Great Waves and L-Curves: Some Thoughts on the nfpSynergy Blogs

A few quick thoughts on the insightful recent pieces from Joe Saxton at nfpSynergy, which lay out some of the bigger threats and opportunities currently facing fundraising.

The challenges are spot on. Very hard to argue that squeezed incomes, growing public debt, lower Government funding, disintermediation and new technologies allowing more public fundraising are anything else but facts of life fundraisers must learn to live with. Perhaps most concerning is the fall in incomes which, combined with growing debt, will probably reduce confidence to give among a broad swathe of families, especially as these trends are so widely reported that, reporting which could curb confidence to spend. To my mind, these threats deserve far more attention and deliberative discussion.

Great to see Rowenna Fielding use her comment to pick up on the fact that smaller databases need not be a synonym for shrinking income. She is absolutely right to say that “[r]educing database sizes so that they reflect high-quality engagement with supporters rather than large volumes of obsolete data is a good thing”. We now have many years of evidence to suggest that response rates for many charity marketing appeals are well below 1% in many cases. My own view is that sending appeal after appeal to largely unresponsive audiences has been one of the main reasons for the doubling of complaints about charity fundraising in four short years from 2012-2016. This model seems especially futile given that a tiny minority of donor provide a significant fraction of the income for many of our organisations. Many not-for-profit’s income base would look like an L-curve (with the L turned anticlockwise to lie on its long edge), with a third or more of all income coming from just one or two tenths of a per cent of the donor base (this trend also holds in the US, as the work of Peter Wylie has shown). Important to note too that since the 1970’s and 1980’s, when charities began to adopt database-driven marketing activities, the level of donations from private sources to UK not-for-profits has not risen at all (as far as data is available) and, as I wrote recently, has probably fallen as a proportion of economic activity far more quickly than many people realise. It also seems possible that the use of database-driven fundraising has increased inequality within the sector, with a small number of the very largest organisations reaping most of the benefits of marketing-led approaches. This links to Joe’s very pertinent point on mass affluence. Approaches to this group in recent years have often taken the form of ‘mid-value’ fundraising, where a combination of greater ask amounts, bespoke communications and dedicated relationship managers are employed with higher value donors to drive giving. Speeding up growth in this area, and exploring other methods to capitalise on the mass affluent market, will be an important part of solving the puzzle of how to grow overall giving in the coming years.


Just 0.1% of the supporter base often give 30%-60% of total donations, as Peter Wylie’s work has shown. See:

And while it is true that Legacies present a tremendous opportunity for fundraising, it is also the case that the ‘Bank of Mum and Dad’ is the 9th biggest mortgage lender in the country, and that unsecured credit is exploding (again) in the UK, leading to concern from the Bank of England and others that consumer credit growth is a risk to the economy. The estimated £6.8trn (trillion) value of UK homes does have extraordinary potential for to grow fundraising, this does I think have to be tempered by the fact that much of this value is either likely to be tie up in parents’ commitments to support their children to get on the property ladder. Having said this, it’s hard to see why the ‘giving while living’ model popularised for the wealthy by Chuck Feeney should not be rolled out more widely than it currently is, provided ways can be found to unlock value currently tied up in illiquid assets like real estate.

Joe and I share the same major concern, namely, who is going to guide charities towards the major structural changes needed to move from here to there. The ‘great waves’ of funding which have sustained UK not-for-profits over most of the last century originated (as far as I can see) in large measure from outside the not-for-profit sector. World War 2 drove many innovations in fundraising which are still with us today (including payroll giving, door-to-door collections, sponsored activities and selling goods to raise funds for charity). The establishment of the National Lottery was a Government initiative, driven personally by Sir John Major, with the huge increase in spending on and contracts to the Third Sector initiated by New Labour beginning in 1997. The fact that, as Joe says, the Institute of Fundraising, NCVO and other major bodies are showing rather little interest in nudging the sector towards a sustainable growth path should be of concern to all of us. Existing funding models are not in good health, yet the bodies who could help drive moves to new methods are not doing so. Will they ever?



