Category: Prospect Research

A Window on Philanthropy in Italy

Posted on by Chris

Another window on high-value philanthropy just opened in Italy thanks to UNHCR and Gruppo Kairos, a private banking and wealth management firm. In March, UNHCR published the results of a survey carried out with the finance firm. I am grateful to Giovanna Li Perni at UNHCR for a copy of the report, and for her presentation of the results at last week’s Festival del Fundraising.

During October-November 2015 Kairos asked its HNWI clients to complete a questionnaire; 91 of them, 44% women, 56% men, did so. This is not therefore a balanced representative sample of people of wealth in Italy (so we cannot safely extrapolate the results) but does give us at least some insight into how this group of people reacted. The group included a wide range of wealth levels from €1m to more than €30m, and a spread of age groups with, as you would expect, a bias toward middle age and older (85% were aged 46 or over). Almost all of the group were donors – 91% had made at least one donation to a social cause in the previous year (against 26% of the general population). The percentage who gave rose with increasing wealth, reaching 100% of people with wealth over €30m.

When asked about their largest gift during 2015 to any one organisation, most reported €5,000, with 73% of women giving at this level and 49% of men. Older people tended to give more, so 22% of the over-65s gave €25,000 and 11% gave €50,000. Of course these people were giving to a number of organisations, so 30% of this older group gave away a total of between €50,000-€100,000 in 2015.

Asked about the causes to which they made their largest gift in 2015, 21% chose scientific or medical research, 19% favoured children’s causes, and 16% poverty in Italy. Importantly for UNHCR, 10% chose help and protection for refugees as their top cause. 62% gave principally to causes in Italy.

Why did they give?

More than half (52%) said that their main reason for giving was because they felt privileged. 26% said it was giving made them feel useful. Interestingly just 4% of donors said that they gave because of their religious values, with 9% saying that they want to change things, to make a difference and the same percentage saying that they gave to continue a family tradition of philanthropy.

In choosing a non-profit, two major reasons stood out; the cause, and ‘transparency of the organisation and exhaustive documentation on results.’ This focus on transparency is interesting and is part of a trend we can see across Europe toward greater transparency in the non-profit sector. New laws (for example, in Holland) and new organisations (for example Fundación Lealtad in Spain) are encouraging this trend toward transparency.

Italians will tell you that business in the country is based on personal connections, and it seems that this might be true for philanthropy also. It is certainly the case for this group of philanthropists, who say that the most common channel for hearing about the organisations they support is via their personal network (28% of respondents, the largest single group), while 15% say that they chose the cause because they knew the leader of the organisation in person.

What does this tell us about strategy?

The information in this report is gathered from the clients of one bank, so we should be careful about extrapolating from it. But given that there is almost nothing else available on HNWI philanthropy in the Italian market, we might at least test some conclusions.

The research should help push up the pricing of ‘major donor’ programmes. Individuals responding to this survey have made gifts in excess of €100,000 to single organisations, and 20% of them have made gifts of €25,000 or more. We can even venture a Gift Capacity calculation for this group, defining ‘Gift Capacity’ as ‘The largest total gift that one person could give to any one cause, in ideal conditions, over five years’ (see my previous blog on this topic.) Five of the respondents with net worth of €5-€10m made gifts to single organisations of €100,000 or more, between 1% and 2% of their net worth.

The research makes the case for prospect research. It shows that personal networks are the means by which these HNWIs have been reached by their non-profit partners, and that these networks are their primary source of information. Prospect research has the tools to identify personal networks. Sadly, the number of prospect researchers in Italy is still in single figures.

This research was carried out in partnership with Gruppo Kairos, and we have here a strategic clue that a number of NGOs in Europe are starting to follow up. Private wealth managers and bankers are increasingly interested in philanthropy, and we would all do well to focus more attention on this key group of intermediaries.

This is the second year in which UNHCR and Kairos have carried out this study, and the plan is to continue the annual series; another opening window on the world of HNWI philanthropy in Europe.

The Edge of Privacy

Posted on by Chris

We live in interesting times, privately.

