It ends with Google

On Tuesday I spent the morning at the Ship2B Foundation in Barcelona. Ship2B brings together social change organisations – charities and social enterprises – with grant-making foundations, companies, family offices and venture philanthropists. The social change organisations work on themes in ‘Laboratories’ where the foundations, companies and philanthropists provide advice, contacts and money to accelerate their growth, to ‘scale.’

I sat in on a presentation by the Water4Life lab group. Here were a range of projects on water use and water management. One project was using data from Aigües de Barcelona, the Barcelona water utility, to pinpoint areas of poverty in the city based on how much water each household was using. The project was analysing mass data gathered for one purpose (water supply bills) and using it for another (mapping and understanding poverty).

Which led me to think about the Information Commissioner’s current focus on public domain information collected for one purpose, being used for another.

The ICO have told charities that “publicly available data…is not fair game.” It is not enough to claim that you have a “legitimate interest” in using data from public registers such as Companies House, and news and press reports; you “must balance this against the prejudice to the rights and freedoms of individuals.”

The team at Factary is working hard to ensure we are fully compliant with this new emphasis from the ICO. So this week we contacted one of our suppliers to check that their data was fully compliant. They told us that “…in light of the new GDPR legislation we are currently in discussions…” with suppliers. This is a leading data house that provides data drawn from Companies House. Their end supplier is Companies House.

The Supply Chain

Factary – and any prospect researcher who uses UK companies information from one of the large data houses – is in a supply chain that starts at Companies House. At some point, someone is going to knock on the door of Companies House and ask “are you compliant?”

Before they made their data freely available to anyone, Companies House earned £8.7m in a year, selling it to data users. I have been registered at Companies House as a director since 1990. I have never, ever, had a letter from them asking me if it’s OK to publish my name and address in their register, and then to sell that data on to the big data houses.

I was never asked, because Companies House had a duty in law to gather my personal information and publish it. They turned my private information into public information. They promoted my private information “to power a great range of products” and to encourage “even more people to explore and use [the] data.”

Companies House represents the contradictions at the heart of the legislation that ICO is forced to apply. Data from Companies House that we all believed to be publicly available, and in which we all had a legitimate interest, is no longer “fair game.”

So who is the biggest supplier of publicly available data?

Google, of course.

A Little Light Googling

Every day, millions of people in Britain type the name of a person – a celebrity, a footballer, a friend, a company owner – into Google. Google returns thousands or millions of results; “Theresa May” returns 24 million publicly available results this morning, ranging from press reports to biographic reference sites.

I did not ask the Prime Minister if I might check her name in Google. I am certainly prejudicing her right to privacy by putting her name into Google, because thanks to Google I can see all sorts of scurrilous, unrepeatable stuff about our glorious leader.

Google is a massive re-purposer of publicly available data. Data gathered for one purpose (selling newspapers, or adverts in scurrilous blogs) is re-purposed every single day by Google on behalf of its millions of users.

This is where the contradictions in UK privacy legislation are crystallised. This is where the ICO is heading in its search for the right balance between legitimate interest and the rights and freedoms of individuals.

I want to be a fly on the wall when the ICO knock on the door of number 6, Pancras Square, London N1, the UK headquarters of Google. That battle – between the ICO and Google – will be one to watch.

5 Questions to Ask the ICO

The Information Commissioner, the Fundraising Regulator and the Charity Commission are due to meet fundraisers in Manchester tomorrow, on Tuesday 21st February, for the Fundraising and Regulatory Compliance Conference. The ICO have produced a conference paper for delegates to read prior to 21st, which can be accessed here.

The paper, amongst other things, sets out the ICO’s view of data protection in relation to Database Screening and, it seems, prospect research – although, whilst it mentions ‘Screening’ specifically, the paper rather ambiguously only refers to other [research] “…activities such as profiling individuals”. We do need to get some clarification on what they mean by this but, from the context, it does appear to refer to researching donors and supporters using public domain sources and/or using information not supplied directly by the data subject (so, prospect research).