The shock result of June’s UK general election was undoubtedly the victory in the Royal Borough of Kensington & Chelsea (K&C) of the left-leaning Labour Party, when many had assumed K&C, (London’s wealthiest Borough), would, by nature of its affluence, forever remain a safe Conservative seat.


On closer inspection the shock is not entirely merited, especially given K&C’s “startling” inequality. Simmering grievances in the Borough, at least partly the result of gaping wealth differentials, were exposed just days after the election by the visceral local reaction to a lethal fire at (Council-owned and run) Grenfell Tower in the north of the Borough, and the Council’s abject response to it. Indeed, the yawning gap between rich and poor in K&C is an open secret to locals; as victorious Labour candidate Emma Dent Coad (pictured above, who before winning was a K&C Councillor) said in a powerful acceptance speech, K&C has “areas of extreme poverty…[p]eople [in K&C] are getting poorer, their income is dropping, life expectancy is dropping and their health is getting worse. There is no trickle down in Golborne ward and there is no trickle down anywhere in Kensington”. Dent Coad’s more recent public statements claim Victorian-era diseases like TB and rickets are still present in K&C, and that, so compressed are the Borough’s geographic inequalities of affluence, simply crossing the road can see the average income of residents fall by ten times. While it is an outlier, K&C is not entirely unrepresentative of the modern trend of wide divergences between haves and have-nots.

All of this matters for fundraising – a lot. In the UK and elsewhere, wealth is held in fewer and fewer hands, with distributions of wealth and income increasingly lopsided. Contemporary fundraising technologies, many with their genesis in postwar fundraising efforts, often rely on broad participation across society. A shrunken middle-class restricts this, with fewer citizens able to afford to support good causes, which in turn means fewer funds raised and less participation. And economic changes are colliding with a tougher regulatory regime in which marketing is increasingly challenging, and which may rule out go-to methods of acquisition-based business models. With such strong headwinds, declining participation in the sector might seem inevitable, and with it any hopes of maintaining donation levels, let alone increasing the amount donated.

The cloud may, however, have a silver lining, in this case the fact that our ability to tailor approaches to higher value audiences has never been greater. Databases like the Luxemburg Income Study and the World Top Income Database offer unprecedented scope to analyse the social dynamics of wealth in the UK and across the world to a remarkable degree of granularity. Much of this information was assembled by a cohort of academics, lead by the eminent Professor Sir Tony Atkinson (who sadly died earlier this year), and including Professors Thomas Piketty (of Capital in the 21st Century fame), Emmanual Saez and Gabriel Zucman, (the latter’s recent work having shone much light on the widespread use of tax havens). We know more, in more detail, than we ever have about how to identify those with the means to support our great causes. And at a more practical level, moves towards data-driven methods have been taken, notably by research consultancy Factary, whose approach to database screening has, they say, been “revolutionised” by the use of data on “socio- and geo-demographic factors” to “prioritise the database” according to ability and likelihood to give. Rather than using a bank of more or less static data produced by desk research work to screen against, Factary now use overlaid data, to indicate those most likely to give. While I am not familiar with the precise data used, such methodologies are surely the future for fundraising research, especially considering that those able to donate major gifts (say of £10,000 or more) are likely to be located in fewer than 10,000 of the 1.8m postcodes in the UK. Data (academic or publicly available) is accessible like never before, making analysis of economic geography sensible and achievable, and could, if used properly, give a much-needed lease of life to British high-value fundraising. Such a pivot towards high-value is not without risks, perhaps the greatest being the chance of the interests of a minority being heard more loudly than those of the majority. However, while the Third Sector would surely lose credibility if it were seen to give undue attention to niche interests, no-one thinks UK not-for-profits face SuperPAC-type capture anytime soon. More likely is the familiar issue of certain causes being harder to raise for than others, which is as old as the sector itself, and probably insoluble. More regulation, or a hard interpretation of the DPA or GDPR precluding analysis like that described above, is another risk, but, by retaining manual elements in analytical processes and taking a truly donor-centred approach, one which should be able to be mitigated.