Confusing, contradictory times, when lawmakers require us to lock-down data whilst revealing their intimate thoughts on Twitter. Times when it is OK for a dominant search engine to track our billions of tiny searches, for our wrist watch to measure and transmit our sleeping and walking in the name of fitness. Times when we choose to tell our life stories in Facebook.

And times when our private underbelly is revealed to the world. Two stories have exposed privacy in all its moral complexity; the Panama Papers, and the Ashley Madison data breach. Both have been stories about activities that are legal (being a director of an offshore company and having an affair, or both simultaneously, are not illegal activities.) Both are about normal immorality.

Both stories are to some degree about power. The Panama Papers show us that the powerful are willing to mix their businesses with drug dealers, dictators and money launderers in order to avoid taxes. If you need to be reminded about just how powerful these people are, bear in mind that just one person was prosecuted out of the 1,000 UK names released in the last big tax-related data breach; the Falciani/HSBC affair [Source: ‘Tax Havens don’t need reform, but abolition’, Richard Brooks, Guardian Weekly, 8/4/16]

Both the Panama Papers and Ashley Madison are about relationships, a subject at the heart of prospect research. John knows Jane because both of them invest in the same company in the British Virgin Islands. And John knows Mary because he signed up for Ashley Madison and she’s his new friend.

John is a donor to your charity. He’s in your database, and he has turned up in a screening (carried out, naturally, by Factary). We’ve spotted him in Companies House, a public domain data set, as a director of an investment firm in Holborn, so we have flagged him as interesting.

When you transferred the data to Factary you took the utmost care over the process, using our sFTP (secure FTP) site and thus ensuring that John’s details were encrypted and safe. You checked that the computer link was over a HTTPS network. You made sure that the data would be stored in servers in the UK, in a physically safe and secured building. You did that because you are a conscientious prospect researcher, using the best practice required by the law.

John did not take the same care. When he invested in the British Virgin Islands via Mossack Fonseca he did so through the open web, by email. He joined Ashley Madison the same way, signing up on their website; no encryption, no security. Worse, he was voluntarily exporting his data outside of the protection offered by the European Union through its Data Directive.

And now John has a photograph of him and Mary together at a work conference and he’s posted it on his Facebook page.

Where is the edge of privacy?

Is it the frontier between long standing public domain records and the new stuff, between Companies House and Facebook, for example?

Is it between voluntarily released information and stuff that is Wikileaked?

Is it between Victorian morality and modern – between a marriage notice in the Telegraph, and Ashley Madison?

Above all, is it where people of power dictate it should be? So that we are allowed to see the company directorships of the little people, but cannot see into the murky world of British Virgin Islands connections? Or into the equally dark corners of political connection and patronage?

This is where we are, like it or not, in prospect research. Prospect researchers live on the edge of privacy, using personal information that is in the public domain, for public good. We research John Doe in order to help our fundraising colleagues reach out to him for a donation that will benefit a poor person, or a scholarship kid, or an eye-opening cultural event.

But the power of research comes with a responsibility; it is our profession that must lead the debates on power and privacy, on public domain and private.

Thank goodness it is us, because prospect researchers have a special moral compass. We have chosen to work for causes we believe in, to make sacrifices (anyone want to talk about pay rates for researchers?) for something we believe to be right and good. We have chosen not to sit in the glory seat in fundraising; we are clearly not in this for vanity or fame. We know the value of information, and we have seen the intimacies and the inanities that people are willing to share on the web. We chose every day between information that is right and relevant, and rubbish.

Prospect researchers are the best placed people in the non-profit sector to describe where a private life becomes public.

But we had better get out there and get talking; our donors, our colleagues and our organisations need our guidance as we walk, together, along the edge of privacy.

Five ways to make use of donation data

Posted on by NicolaW

There has been some interest online over the past few months in how prospect researchers can make the best use of ‘donation data’ – i.e. databases, reports and websites that list donations, showing who gave, how much, and to whom.