The paper initially outlines why an organisation should use a privacy policy to explain how they make use of data. It then explains the ‘legitimate interests’ condition in relation to the DPA. In this sense, the paper is useful in outlining that charities need to be honest and fair in their processing of data. This is something that cannot and should not be argued with. As we have said before (e.g. here and here), all charities must make sure they have robust, fair and easily accessible privacy policies which openly explain how they collect, store, use and process data.

The conference paper outlines situations in which such a policy must be communicated to a supporter, some ways this can be done, and even when it is not necessary / practical to do so. This is all useful and welcome information. We now hope that perhaps the Fundraising Regulator will issue some sample privacy policies at the conference on Tuesday that provide examples of the language that charities can use to comply with fair processing of data for fundraising.

However, the paper then states that it is ‘highly unlikely’ that charities will be able to rely on legitimate interests as a condition to process data for Database Screening – specifically using third party providers or involving any personal data not supplied by the data subject – or for ‘profiling individuals’. Instead these activities will require explicit consent from data subjects. This is because, the ICO states, these activities are a) not ‘compatible’ with processing data collected from a donor at the point of donation and b) not within the ‘reasonable expectations’ of a donor.

Please read the conference paper. Think about how it will affect you and your work and highlight any areas you feel are not clear. The conference on 21st February is a very important event and the questions we ask (and the answers we receive) about this paper are likely to have a long-term effect on fundraising and research. If you are not going to be at the conference on Tuesday, you can pass any questions that you may have about it directly to the ICO (send them to events@ico.org.uk and ask for them to be forwarded to the relevant dept).

Below are 5 of the questions we would like to ask, now that we have read the paper:

  1. The ICO say in its paper for this conference that individuals are “highly unlikely to expect” certain types of data processing. In the ICO’s press release announcing the British Heart Foundation and RSPCA monetary penalties they are quoted as saying “millions of people who give their time and money to benefit good causes will be saddened…” to know that charities would ask them for more money.
    1. Does the ICO have evidence that shows what donors expect?
    2. There is, in fact, strong evidence to support the fact that processing of personal data for research is within the reasonable expectations of many donors; a recent study concluded that 78% of donors said that better research before they are approached by a non-profit is the most significant area of improvement in fundraising in the past 10 years. Therefore, if fair processing is adhered to and prospect research is within the reasonable expectations of donors, then can the ICO confirm that charities can rely on legitimate interests to undertake this type of activity?
    3. Sources
      1. ICO, Fundraising and regulatory compliance, 21st February 2017
      2. ICO investigation reveals how charities have been exploiting supporters, 16th December 2016
      3. Breeze & Lloyd, (2013); Why Rich People Give. London, DSC.
  2. Tesco’s Privacy Policy, which customers using its loyalty card must accept, says: “We may also use personal data from other sources, such as specialist companies that supply information, online media channels (online media channels include websites, social media sites, pay TV providers and any other channels that become available to us), our Retail Partners and public registers (for example, the electoral roll)”. They state that they do this in order to provide a better service and experience to their customers.
    1. If a charity used this same statement in its privacy policy, could charities use the public and private domain sources listed by Tesco in research so as to provide a better service and experience to donors?
    2. If not, why not?
    3. Source: Tesco Privacy and Cookie Policy
  3. The paper for the conference says: “It’s legitimate for you to process personal data in order to properly administer donations received from individuals”. The paper suggests throughout, as highlighted above, that “administering donations” is the only purpose for which a charity would use data collected at the point of donation or at the point a supporter joins a charity database. It suggests, therefore, that fundraising (including the market research necessary for raising funds) is not a compatible purpose for processing donation information.
    1. Is it?
    2. If not, why can, for example, Tesco use transaction information for more than simply administering a transaction (see their privacy policy linked above)?
    3. As charities rely on fundraising to carry out their work, is it not within their legitimate interests to use data collected from supporters for fundraising purposes, providing that fair processing and the rules of PECR, the MPS/TPS/FPS etc. are all adhered to?
  4. Here is a common story: a charity Board member meets an individual at, say, a cocktail party. The Board member comes back to the charity fundraiser with the individual’s name and says “X is interested in what we do. And he is wealthy.” The ICO says in its paper for this conference: “Far more intrusive are activities such as profiling individuals, particularly where this involves getting more information that the individual has not given you, either directly or via third-party companies. In these cases the legitimate interest condition is highly unlikely to apply. So you’d need to seek the consent of individuals before doing such processing.”
    1. The X named by our Board member is not a donor. We have no permissions or opt-ins or opt-outs. Can we look him up on Google or LinkedIn or Companies House without his permission?
  5. The Charity Commission imposes a duty to check on donors and potential donors. The Charity Commission recommends that trustees understand their donors and asks: “Have any public concerns been raised about the donors or their activities?” The Commission suggests that “full use should be made of internet websites” to check on donors. This is directly contrary to the ICO guidance which would not permit the use of public domain information until the donor has signed up to our privacy policy.
    1. Given that we want to research a potential donor before she does this, whose guidance should we follow – that of the ICO or that of the Charity Commission?
    2. Source: Charity Commission for England and Wales, Tool 6: Know Your Donor – Key Questions

