Trends in High Value fundraising Worldwide

Sharon JacksonHead of International Market Development

ActionAid International

In this session we will…

• Highlight some of the key global trends impacting on High Value fundraising – and the opportunities and challenges they present

• Explore ways in which we can respond to both the challenges and opportunities

• Pin-point areas of similarity and difference across different markets/regions

• Share real life examples of activities, approaches and practices that are working across the world

First of all…. We need some clarity…

What do I mean by ‘High Value’ fundraising?

• For ActionAid, High Value donors are:– Individual major donors, – charitable trusts and foundations, – companies.

• Entry level gift?• These areas are combined as require a similar

approach– account management– proposal/reporting process – relationships are key.

• Government donors…..Cross over??

Who is already doing High Value fundraising of any kind?

Which kind? How long for? Which countries?

Who are our High Value Donors?

Why do major donors give?• Investment• Putting something back• Religion (part of all religions...)• Socially aware• Feel-good factor• Social obligation (Russia)• Conditions of inheritance• Recognition• Concern for the next generation...(Warren Buffet and

Emma Thompson!)• Social acceptance• They love people, Africa, Brazil, Water, Land Rights, etc• Hearts and minds…..

Why do Grant-making Trusts and Foundations give?

• Socially aware and charitable founder/benefactor

• Formal obligation to donate funds – clearly stated guidelines

• Often in-undated with proposals• Need to comply with stated objectives and

demonstrate due diligence – less flexibility

Why do companies give?

• True philanthropic gifts are rare – but not unheard of

• Social investment agenda• CSR agenda• PR opportunities• Employee retention• Different motives = different offer needed =different budget line

Where are ActionAid’s High Value programmes - 2011?

• UK• USA• Italy• India• Greece• Denmark (new)• Australia (new)• Brazil (new)• Thailand (brand new!)• Kenya? Vietnam? Rwanda? China?

What are the key global trends impacting on High Value

Fundraising?

And how are organisations like ActionAid responding?

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Political…Tougher Public Trust and Confidence in Charities

F o c u s :• Media coverage of controversies and corruption• ‘Experts’ questioning the validity and impact of aid• Consumers are expecting more than ever before• Increased competition

I m p l i c a t i o n s f o r F u n d r a i s i n g …• Increases in levels of restriction• Donors more demanding – SROI and impact measures• Interest in tangibles (build a school!) • Importance of building relationships – to build trust• Role of advisors and intermediaries

“Next to doing the right thing, the most important is to let people know

you are doing the right thing” John D Rockerfeller

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Political…T a x a t i o n

• More countries now offer tax incentives to donors

I m p l i c a t i o n s f o r F u n d r a i s i n g …• Legal and tax barriers currently hamper

cross-border giving• Third sector role in lobbying and

promoting?• Motivation for giving????• Influence on how and when people give• Giving while living versus legacies

In 1984, Charles F. “Chuck” Feeney, co-founder of the Duty Free Shoppers Group, transferred his business interests, then conservatively valued in the hundreds of millions of dollars, into a foundation - Atlantic Philanthropies….

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E c o n o m i c …Impact of global recession on charitable giving…The global recession is re-shaping giving practices.

I m p l i c a t i o n s f o r F u n d r a i s i n g …• Many wealthy individuals have done better than most• Foundations are being more selective and demanding – bigger

grants to fewer• CSR budgets in Europe and USA affected – other budget lines?• Charities seen helping people in difficult times are the ones

people give up luxuries to support• Keep your donors close even when they cannot afford to give

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Economic…E m e r g i n g M a r k e t s w i l l

o u t p a c e r e s t o f t h e w o r l d

• Asia will lead with GDP growth of 7.1%.• Latin America, the Middle East, and Africa in the 3 – 4% range. • Emerging Europe will expand only 1.7%.

Top Ten Economic Predictions for 2010 – Nariman Behravesh, IHS Chief Economist

I m p l i c a t i o n s f o r F u n d r a i s i n g …

• Big opportunities for fundraising in middle income countries!