Recent blogs such as this one from iWave inspired us to carry out a survey amongst our subscribers to Factary Phi to find out for ourselves how and why they are using donation data. Some of their answers were unexpected – we found out that our subscribers are very imaginative when it comes to making use of data on donations in their research. Below we have outlined some of the ways our subscribers have told us they’re making use of the data.

If you use donation data in your research, we hope the innovative approaches of our subscribers prove inspirational to you!

The five ways our subscribers are using Phi data

  1. To understand philanthropic interests to help identify the best prospects

    Overall (and perhaps the least surprising in many ways) was that a whopping 90% of respondents to our survey mentioned that the two ways they mainly use the donation data in Phi were to:

    1. Research existing prospects, e.g.:
      • “Searching by name and checking which causes [prospects] are giving to, to determine philanthropic interests”
      • “Get a sense of causes these donors or prospects support”
      • “Research other charities supported by existing supporters and prospects”
    2. Find new prospects, e.g.:
      • “Identify people supporting competitor charities/similar causes through searching by [recipients] activity type”
      • “To identify new potential prospects giving to a similar cause”
      • “Check who is giving to similar causes [and] check who is giving to particular causes”

    As we know, using research on donation history to find prospects with an affinity to a particular cause has been long proven as an effective strategy for understanding which of your current prospects might prove to be the most likely to donate – and also for finding new potential likely donors. This is because many donors will have a specific interest in a particular cause and will more readily consider donating to organisations operating in a similar field in the future (Breeze & Lloyd, 2013). This type of approach to the research was said to be useful for researching all types of prospects on Phi, including individuals, trusts and companies.

  2. To help researchers shape fundraising strategy

    Interestingly, prospect researchers using Phi told us that researching donation data can be a way that they can help their organisations to plan fundraising strategy. Subscribers noted that the breadth of data on Phi allowed them, together with additional research, to benchmark types of donors to similar organisations or projects, thereby gaining an understanding of the current fundraising market. So, for example, the research might show if individual major donors would be more or less likely to support a particular type of project or campaign than trusts & foundations. Armed with this knowledge, researchers can then advise senior management on the likely avenues for support, thereby shaping the fundraising strategy around the type of donor most likely to give.

    The ability for researchers to ascertain potential levels of giving was another factor mentioned in helping to shape strategy – by using Phi to research donation levels, researchers are able to estimate the potential eventual Ask for current donors and existing / potential prospects. Knowing a prospect’s previous donation levels to different causes is a useful way to gauge their likely or potential future donation to your cause – and arguably more accurate than basing their estimated gift capacity on wealth data alone. This donation information enables researchers to contribute to discussions around fundraising targets for campaigns and projects, potentially putting them in a central role during decision-making around prospect allocation and fundraising strategy development.

    Also, some researchers stated that the data on Phi also helps them identify local recipient organisations (by searching for donations to a particular region or town) to see if there are common funders or funding networks prevalent in that local area, thereby contributing to an understanding of the potential local prospect pool or philanthropic networks to be cultivated. This approach was said to help both national charities with local offices and also regional organisations (such as hospices).

  3. To encourage stronger relationships between fundraisers and researchers

    We thought this was a particularly nice benefit to researching donation data!

    Some of our respondents reported that fundraisers were more willing to take on prospects that a prospect researcher had identified if they could provide information to the fundraiser on the prospects’ previous donations. When these prospects turned out to be decent (and ultimately donated to the cause), the fundraisers were then more open to working with the researcher’s suggestions in the future, thereby creating a better working relationship.

    Respondents also noted that even where information on specific gift amounts was omitted from the donation search, simply identifying that the prospect is philanthropic was sometimes enough to encourage fundraisers to act on their suggestions.

  4. To understand how donors give

    Turns out, knowing how donors give is almost as important to researchers as knowing how much they give.

    Subscribers reported that having donation data which covers a broad range of types of giving is incredibly useful. Being able to see prospects giving via their charitable trust, their company and as an individual gives a quick overview of the prospects’ philanthropic portfolio. Using this information, researchers can then advise on approach strategies – e.g. whether to approach a prospect as an individual major donor or via their charitable trust for a specific project.