These are just some of the questions we feel require clarification from the ICO and we’ll be submitting these prior to the event. We will also be attending the event on Tuesday and we’ll report back on what happened as soon as possible afterwards through this blog.

Please also keep an eye on Factary’s Twitter feed during the day as we will attempt, where possible, to Tweet any significant points or answers to any questions raised during the conference.

Mind the Gap

Thank you for your comments in the Factary blog over the last few weeks. Even the ones we disagree with.

Really.

Because your comments – Adrian, Charlotte, Elizabeth, Finbar, Gareth, Jay, Jeremy, Jon, Julie, Luke, Nicola, Oliver, Peter, Philip, Sarah, Tim, – show the size of the gap between two camps.

In one camp are the people who work with philanthropists in charities, universities, theatres and museums. These people know that in order to manage a relationship with a customer – in this case, a philanthropist – we need to do what the banks, the supermarkets, the accountants, lawyers, architects and many others do. We need to be able to access public domain information in order to understand our customer, and we know that we have a legitimate interest in doing so. Sometimes we are required to do this research – for example by our supervisors at the Charity Commission.

Sometimes, we need to do this research before we have met the person. Which is why we have a range of controls, including legal controls and codes of conduct that set limits on this type of research.

In the other camp are the people who believe that precisely this type of research is an intrusion into an individual’s privacy. That searching for a named individual in Companies House fundamentally affects the rights of that person.

This is out of our hands now. The Fundraising Regulator and the Information Commissioner are putting together guidance that – we hope – will resolve this difference.

So we are closing, for now, this thread of conversation. We are not going to take any more comments in this area, for now. The debate needs much more hallowed halls than Factary can offer – it should be taking place in Parliament, or at the NCVO, not in our blog.

We have a job to do – to provide ethically sourced public domain information for our many non-profit clients, and we’d better get back to that.

The Future of Philanthropy, in 1 Question

You are at a board meeting of your charity. Board member Jane mentions her friend Peter, and says he might be interested in making a donation. Peter, she says, is the owner of a large software company.

Peter, to be clear, is NOT A CURRENT DONOR. He has not opted in or opted out or opted for anything at your charity.

Back at the office you put Peter’s name into Google. It’s in your legitimate interests to do so, and Peter would expect you to do this.

Turns out that Peter’s business is based in Newcastle.

You are in London, so there is time and travel cost to consider if you are to visit him. You use Companies House to find out about Peter’s shareholding and the company’s profits. These figures help you estimate Peter’s gift capacity. Again, it’s legitimate for a charity to estimate the size of a potential donation before it decides to spend money on a visit to Newcastle.

At an invitation-only event on the 21st of February, the Information Commissioner’s staff will tell charities and the Fundraising Regulator whether or not they can do this search.

The future of philanthropy in the UK hangs on the ICO’s reply to this one question.

Can a prospect researcher do the search outlined above?

If the answer to the question is “No”, then high-value philanthropy in the UK will change dramatically.

