Post on 19-Oct-2014
description
Prospect research and major giving:
How can research inform your
major gift ask?
Conor McCarthy
Fundraising Research & Consulting
Agenda
• Australian wealth
• Major giving in Australia
• Key objectives in prospect research
• Tools for assessing wealth
• Tools for assessing previous giving
• Using research to inform your major gift ask
Australian wealth
Australian wealth
'The cold economic data shows Australians today are as close as they have been for more than a century to being the richest people on earth.' (AFR magazine, 25 May 2012)
Australian wealth
Credit Suisse's Global Wealth Report 2012 tells us that Australia's median wealth per adult is $US194,000 … the highest in the world.
Australian wealth
In 2011, Australia had the world’s sixth highest per capita income:
IMF 2011 via Wikipedia
# Country
1 Luxembourg
2 Qatar
3 Norway
4 Switzerland
5 United Arab Emirates
6 Australia
Australian wealth
The Australian Bureau of Statistics tell us that the wealthiest 20% of Australian households had average net worth of $2.2m in 2009-10.
Australian wealth
• As you would expect, much of the average Australian’s wealth is in housing.
• There’s a strong concentration in the top 10%
Australian wealth
There are several thousand people who have appeared on one or another of the various rich lists by now: • BRW (Rich 200, Executive Rich List, Young Rich List
etc) • Mayne Rich List • Forbes • Courier-Mail WA Rich List • Queensland Top 100 • Resources Rich List • AFR remuneration reports
Australian wealth
And of course the price of entry keeps going up …
10
210
0
50
100
150
200
250
BRW Rich List entry level in AU$ millions
Australian wealth
Australia has an estimated 3,000+ uHNWIs (worth US$30m+), many of whom have appeared on rich lists.
But it also has a much larger pool of upper-middle-class wealth.
Australian wealth
• Capgemini produce an annual World Wealth Report and a regular Asia Pacific Wealth Report
• Looks at High Net Worth Individuals (HNWIs) – worth US$1m (excludes consumables and primary residence) and Ultra High Net Worth Individuals – worth US$30m and more
• Gives a sense of global wealth distribution and trends
Australian wealth
There’s a large pool of upper-middle class wealth in Australia - around 179,000 millionaires (excluding housing, including super).
HNWIs in Australia, in thousands. Source CapGemini World Wealth Report
0
50
100
150
200
250
2004 2005 2006 2007 2008 2009 2010 2011
Number of HNWIs (thousands)
Number of HNWIs (m)
Australian wealth
That said, this is a period of global uncertainty, and people may not feel as rich as they really are …
“Falling house and equity prices have made many feel poorer despite strong income
growth. By RBA estimates, household worth fell by 6.5 per cent last year and is down 11.5 per cent from its 2007 peak.
When surveyed last year by The Boston Consulting Group (BCG), nearly half the participating Australians planned to cut back discretionary spending over the year ahead, more than all other developed countries except Greece (53 per cent) and the UK (50 per cent).” (AFR magazine, 25 May 2012)
Australian giving
Australian giving
What percentage of Australian taxpayers give?
35% Source: Myles McGregor-Lowndes and Emma Pelling, An examination of tax deductible donations made by individual Australian taxpayers in 2009 – 10 (QUT, 2012), (p. 4). 4.4 million taxpayers (35.55%) claimed a deduction for a donation in 2009-10. 4.65m taxpayers (37.83%) claimed a deduction for a donation in 2008-09.
Australian giving
Australian giving
Australian major giving
A 2011 report from QUT says major gifts are still an underdeveloped area of Australian philanthropy
In the US, a Bank of America Merrill Lynch study in 2010 showed that major gifts from individuals account for around half of all charitable giving
Australian major giving
"Many wealthy Australians are perceived by their peers to not be giving, or to be giving significantly less than they might readily be able to give."
Wendy Scaife, Katie McDonald & Susan Smyllie, A Transformational Role : Donor and charity perspectives on major giving in Australia (QUT, 2011).
Australian major giving
Australian major giving is growing.
See FR&C’s list of the Top 200 Australian philanthropists with giving of $1m to $500m.
Australian major giving
This is the Top 10 …
Australian major giving
1. Chuck Feeney – c. $500m in Australian giving via Atlantic Philanthropies
2. John Kinghorn – Established Kinghorn Foundation in 2005 with $300 million, $25m to Garvan Institute (2009)
3. Talbot Family – Bequest from Ken Talbot to Talbot Family Foundation of c. $300m (2010)
Australian major giving
4. Myer Family - $16m in 2009-10, $156m in total giving, via the Myer Foundation
5. Estate of Sir Ian Potter – $14.2m in 2009-10 and over $150m in total giving since 1964, including $8m from Lady Potter to the Australian Ballet (2010)
Australian major giving
6. Andrew Forrest – c. $80m to Australian Children’s Trust (2007), $2m to the launch of the Australian Employment Covenant/Generation One initiative on indigenous employment, and a further $50m in shares to various charities in 2011 plus a further $5m in shares to Murdoch University and four WA performing arts organisations, and a $3m cash donation to complete the Art Gallery of WA's $25m campaign. Joined giving pledge in 2013 pledging to give away half his wealth.