    Breeze & Lloyd (2013) reported that whilst 73% of rich donors give via their charitable trust, 49% also give one off donations, 28% give via standing order/direct debit and 22% are planning to give via their will. This breadth of giving is reflected in Phi, with donations showing donors giving via multiple channels, making the data useful for trust fundraisers, corporate fundraisers and major donor or individual giving teams. Being able to contribute to so many areas of fundraising can make a prospect researcher an invaluable and valued part of the wider team.

    One subscriber also mentioned that the inclusion of political donations on Phi was especially useful as, because they were new to prospect research when they first started using Phi, they wouldn’t have thought of political donations as a source for prospect information. Also, US research in 2015 by DonorSearch reported that individuals who gave >$2.5k in political donations were 15 times more likely to give to a charitable organisation than those who hadn’t (whether this is also true of political donors in the UK is unclear, however).

  5. To improve the perception of researchers in their own organisations

    Perhaps our favourite benefit of all!

    As stated above, relationships with fundraisers have been known to improve through using donation data as a research tool, but subscribers further noted ways in which making use of donation data in different ways can highlight the enormous contribution prospect research makes to a team. Some examples are:

    • Prospect researchers use the data to increase their knowledge of the prospect pool and to prioritise long lists of prospects by previous giving – this is invaluable information when discussing cultivation strategies and allocating prospects to fundraisers.
    • Data on giving history enables researchers to boost numbers of new prospects, which can bring research into a more central role when moving through a campaign, for example.
    • Research into philanthropic interests had highlighted where prospects had made large gifts to other organisations that had strong links to their own Trustees or Chairman. Noting these links and connections was hugely important in devising an approach strategy for the prospect and wouldn’t have happened about without the research into philanthropic affiliations and donation history.

One more thing…

Perhaps the best outcome of all, for everyone involved, is to know that some of our subscribers have stated that research into prospects’ donation history ultimately helps lead to new gifts for their organisations. Which is, after all, what it’s all about!

We hope this proves useful for you in your own research.

And, finally…thanks to all of the subscribers to Factary Phi who took part in our survey!

Foundations of Wealth Revisited: A Story of Growing Potential…

Posted on by willw

For three years Factary produced a ‘Foundations of Wealth’ report focused on the Ultra High Net Worth Individuals (UHNWIs) and High Net Worth Individuals (HNWIs) (minimum estimated wealth of £10m) that founded grant-making trusts and foundations, featured in Factary’s New Trust Update during 2012, 2013 and 2014. We have now revisited these trusts and foundations to see how they are performing financially and what this means for hopeful beneficiaries.

These three reports, all available for free to New Trust Update subscribers via the new online archive service, contain profiles of 104 philanthropists and their grant-making trusts and foundations, of which nearly half are not on Trustfunding.org. Top of the list in terms of estimated wealth is Mrs Usha Mittal (£9.2bn) with other billionaires including the Swire family, the Fleming family, Ian Livingstone and Spiro Latsis. Together they have a combined estimated wealth of £34.36bn – the question is, how much of their wealth are they giving to charitable causes?

Based on financial information from the last financial year 98 trusts and foundations (six are still yet to submit their first set of accounts to the Charity Commission) had a total expenditure of £26.17m. Only seven had a total expenditure of over £1m in the last financial year whilst over one in 10 had an expenditure of £0 despite some having been registered for three years now. This is somewhat disappointing, especially when compared to their estimated wealth which shows that the average expenditure as a percentage of estimated wealth is a meagre 0.08%! Only seven individuals gave over 1% of their estimated wealth to other organisations in the last financial year, with the most generous person giving just under 3% of their estimated wealth as grants. This is well under the ‘5% of total assets’ figure that is often used as the basis for estimating gift capacity for major donors…

The biggest giver in terms of charitable expenditure was Sir Peter Harrison – former Chairman and Chief Executive Officer of computer network company Chernikeeff. The Peter Harrison Heritage Foundation had a total expenditure of £4.5m in 2013/14 which included a grant of £2m to the Clarence House Restoration Project and £1.75m to the Imperial War Museum.