It will no longer be possible to use public-domain information to identify or understand potential donors. Charities, universities, museums, hospitals and theatres will have to stop, immediately, all proactive forms of reaching out to new high-value supporters.

How will high-value philanthropists react? They will give less. When charities stop asking, people of wealth will stop giving, or give less and less often.This is not just an assertion – it is demonstrated by research. In “Richer Lives: why rich people give”, Theresa Lloyd and Beth Breeze report that 69% of rich donors give ‘If I am asked by someone I know and respect.’ Charities, from cancer research to the lifeboats, will have to adapt to a dramatic cut in their income.

Some philanthropists will respond by setting up their own foundations. We know from Factary’s New Trust Update that they are already doing this in some numbers. They will manage their own projects via these foundations, meaning less money for mainstream charities.

If the answer to the question is “No”, then the ICO is taking on not just the charity sector, but pretty much every business in the UK. Because every day hundreds of thousands of secretaries, assistants and marketing people do this exact search to check up on potential customers. Can that really be the ICO’s intent?

If the answer is “Yes”, then the ICO is affirming prospect research. We CAN continue to research, understand, and evaluate potential donors and, with permission, actual donors.

We will know the future of philanthropy in the UK on the 21st of February.


Chris Carnie is the author of “How Philanthropy is Changing in Europe”, published by Policy Press. He writes in a personal capacity.

Divided Rules

Prospect researchers are at the nexus of a storm between five government agencies. Thanks to the monetary penalties imposed by the Information Commissioner in December 2016 on two leading charities we can now see the extent of the battlefield.

In one corner is the Information Commissioner’s Office, ICO. In its press release announcing fines for the RSPCA and the British Heart Foundation, ICO condemned the use of “information from publically[sic]-available sources to investigate income, property values, lifestyle and even friendship circles.”

This appears to put the ICO in direct opposition to the Charity Commission. In a series of papers entitled ‘The Compliance Toolkit’ the Commission reminds charities that they have a duty to check on donors and potential donors. Tool 6 in the suite is called ‘Know Your Donor’, and here the Charity Commission asks;

“Have any public concerns been raised about the donors or their activities? If so, what was the nature of the concerns and how long ago were they raised? Did the police or a regulator investigate the concerns? What was the outcome?”

How would you find out whether “public concerns” have been raised, if you did not use “publically-available sources”?

You simply have to use newspapers, government sources, and a search engine if you are to find out whether public concerns have been raised. There is no other way. And of course the Charity Commission says so, recommending that “full use should be made of internet websites” to check donors.

Your duty

The Commission goes further, and reminds trustees that “…if the trustees have reasonable cause to suspect that a donation is related to terrorist financing, they are under specific legal duties under the Counter-Terrorism Act to report the matter to the police. In the case of money laundering, reports can be made to the police, a customs officer (HMRC), or an officer of the National Crime Agency.” The Commission suggests a threshold for reporting – donations of £25,000 or more.

But we are not done yet. Because if you have the slightest suspicion that the donor may be a bit iffy, the Charity Commission requires you to “…check the donor against the consolidated lists of financial sanctions targets and proscribed organisations.”

Gosh.

That means this list.

The list contains 8,885 names of individuals who are under sanctions. It includes their date and place of birth, their passport or ID number, and a biographic note such as “Manager of the branch of Syrian Scientific Studies and research Centre.”

That is personal information held in the public domain, that the Charity Commission requires us to review.

The Libya Connection

Why are four government agencies – the Police, HMRC, the National Crime Agency and the Charity Commission – interested in these checks?

In part, the story is linked to the London School of Economics, and the controversy over a gift from Libya. The result of the controversy was the Woolf Inquiry, which published its report in October 2011.

After a detailed study of the history of this gift, Lord Woolf made a series of recommendations on accepting funds from “less well known” high-value philanthropists including an inquiry into the sources of their funds (p. 69) and a thorough due diligence assessment (p. 22).

These searches are only possible with public domain information.