Australian major giving
7. Fairfax family – over $97m in total giving via Vincent Fairfax Family Foundation since 1962; Tim Fairfax gives over $3m per annum through Tim Fairfax Family Foundation including $1m+ to National Portrait Gallery
8. Clive Palmer - $100m for medical research and remote WA communities (2008), $6m to Duke of Edinburgh Awards Program (2010)
Australian major giving
9. Estate of William Buckland – the William Buckland Foundation distributes around $5m per annum, with total giving to 2010 reaching $74m
10. Greg Poche - $40m to melanoma research (2005) and $20m to indigenous health (2008, 2010)
Australian major giving
• You’ll notice how many of those really big gifts are recent
• A majority of those donors in our estimated Top 200 had made one or more very substantial gifts in the past five years
• Not nearly where the US is yet, but growing nonetheless
Australian major giving
In 2009-10, 3,760 taxpayers made gifts of over $25k.
They gave $481m - almost 25% of all individual giving that year.
Source: Myles McGregor-Lowndes and Emma Pelling, An examination of tax deductible donations made by individual Australian taxpayers in 2009 – 10 (QUT, 2012)
Australian major giving
• PAFs - Private Ancillary Funds
• Trusts that receive tax-deductible donations and distribute a defined percentage to DGRs.
• Originally set up as PPFs in 2001; PAFs since 2009.
Australian major giving
There are now 1,050 Private Ancillary Funds (PAFs) in Australia – vehicles for charitable giving managing over $2bn in funds. Some are corporate, but many are vehicles for individual and family giving.
Australian major giving
PAF distributions to 2010
Source: ATO, JBWere Australian Giving Trends 2012
Australian major giving
In addition to distributions already made, $2bn in PAF funds under management means a large pipeline for future giving.
Key objectives in prospect research
Key objectives in prospect research
It takes more than just wealth …
Linkage
Interest
Ability
Propensity to give
Key objectives in prospect research
Prospect research tries to answer three questions:
• How much can someone give?
• How likely are they to give?
• How connected are they with our organisation?
Key objectives in prospect research
Or to put it another way:
• What can we learn about the income and assets of a potential donor?
• What is their philanthropic history with us and with other organisations?
• What is the full extent of their relationships with our organisation?
Rating
0 1 2 3 4 5
Ability to give Unable to rate Cannot give a
major gift
Could give at
major gift level
Could give
$100k+
Could give
$500k+
Could give
$1m+
Inclination to
give
Unable to rate No known
giving
Gives
elsewhere
Low level
donor to us
Lapsed major
donor to us
Current major
donor to us
Relationship
to your
organisation
Unable to rate No current
relationship
Family
connection
One of:
alumnus /
member /
patient /
donor
Two of:
alumnus /
member /
patient /
donor
Current
committee or
staff member
The major gift cycle
Cultivation and
Engagement
Solicitation of Gifts
Identificat
ion
Stewardship and
Recognition
Identification Cultivation
and Engagement
Stewardship Solicitation
and Recognition of Gifts
Researching wealth
Estimating wealth
• We’re usually asked – how much is someone worth? $5m? $10m? $20m?
• It’s a fair question ...
• But we may not have an absolute answer!
• What we most often give are wealth indicators ...
• And remember that income rather than assets is often more important for major giving
Estimating wealth
This from a profile we wrote for a client: “Total wealth unknown.
Publicly available data on remuneration and shareholdings follows – remuneration currently at around $330k in 2010 from director’s fees, but has been much higher in previous years – salary plus options in 2002 alone were over $2.5m.
Identified public shareholdings, if still held, would be worth $3.7m, but this is an indicator rather than an estimate. On these indicators, total wealth should be considerably higher.”
Rich Lists
• BRW (Rich 200, Executive Rich List, Young Rich List etc)
• Mayne Rich List
• Forbes (multiple countries)
• Queensland Top 100
• Resources Rich List
• Hurun Report (China)
• Asiamoney
• AFR remuneration reports
Annual reports
• Public company annual reports – directors’ report gives remuneration and shareholdings for directors and senior executives
• Report will also contain details of major shareholders
Annual reports
Qantas Chief Executive Officer Alan Joyce’s remuneration for 2012 was $2.28m (of which $2.109m was base pay). In 2011 it was $4.071m (of which $2.045m was base pay). He held 2,531,188 Qantas shares in 2012. (Qantas also provide a set of statutory remuneration figures which are higher than this).
