I want to be in America

It’s frustrating, living in Europe (no, this is not going to be a piece about Mr Cameron and his referendum…)

It’s frustrating because we have so little data on philanthropy. Everywhere I look there is data on philanthropy in the USA, and a stream of clever academic research papers from across the Atlantic on who is giving, why they are giving and what they are giving.

But Europe? Yes, there are some very good centres of research, but there are not nearly enough of them.

This morning I checked the listings for academic centres of research into philanthropy, at the International Society for Third Sector Research. The results? Of the 153 academic centres of research identified by ISTR, 53 are in just one country. Yes,the USA. The next nearest country by volume of research centres is the UK, with just 11. Counting all of the centres across Europe, we still come to a smaller total than the USA with 36 centres against their 53.

Here are the (approximately) 50 countries of Europe:

Academic Research Centres in Philanthropy, Europe
Academic Research Centres in Philanthropy, Europe

And here is the single United States of America:

Academic Research Centres in Philanthropy, USA
Academic Research Centres in Philanthropy, USA

Quantity is not the same as quality, and Europe’s research centres produce a lot of very useful and valuable data. But we are being held back in our understanding of philanthropy in Europe because we have not built the academic power-houses that our colleagues in the US have created. This is a source of bias in our research – with all that wealth of data from the USA the models from across the Atlantic have become the norm. In Europe this has led a few people – notably in France – to look for new paradigms, different models, in philanthropy research. Good news, if we are to build a balanced, culturally-sensitive, understanding of philanthropy.

Still wondering about major donors?

If you had any doubts about “major donor” fundraising – at Factary we use the term “strategic donor” – then today’s article by Martin Wolf should help dispel them (Wolf, M., 2016. The economic losers are in revolt against the elites. Financial Times).

In the article, Wolf reviews the work of Branko Milanovic, previously Lead Economist at the World Bank’s research department, who showed in a 2013 paper (Milanovic, B., 2013. Global Income Inequality by the Numbers: In History and Now. An Overview. Global Policy (May 2013), pp.198–208.) how personal incomes for the majority of people in Europe and the US have stagnated whilst the incomes of the wealthiest 10% have grown. This we knew from other studies of the wealth gap. But what makes this chart so interesting is that there is another group of people whose incomes have stagnated – the poorest 10% globally.

Change in real income between 1988 and 2008 at various percentiles of global income distribution (calculated in 2005 international dollars)

income distribution global

Notes: This is global income, so the middle class in Europe is in the 70%-80% range. The vertical axis shows the percentage change in real income, measured in constant international dollars. The horizontal axis shows the percentile position in the global income distribution. The percentile positions run from 5 to 95, in increments of five, while the top 5% are divided into two groups: the top 1%, and those between 95th and 99th percentiles.

So here is a demand and a supply argument for strategic donor fundraising. On the demand side (of the non-profit world) the poorest of the poor are staying poor or getting poorer. Non-profits have more to do, must raise more to help more.

On the supply side, the “normal” donors (or “consumer donors”) who provide the bulk of donations to Europe’s non-profits are earning the same as they earned in 1998, or less. Perhaps this is part of the reason why regular fundraising has been struggling for so long; middle income donors (in Europe) have been taking home the same wages for the last ten years, so they are unable to increase their gifts, despite the best efforts of fundraising. As Prof Adrian Sargeant never tires of telling us,

‘In the UK, charitable giving is estimated to be around one per cent of gross domestic product and while there are annual variations, this figure has proved remarkably static over time. Despite the best efforts of governments, philanthropists and a generation of fundraisers, the needle hasn’t moved much on giving since data were first recorded.’

(Sargeant, A. & Shang, J., 2011. Growing Philanthropy in the United Kingdom. A Report on the July 2011 Growing Philanthropy Summit, Bristol, UK: University of the West of England. Available here.)

But up there among the elites the picture is very different. The top ten percent of earners enjoyed real-term income growth over the period 1998-2008 with the top 1% winning increases of 60% on average, world-wide. Yes, the subsequent recession may have taken a little off the top of that, but as the annual European wealth lists show us, wealth has survived the recession in remarkably good shape.

So at both ends of our work as fundraisers there is a case for strategic donors; at the poorest end where we have to do more and more for people with less and less, and at the wealthiest end where we can see a significant segment of the population heading up the income ladder.

Time to chase after your well researched prospect pool…with a strong, well-researched, case statement.

Which leaves me – and many fundraisers – in the ethical soup. I joined fundraising as a means to an end – the end of social inequalities, of poverty, of human suffering. So while I celebrate the growth of the strategic philanthropy market…I disapprove of the system that makes a few rich and leaves the rest poor.

Difficult dilemma.

But there is a lot of potentially philanthropic money out there, and a lot more people who need it; so stop wondering about major donors and get on with it.

The Laboratory for Philanthropy

I am just back from the annual European Venture Philanthropy Association conference, this year in Madrid. I have attended most of the organisation’s fifteen conferences – because venture philanthropy is at the cutting edge of all of Europe’s philanthropy.

The conference is increasingly focused on impact investing. This phrase has as many interpretations as there are official languages in the EU – but it covers the broad range, from grants, to projects that can demonstrate social impact, to for-profit investments in social enterprises that deliver near-market rates of return. There were a mixture of social enterprises, charities and foundations pitching for business at the event, but all of them were able to show precisely what return – social or financial or both – they could offer. More, to be blunt, than many of our largest charities can manage.

Scale is a central theme. This word is used to mean “growth” as in: ‘We’ve got a great idea – how can we scale it up?’ It is the obsession of my friend Miquel de Paladella who announced a successful second round of investment – €430,000 – to expand the JumpMath franchise in Spain. Visit their website (in English) and you’ll see that their impact indicators are on the front page. This display of impact is not the only reason for their success, but it is central to explaining why they raised finance.

