Pathfinder has reset its charitable giving policy with donations switching from the previous 20 per cent of KiwiSaver fees to 1 per cent of annual revenue of the entire fund suite.
“From 1 April this year, we have been dedicating 1% of revenue from across our whole business (this covers all our retail managed funds as well as our KiwiSaver funds) to support our vision for a better future happening faster,” Pathfinder told investors last week.
John Berry, Pathfinder chief, said in the note that the change would also see the manager choosing the end charities rather than KiwiSaver members as per the original strategy.
“After four years of funding our charity partners we’ve decided it’s time to step up the way we do things to have a more direct impact on the pillars our investing stands on,” Berry said.
He said under the updated approach, Pathfinder would broaden the potential donations to include scholarships, social enterprise grants as well as education and “awareness” charities.
Since establishing the Pathfinder KiwiSaver scheme in 2019 (originally under the CareSaver brand), the manager has directed some $1.35 million to various charities.
According to Berry, setting the initial charity ratio to 20 per cent of KiwiSaver fees enabled the manager to make sizable donations from “day one”.
But as the Pathfinder scheme has grown and the group now also responsible for managing funds across the wider Alvarium NZ parent, he said a rethink of the charitable giving policy made sense.
“We are following the Patagonia model of giving 1 per cent of revenue to charities,” Berry said.
Outdoor clothing firm, Patagonia, has given away US$140 million in charitable donations since instituting the 1 per cent policy in 1985, the group’s website says.
The Pathfinder KiwiSaver scheme collected more than $2.3 million in management fees last year while assets under management have grown to almost $350 million at the end of March.
Berry said Pathfinder in total manages about $700 million with the 1 per cent donation pool to be filled from annual revenue on all funds.
“We think it’s important for managers to give something back to the community as they grow with scale,” he said.
Founded in 2009 by Berry and Paul Brownsey, Pathfinder was absorbed into the Alvarium group in 2021 (after an earlier part-ownership). Brownsey, who was chief investment officer, left the business this February.