Connect4
• Good for executive / director remuneration and broad searches of annual reports
Morningstar DatAnalysis
Holds an archive of 45,000 annual reports for ASX 2000 companies.
Businessweek
• Comprehensive background on major public companies
• Also covers executive remuneration
• http://investing.businessweek.com
Directors’ transactions
• http://www.directorstransactions.com.au/
• Or via Factiva
Salary surveys
• Media reports may be helpful for professional salaries (e.g. AFR’s annual review of legal salaries)
Salary surveys
• If you know someone’s position, a salary guide can help you estimate income
Property
• State Land registry
Property
• Property prices – Domain, CBA property app, or media search
Directorships and shareholdings
• ASIC data
• Multiple brokers available
• Can search on persons or companies
Media / web search
• Tools used for more general research may be of use for wealth information
• An historical media search (via Factiva) might reveal family wealth, sale of business, sale of property
• LinkedIn can reveal career path
Australian Bureau of Statistics
• Statistics (including wealth information) by suburb
Foundations
• Many Foundation websites have details of budget and priorities
Foundation lists
Philanthropy Australia database www.philanthropy.org.au
Foundation lists
• Strategic Grants offer a giving calendar product listing deadlines for foundations who give to your sector
62
Private and publicly unlisted companies
Type
Small Pty Large Pty Public
unlisted
Public ASX
listed
Approx
number 1.59m 20,000 20,000 2,500
Shareholders Max 50
Can’t
approach
public for
money
Max 50
Can’t
approach
public for
money
50+ 50+
Lodge
financials
No Yes Yes Yes
D&B Company 360. Covers 50,000 Australian public and private companies
Private and publicly unlisted companies
Researching giving
How much do people give?
Source: Myles McGregor-Lowndes and Emma Pelling, An examination of tax deductible donations made by individual Australian taxpayers in 2009 – 10 (QUT, 2012)
How much do people give?
Source: Myles McGregor-Lowndes and Emma Pelling, An examination of tax deductible donations made by individual Australian taxpayers in 2009 – 10 (QUT, 2012)
How much do people give?
Source: Myles McGregor-Lowndes and Emma Pelling, An examination of tax deductible donations made by individual Australian taxpayers in 2009 – 10 (QUT, 2012)
Giving elsewhere
• Google search for donor name + relevant keyword
• Example search terms:
donor, donation, philanthropy, benefactor, non-profit, foundation
• Note that not all donor
rolls are online
Giving elsewhere
FR&C’s GiftSearch database lists donations to Australian charities:
Giving elsewhere
• Governor General’s website www.gg.gov.au
• Posts detailed
biographies of honorees,
often including
philanthropy
• Search via Google
Advanced Search
Research and the major gift ask
Research and the major gift ask
Research can help to advise on:
• Interest
• Timing
• Who should ask
• The ask amount
Interest
• Have they given to this area before, either here or elsewhere?
• Are they a graduate in this area?
• Do they have family connections to this area, e.g. children?
• Does the project relate to something that affects them, or someone close to them, personally?
Timing
• Has their financial position changed recently?
• Have they made a major commitment elsewhere?
• Are there other circumstances making an ask appropriate / inappropriate at this time?
Who should ask?
• Principle is ‘peer to peer’ fundraising for major gifts
• Research can help to establish networks
How much to ask for?
• For major gifts, the gift will normally be from income rather than assets
• If there’s a foundation or PAF, of course, that’s different, and seek to estimate the foundation’s assets as well as previous gifts
• For bequests, assets are more relevant
How much to ask for?
It depends on the individual …
How much to ask for?
As a guide amount
1-5% of gross household income
How much to ask for?
• Take account of wealth information
• Take account of previous giving
(to us and elsewhere) and known commitments
• Have things changed since those previous gifts?
• Can you accept a pledge over multiple years?
• How much is needed for the project?
• Better to ask for too much than too little!
More information
Resources list on our website: http://www.fundraisingresearch.com.au/ also: http://www.fundraisingresearch.info/ http://www.aprahome.org/ http://www.supportingadvancement.com/ Blackbaud’s prospect research blog at: http://www.npengage.com/ Training via: http://www.artfultraining.com/
Regional resources
• Guides to prospect research resources in China and India from Beth Bandy (International Fundraising Intelligence): http://www.ifintelligence.com/
• Asian prospect research services from Gnosis: http://gnosis.com.sg/
• Global wealth lists from Helen Brown Group: http://www.helenbrowngroup.com/services/wealth-lists/
• Regional wealth and philanthropy lists from the Hurun report: http://www.hurun.net/usen/
• Regional wealth report from Capgemini: http://www.capgemini.com/resources/asiapacific-wealth-report-2012--english-version
Questions?