australian people have given is almost miniscule or has been. But it certainly is growing as people become more aware of philanthropy and the importance of giving back to the community, the easier you can make these systems so you’re still leaving choice with either the shareholder or the staff member or the customer but you’re making the system easier, so that they can give and that’s where we’re going to see the growth. In the past, in Australia, the giving has been a donation; it’s been getting out your cheque, getting out your credit card, and purely writing a donation. But as we introduce these new methods, such as, workplace giving or dividends or cause related marketing it’s a way that people can contribute in an ongoing way. I think corporates have also really realised that they need to be part of the community that they live in, a lot of that is the public perception, but a lot of that is, as well, if you’re not creating a healthy community then you’re not going to have a healthy company.
Simon Hoyle: Nikki Johnston, it’s been a great pleasure speaking to you this morning and thank you very much for your time.
Nikki Johnson: It’s been wonderful Simon, and you can probably gather that I can keep going for another hour if you’d like me to, but it’s a wonderful opportunity to talk about the changes in corporate giving.

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