Prospect research and major giving with Conor McCarthy


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In a recent webinar Conor McCarthy, Managing Director at Fundraising Research & Consulting (FR&C) discussed how best to research individual donors to determine a major gift ask strategy.

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Prospect research and major giving with Conor McCarthy

  1. 1. Prospect research and major giving:How can research inform yourmajor gift ask?Conor McCarthyFundraising Research & Consulting
  2. 2. 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
  3. 3. Australian wealth
  4. 4. Australian wealthThe cold economic data showsAustralians today are as close as theyhave been for more than a century tobeing the richest people on earth.(AFR magazine, 25 May 2012)
  5. 5. Australian wealthCredit Suisses Global Wealth Report 2012 tells usthat Australias median wealth per adult is$US194,000 … the highest in the world.
  6. 6. Australian wealthIn 2011, Australia had the world’s sixth highest percapita income:IMF 2011 via Wikipedia# Country1 Luxembourg2 Qatar3 Norway4 Switzerland5 United Arab Emirates6 Australia
  7. 7. Australian wealthThe Australian Bureau of Statistics tell us that thewealthiest 20% of Australian households hadaverage net worth of $2.2m in 2009-10.
  8. 8. Australian wealth• As you would expect, much of the averageAustralian’s wealth is in housing.• There’s a strong concentration in the top 10%
  9. 9. Australian wealthThere are several thousand people who have appearedon one or another of the various rich lists by now:• BRW (Rich 200, Executive Rich List, Young Rich Listetc)• Mayne Rich List• Forbes• Courier-Mail WA Rich List• Queensland Top 100• Resources Rich List• AFR remuneration reports
  10. 10. Australian wealthAnd of course the price of entry keeps going up …10210050100150200250BRW Rich List entry level in AU$ millions
  11. 11. Australian wealthAustralia has an estimated 3,000+ uHNWIs(worth US$30m+), many of whom haveappeared on rich lists.But it also has a much larger pool of upper-middle-class wealth.
  12. 12. Australian wealth• Capgemini produce an annual World WealthReport and a regular Asia Pacific Wealth Report• Looks at High Net Worth Individuals (HNWIs) –worth US$1m (excludes consumables andprimary residence) and Ultra High Net WorthIndividuals – worth US$30m and more• Gives a sense of global wealth distribution andtrends
  13. 13. Australian wealthThere’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 Report0501001502002502004 2005 2006 2007 2008 2009 2010 2011Number of HNWIs (thousands)Number of HNWIs (m)
  14. 14. Australian wealthThat said, this is a period of global uncertainty, andpeople may not feel as rich as they really are …“Falling house and equity prices have made many feel poorer despite strong incomegrowth. By RBA estimates, household worth fell by 6.5 per cent last year and is down 11.5per cent from its 2007 peak.When surveyed last year by The Boston Consulting Group (BCG), nearly half theparticipating 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 percent).” (AFR magazine, 25 May 2012)
  15. 15. Australian giving
  16. 16. Australian givingWhat percentage of Australian taxpayersgive?35%Source: Myles McGregor-Lowndes and Emma Pelling, An examination of tax deductible donations made by individual Australiantaxpayers in 2009 – 10 (QUT, 2012), (p. 4). 4.4 million taxpayers (35.55%) claimed a deduction for a donation in 2009-10. 4.65mtaxpayers (37.83%) claimed a deduction for a donation in 2008-09.
  17. 17. Australian giving
  18. 18. Australian giving
  19. 19. Australian major givingA 2011 report from QUT says major gifts are stillan underdeveloped area of AustralianphilanthropyIn the US, a Bank of America Merrill Lynch studyin 2010 showed that major gifts from individualsaccount for around half of all charitable giving
  20. 20. Australian major giving"Many wealthy Australians are perceived bytheir peers to not be giving, or to be givingsignificantly less than they might readily beable to give."Wendy Scaife, Katie McDonald & Susan Smyllie, A Transformational Role : Donor and charity perspectives on major giving in Australia(QUT, 2011).
  21. 21. Australian major givingAustralian major giving is growing.See FR&C’s list of the Top 200 Australian philanthropistswith giving of $1m to $500m.
  22. 22. Australian major givingThis is the Top 10 …
  23. 23. Australian major giving1. Chuck Feeney – c. $500m in Australian giving viaAtlantic Philanthropies2. John Kinghorn – Established Kinghorn Foundationin 2005 with $300 million, $25m to Garvan Institute(2009)3. Talbot Family – Bequest from Ken Talbot to TalbotFamily Foundation of c. $300m (2010)
  24. 24. Australian major giving4. Myer Family - $16m in 2009-10, $156m in total giving,via the Myer Foundation5. Estate of Sir Ian Potter – $14.2m in 2009-10 and over$150m in total giving since 1964, including $8m fromLady Potter to the Australian Ballet (2010)
  25. 25. Australian major giving6. Andrew Forrest – c. $80m to Australian Children’sTrust (2007), $2m to the launch of the AustralianEmployment Covenant/Generation One initiative onindigenous employment, and a further $50m inshares to various charities in 2011 plus a further $5min shares to Murdoch University and four WAperforming arts organisations, and a $3m cashdonation to complete the Art Gallery of WAs $25mcampaign. Joined giving pledge in 2013 pledging togive away half his wealth.