Highlights: study by Deloitte Center for Financial Services May 2011

Highlights: study by Deloitte Center for Financial Services May 2011

• Total wealth of millionaire households in these 25 economies forecast to grow:$92 trillion 2011 to $202 trillion 2020.

• U.S. and Europe will remain the global centers of wealth over the next decade, in terms of both the amount of wealth and number of millionaire households.

• Emerging market economies likely to be more dynamic in terms of growth. China may continue to be the driving force in the growth of millionaire wealth, followed by Brazil and Russia.

Capgemini and Merril Lynch World Wealth Report 2011• �HNWI wealth grew 9.7% in 2010 to US$42.7 trillion, surpassing 2007 pre-crisis

peak. • Global population of HNWI grew 8.3% to 10.9 million. • Asia-Pacific: 3.3million HNWIs – now second-largest behind North America.

Ahead of Europe for first time. Combined wealth of Asia-Pacific HNWIs exceeds Europe’s

• North America: HNWI wealth up 9.1% to US$11.6trillion • Latin America: HNWI population up 6.2% in 2010. Wealth rose 9.2%. This

segment proving relatively resilient and stable in recent years • India’s HNWI population entered the Top 12 for first time and Australia edged up �

another notch to No. 9. • 53.0% of the world’s HNWIs were still concentrated in the U.S., Japan, and

Germany.• �The global population of Ultra-HNWIs grew by 10.2% in 2010 and its wealth by

11.5%.

The wealthy are mostly men – but increasingly women

The wealthy are getting younger…

Old money versus new money

• 15 years ago, 75% of the Sunday Times Rich List had inherited their wealth and 25% were self-made. Today that ratio is reversed– Engaged philanthropy (venture, catalytic)– Investment approach/business models– Philanthropy advisers/ organisations (NPC, Philanthropy

UK, Coutts etc)

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Social…G r o w t h i n V o l u n t e e r i s m

• In UK 40 % of adults volunteered formally at least once in 2009/10• Recession direct impact on volunteering in Europe

I m p l i c a t i o n s f o r F u n d r a i s i n g …• Services in Kind and pro bono agreements with companies • Employee engagement needs to be part of corporate package• People want higher levels of involvement with the charities

they support• Supporter visits and Events• Engaged philanthropy… Want to give advice as well as money

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Social…I n c r e a s e i n c a u s e -r e l a t e d M a r k e t i n g

‘Embedded generosity’ makes giving painlessE x a m p l e s :•Pampers & Unicef•WaterAid and H&M•G-Star Democratic and ActionAid

I m p l i c a t i o n s f o r F u n d r a i s i n g …• Visibility and brand awareness as well as funds• Win-win!• Expect lots of innovative corporate giving

schemes that involve customers co-donating and/or co-deciding.

NB: Companies want visibility

• Co-branding and sponsorship• Emergencies or issues with media coverage• Their employees – your volunteers• Pro-bono opportunities – easier to give

time/services than money

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Social… C e l e b r i t y …

Worldwide trend of celebrity endorsement to raise awareness and funds…

I m p l i c a t i o n s f o r F u n d r a i s i n g …• How can we get celebrities on board? Who will

appeal to our specific audiences? How can they help us?

…

• Particularly used for emergency or specific appeals – celebrity in televised film or appeal to draw attention to a cause

• Celebrity sponsored events to raise money for a specific cause

e.g. Haile Gebrselassie and Ethiopia Marathon

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Social…D i a s p o r a – J a r g o n o r O p p o r t u n i t y ?

‘Diaspora giving’ is the broad term used to describe people giving to their country of origin or culture.

• May become a more formally established part of giving portfolios

• Known as ‘heritage fundraising’ in the US or‘philanthropatriotism’

I m p l i c a t i o n s f o r F u n d r a i s i n g …• How can we connect people in a meaningful way?

