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Geoff Harris on why he gives

 

30 August 2017

 

 

 

 

 

Rich lister Geoff Harris's philosophy is 'there’s no point being the richest man in the cemetery'.
By Nicole Richards.

Flight Centre co-founder and self-made millionaire Geoff Harris has featured on plenty of ‘top 200 rich lists’ and his recent $4 million gift to help combat homelessness made headlines. But the motivation for his “pragmatic” philanthropy is deeply personal.

“Why do I give?” Harris muses momentarily when asked about his giving philosophy.

“I’ve been very lucky in my business career and I’ve walked through doors and taken risks so I try to give a fair bit of what I get so I can help in areas that I’m passionate about.”

One of those areas is at-risk youth in his hometown of Melbourne. And it’s personal.

“I guess it goes back to when I was a 14 year old pimply, tall, skinny kid with glasses,” he says. “I was badly bullied and got bashed up in the school yard over a six-month period. It really had a profound impact on me – lots of self-doubt and fears. I left school in Year 10; I was basically a round peg in a square hole.

Direct dealing is a trait that characterises Harris’s philanthropy. Best known for purchasing properties for the Reach Foundation ($2.3 million, 2001) and social enterprise STREAT ($2.5 million, 2013) Harris drew up 50-year leases with each organisation paying the princely sum of $5 rent per annum. He also takes care of the $200,000 annual rent for youth community group Whitelion and makes additional sizeable donations to all three organisations.

“Now, when I do talks with the kids at Reach or whatever, I see a lot of myself in them. They ask me how I came to be so successful and I always tell them they can do exactly what I’ve done with a bit of hard work and walking through that door when an opportunity presents itself.”

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New approaches to combat homelessness

With the help of his son, Brad, Harris’s latest, much lauded, philanthropic foray has seen him size up the intractable issue of homelessness to come up with a new approach that is cost-efficient, serves a greater social good, and, true to form, has the potential to be win-win.

Harris seems a little surprised by all the fuss.

“It’s common sense, but it needs a bit of pragmatism to drive it,” he says. “I’m staggered that it hasn’t been done before.”

The genesis of the idea, he says, came from applying “pragmatic business thinking.”

“Brad and I were talking about how the number of homeless people in Melbourne had grown over the last couple of years and we were both shaking our heads thinking there must be something that could be done. I said to Brad, ‘All right, here’s a project — you go out and rustle around and shake the tree and see what you can find.’”

While probing around the issue, Brad encountered Launch Housing, a Melbourne-based community organisation providing housing and homelessness support. During a meeting, Launch mentioned they’d had an approach from VicRoads to lease on-ramp and future freeway land that had been set aside for use in 15-30 years’ time that might be rented for a dollar a year.

“Our ears really pricked up,” Harris says. “We knew there was a chance to unlock the economic model here. Governments traditionally spend around $250,000 to $300,000 on a house and land but we’d discovered a way to build an architecturally designed kit home, made here in Victoria, with a little lounge room, a bedroom and a kitchen that can be built for around $75,000 on its own land rented from VicRoads.

“You can put six or seven of these on a block of land for a dollar a year which means you’re unlocking the economic model at only 20 per cent of the cost that the government is already spending.”

Harris was sold. He agreed to contribute $4 million in seed capital to get the model up-and-running.

“We’ve got the capital for our personal donation to be able to build 60-odd houses; we’ve got the approval from VicRoads for the land; and we’ve got approval from council for the first few blocks.

“We’ll have six or seven of these portable homes on one block, all nicely landscaped, in an aspirational suburb — not a ghetto of 500 or 1000 people in a high rise where they feel like they are part of an underprivileged ghetto.”

The father-son duo is now working to get government buy-in.

“We’d love to see them get behind it and say, ‘wow, for all the hundreds of millions we’re spending on homelessness at the moment, we could put money towards this particular model and really move the needle',” Harris says.

“There’s no reason why the federal government can’t pick it up too and really run with it because it’s dramatically reducing the cost of social housing on unused land.”

“What can you leave behind that connects you to your community and you can pass on to your children and get them to think about this issue and be part of it too?”

Harris describes it as a win-win

“In the case of the Reach and STREAT buildings we’ve done a deal with the Victorian government to forgive land tax which is not quite, but roughly, equal to the rental forgiven and seeing as the property is owned by our family, we’ll still get the capital gain over 50 years.

“With STREAT, we’ve allowed the bank to lend $2.5 million against the $2.5 million I spent to purchase the building so I’ve given them the title and STREAT’s paying interest on that loan. STREAT raised another million dollars just from philanthropic gifts to complete the rest of the renovation.

“So it’s a bit of a win-win, my family still gets the capital gain, it achieves a social outcome, STREAT pays off the interest on the loan – we negotiated for the council to forgive rates and we don’t have to pay land tax so they’ve got minimal holding costs. Everyone wins.”

The social-enterprise model appeals to Harris’s business instincts and is one he says he’ll be “devoting a lot more of my time to down the track”.

“Being a business person, I find the social-enterprise model very interesting,” he explains. “STREAT has already got to a point where 70 per cent of its funding is coming from the businesses and we hope to get that to 100 per cent within a few years.

“So, that means, not only is STREAT deriving income for its charitable purposes, but the young people they’re helping can work in the businesses to gain self-esteem and that important sense of belonging."

Harris is also a long-term mentor to STREAT chief executive officer Rebecca Scott, with whom he meets regularly and describes as “bloody fabulous”.

In keeping with his preference for a direct approach, Harris doesn’t structure his giving through a private ancillary trust, nor does he use the services of a philanthropic adviser.

“I used to have a foundation but I cancelled it because it was all too complicated,” he says.

“I prefer to give directly to the charitable entities myself — I steer away from all the bureaucracy. I pick the people and the organisations to support, I write them a cheque, I get the tax deductibility — I don’t need anything else.”

 

Family philanthropy

Harris is keen to continue to work alongside and involve his offspring in charitable pursuits and hopes that his son and two daughters will “take over more and more of this stuff”.

“We regularly talk about it, and my girls have different goals, for instance one of them is into animal welfare,” he says, “but I think it’s important that wealthier families look at their community connections and the sort of legacies they can leave in the areas they’re passionate about.

“What can you leave behind that connects you to your community and you can pass on to your children and get them to think about this issue and be part of it too?

“I think that’s really important — there’s no point in dying and being the richest man in the cemetery.”

This article first appeared in Generosity magazine.

 

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