  26. 26. Australian major giving7. Fairfax family – over $97m in total giving via VincentFairfax Family Foundation since 1962; Tim Fairfaxgives over $3m per annum through Tim FairfaxFamily Foundation including $1m+ to NationalPortrait Gallery8. Clive Palmer - $100m for medical research andremote WA communities (2008), $6m to Duke ofEdinburgh Awards Program (2010)
  27. 27. Australian major giving9. Estate of William Buckland – the William BucklandFoundation distributes around $5m per annum,with total giving to 2010 reaching $74m10. Greg Poche - $40m to melanoma research (2005) and$20m to indigenous health (2008, 2010)
  28. 28. Australian major giving• You’ll notice how many of those really big giftsare recent• A majority of those donors in our estimated Top200 had made one or more very substantial giftsin the past five years• Not nearly where the US is yet, but growingnonetheless
  29. 29. Australian major givingIn 2009-10, 3,760 taxpayers made gifts ofover $25k.They gave $481m - almost 25% of allindividual giving that year.Source: Myles McGregor-Lowndes and Emma Pelling, An examination of tax deductibledonations made by individual Australian taxpayers in 2009 – 10 (QUT, 2012)
  30. 30. Australian major giving• PAFs - Private Ancillary Funds• Trusts that receive tax-deductible donations anddistribute a defined percentage to DGRs.• Originally set up as PPFs in 2001; PAFs since2009.
  31. 31. Australian major givingThere are now 1,050 Private Ancillary Funds (PAFs) inAustralia – vehicles for charitable giving managing over$2bn in funds. Some are corporate, but many are vehiclesfor individual and family giving.
  32. 32. Australian major givingPAF distributions to 2010Source: ATO, JBWere Australian Giving Trends 2012
  33. 33. Australian major givingIn addition to distributions already made,$2bn in PAF funds under managementmeans a large pipeline for future giving.
  34. 34. Key objectives in prospect research
  35. 35. Key objectives in prospect researchIt takes more than just wealth …LinkageInterestAbilityPropensityto give
  36. 36. Key objectives in prospect researchProspect research tries to answer three questions:• How much can someone give?• How likely are they to give?• How connected are they with our organisation?
  37. 37. Key objectives in prospect researchOr to put it another way:• What can we learn about the income and assetsof a potential donor?• What is their philanthropic history with us andwith other organisations?• What is the full extent of their relationships withour organisation?
  38. 38. Rating0 1 2 3 4 5Ability to give Unable to rate Cannot give amajor giftCould give atmajor gift levelCould give$100k+Could give$500k+Could give$1m+Inclination togiveUnable to rate No knowngivingGiveselsewhereLow leveldonor to usLapsed majordonor to usCurrent majordonor to usRelationshipto yourorganisationUnable to rate No currentrelationshipFamilyconnectionOne of:alumnus /member /patient /donorTwo of:alumnus /member /patient /donorCurrentcommittee orstaff member
  39. 39. The major gift cycleCultivation andEngagementSolicitation of GiftsIdentificationStewardship andRecognitionIdentification Cultivationand EngagementStewardship Solicitationand Recognition of Gifts
  40. 40. Researching wealth
  41. 41. Estimating wealth• We’re usually asked – how much issomeone worth? $5m? $10m? $20m?• It’s a fair question ...• But we may not have an absolute answer!• What we most often give are wealthindicators ...• And remember that income rather thanassets is often more important for majorgiving
  42. 42. Estimating wealthThis from a profile we wrote for a client:“Total wealth unknown.Publicly available data on remuneration and shareholdingsfollows – remuneration currently at around $330k in 2010from director’s fees, but has been much higher in previousyears – salary plus options in 2002 alone were over $2.5m.Identified public shareholdings, if still held, would beworth $3.7m, but this is an indicator rather than anestimate. On these indicators, total wealth should beconsiderably higher.”
  43. 43. Rich Lists• BRW (Rich 200, Executive Rich List, YoungRich List etc)• Mayne Rich List• Forbes (multiple countries)• Queensland Top 100• Resources Rich List• Hurun Report (China)• Asiamoney• AFR remuneration reports
  44. 44. Annual reports• Public company annual reports – directors’report gives remuneration and shareholdings fordirectors and senior executives• Report will also contain details of majorshareholders
  45. 45. Annual reportsQantas Chief Executive Officer AlanJoyce’s remuneration for 2012 was $2.28m(of which $2.109m was base pay).In 2011 it was $4.071m (of which $2.045mwas base pay).He held 2,531,188 Qantas shares in 2012.(Qantas also provide a set of statutoryremuneration figures which are higherthan this).
