Milan x 2

I have been to Milan twice this month. This is not just because I am a lover of Italy’s food, fashion and people (I am) but because both the Festival del Fundraising and the European Foundation Centre Conference were held in, or near, Milan.

This was like a Barcelona-Real Madrid match, with each team playing solo, two weeks apart. Two of the most significant stakeholder groups in the non-profit sector, the fundraisers and the philanthropists, each with their own view of how to change the world.

Amongst the differences there were common themes. Both sectors are growing. This year’s Festival del Fundraising was the largest ever, and the EFC Conference was a sell-out too. The rate of foundation growth is astonishing – two new German foundations are created each day, and we know from Factary’s New Trust Update that 214 new grant-makers were registered in 2014 in the UK. The same growth story emerged at EFC from all over Europe.

Both foundations and fundraisers are becoming more professional. Foundation staff are training at centres such as the Erasmus Centre for Strategic Philanthropy, while fundraisers are going to back to school at universities across the continent, including Italy’s University of Bologna, and the course I teach on, the Postgraduate Certificate in Fundraising at the University of Barcelona.

While both teams are training, there is a remarkable demographic similarity between them. Women lead both teams. The population at the Festival, and at EFC reflected this, whether we were talking about the all-women fundraising team at Save the Children in Rome or the Chair and key staff of Turkey’s Vehbi Koç Foundation. The future of our increasingly interconnected sector will be shaped by women.

Both conferences dealt with social change, in slightly different ways. At the Festival we heard about social change brought about by donations through non-profits. At the EFC we heard about social change through collaboration. Yes, collaboration. Not grant-making, or at least not centrally grant-making. An excellent workshop led by Nicky McIntyre of Mama Cash showed how Oak Foundation was focusing on changing the situation of women by collaborating with companies. Katharina Samara-Wickram from Oak Foundation described the organisation’s evolving Theory of Change. The foundation had initially focused all its women’s rights efforts on women’s rights organisations. But it had also commissioned research, from AWID amongst others, and had discovered that it might get more rights for its dollar (or Swiss Franc) if it instead worked on the millions of companies employing hundreds of millions of women around the globe. As a result Oak has developed an 8-point Business Case for women’s rights aimed at employers and using them as the vehicle for winning rights for women. This was one example amongst many of collaborations between foundations, NGOs and business to effect change in society.

I discussed this with a team from a leading UN organisation. The implications for fundraising are important, with the role of the fundraiser changing from being simply a grant-chaser to becoming the central relationship point for a complex web linking her own organisation with foundations, companies and other stakeholder groups.

The significant divergence between the two conferences came when we talked about investment. Fundraising team leaders in Italy complained about a lack of investment. Salaries in the sector are still modest and few organisations are willing to take the brave step of dramatically increasing investment in fundraising. By contrast the foundation sector spent a lot of time on investment, and appears to be ready to take on risk, so long as it has a social end. Thus the Italian majors, Fondazione Cariplo and Fondazione CRT both have programmes for investing their endowment in activities with a social as well as a financial purpose. There was some talk of divestment – with foundations encouraged to divest from the fossil fuel industry. But the bigger theme was Mission Related Investment. This was talked about across the EFC conference, with foundations making substantial investments in the social housing sector, and as venture philanthropy in social enterprises. Mission Related Investment opens up a substantial new line of funding for social purpose organisations – another challenge for traditional fundraising teams in Europe.

With only a little hindsight, both conferences felt like a revolution. Just ten years ago the Italian fundraising sector was tiny – a handful of visionaries in a few risk-ready organisations. At that time most European foundations were a closed shop – few published an annual report or had a website or could be induced to talk about their work. Their boards and management were older and dominated by men. Since then we have had a wave of transparency legislation running across Europe accompanied by a push for the same by the EFC itself – so now we can see what’s happening in foundations in Switzerland, the Netherlands and Spain (ironically, Italy remains somewhere behind the pack on transparency.) The feeling that a revolution is taking place in the sector ran through both conferences.

It is great to be living in revolutionary times.

8th Festival del Fundraising – Italy

In Italy there is no fundraising “conference” – no dull meeting of people saying the same old, same old.

But there is a Festival. The Festival del Fundraising took place this year on the shores of Lake Garda, near Verona. With 650 participants it was bigger this year than ever before, and it launched the festival mood with “Fundraiser’s Got Talent” an opening session in full Italian TV-show style. This is a young and growing fundraising market with a strong backbone of training, thanks to the Masters in Fundraising offered by the University of Bologna. This year there was an invited group of students from the Columbia University MSc in Fundraising Management, so the conversations in class and around the bar were cross-cultural: everyone learned from each other.

