Blog

Milan x 2

Posted on by Chris

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

Posted on by Chris

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

Posted on by Shaun

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.

New Frontiers of Philanthropy: A Review

Posted on by Chris

New Frontiers of Philanthropy (Oxford University Press, 2014) is the Haynes manual for new philanthropists. With this book we can open up the engine of new philanthropy and check out the workings. With 653 pages plus an extensive bibliography it is a substantial volume covering the people and organisations involved in new forms of philanthropy, the tools that they are using, and key issues.

New Frontiers of Phil cover

Whether you are a fundraiser working with philanthropists or foundations, a researcher trying to understand philanthropy, the manager of a family foundation or a financial adviser you will find lots to interest you here.

The book has three main sections:

“New Actors” deals with new organisations in the philanthropy and social area. These new actors may be assembling capital, providing secondary markets or exchanges, or prospecting for new ventures, and Professor Lester Salamon makes clear in his introduction that many fundraisers are not considering our do not understand some of the key actors in finance, such as pension funds.

The section includes some terminology from the finance sector that we are going to have to get used to applying in the non-profit sector: “capital aggregators” for example are essentially fundraising organisations such as community foundations.

The increasing involvement of business in charitable activities is highlighted – and Rick Cohen contributes a chapter on corporate-originated charitable funds, such as the Fidelity Charitable Gift Fund with US$3.8bn in assets under management. These funds are growing faster, operating more efficiently, and selling more aggressively than their purely charitable counterparts, trends highlighted by Prof. Salamon who notes that commercial donor-directed funds are now larger than community foundations in the USA.

Because the book’s scope is so wide it includes entities that are on the margins between charity and business, or “impact-first” and “finance-first”. It includes a deal of material on businesses that are focusing on the “base of the pyramid” (the poor). For Prof. Salamon these are businesses that are meeting a social need; for me these are simply businesses dealing with a different market segment.

“New Tools” is an encyclopaedic description of the many different ways in which someone who wants to do social or environmental good might go about it. It covers loans, social impact bonds, socially responsible investment, new forms of grant making including prizes, crowdfunding… and more. Fundraisers and financial advisers should take the time to read this section because it will inspire both to try new products with their philanthropic customers.

The third section in the book, “Cross-Cutting Issues”, debates the issues that emerge from the new philanthropy including “the elusive quest for impact”. Dr Alex Nicholls and Rodney Schwartz send out a wake-up call to the fundraising community, with a chapter on the demand side of the social investment marketplace, saying that the challenge is “..not an insufficient supply of social investment capital but an insufficient supply of investment-ready deals.” (In plain fundraising speak: ‘there are lots of donors, but not enough well-prepared proposals’.)

In this section there is a thoughtful piece by Dr Maximilian Martin giving the global perspective on new philanthropy. Dr Martin challenges the conventional view, arguing that social capital markets are inefficiently relationship-driven, not value-driven. He is subtly signalling the limits of relationship fundraising, noting that “…nonprofit leaders typically spend vast amounts of time on fundraising rather than on the continuous improvement of the work of the organizations they lead.” [p.608] He creates the phrase “synthesized social businesses” to suggest that we should move from a world of small fragmented organisations to one in which we build larger business ventures with a social purpose. “A philanthropic foundation could acquire [control over] …a company with the mission to make the good or service available to as many people as possible around the world.”

If you want to understand what is happening out at philanthropy’s cutting edge, this is the book for you. No-one in the book is claiming that all our donors are going to be asking us about making a quasi equity investment in our social enterprise next week. But the evidence from the impact of the venture philanthropy movement in Europe is that these ideas are already circulating in a donor community that is looking for change.

Be prepared for the new philanthropy; read this book.

Factary and the new philanthropy
Factary has monitored and researched the new philanthropy for many years. We were the first research group to publish a report on venture philanthropy in the UK and we continue to monitor new developments. Contact Nicola Williams, nicolaw@factary.com or Chris Carnie, chris@factary.com if you would like to know more about our services in this area.

The Prospect of Power

Posted on by Chris

The Researchers in Fundraising conference this week in London feels like a milestone in our profession – the arrival of a real community of professionals.