Navigating these risks would, however, have the benefit of diversifying the income base for a sector whose overall revenue remains stubbornly flat. And if you think that increasing the amount donated to not-for-profits in this way seems unrealistic, is it any more so than, say, Labour winning in Kensington & Chelsea?

Voice of the Beehive

Which charities make the biggest impact? Which will do the most good with the grants they receive? Which causes are the most in-need in a given area, and which projects have helped them the most? All questions that grant-makers ask when looking to disburse funds, and all questions for which supporting evidence is far more difficult to find than should be the case.

Perhaps not for much longer. Rachel Rank and her colleagues at 360 Giving are changing the way we access data so that data about charitable grants is simpler, more accurate, easier to access and faster to work with. 360 Giving (and sister organisation Beehive Giving) are bringing the concept of an ‘open data standard’ to the third sector – and not before time.


Recent publications using the standard mean “[m]ore than £10bn worth of grants [have] been published to the 360Giving Standard with the addition of nine more grantmakers in the last two months”. And with recent editorial contributions from former-NCVO data guru David Kane, CAF’s Rhodri Davies and others, 360 Giving also features high-quality content. Meanwhile, the format itself helps grantmakers and those aiming to create beneficial social impact to make decisions based on evidence and, crucially in these austere times, clearly highlights need in local areas to better target scarce resources.

What’s not to like?

Falling Flat?

The dominant narrative around UK not-for-profit income in recent years has either been of reasonable stability in the face of economic shocks, or of fairly gentle and understandable decline as older technologies become less effective. The release of the latest CAF Giving Report prompted me to look again at this narrative.

Some basic economic analysis of the CAF figures seems to show a different story than the ‘flat income’ narrative . The UK Giving Report usually reports voluntary donations in cash terms, as in the graph below. However, despite there being comparator figures for economic growth, there is rather little comparative analysis of the figures. This matters because economies are dynamic things – the value of a currency changes from minute to minute, and the overall amount of economic activity fluctuates over time, too.

CAF graph

It also matters as it means that the cash figures in the report do not show donations as a proportion of overall economic activity. Despite aggregate GDP growth of 15.7% from 2005-2015, (calculated simply by summing the figures in orange in the graph). Donations are shown as broadly flat, when as a proportion of the total economy they are declining by at least as much as the economy is growing, some 1.5% a year. In 2005, British annual GDP was £1.676trn, with donations at £10.3bn, or 0.0061% of GDP. In 2015, British GDP had grown to £1.889trn, with donations having fallen to £9.6bn, 0.0051% of GDP, an alarming 17.3% drop in donations as a share of the economy in just a decade. Another omitted trend is inflation; voluntary giving in 2005 was £10.3bn – £14.1bn in 2015 money; had charitable giving kept pace with inflation over this time it would in real terms be approximately £4bn higher than it currently is. When I asked them about inflation, CAF said “we have reported on this in previous years and may do so again but looking at it without adjustment is also useful because it shows that the actual amounts people donate are fairly constant, regardless of inflation levels”. Fair enough, though one would think that this type of economic analysis would be included in most years especially as, taken together, inflation and growth mean the same amount of money buys progessively less impact over time. This is especially noteworthy as the rate at which it is happening seems not to be widely realised, running (as it does) counter to the popular (and more reassuring) narrative of stability or gentle, heroic decline.

And consider all this in light of the sectors overall dynamics. I was struck to learn recently that one major national health charity’s income nearly doubled in the 10 years before 2016, at a compounded rate of 7% a year. In light of the above, the point is that this growth has come within a static sector, meaning that while the size of the cake remains the same, the slices for some are growing quickly, at the expense of others. Each year of no growth also reinforces the harmful idea that the current rate of voluntary donations is somehow a natural maximum and that therefore we are in a kind of secular stagnation where the best to be hoped for are year after year of flat numbers. My response to this is the graph below, which I’ve used before and will probably use again, showing steep recent growth in British sales of ethical goods and services. Growth for socially-oriented organisations is not only possible, it is happening:


That’s the past and present – what of the future? The declining share of the total economy devoted to voluntary donations suggests that, if the present trend continues, UK not-for-profit’s will by 2025 be able to fund around 34% less good work each year than if donations had kept pace with inflation and GDP growth over the 20 previous years. If unchecked, this would lead to a potential ‘crisis of relevance’ for a sector. I also worry about the financial health of mid-sized not-for-profits, (those with income in the £5m-£20m bracket) who, faced with stricter regulation and larger competitors with more financial firepower, could be forced to shut their doors or seek to merge to survive.