Italy’s NGOs, universities, arts and cultural organisations are increasingly looking to fundraising for growth. The Italian state is cutting back, and there is a hunger for doing more and better. Leading NGOs have focused in the past on direct mail marketing but many are developing DRTV and new media methods, and a few are focusing on strategic (major) donors.

I gave a master class on foundations in Europe. The Italian foundation sector is significant – the largest in Europe by assets. [See figure]

Assets and Spending by European Foundations
Assets and Spending by European Foundations

Why so large? Principally thanks to a handful of mega-foundations created when the Italian Government split the huge regional savings banks which had previously carried out a mixed banking and social role, into banks, and foundations. Thus the Fondazione Cariplo has €7.7 billion in assets, while Fondazione CRT, built from the old savings bank of Turin has €2.2 billion. These huge foundations are relatively easy to find but the rest of the sector remains a mystery. There are thousands of foundations in Italy including family and church foundations which are almost completely invisible, and certainly do not have the type of glass pockets that would be expected amongst US or UK foundations.

The lack of transparency amongst strategic donors was a common theme in the conference – many donors do not want their name published nor their gift known. There are many reasons for this including, according to one speaker, the Catholic culture of separating philanthropy from the rest of one’s public life. This tendency to secrecy has been exacerbated by a new tool being used by the Italian tax authorities for measuring individual wealth: part of the measure is how much you give to charity. If you give a lot it is assumed that you have a lot, and people of wealth are concerned that this will mean they end up paying a lot more tax.

There are also problems of recruitment in this young and growing market. In the strategic donor area there are very few fundraisers with experience of strategic donor or foundation work, and almost none with prospect research experience. Setting up a team involves difficult choices between waiting to recruit someone experienced or training a newcomer. Salaries in the sector are still modest and so it is especially hard to recruit people with experience from relevant commercial sectors such as finance and banking.

The strong foundation of the Master in Fundraising at Bologna combined with a sector that wants to grow and the enthusiasm of hundreds of Italian fundraisers means that this is an exciting development market for fundraising. It is now time for the philanthropic sector to respond by moving toward a modern, transparent, accountable style of giving. Then we can have a real festival of fundraising.

Thanks to Columbia University and Valerio Melandri at the Festival del Fundraising / University of Bologna for the opportunity to speak at this event.

Factary is active in Italy, where we have carried out research, training and consultancy assignments for leading NGOs.

The £6.8 billion Recipe for Philanthropy

There is a kitchen theme in this year’s Foundations of Wealth, published today, with Gordon Ramsay featured alongside the owner of the UK’s largest franchise for Domino’s Pizzas, and a kitchenware manufacturer.

They are three amongst 42 wealthy philanthropists who have set up a grant-making trust during 2014, all of them profiled in depth in our freshly-prepared report.

New trusts appear to be boys’ toys. 93% of the wealthy founders whom we profile are men, with just 7% women. That is the same ratio as in 2013, and slightly more male than in 2012. It reflects the gender imbalance in great wealth in the UK with around 10% of the Sunday Times Rich List being women, and a hard-to-explain gender imbalance in structured philanthropy. As “Untapped Potential” reported in 2011, just 4.8% of European foundation grant monies go to women and girls (see Shah, Seema, Lawrence T McGill, and Karen Weisblatt. Untapped Potential: European Foundation Funding for Women and Girls. New York: Foundation Center, 2011.) Factary is currently engaged in a study of philanthropy amongst women of wealth to try to find out why.

As in previous reports, the founders of UK grant-making trusts are economically active – more than two thirds (69%) are under 65 – a similar percentage to 2013 and a slightly younger profile than 2012, when 53% were under 65.

Their’s is new money – more than three quarters are self-made millionaires – with wealth principally from financial services, retail, manufacture and property. The total wealth represented by the 42 we have profiled in depth is over £6.8 billion – reflecting the increasing concentration of wealth in the UK.

The founders are distinctly international, with four people of Indian descent and three others with non-UK nationality, as well as founders who have lived and worked abroad. The UK is not the easiest country in the world in which to create a charitable foundation (it is arguably easier in the Netherlands, for example) but the combination of a wealth management industry that is growing and gearing up for philanthropy, a broadly stable economic climate and people – philanthropists – who want to make their giving more effective has led to a boom in the establishment of trusts. Last year we reported on 214 newly created grant-making trusts in our monthly New Trust Update report.

Could you build a partnership with these new trusts and foundations? Our report tells you about the founding philanthropists, about their philanthropy they set up their foundation, and about the new foundation’s interests. Health, welfare, education and training are the big subjects, and we’ve identified clusters of interests linking health and arts, education and welfare. We have researched an in-depth profile of each of these leading philanthropists, and here you will find biographic information that will help you build a link with the trust, or the founder.

Philanthropy is alive and well in the UK amongst people of wealth. These good 42 at least are willing to share their wealth with the rest of society.