Catch-22

Under questioning at last year’s CASE conference, ICO spokesperson Richard Marbrow did allow that we could use public domain information for due diligence purposes. But he went on to say that this same information could not be used for assessing gift capacity because that would be an “incompatible purpose” for the use of data.

But that leaves us prospect researchers in Catch-22.

I cannot carry out full due diligence on all my prospects. To do so would be a scandalous waste of charity resources. The Charity Commission suggests that the threshold should be £25,000. So if I am to decide that Mrs A or Mr B must be checked via due diligence…I have to assess their gift capacity.

To do that, I need the help of a fifth government agency, Companies House.

Open for Business

Mr Marbrow cited Companies House various times during 2016, telling fundraisers and prospect researchers that because the information in Companies House was collected for one purpose – regulation – it could not be used for another – prospect research.

What does Companies House say? Here is their July 2014 press release*

“Companies House is to make all of its digital data available free of charge. This will make the UK the first country to establish a truly open register of business information.
As a result, it will be easier for businesses and members of the public to research and scrutinise the activities and ownership of companies and connected individuals. … This is a considerable step forward in improving corporate transparency…

It will also open up opportunities for entrepreneurs to come up with innovative ways of using the information.”

So, Companies House wants us to “research and scrutinise the activities and ownership of companies and connected individuals,” and to find “innovative ways of using the information.”

The Battle for Philanthropy

Prospect researchers are caught in the centre of a battlefield between government agencies, between “innovative ways” of using information, terrorism legislation, due diligence and privacy.

We must defend our corner of this bloody battlefield.

We need our friends in fundraising and philanthropy, in Parliament and in civil society, to support the sensible, ethical, managed use of public domain information in the search for philanthropists.

 

 

*I am grateful to a colleague at a leading University for pointing this out.

Chris Carnie is the author of “How Philanthropy is Changing in Europe”, published by Policy Press. He writes in a personal capacity.

In Defence of the Public Domain

A university, a museum, or a charity does not raise £10m or £50m or more by accident. An alumna did not wake up one morning thinking “I must give £1m to my alma mater.”

This happened because a dedicated group of professionals managed a process that led to the alumna being asked for a very large philanthropic gift.

At the heart of that process was, and is, the prospect research team. The team used – like we all do – public domain information to identify and understand potential supporters.

But now one government agency, the Information Commissioner’s Office, wants to stop us using public domain information. In the emotionally-worded press release that accompanied the penalties for the British Heart Foundation and RSPCA, the ICO says that “companies used other information from publically [sic]-available sources to investigate income, property values, lifestyle and even friendship circles.” ICO staff members at fundraising and research conferences throughout 2016 told us that the information on directors held by Companies House is compiled for one purpose (regulation of business) and therefore cannot be used for another (prospect research.)

So perhaps we cannot use public domain information to identify and understand potential supporters.

Purposes

But think for a moment.

Why do I have my profile in LinkedIn? What is my ‘purpose’? Is it just a marketing tool, showing potential clients what a clever chap I am? No! I had all sorts of purposes in mind when I created my profile in LinkedIn. I wanted to reassure clients that I was, and am, a decent person. I am proud of what I have done and wanted – sorry folks, this gets personal – to boast a wee bit about setting up Factary, about the books I have written and the languages I speak. I wanted access to the profiles of other people with whom I might work or even play. I wanted to explain who I am and how I got here – it’s cathartic. And I wanted a useful depository for my lifeline – to remind me of exactly when I went to school or which year I started in fundraising.

I had a whole variety of ‘purposes.’

Expectations

As a result, I have a very wide variety of ‘expectations.’ This word is important, because the ICO believes that “millions of people who give their time and money to benefit good causes will be saddened” by the news that charities targeted them for more money; in other words, this is about what people expect. With my profile in LinkedIn I expected that people would look at my personal story. I expected that Southampton Uni, my alma mater, would contact me about a donation (they did.) I expected that I would be networked to, and with (and indeed welcomed that opportunity.)

The person who has her biography in Who’s Who, or who gives a personal interview in the Times, or who is listed as the director of a company, or as the trustee of a charitable foundation has the same wide range of expectations.