Ideas matter. The story we tell of not-for-profits’ place in our economy and society relies to a great extent on how we measure organisational impact, which in turn relies to a significant extent on income – relative and absolute. The above should sharpen focus on the declining effectiveness of some fundraising approaches, a decline which could well be far sharper than sometimes thought.

Rich List Redux

Another year, another Sunday Times Rich List and it is, today’s release tells us, “boom time for billionaires”.  Much is made of the rising level of philanthropic giving among the über-wealthy, but the bigger story seems to be the sheer overall rise in wealth, which is striking even for those of us who have kept a close eye on ‘The List’ in recent years.  Key stats are:

  • An overall year-on-year increase in estimated wealth of 14%
  • The top 500 individuals and families in 2017’s list are worth more than the value of the entire 1,000-strong 2016 list
  • A billionaire boom: 15 years ago there were just 21 billionaires listed; this year the figure is 134
  • The entry level of £110m is double that of the 2009 list
  • The 2017 total list value is more than six times that of the 1997 list, whose value was an estimated £99bn


For charities, a 20% increase in the value of UHNWI philanthropy over the last year does not quite obscure the gulf between donations and the wealth of the haves and the have yachts.  While 260 philanthropists in the list are quoted as giving an estimated total of £3.196bn, up 20% from 2016, the potential for contributions from this group to completely transform the face of British philanthropy is beyond doubt – just 2% of the value of the Rich List would double private donations in this country, which currently stand at c£11bn-£13bn per year.  However, UHNWI donations continue to lag well behind even this number, and have not shown any sign of catching up with donations from the public more widely.  Particularly striking is the absence of any of the very wealthiest families in the Giving List index of the most generous HNWI’s.  Indeed, none of the 41 wealthiest ‘Listers’ – with estimated wealth in excess of £274bn – appear in the Giving List, and, with only a couple of exceptions, it is only once we reach the middle ranks of the list that significant donations kick in.  No doubt there are many anonymous donors at the top end of the list, and data used to compile wealth, power and philanthropy lists will of course always be partial at best.  However even taking this into account, it does seem that the gap between what is and what could be for British HNWI has never been greater.  Another trend is the rise in ‘giving while living’.  There are likely to be many reasons for this, however the rise of self-made money could well be feeding a more hands-on approach to philanthropy.  It is also likely that the pleasure of giving to good causes, as evidenced by Giving Pledge and other such initiatives, has had an effect.

And away from philanthropy, an ever-greater concentration of wealth gives more and more political clout to UHNWIs, whose political donations give them real – some would say really worrying – traction in the political process.  And at the confluence of politics, philanthropy and finance, I was especially struck by Crispin Odey’s donation of £873,328 to the ‘Leave’ campaign, as Odey bet (via his fund Odey Asset Management) that the UK economy would slow down in the event of Brexit.  The bet backfired however, as the UK economy powered on through, causing his marquee fund to lose almost half its value in a matter of months.

Nestled among new List compiler Robert Watt’s engaging prose are fascinating nuggets of trivia, some of which give make light of the unattainable wealth of list members. For instance Jack Ma (estimated net worth: £26.7bn) apparently thinks that the optimum earning level for happiness is £2,500-£5,000 per month – “the more money you have”, he is quoted as saying, “the more things you have to do”.  Another, perhaps even more germane, nugget is elsewhere.  In a fascinating interview with Management Today, Rich List founder Robert Beresford says that “around 90% of the [lists] wealth is not liquid, it is tied up in the businesses that the current rich or previous generations have built”.  This shows two things – first, that the fraction of British HNWI wealth needed to significantly raise overall private philanthropy is far higher than first impressions of headline figures suggest.  Second, that, as a result of this, fundraisers will have to work very hard to build strong enough relationships to achieve such increased gift levels.  A tough ask – but by no means impossible,

It seems that, as Beth Breeze’s recent Good Asking report suggested, fundraising research is needed – now, more than ever.