There were signals everywhere that we are a real profession. We, the community, have our networks – I saw lots of ‘Hello again! How are you?’s. We have an emerging group of personalities – Martin Mina (Action on Hearing Loss) is the personification of the funny-but-with-a-message presenter. We have our academics – Dr Beth Breeze (University of Kent) continues to uncover the emotional underwiring that supports philanthropy and fundraising. We have international appeal, with Helen Brown (Helen Brown Group) and Gerry Lawless (iWave) flying all the way across the Atlantic to join us.

We have suppliers anxious to win our business and therefore competing (this is normal and healthy) to innovate for our sector. We have media – social media – as conference attendees Tweeted #RIFConf2014 to the world. We even have the beginnings of politics, the politics of women and women’s rights in a workplace where too many bosses (mea culpa) are still men, celebrated by Beth Breeze in her sense of enjoyment at a conference audience that was mainly female.

And we have the intellectual and ethical challenges that define a real profession, personified in Karl Newton of LSE with his intimate description of the Gaddafi incident.

So what’s missing? At the conference the missing ingredient, reported again and again by researchers, was power. They didn’t use that word. What they said was ‘I just can’t get my boss to take research seriously’, or ‘I couldn’t get the budget’, or ‘My boss wrote our policy and I can’t get him to change it.’

Power, and the lack of it, is not a new topic at RiF. But now that we have a real, fully-fledged profession the lack of it is becoming more painful. We need the power to influence our fundraising colleagues. We need the power to write strategy, manage people and influence policy in the fundraising community. We need the power to set budgets, hire and fire. We need the power to commission research, development and innovation in our field. With the Sword of Damocles of new EU data protection legislation hanging over us, we need the power to influence legislation.

We need power, and we need it now.

We know how power works. We research it all the time. It is linked to circles of influence, to people with a strong voice, to a community united behind one or two clear ideas simply expressed.

We don’t have to call it that. We can call it “voice” , or “influence” or “a seat at the high table.” We can be subtle about winning power or we can be loud and proud. We can fight or argue, persuade or hint.

We need friends high up in the non-profit trees. The Chief executive of a brand-name national charity who ‘gets’ research. The MPs and MEPs who used to work in nonprofits, who befriend research. Senior staff at the Institute of Fundraising. We need to find these people (ha! easy for us prospect researchers!) We need to cultivate them and we need to persuade them with one or two clear simple messages. And then, like good fundraisers, we need to steward them.

We can use the power of research. We can do this.

Factary Atom: what makes it different (and quite probably better)?

Posted on by Shaun

A few people in various research forums have asked how Atom differs from other providers of network maps. I thought I’d run through a few of the key differences here.

First, Atom is a tailored service. Unlike other providers, which mainly if not exclusively offer subscription-only access to their database, in an Atom project we would work with you to identify your specific needs and then prepare a dataset to meet those needs. For example, we could provide a map showing the connections of your board, your most generous supporters or potential major prospects. We can provide you with online access to this map, along with a guide instructing you on how to use it. We provide a copy of the data gathered during the course of our research for you to import back into your database. Finally, we are also able to provide a report drawing attention to any items of particular interest within your map.

Second, in contrast to many other network map providers we do not limit the information we gather to business positions only. We only use data from reliable sources (Companies House, Bureau van Dijk/DASH, Debrett’s People of Today and Who’s Who, to name a few) and do not ‘harvest’ unverifiable data from the internet. We also include information on individuals’ non-business positions – so any charitable affiliations, club or society memberships, social or family connections, leisure interests, and so on.

Third, we make use of more information that we gather to draw connections. Several other network map providers do include educational information on the people in its database – but I’m not certain whether they draw connections on that basis, which Atom certainly does. We also draw connections between people on the basis of shared leisure interests. This doesn’t indicate a real-world connection of course, but is immensely useful in strategising. In fact, since Atom is a tailored service we are in principle able to include any data available in the public domain within our maps.

The upshot of this is that our maps potentially present a more rounded picture of the individuals within it. A report we published earlier this year on the basis of the data gathered for Atom projects since its launch in 2011 showed that half of all connections discovered were on the basis of non-business positions. Given that non-profits often have different aims from businesses when using maps this additional data is, we feel, vital. For example should a map of your board show that one of them is connected to a trustee of a major grant-maker via a shared membership of a London club, this could form the basis of a useful point of access.