The most generous philanthropist, giving away the greatest percentage of his estimated wealth as charitable expenditure, was Sir Mick Davis – former Chief Executive Officer of the mining company Xstrata plc from 2001 until its merger with Glencore in 2013. The Davis Foundation had a total expenditure of £2.2m in 2014/15 which equates to 2.95% of his estimated wealth. Grant recipients were not disclosed.

Other significant grants awarded by these new philanthropists in the last couple of years include £6m from The Dorothy & Spiro Latsis Benevolent Trust to Great Ormond Street Children’s Hospital and £1m to Boston Children’s Hospital (both in 2013 and hence excluded from this analysis of activity in the last financial year), £2m to the UBS Optimus Foundation by The Holroyd Foundation, £1m to the Royal Shakespeare Company by Lady Sainsbury’s Backstage Trust and £770,125 to  Clinton Health Access Initiative by the Surgo Foundation UK.

Notable names that have been less than generous with their charitable giving via their foundations to date include Michael Lemos (son of Greek shipping tycoon Constantinos Lemos) whose CML Family Foundation donated £3,406 which is 0.001% of his estimated wealth of £605m and Richard Higham (Group Chief Executive of Acteon Group Ltd) whose Higham Family Trust had an expenditure of just over £6,000 in 2014/15, which represents 0.004% of his estimated £150m wealth. Some of those whose trusts and foundations have shown no financial activity include former CEO of wealth management company Towry Andrew Fisher, Conservative Party donor and Domino’s Pizza franchise owner Moonpal Singh Grewal and Abhisheck Lodha, Managing Director of global real estate developer Lodha Group.

Of course there will be a number of possible reasons why these figures are so low – not all their charitable giving is directed through their foundation; this is not their primary foundation; the nature of their wealth means they do not have high levels of liquid assets; or they are still in the process of building up reserves.

It is this last point that is perhaps of most interest when we look at the figures. Whilst the total expenditure was only £26.17m in the last financial year, the total assets of the 79 trusts and foundations for which data was available was over five times this amount at £148.7m. 25 of these have assets in excess of £1m and 10 have assets in excess of £5m. This equates to an average of 0.62% of the philanthropists’ estimated wealth, with 15 building up assets of over 5% of their estimated wealth.

The foundation showing the largest asset amount is The Christie Foundation founded by Iain Abrahams, the former Executive Vice Chairman of Barclays Capital. The foundation has assets of over £21m for 2014/15 which represents over 40% of his estimated wealth, making him the also most generous benefactor. So far the only identified donation made by his foundation is of £150,000 to the Elton John Aids Foundation, of which he is also a Trustee.

What this shows is the considerable potential these trusts and foundations have for the sector. Whilst they may not yet be giving at a level in keeping with their vast wealth, these UHNWIs and HNWIs are ear-marking significant amounts of their wealth to be given away to charitable causes over the course of their lifetime and beyond, sustaining the charitable sector for years to come.

The financial data for these 104 trusts and foundations, along with the three Foundations of Wealth reports and all the past issues of New Trust Update dating back to 2005, is available online to NTU subscribers. If you want further information about New Trust Update and our searchable archive please contact Nicola Williams.

Measuring the Immeasurable

Posted on by Chris

We prospect researchers say it all the time. But I’m not sure that our fundraising colleagues really get it.

 

It’s immeasurable. No, we cannot give you a precise figure.

 

An individual’s wealth is a private affair. Just how private is being made clear by the Panama Papers. Here we can see how people from footballers to political leaders hide their wealth and their income from public view. These are just the types of people that we prospect researchers are asked to analyse and measure; what is her wealth, and what is her gift capacity?