Turning the geek factor up to 11 for a moment, there are some interesting possibilities for mathematical techniques used in technologies like predictive text to be used to assess fundraising interventions.  Ever since an influential 1948 paper by Claude Shannon – “the Father of the Information Age” – so-called ‘Markov Chain’ models (a variant of which is  ‘Markov Chain Monte Carlo’, or MCMC) have been “widely used in speech recognition, handwriting recognition, information retrieval, data compression, and spam filtering”, as well as ‘Natural Language Processing’/word prediction, by assigning probabilities to ‘state transitions’, ie the probability of one letter or word following another.  Using such chains to predict which fundraising interventions are most likely to lead to a gift would be a huge boon for the industry, leading (in theory at least) to far more efficient donor journeys and more granular understandings of business process value.  So, who wants to Run DMCMC?


Imagine an ant crawling along a beach, left and right, forward and back, up and down, as it navigates home. It’s chosen path looks something like this:

Ant walk pic

The route is complex, but the complexity is a product of the environment, not the ant, whose decision-making power is minimal.  The example is abstract but relevant for people, too: “human beings, viewed as behaving systems, are quite simple. The apparent complexity of our behavior over time is largely a reflection of the complexity of the environment in which we find ourselves.”

The question of how to navigate complex environments using limited decisionmaking capacity and incomplete information is at least as relevant for organisations as it is for animals.  As a fascinating recent post [login required] to the Prospect-DMM email forum suggests, the answer may lie partly in the use of ratios, which offer an elegant, contextualised ways to cut through bewildering amounts of information.  Simple, powerful metrics to use in fundraising could include:

  • Last five years giving/lifetime total
  • Responses/contacts
  • Number of appeal/number of gifts
  • Cost of appeals/lifetime donations

One obstacle is not being able to integrate or even extract information from our database systems to begin with.  Recent news that insurance giant Aviva has made great strides in integrating database systems to the great advantage of their business raised a thought which is highly relevant for many charities: are we prisoners or masters of our IT/database systems?  And, when techniques like database screening may be restricted or even off-limits in future, can we afford not to try to mine other data for insights?

Weapons of Math Destruction

If, as the ICO believes, the British public would experience “substantial distress” in learning their data had been processed in a wealth screening, the public will surely be distraught should they ever read Cathy O’Neils 2016 book Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy.  The many ways in which mathematical models and algorithms – the so-called ‘WMDs’ – are used to make crucial decisions relating to the public realm and, increasingly, private lives are as worrying and widespread as they are opaque and unaccountable.  Across vital issues like criminal justice (where court decisions increasingly use automated quantitative modelling and scoring), access to credit, finance and education (where credit scoring and rating of teachers increasingly rely on WMDs), jobs and employment (where a missed payment could mean being overlooked for a job interview) and even the feelings and emotions we experience (thanks again, Facebook), WMD’s are in wide and growing use.  This largely unseen trend is worrying as WMD’s inevitably contain errors and anomalies which, if not caught, can have significant effects for those affected by their scores or results.  Even worse, WMDs can have pernicious effects when they run perfectly – many contain implicit value judgements which end up disadvantaging poorer groups, or, in the case of aggressive advertising, are designed to target these very people.  Yet all too often WMDs’ methods and results go unchallenged.

O’Neils Mathbabe blog is an engaging mix of political commentary, engaging geekery and knitted hats – well worth a read.  And both are valuable and timely in helping us to understand – and hopefully better manage – our algorithmic overlords.

Where is the Money (Going to Be)?

In No Country for Old Men, menacing assassin Anton Chigurh (Javier Bardem) shuns Woody Harrelson’s frightened offer of help to find a satchel loaded with millions of dollars.  “I can find it from the riverbank”, a terrified Harrelson pleads at gunpoint, “I know where it is”.  “I know something better”, counters the icy Chigurh, “I know where it’s going to be”.