The ‘purpose’ of a personal interview in the Times is to sell advertising space on the facing page of the newspaper; “All the papers that matter live off their advertisements,” said George Orwell, in Why I Write*.

But that is not the ‘purpose’ that the interviewee had in mind when she was approached by the journalist. Nor is it the ‘expectation’ of the interviewee. She knows, when she agrees to give the interview, that her warts-and-all will be exposed to public view. She expects that she will receive praise, opprobrium, investor pitches, car sales teams and an approach from a headhunter as the result of her interview.

The Public Domain

Information on company directors in Companies House – the Registrar of Companies for England and Wales – is made public for various purposes. The Registrar was created by The Joint Stock Companies Act of 1844. In the debate of the Bill that would create the Act (3rd July 1844), Mr Gladstone said “The principal object of the Bill was, that there should be established a public office, to which all parties soliciting to take part in Joint Stock Companies might repair, in order to know the real history of these companies.” Mr Gladstone was talking very clearly about corruption; “…it was most important that the Legislature should put a stop to the system that had been so long carried on of attaching the names of hon. Members, and men of importance and property, to schemes in order to entrap the unwary.”

So here again, at Companies House, we have a variety of purposes for information in the public domain. It is right and proper that prospect researchers use Companies House information to establish the “real history” of “men of importance and property”, and, 172 years after Mr Gladstone’s speech, of women of importance and property too.

All the universities that are engaged in raising funds, along with our theatres, museums and charities, manage a process that results in high-value philanthropy. At the heart of that managed process is prospect research. And alongside every prospect researcher is public domain information.

People in the public domain – in Who’s Who, or LinkedIn, the Times or Companies House – are there for a variety of ‘purposes.’ They expect that the information will be used in a variety of ways – including, yes, by people who will lead them into great philanthropic acts.

We prospect researchers do great works with public domain information. It is wholly legitimate that we use public domain information for this purpose. We must defend our right to do so.

Chris Carnie is the author of “How Philanthropy is Changing in Europe”, published by Policy Press in January 2017. He writes in a personal capacity.

*The fuller quote, given here is:

“Is the English press honest or dishonest? At normal times it is deeply dishonest. All the papers that matter live off their advertisements, and the advertisers exercise an indirect censorship over news.”

Foundations of Wealth Revisited: A Story of Growing Potential…

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.

Bring in the New

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.

Trusting Prospects

The UK has had a strange fundraising summer. It started in May with the suicide of an elderly lady in Bristol. That sparked a tabloid newspaper storm led by the Daily Mail. The newspapers claimed that the lady had jumped to her death as the result of pressure from telephone and direct mail appeals from charities. The inquest held in Bristol in September was told by the family that this was not the case.

But the media were not to be restrained by the mere facts of the case. They continued to ride rough-shod over charities and fundraising. And then the Government – led by the party that had espoused “Big Society” – waded in. In July the House of Commons Public Administration and Constitutional Affairs Committee announced an enquiry into fundraising. NCVO was asked to report, a Fundraising Preference Service was hurriedly assembled and even the normally sanguine Information Commissioner leapt into the fray with new rules on the use of the telephone.

This has not ended yet. There is to be a NCVO Summit on the future of fundraising regulation in December, and we can expect the tabloids to continue their fundraising feeding frenzy as Christmas approaches.

How should prospect researchers react? What is the best we can do for our colleagues and, above all, the people, places or causes we work for?

We know them

We prospect researchers know our donors better than almost anyone else in our organisation. We have spent time learning about their motivations and the stuff they don’t like – their objections. These may include objections to the way we manage our relationship with them. It is time to apply that knowledge answer objections that may have been inflamed by the media firestorm.

Relationship Management

We are members of the team that is managing our relationship with our donor. Right now some of our donors will be feeling a little bruised, so it is more important than ever to engage the skills of prospect researchers in cautious relationship management. Time too to remember a primary skill in research – listening to the donor.