 

Bear in mind that Mossack Fonseca is described as Panama’s fourth largest firm in this offshore business. The Legal 500 lists five more leading firms operating in this sector in Panama. There are hundreds more in Panama, and more in the British Virgin Islands, Cayman, Gibraltar and any number of other fiscal watering holes. We are seeing, even with the 2.9 terabytes of information from Panama, only a tiny slice of the full picture.

 

The OECD reports that 27 of the 34 OECD members “store or require insufficient beneficial ownership information for legal persons, and no country is fully compliant with the beneficial ownership recommendations for legal arrangements.” In other words, as campaigners such as Andy Wightman have shown in his books on land ownership in Scotland, we cannot know who owns companies or who controls trusts.

 

The UK is rolling out regulations that will expose some of this – although information on the control of trusts (not the charitable sort, these are legal trusts) will only be available to ‘competent authorities.’ A grey phrase that, we can assume, excludes the, er, incompetent public. Business shareholdings of 25% or more will mean a declaration of beneficial ownership. It is worth noting that many of the schemes outlined in the Panama Papers involve small but valuable shareholdings. As Jake Hayman has already noted in Forbes, this is relevant to philanthropy.

 

The Panama Papers have many implications for prospect researchers. They are another mine of information – you will have to decide for yourself whether this is good practice, or not – on wealth. They remind us that we must be cautious with our estimates of wealth and gift capacity. And they demonstrate that our due diligence is less than comprehensive; if we cannot know who controls a business that wants to donate to us, or we cannot say  which companies Samantha Supporter controls, then how can we measure whether she meets our due diligence requirement?

 

I suggest sticking this version of The Panama Papers on the door of the Prospect Research office in your organisation:

1. No, we can’t tell you how wealthy she is
2. No, we can’t tell you who owns that property
3. Don’t expect due diligence to be really diligent. We’ll do our best, but don’t ask us to hack any more Panama lawyers.

Out. Here. Now.

Posted on by Chris

I met her on Tuesday, in Bilbao, Spain. She had started back in work on Monday after a two year break. Trained as a journalist, she had been allocated a new job at the NGO. One that had never existed, before Monday.

Paula is the NGO’s first prospect researcher. The latest recruit in Europe to fundraising’s most exciting profession.

Most exciting? Aren’t you being a bit hyperbolic, Chris? What about the glamorous folk who do events, or the facers on the street with their VR technology? Or the growing band of major donor fundraisers? Isn’t that more exciting?

No. They are welcome to their red carpets, their Samsung Edges and their private dining rooms. None of them are half as productive as a good prospect researcher, nor at such an exciting moment in the professionalization of fundraising.

 

Productivity

You are the Dean of a Business School. You want to run a €100m campaign to expand the School. You go out and recruit a team of 6 fundraisers and a couple of assistants. They tell you that they need good research, so you hire one prospect researcher.

The six fundraisers bring in a total of €120m. That’s €20 million each. Fabulous result … except that it would not have happened at all if you had not had that prospect researcher. She was the one who found the names you met. She was the one who found your top donors. She was the one who gave you the profiles and the briefings, suggesting you could ask more than you thought.

It’s her, the prospect researcher, who wins the productivity gold medal. Because she found most of that €120 million.

She is far too modest to claim that prize. But this month, Prospect Development Pride Month, she can.

 

It’s Exciting, here in Europe

Prospect research, and by extension philanthropy and fundraising, is going through a revolution here in Europe.

It’s a revolution in transparency. Thanks to the growth of professional staff amongst Europe’s foundations – staff who want to talk about their foundation’s successes – and thanks to governments pushing foundations to open up, we can see further, and deeper than ever before.

The Dutch Government has recently passed regulations requiring endowed foundations there to publish their accounts. The Catalan government has passed a law requiring transparency amongst publicly funded foundations, as has the Spanish government. Switzerland’s increasingly professional foundation sector has opened up with an association website, and the Scottish charity regulator is about to put many charity accounts online.

If you live on the other side of the Atlantic all of this will sound woefully like the Dark Ages. But for us, here in Europe, it is an exciting time. Because transparency means not only that we can do better prospect research but also that philanthropists themselves can see what their peers are doing.