Chigurh Hotel Scene pic

As fundraising researchers, we spend a lot of time focusing on where the money is.  But do we spend enough thinking about where it is going to be?  The scene is a reminder that to prospect by relying on companies or sectors enjoying current success (as a way to assess employees’ affluence) is to miss a trick.  Do we prospect often enough by trying to predict which sectors will become successful in the future?  It may sound like a fool’s errand, but understanding which sectors and products are on a strong growth path and likely to experience an uptick in growth – wearable tech, virtual reality, voice recognition technologies and peer-to-peer finance come to mind – would be a boon for prospect research.  Intelligence on mergers & acquisitions, IPOs and other comparable ‘liquidity events’ is equally valuable (lookin’ at you, Aramco).  Such horizon-scanning need not be resource-intensive and is par for the course for many investors and businesses – for very good reason.

Calling Bullshit

How to call bullshit in the age of Big Data?  There is now a whole course designed to do just that, and it is the best thing ever (no b*llshit).


Heat & Light

Heat & Light

The Information Commissioner’s recent decision to fine several charities for data processing and consent transgressions has generated a remarkable amount of heat (in the form of impassioned comment) but, from my perspective as a practitioner, somewhat less light (ie actionable insights).  So I have collected a short list of questions below – these are presented as honest enquiries, informed by an awareness that change in fundraising practices is inevitable, that better ways of working are possible, even desirable, and that tomorrow’s ICO compliance conference is likely to be a big part of this change.

Before the questions, though, permit a historical detour, as it is absolutely imperative to recognise the antecedents of current regulatory attention on charities.  Even the most cursory search of recent Fundraising Standards Board’s (FRSB) Annual Complaints Reports shows total complaints received doubled in four years, from 33,744 in 2012 to 66,814 in 2015, complaints which were prompted some 60 billion fundraising contacts over this time.  Strikingly, the FRSB estimated that for each complaint received, a further 20 people are annoyed but do not complain; this puts the 2015 total at around 1.3m.  Their source seems clear: “half of all complaints are incurred by less than 2% of charities reporting”…”just 1% of reporting charities (all of which have voluntary income of £10 million and over) generate six in every ten complaints”.  Frustration at continued inaction in addressing the issue led outgoing FRSB Chair Andrew Hind to deliver a strongly worded rebuke in his 2016 Complaint Report foreword:

“[T]his report shows that more than 66,000 people were so unhappy about a charity fundraising activity targeted at them last year that they took the time and trouble to make a formal complaint about it to the charity concerned…The stark reality identified by this report is therefore that, in all likelihood, some 1.3 million people were dissatisfied by the impact that a charity fundraising technique had on them in 2015. That’s enough unhappy people to fill Wembley stadium 15 times over.  Just three fundraising activities – direct mail, telephone calls and doorstep fundraising – are responsible for more than seven in ten of these concerns” [italics added]

A brief word also on the Daily Fail, whose 2015 ‘New Shame of Charities’ story is widely thought to have precipitated the current storm?  It should be remembered that the story was prompted by a concerned whistleblower, as DM Investigations Editor Katherine Faulkner made clear in her evidence (given in a closed session) to the Commons Public Administration and Constitutional Affairs Committee (PACAC) in October 2015.  The DM were not even the first newspaper to run such whistleblower stories in recent years – in 2009 the Daily Mirror published a similar one relating to charity telemarketing, while, in 2012 the Telegraph ran an exposé of what it called “aggressive, intimidatory and potentially unlawful [fundraising] tactics”, after an undercover Telegraph reporter worked at Tag Communications for 12 days, the FRSB later found Tag had “deliberately confused and misled the public” in their fundraising activities.  This story used the very same method as did the DM in 2015; indeed, it seems highly unlikely the DM would have covered charities in such detail in recent years had earlier stories not set a marker and had a whistleblower not approached them. Media coverage obviously caught the ICO’s attention (their reply to my recent Freedom of Information request says “[a]llegations have been made in the media that individuals are being overwhelmed by fundraising requests”).  But, odious as the DM is, there is a wider backstory of public dissatisfaction with and frustration towards charity fundraising which cannot, and should not, be ignored.  The current climate may make the above look like the case for the prosecution; it is not, but those who cannot remember the past are condemned to repeat it and I, for one, do not wish to see the recent past of British charity fundraising repeated anytime soon.