Institutional Memory

Researchers stay longer in post then their fundraising colleagues. So we often become the repository of our organisation’s memory. Old Mrs Smith who does not want to hear ever again from our boss – they fell out 5 years ago. Or John who is having an affair with Peter who is married to Rachel in Accounts. We can’t keep that stuff in a database but we ain’t going to forget it either.

You are a Protocologist

Prospect researchers are above all people of systems. Now is the time to ensure that our systems work… for everyone. Time to review protocols and policies to make sure that they are clear to all of our stakeholders, donors included. We can be proud of our protocols because now – in the difficult moments – is when they really will make a difference, for the good.

Just About Managing

This is a new more challenging fundraising environment. It is a time for critical decisions by management, for the creation of new strategies and new models. Those big decisions have one basic need – information. Who is best placed in the organisation to uncover, analyse and transmit that information?

Yes, the prospect researcher.

Ethical Thinking

Prospect research has always been a place for ethical debate. We have to live in the grey, foggy frontier between the donor and our organisation, a place where personal values, organisational values and sometimes the law can easily be lost. That’s why we have codes of practice, and full, frank debate in our online forums and meetings. We are decent honest people doing good and we are right to question our ethics all of the time. We can apply this careful, thoughtful process of developing ethics to help our colleagues.

Data Guardian

Data rules are probably the slipperiest part of our job. They are not evolving as fast as the Internet, and so the net is full of contradictions. Prospect researchers have a clear guardian duty on behalf of the donors and supporters whose data we hold. Now, when the use of data is being questioned (ironically, by a media that survives by selling personal data…) the steady hand of the prospect research guardian is more vital than ever.

Risk and Reputation Savers

These media and Westminster attacks on our sector represent a risk. Adrian Sargeant, in a paper published this month[1], quantifies that as £2 billion in lost income by 2020. Charity reputations are on the line. These themes of risk and reputation are central to prospect research. We know how to do reputational research. We measure risk whenever we assess a prospect. Now we have to apply those skills to help our own organisations to reduce risk and safeguard reputation.

And Research, Of Course

In these shifting sands – it is not at all clear that there is a policy behind any of these rushed reforms – your colleagues need your research skills more than ever. Not to write another profile – although that as well – but to track what is happening in the sector, in the media, and in the Government so that your organisations can be ahead of the curve. Or at least ahead of the Mail.

In the end this summer’s discontent with fundraising is about trust, as is so much in our non-profit sector. We prospect researchers can rebuild trust one donor at a time by explaining our systems and our methods with honesty and transparency. In the end that transparency and honesty will win over the sensationalism of the press and the knee-jerk tabloid policies of Westminster. Remember that according to Mori[2] research only one person in five trusts a journalist to tell the truth and just one in six trust a politician.

Prospect researchers are central in rebuilding trust in non-profits. We are a central link in the chain between a donor who wants to do good and a beneficiary who needs that help. We’ve got a job to do. Let’s do it.

[This blog is based on the talk I gave, 23rd November 2015, to the Researchers in Fundraising annual conference. My presentation is at http://prezi.com/b78cxodq30it/?utm_campaign=share&utm_medium=copy&rc=ex0share ]

 

1. Fundraisers’ perceptions of fundraising regulation reform and the Fundraising Preference Service, Results of a survey conducted by the Plymouth Charity Lab, Prof Adrian Sargeant, Rogare/Plymouth University, Nov 2015.
2. Ipsos Mori, Trust in the Professions, 2015.

Trust Women

Why so few women in UK foundations?

We’ve analysed all of the newly created grant-making trusts (foundations) registered in England and Wales since 2005 – a data set of 2,312 new grant-makers. Our findings are in a new Factary report, ‘Trust Women’, available for download here.

Key Findings:

  • Boards are not balanced – on average there is just one woman per board across all of these trusts.
  • Almost one third (29.7%) had all-men boards when they were registered.
  • Just one trust in five has women in the majority on boards.
  • And we found some evidence that trusts with women in the majority were poorer at start-up than those with men-majority boards.

Our report is based on Factary’s New Trust Update dataset (http://factary.com/what-we-do/new-trust-update/ ).

To find out more about this data, contact research@factary.com

Download ‘Trust Women’ here.