A significant barrier to the growth of high-value philanthropy here in Europe is that people of wealth have no reference points for giving. A partner in a law firm does not know what partners in other law firms are giving, because the information is not anywhere in the public domain. In the UK there is now significant reporting of donations in the public domain; at Factary we research and compile this into Factary Phi. Continental Europe has been more reticent, but recently organisations including HEC, the Paris business school, or the Musée du Louvre have started to publish the names of major donors. At last, philanthropists in Europe can see how much they should be giving.

Transparency is transforming our profession.

Paula has an exciting career ahead of her. She is joining the profession at a moment when it is getting really interesting. She, like me, can be proud to be a prospect researcher.

 

#ResearchPride

This blog is inspired like so much in my career by the wonderful Helen Brown. She created #ResearchPride with this blog https://www.helenbrowngroup.com/coming-out/ . Now, each March is #ResearchPride month, so feel free to join in and spread the, er, good vibrations.

 

Helen is continually updating this post (she does not sleep, that girl) with new blogs on #ResearchPride at https://www.helenbrowngroup.com/proud-voices-in-harmony/

Here is a selection of other blogs on the topic:

http://apramidsouth.blogspot.com.es/2016/03/happy-prospect-development-pride-month.html
http://prospectdevelopment.blogspot.com.es/2016/03/evolve-by-getting-involved.html
http://searchresearch1.blogspot.com.es/2016/03/why-research-skills-matter-more-than.html?platform=hootsuite
http://www.jenniferfilla.com/researchpride2016/
http://www.prospectresearchinstitute.org/ivegotyourprivacy-researchpride/
http://www.staupell.com/blog/my-bourne-identity
https://diversitydrivendata.wordpress.com/2016/03/01/q-for-researchpride-month/
https://srbernstein2.wordpress.com/2016/03/11/if-i-could-save-time-in-a-bottle/
https://www.iwave.com/2016/03/02/prospect-research-pride-month/
https://www.linkedin.com/pulse/five-reasons-why-my-work-life-prospect-development-sharon-parkinson


Twitter hashtag: #ResearchPride

Bring in the New

Posted on by Chris

Q: Where can you find more than 9,000 philanthropists who took the brave and often complicated step of creating a new grant-making charitable trust (a ‘foundation’ in international terminology)?

A: In Factary’s new New Trust Update Archive.

The new NTU Archive is many things. It’s a simple, fast and efficient way to find trusts and foundations in the UK. It’s a great way of finding out about philanthropists, and it is a history of the last ten years of philanthropy in the UK.

Factary began recording the new wave of philanthropy back in 1993, when we noticed that the Charity Commission for England and Wales was experiencing a boom in trust registrations. We discovered that the registration documents for charities – which are in the public domain – contained information that allowed fundraisers to get a clearer idea of what the activities of new trusts, and who was behind them. This was not, at the start, an easy process. We had to take the train to Taunton (where the Charity Commission keeps part of its archive) and request, one by one, the registration documents for these new charities. We then had to go through each document by hand to pick out the charities that looked like they might be, or might become, grant-makers, and start the process of research.

The second part of this process has not varied much over the years – we still carry out detailed research on each trust, contacting trust administrators and aiming to establish who is behind the trust, what their interests are, and what they hope to do.

The Factary team moves fast on that research, and subscribers to New Trust Update (we limit the number of subscribers to 100) rely on us to be the first to hear about new grant-makers.

The result is a rich database of more than 2,500 trusts with interests in arts, rights, women, older people, animals, the environment… the whole range of charitable activity. Users of the NTU Archive can search the entire data set using combinations of codes (for example, ‘Education and Training’) and keywords, to find trusts that were created with those interests.

Users can research trustees by name. There are more than 9,000 trustees listed here, so this is a rich database on individual philanthropy – people who are concerned enough about a social or environmental issues to create a foundation or to join the board of a new foundation. Information on philanthropy in the UK – with the honourable exception of Factary Phi – is hard to find and this data, linking people to their philanthropic interests is invaluable to the non-profit sector.