I would add that the recent ICO rulings seem to me to present a real opportunity for the sector.  I cannot escape the conclusion that affinity and engagement are the key determinants of large contributions, and I see no reason why an increased emphasis on measuring and acting on these attributes cannot yield substantial gains for many charities.  Odd as it sounds, I also welcome the recent scrutiny on screening – the ICO’s actions can in important ways be seen as a catalyst for fundamentally more open and transparent relationships with our donors.  They are also a spur to re-examine longstanding practices, a result of which may well be an increased capacity to build enduring relationships with supporters.

All that said, my questions are:

  1. Consents & reasonable expectations.  We travel magically to a Utopia where charities have in the recent past secured every necessary consent, perfect privacy statements are publicly displayed and where, thanks to a concerted communications campaign, “substantial distress” would not reasonably be expected to be caused upon learning that ones data been processed in a wealth screening.  In this world, is wealth screening illegal?
  2. Types of screening.  Any organisation with significant data assets screens regularly – so as not to send mail to deceased people/so use the correct address, and for any number of other reasons.  Is the risk of “substantial distress” the main, or only, difference between these processes?
  3. Substantial distress.  Both the recent ICO Civil Monetary Penalty notices and paper accompanying the imminent Fundraising & Regulatory Compliance Conference stress the likelihood that “substantial distress” would be caused were data controllers to learn their data had been processed in a wealth screening.  This might be true, however no evidence is cited to support this claim in the judgement or the paper, and subsequent Freedom of Information requests have been refused or are awaiting a reply (Note to Madeline Bowles: whoever you are, thankyou!).
    1. Related: how can we know “substantial distress” is likely when such distress is itself partly the result of the manner in which the activity in question is described or explained?
  4. Understanding capacity to give.  Quite simply, how are charities to arrive at an understanding of who might have capacity to be able to make a major donation without analysing publicly available sources?

Do also check out Factary’s very good recent “5 Questions to Ask the ICO“.

For those attending the conference tomorrow – enjoy.  For everyone else – catch you at online at #FRCC2017!

Heat & Light II: “Let Sunshine Win the Day”

George Osborne revelled in his role as the ‘Austerity Chancellor’.  However, for all his talk of “tough choices”, this austerity did not, it seems, extend to charitable sector spending, where at times his decisions seem generous almost to the point of profligacy.  Nowhere is this clearer than in the case of disbursals of funds raised by fines on banks, in which Osborne had significant – if not sole – say in directing the funds, totalling by some estimates almost £900m. Some edited highlights of these disbursals include:

  • £50m to the Cadet Expansion Programme (itself established in 2012 by the Coalition) to place 500 Cadets in British schools, each cadet costing, it seems, a cool £100,000, more than many whole charities cost each year
  • £7.6m towards the refurbishment of Wentworth Woodhouse, which led the Guardian to question the surprise choice – with a £42m total cost of renovation, £7.6m will only pay for the roof to be fixed and some other structural repairs at a private home which only granted access to the public in the 1980’s.  The funds were said to be contingent on the Wentworth Woodhouse Preservation Trust publishing a business case which, at the time of writing in February 2017, did not seem to have been posted to the Trust’s website
  • £20m towards the costs of the National Rehabilitation Centre at Stanford Hall in Nottinghamshire, which Ceasefire magazine have cogently and persuasively argued should really be a cost borne by Government, who sent affected veterans to battle in the first place
  • £35m towards the Armed Forces Covenant (Libor) fund.  The Fund was established in 2010 by the new Coalition Government – David Cameron himself tasked the initial  working group with producing a “low-cost” ideas for rebuilding the Covenant.  Again, this is arguably money which should have been provided by Government to care for veterans.

