If we are to be a truly prosperous and inclusive nation, where all have an opportunity to flourish, there is clearly a need for change. There are no easy solutions and no one entity has "the job to fix this" – we're all in it together: governments, businesses and charities, big and small, volunteers and community groups, philanthropy.

What is the role of philanthropy in all this? The size of Australia's economy is about $1.7 trillion a year, and the size government is around $540 billion. The annual income of the charitable sector is $122 billion, with $7.3 billion of that coming from donations and philanthropy. The charitable sector's contribution might sound like a small sum. 

But it's how the philanthropic dollar is spent that makes it so valuable. A profound difference between philanthropy and our much larger funder, government, is that philanthropy is freer to fund risky things.

It's understandable taxpayers don't want governments spending taxes on unproven projects – and the 24-hour news cycle and new forms of media mean scrutiny is more pronounced than ever before. Philanthropy isn't burdened by these same restrictions. 

Philanthropy is an "innovation engine", providing funding which drives new approaches to solving complex social and environmental challenges. It can take the path less trodden  – and this is its power.

Take the example of the invention of the cochlear implant. In 1978 Professor Graeme Clark was at a critical stage in his research, but did not have the funding to retain a key engineer on his groundbreaking project.

At this tipping point, Clark received a $15,000 grant from The Clive and Vera Ramaciotti Foundations, which allowed him to retain his engineer and ultimately led to the successful development of the world's first multichannel cochlear implant. That $15,000, equivalent to $73,000 today, may not seem like a huge amount – but today more than 200,000 people in 70 countries have been fitted with the cochlear implant.

Philanthropy can and does make a big difference, but we can't relax. It's critical that every dollar is working to make as big an impact as possible. Therefore, philanthropy must always seek even better ways to generate change and opportunity. 

And Australian philanthropy is doing just that. For example: There is a strong emphasis on more strategic collaboration – we have seen an example on ABC's Four Corners this week, which profiled Bourke's Maranguka Justice Reinvestment Project, through which community groups, philanthropy and government are working to address high rates of youth incarceration and improve wellbeing.

Philanthropists are also exploring ways of providing funding to charities. We are seeing more funding for the "less sexy" stuff – such as infrastructure, technology and staff development. Such support is critical to helping charities have a bigger impact.

We know that money is not all philanthropy has to offer – it increasingly offers voice and influence to support advocacy around important issues like climate change.

If you want to change the world, one of the most effective and valuable things you can do is volunteer or donate. Philanthropy is a crucial part of our economy and society.