Finally, we use a method of showing connections between individuals that takes into account not only shared positions at an organisation but also the time spent at that organisation. If two people have spent time at the same company, but during non-overlapping periods, then there’s no true basis for saying a connection exists between them. Atom takes this information into account, drawing direct links between individuals only where they’ve spent overlapping years at an organisation.

Factary Director Martine Godefroid workshop at 9th AFF Conference

Posted on by Shaun

Martine Godefroid, Managing Director of Factary Europe, will be giving a workshop with Mélina Mercier, Director-General of the Fondation de l’UPMC, at the 9th Fundraising Conference of the L’Association Française des Fundraisers.

bandeau_ESR_2014_sm

Événement phare du secteur de l’enseignement supérieur et de la recherche, cette conférence vous permet, une fois par an, d’être au cœur des enjeux du fundraising, de rencontrer un grand nombre de professionnels du secteur et de monter en expertise sur tous les sujets qui font votre quotidien. Quel que soit votre niveau, quelle que soit la taille de votre structure, vous pouvez être de la partie!

L’innovation, la créativité et le renouveau sont au cœur de vos métiers; ils seront également au centre de la 9ème édition de la conférence et des sessions qui y seront dispensées. Inspirez-vous des intervenants internationaux qui seront à l’honneur cette année et puisez des idées applicables dans votre structure! C’est un moment unique pour prendre la température du secteur, motiver vos équipes… et vous-même! Vous pourrez partager vos bonnes pratiques, vos succès mais aussi vos craintes et échanger avec vos pairs tout au long de la formation.

The Venture Philanthropists: our ‘very comprehensive’ report

Posted on by Chris

At this week’s European Venture Philanthropy Association (http://evpa.eu.com/) conference, a senior UK venture philanthropist described our latest report, The Venture Philanthropists, as “very comprehensive.”

The focus of the report is the 254 board members and patrons who lead the UK venture philanthropy sector. We include biographies of each, and a handy networking index to identify who is linked to which fund. Many are people of wealth; we identify £38 billion in personal wealth.

Contents page 1

The 177-page report includes:

  • A clear explanation of venture philanthropy
  • A brief history of VP
  • Detailed analysis of trends in this fast-growing sector
  • Detailed profiles of the 22 venture philanthropy funds active in the UK
  • Biographies of the 254 board members and advisers who lead VP funds
  • More than 150 organisations and projects that have benefited from venture philanthropy
  • A who’s who in VP index linking people to companies and charitable trusts and foundations

The Venture Philanthropists is available at:

  • Non-profits: £250 per copy
  • For-profits: £300 per copy
  • Subscribers to Factary’s New Trust Update or Factary Phi, or those taking out a subscription with the report: £150 per copy.

To order a copy of the report contact Nicola Williams at Factary, nicolaw@factary.com or call Factary on +44 117 916 6740.

Who's who in VP
Who’s who in VP
Impetus-PEF
Impetus-PEF
Impetus-PEF people
Impetus-PEF biographies

Venture Philanthropy: A Great Growth Story

Posted on by Chris

We have just completed an in-depth study of the UK’s venture philanthropy sector – and it is all about growth.

Two years ago we reported that there were 11 venture philanthropy organisations in the UK, giving (or investing, or lending) a total of £52 million.

This year we have identified 22 organisations active in VP in the UK – double the 2011 number – with assets of £2.8 billion and income, at £274 million, up 171% on two years ago. The fastest growth area of all is in grants, loans and investments, up 221% on two years ago.

The report – The Venture Philanthropists – focuses on the 254 board members and patrons in the UK VP sector, including brief biographies of each. We include a Networking index that shows the links between VP supporters, companies and trusts or foundations. The report gives detailed information on each of the 22 venture philanthropy funds active in the UK.

The 177-page report includes information on more than 150 charities and projects that have benefited from venture philanthropy.

The Venture Philanthropists is available now:

  • Non-profits £250 per copy
  • For-profits £300 per copy
  • Subscribers to Factary’s New Trust Update, or those taking out a subscription with the report, £150 per copy.

To order your copy contact Nicola Williams at Factary, nicolaw@factary.com or call us on +44 117 916 6740.