A recent Private Eye story also reported on the continued expense of the National Citizenship Service (NCS), which (it reports) will receive £1.26bn from 2016-2020.  This includes £187m in 2016-17 making it one of the largest charities in the country according to recent figures from Professor Cathy Pharoah at the Centre for Giving and Philanthropy at Cass Business School.  Despite this, the NCS is on track to miss participation targets by some 40%, with a recent National Audit Office report, saying “[w]eaknesses in governance and cost control need to be addressed”, concerns which led Meg Hillier MP, Chair of the influential Parliamentary Public Accounts Committee, to say “it is difficult to see how [the NCS] will be sustainable in the long term”.

Charities faced allegations of misspending or getting poor value for money from LIBOR funds they received, but surely the bigger question surrounds opaque Government decisionmaking.  It is concerning that not long before the Kids Company enquiry, the Treasury and MoD were making highly centralised decisions as to who would receive hundreds of millions of pounds, with very little transparency, and with MP’s apparently lobbying for a share of the funds.  As Civil Society reporter Helen Sharman wrote in late 2016, “[w]hen an MP writes to the man in charge of the government’s chequebook, seeking preferential treatment for a charity he supports, and the charity then receives a considerable chunk of what is on offer, we cannot help being slightly suspicious that public money is being distributed to charities because of patronage, rather than merit.”  Ms Sharman’s Civil Society colleague Gareth Jones sums the issue up well in saying “the longer the Treasury declines to outline a detailed decision-making process for these grants, the more we will have to infer that there simply isn’t one.  With charitable funding so scarce, it is vital that every penny is directed in the most targeted, effective way. No doubt the vast majority of causes receiving Libor funding (if not all) are very worthy, but do we know that there aren’t other causes that are more deserving?”

In 2006, David Cameron famously used his first Conservative conference as leader to urge colleagues to “let sunshine win the day”.  Will this Government let some sunshine illuminate their decisions around how charity funding choices are made?

Bricks and Mortar

With legacy bequests left to British charities measured in the billions and the value of British residential real estate measured in the trillions, why is high-value legacy fundraising not top of every fundraising directors to-do list?  The estimated value of members of the Sunday Times Rich List has grown from £99bn in 1997 to more than £500bn in 2016.  However, even this astronomical growth is dwarfed by the explosion in the estimated value of British real estate, whose value a 2016 Saville’s research report estimates at more than £6tn (trillion).  To put that into perspective, if everything in the UK were to be sold, it would fetch an estimated £8tn.  In answering the question “where is the money”, the answer, in the UK at least, is clear: “bricks and mortar”.

This is an urgent issue for British charities.  A perfect storm of more activist regulation, stubbornly high attrition/low response rates and a struggling cost-per-acquisition business model mean charity Direct Marketing is both waving and drowning.  Of charities’ existing major revenue streams, only legacies, major donations and ‘mid-value’ giving seem to have any chance of filling the gap left by falling or flatlining direct mail, face-to-face, door-to-door, telephone and DRTV.  And Legacies offer far greater scope for much-needed unrestricted funds than do major gifts, as well as the chance for collaboration between fundraising teams to build a value proposition stretching across the life course.

And crucially, legacies are highly unequal – in a good way.  A colleague recently recounted how a former charity received around 200 legacy bequests each year, with half a dozen accounting for around 40% of the total received – just one or two more of these big bequests would have transformed the charity’s financial outlook.  For a sector populated largely by micro-organisations, many with few or no paid employees, legacies are far more realistic proposition than securing and stewarding major donations.  Substantial legacies are possible for far more people than major lifetime gifts.  Many households in middle-England would never have the means to give a gift in the hundreds of thousands, but far more would could consider a legacy of this scale.
Property wealth is also far more broadly distributed than cash, meaning legacies enable more regional charities to raise big gifts. Many HNWI’s are London-based, however property wealth is far more broadly distributed, meaning charities across the country can seek and secure significant legacies.  The UK, already unequal and set to become even more so in the near future, offers far more opportunities to raise funds from property wealth than cash.  We should recognise this, and act accordingly.