  46. 46. Connect4• Good for executive / director remuneration andbroad searches of annual reports
  47. 47. Morningstar DatAnalysisHolds an archive of 45,000 annual reportsfor ASX 2000 companies.
  48. 48. Businessweek• Comprehensive background on major publiccompanies• Also covers executive remuneration•
  49. 49. Directors’ transactions•• Or via Factiva
  50. 50. Salary surveys• Media reports may be helpful forprofessional salaries (e.g. AFR’s annualreview of legal salaries)
  51. 51. Salary surveys• If you know someone’s position, a salaryguide can help you estimate income
  52. 52. Property• State Land registry
  53. 53. Property• Property prices – Domain, CBA propertyapp, or media search
  54. 54. Property• lists last sale price forproperties …
  55. 55. Directorships and shareholdings• ASIC data• Multiple brokers available• Can search on persons or companies
  56. 56. Media / web search• Tools used for more generalresearch may be of use forwealth information• An historical media search(via Factiva) might revealfamily wealth, sale ofbusiness, sale of property• LinkedIn can reveal careerpath
  57. 57. Australian Bureau of Statistics• Statistics (including wealth information)by suburb
  58. 58. Foundations• Many Foundation websites have details ofbudget and priorities
  59. 59. Foundation listsPhilanthropy Australia
  60. 60. Foundation lists• Strategic Grants offer a giving calendarproduct listing deadlines for foundationswho give to your sector
  61. 61. PAFsGlobal Philanthropic’s Guide to PAFs
  62. 62. 62Private and publicly unlistedcompaniesType Small Pty Large Pty PublicunlistedPublic ASXlistedApproxnumber1.59m 20,000 20,000 2,500Shareholders Max 50Can’tapproachpublic formoneyMax 50Can’tapproachpublic formoney50+ 50+LodgefinancialsNo Yes Yes Yes
  63. 63. D&B Company 360. Covers 50,000 Australianpublic and private companiesPrivate and publicly unlistedcompanies
  64. 64. Researching giving
  65. 65. How much do people give?Source: Myles McGregor-Lowndes and Emma Pelling, Anexamination of tax deductible donations made by individualAustralian taxpayers in 2009 – 10 (QUT, 2012)
  66. 66. How much do people give?Source: Myles McGregor-Lowndes and Emma Pelling, Anexamination of tax deductible donations made by individualAustralian taxpayers in 2009 – 10 (QUT, 2012)
  67. 67. How much do people give?Source: Myles McGregor-Lowndes and Emma Pelling, Anexamination of tax deductible donations made by individualAustralian taxpayers in 2009 – 10 (QUT, 2012)
  68. 68. Giving elsewhere• Google search for donor name + relevantkeyword• Example search terms:donor, donation, philanthropy, benefactor, non-profit, foundation• Note that not all donorrolls are online
  69. 69. Giving elsewhereFR&C’s GiftSearch database lists donationsto Australian charities:
  70. 70. Giving elsewhere• Governor General’s• Posts detailedbiographies of honorees,often includingphilanthropy• Search via GoogleAdvanced Search
  71. 71. Research and the major gift ask
  72. 72. Research and the major gift askResearch can help to advise on:• Interest• Timing• Who should ask• The ask amount
  73. 73. Interest• Have they given to this area before, eitherhere 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 thataffects them, or someone close to them,personally?
  74. 74. Timing• Has their financial position changedrecently?• Have they made a major commitmentelsewhere?• Are there other circumstances making anask appropriate / inappropriate at this time?
  75. 75. Who should ask?• Principle is ‘peer to peer’fundraising for major gifts• Research can help toestablish networks
  76. 76. How much to ask for?• For major gifts, the gift will normally be fromincome rather than assets• If there’s a foundation or PAF, of course, that’sdifferent, and seek to estimate the foundation’sassets as well as previous gifts• For bequests, assets are more relevant
  77. 77. How much to ask for?It depends on the individual …
  78. 78. How much to ask for?As a guide amount1-5%of gross household income
  79. 79. How much to ask for?• Take account of wealth information• Take account of previous giving(to us and elsewhere) and knowncommitments• Have things changed since thoseprevious gifts?• Can you accept a pledge over multipleyears?• How much is needed for the project?• Better to ask for too much than toolittle!
  80. 80. More informationResources list on our website:’s prospect research blog at: via:
  81. 81. Regional resources• Guides to prospect research resources in China andIndia from Beth Bandy (International FundraisingIntelligence):• Asian prospect research services from Gnosis:• Global wealth lists from Helen Brown Group:• Regional wealth and philanthropy lists from the Hurunreport:• Regional wealth report from Capgemini:
  82. 82. Questions?
  83. 83. Thank