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Technological…C o n n e c t i n g w i t h O t h e r sProfound shift in the way that we interact and connect with people

• People are calling less and using other ways of direct communication

• Old conventions are changing; moving towards a culture of ‘lightweight, constant contact

I m p l i c a t i o n s f o r F u n d r a i s i n g …• How do we communicate with our donors in ways that are

convenient to them but retain the meaningful 1to1 interaction?• Can we find new ways to connect donors and beneficiaries?• Sometimes we are better to stay traditional – face to face is

best! Relationships are not built on SMS

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Technological…V i r a l M a r k e t i n g

Word-of-mouth is the most successful kind of marketing ….Viral marketing also links directly into the recent shift in the way we communicate with people…

I m p l i c a t i o n s f o r F u n d r a i s i n g …

•Importance of contact networking, volunteer fundraising boards and Donor get Donor programmes•Events play a role…

What is the same across our markets/countries?

The 7 steps…a high value courtship

1. Identify (start with who you know)2. Research and qualify3. Cultivate (the dating game)4. Engagement 5. Ask (no-one gets married without a proposal)6. Close7. Stewardship (it’s about staying married)

You need to make the High Value approach work for you…

• Entry level needs to work for you. What size gifts are in YOUR top 5-20%?

• Prospecting – start with who you know – networking is key

• Need a strong case for support!• Relationship fundraising approach – 1 to 1• Build TRUST!• Recruiting (and developing) the right fundraiser is key• Senior Management Team and Board involvement• FOCUS and prioritise

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AA UK 2009    

Gift level per annum

No of donors giving at this level

Total amount given at this level

Average gift size at this level Donors Income

£0.01-£499 65 £69,043 £1,062

84% 20%

£5,000-£9,999 37 £215,415 £5,822

£10,000-£24,999 12 £152,001 £12,667

£25,000-£49,999 9 £326,800 £36,311

16% 80%£50,000+ 12 £1,410,551 £87,092

Grand Total 135 £2,173,810 £16,102

80% of our income from <20% of our donors…

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AA Italy 2009    

Gift level per annum

No of donors giving at this level

Total amount given at this level

Average gift size at this level Donors Income

5,000-£9,999 1 € 5,000 € 5,000

81% 10%10,000-£24,999 1 € 16,000 € 16,000

25,000-£49,999 2 € 73,000 € 36,500

19% 90%50,000+ 3 € 295,000 € 98,334

Grand Total 27 € 409,740 € 15,176

What is differentacross our markets/countries?

Taxation versus charitable giving

Believe in taxation. Govt then redistributes wealth

Do not believe in taxation. Do not trust Govt to redistribute wealth. Believe in philanthropy and being

able to choose where money goes

USA

UK

Denmark

The Spectrum of Philanthropy: Peter Maple from London Southbank University

Altruism

Enlightened

Self-interestReciprocity

Crucial differences in emerging economies…

• Shock tactics don’t work: they embarrass • Donor may know more than you…• The challenge of visibility• The challenge of geographical proximity• Importance of govt link – Middle East and China• Importance of corporate or royal connections – SE Asia• ‘Monkeys play by sizes!’• Distinction between private and corporate

wealth/giving is less clear• The politics of poverty can get tricky

Private Social Responsibility• “I once attended an evening party organized by a wealthy

family in a South American country, devoted to philanthropy. Guests, similarly ultra-wealthy families, gathered to talk about their giving, share experiences and possibly form alliances….

• As I listened to the other guests talking, I began to realize that giving is seen as just an accessory to a wealthy lifestyle rather an act that implies a complete moral worldview, such giving, new or old, will make no great changes in the world. That perhaps it is time to embrace the idea of ‘private social responsibility’.

• I heard one impeccably dressed lady share with a friend her frustration over peasants in the northern part of the country who did not want to move from their land despite ‘generous’ offers from the company she owned. Her friend nodded sympathetically and replied with a similar story of poor workers demanding some right or other ...”

• Olga Alexeeva, CAF Global Trustees and Philanthropy Bridge Foundation.

Any questions?