Factary’s Will Whitefield emphasises that this is a record of the moment that the trust was created. ‘It’s like a birth photo of the trust. When we research the trust it is around a month or two old; so the trustees, objectives and finances are from those early days.’ But that in itself is valuable, because it allows a researcher to see who the baby was, and how it grew up.

There are plenty of examples of this. The Bernard Sunley Charitable Foundation that we reported in June 2005 topped £4m in income in March 2015, double its spend at start-up. The Schroder Foundation, reported by us in March 2005 and created with a £10 deposit, had grown to £2.2m by April 2015 – that’s 22 million percent growth if you do the maths.

But tracking less spectacular growth is also relevant. For example, a search using the keyword Africa throws up 167 trusts. Pick an early one, such as the Egmont Trust and compare it with the Charity Commission’s current record for the foundation you can see that founding trustees Clare Evans (who had worked with ActionAid in the 1990s) and Jeremy Evans are still in place, but that three others have joined (and two left) over the ten years since we reported its registration in our April 2005 edition.

In here you will find the origins of venture philanthropy and impact investment. The Private Equity Foundation – we reported on it in November 2006 – is in there as is the moment in 2013 when it merged with Impetus to form Impetus Private Equity Foundation. The Apax Foundation – we reported its registration in March 2006 – is there too.

Finally, there is all the great inventiveness of philanthropy here. There are foundations with names based on Beatles’ lyrics (“Love Is All We Need”, registered and reported in 2007), those with hopeful names (“The Making a Difference Foundation,” “Heaven Can Wait” or “The GoodFund”) and foundations from the UK’s vast pool of celebrities, from Gordan Ramsay, chef to the late Dan Maskell, tennis champion.

Factary’s new NTU Archive is an open book on the growth of organised philanthropy in the UK. For more information just get in touch with Nicola Williams.

Safe Harbour in a Storm

Posted on by Chris

On Wednesday it was headline news in Luxembourg where I was working with clients: the European Court of Justice had struck down the Safe Harbor agreement. Max Schrems had won a battle with Facebook and the Irish data protection authorities.

The court ruling that European Commission Decision 2000/520 is invalid means that we can no longer share data easily with US colleagues: Texting your New York colleague with your UK donor’s data of birth just became illegal.

There have always been two routes to data transfer from the EU to the USA: Safe Harbor, and the use of a model contract. The latter route is still open, according to the lawyers; there are useful posts on the ruling and its implications from Norton Rose here and from Clifford Chance here.

So how will this affect prospect research, fundraising and philanthropy?

First, it underlines the relevance of employing prospect researchers. Increasingly, prospect researchers are the custodians of personal data relating to potential and actual supporters. We act as the interface between fundraisers who want to know everything about everybody and the law which restricts what we can record and what we can share. Especially, what we can share with colleagues outside the EU.

Second, it reminds us that personal data is personal. There is an increasingly uncertain frontier between what is public and what is private as social media carries more and more of our donor’s lives. At Factary we have long had concerns about the material that people post in their Facebook pages, and have excluded it from profiles as a general policy. All of us in prospect research should continue to review and re-review our protocols to ensure that we are up-to-the-minute in data protection.

Third, it will mean some hard work over the coming weeks for organisations (universities, arts and culture, NGOs…) with sisters outside the EU (for example, your “Friends of” organisation in Washington DC) to revise or renew agreements that allow data transfer.

Fourth, it means UK suppliers such as Factary should review their data processes to ensure that all of their data is held inside the EU. At Factary we did this some time ago, and yes, all our data and servers are inside the EU.

Finally, this will be especially difficult time for fundraising and philanthropy. Increasingly philanthropists are international – a home here, a business there, and a foundation somewhere else. To work with a donor who lives in Paris but works out of New York we need to be able to share data quickly and effectively with our team. Our philanthropists (major donors, strategic donors) want us to react quickly and to provide coordinated, joined-up service. That is going to be a delicate, difficult job following this ruling.

The closure of Safe Harbor means choppy seas for all of us.

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.