Crowdfunding was popular at the conference. It’s growing fast in all its varied flavours, from crowdfunding for equity through crowdfunding for loans. Factary’s former landlord, Jamie Hartzell of Ethex, gave a concise description of the ethical issues that surround this type of finance. The first social stock exchange in Spain, La Bolsa Social presented its crowdfunded equity programme, and we also heard from Babyloan (yes, that is its real name) in France. Babyloan has tied up with Total, the French energy company, to crowdfund microfinance for green energy projects there.

We discussed the role of foundations and trusts in all this. BMW Foundation described their work in professionalising ‘pro bono’ support for non-profits, working with their alumni and staff. Seb Elsworth of Access Capital described the blend of loans and capacity building that they are planning to offer smaller organisations in the UK, some via Community Foundations. And Arnaud Gillin of Innpact in Luxembourg described the Shell Foundation’s involvement in creating loan structures to support small, growing enterprises through GroFin; it looked complicated but in essence it involves the foundation providing a grant to a lending entity to encourage other investors to join a structured, layered, lending scheme. If the loans fail, the grant money takes the burden of failure, giving lenders higher up the tree greater security. Innpact demonstrated that a grant-maker could multiply by at least four, and sometimes up to 20, the impact of a grant by working in this way.

How can we use all this? In past blogs about EVPA I have emphasised the need to keep an eye on what is happening. Now it’s time to move from watching, to action. Take a look at the extraordinary growth of crowdfunding for example. Robert Wardrop, a Research Fellow at the Cambridge Centre for Alternative Finance showed figures from their 2015 report that indicate a 104% increase in donation-based crowdfunding 2012-2014 in Europe excluding the UK. Reward-based crowdfunding is growing even faster at 127%. There are opportunities for fundraisers here.

Or take the new financial models for foundations – could your organisation structure an entity to offer loans to, say, small farmers, using the expertise you already have and a few of your foundation partners?

And finally, one cheering fact. Despite concerns that we have expressed before (see our report Trust Women for example) about the lack of women in senior positions in European philanthropy, this year’s conference had a majority of women present; 51% of participants were women. A strong message for the future.

The EVPA conference is the bubbling laboratory for philanthropy in Europe. It is where you will meet new people with new ideas – some scary, some brilliant – and see where the mainstream will be, five years later.

Next year’s conference is in Paris. See you there?

Philanthropy in the Gulf – Reporting from Takaful 2015

I am at Takaful 2015 in Abu Dhabi, the conference on philanthropy organised annually by the Gerhart Center, American University of Cairo. It is a fascinating insight into how philanthropy functions in societies in transition – a single frame in a long movie whose end we cannot see.

The big theme on day one of the conference was youth. Defined here as anyone under 35, youth were the focus of the keynote speech by Sheika Al Zain Al Sabah, the head of the Ministry of Youth Affairs in Kuwait. She described how the ministry is working as a lightning conductor for the views of young people in the country. It was the educated younger people of these societies in transition who led the demonstrations and protests of the Arab Spring, and Kuwait has responded by creating a Government department, led by a young member of the Royal Family, to channel their views into policy. Young people were also the focus of a presentation by Lina Hourani, Director of CSR at Al Ahly Group (http://www.csralahligroup.com/), who run 10 day training courses for young social entrepreneurs – next year they run the course at the University of Bristol.

Venture philanthropy is present in the region, and Khulood El Nawas, Chief Officer for Sustainability, Emirates Foundation (http://www.emiratesfoundation.ae/EF/en/about-us/vision-mission) described their four-stage Incubate – Pilot – Scale – Spinoff model for developing programmes. The big gap for them and other speakers was the lack of data – baseline data on young people was absent or unreliable, so measuring impact was difficult or impossible.

The traditional forms of giving are evolving rapidly in these societies, and Omar Bortolazzi of the University of Bologna (https://www.unibo.it/sitoweb/omar.bortolazzi2/cv-en) described the ways in which awqaf (endowed foundations) are changing in Muslim countries in South East Asia, where donors can give through the internet to “e-waqf” set up for a variety of charitable purposes. Dr Youcef Benyza from the University of Batna, Algeria (http://www.univ-batna.dz/index.php/en/) tackled the governance of Zakat funds. Zakat (https://en.wikipedia.org/wiki/ZakaT), the third pillar of Islam, is a form of religious giving based on income and assets such as savings that are not being circulated. In Algeria each mosque collects zakat and passes the money up to a regional zakat office, who report to a government sponsored zakat agency. The process lacks transparency (there is no auditing, and no public reporting) and as a consequence there are regular newspaper reports of corruption in the system. But there is also strong resistance to reform because the funds are regarded as sacred and thus outwith the realm of government or auditors.

I ran a workshop on building partnerships with philanthropic foundations, where we talked about some of the barriers in the region to partnering with outside agencies. In some parts of the region there is suspicion of external funding partners (from Europe or the USA) and there is also a strong sense that regional nonprofits should be raising funds in their own countries, not depending on outsiders. There are legal constraints too – sometimes not clearly defined – that make it hard for organisations here to accept financial support from external partners. But there is a real interest in sharing expertise and knowledge, so we focused on building partnerships at the technician (specialist, expert) level; nonprofits here have developed clever ways of dealing with social problems, and I am looking forward to hearing today (Thursday) about the Wataneya Society for the Development of Orphans (https://www.linkedin.com/company/wataneya-society), who developed a quality standards scheme as a way of improving the conditions for the thousands of children in Egyptian orphanages.

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.

The Prospect of Power

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 Director Martine Godefroid workshop at 9th AFF Conference

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.


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

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 people
Impetus-PEF biographies