Tennis and the Rich List

The 2015 Sunday Times Rich List was published yesterday.  It reminded me of tennis.

The world’s top 100 tennis players (male or female) have about the same levels of talent, skill and motivation.  Yet, they are paid wildly differently for their efforts, with the top three male players earning around one quarter of the total available prize money from 2009-2012.  Inequality in this group is severe, and has increased in recent years.

This trend uncannily mirrors recent UK wealth patterns, namely, the further up the income scale we travel, the more gains accrue.  So, the top 0.5% benefit more than the top 1%, the top 0.1% more than the top 0.5%, the top 0.01% more than the top 0.1%, and so on.   The graph below is indicative, and more detail, using US data, is here.UK 61-11 wealth pic Is this reflected in how charities seek support?  In some cases.  Should we work even harder to bring in truly big gifts more consistently from the wealthiest?  Absolutely.  The maths are simple: the 2015 Rich List estimates that the wealthiest 1,000 people in the UK are worth £547bn, up 5.4% on 2014.  So, even if the estimated value is accurate (and it’s almost certainly too low), gifts over £1m account (at £1.36bn in 2013) for around 0.2% of total top wealth.  Getting this to 1% would quintuple the value of UK high-value philanthropy to around £6bn.  However, a 2013 study by the University of Manchester suggests this is not happening, as the poorest 20% gave 3.2% of their gross monthly income to charity during the four weeks before they were interviewed, while the richest 20% gave 0.9%.  And, the Coutts Million Pound report estimates that the value of the largest gifts has increased in the last decade, but only incrementally, while this year’s Rich List calculates that the wealth of Rich List entrants doubled between 2009-2015.

And, among the ‘merely wealthy‘, it is hard not to agree with research consultancy Factary who concluded in June 2014 that “Middle England is neglected”, ie, that charities leave significant sums from this group ‘on the table’.  The space between Individual (roughly, £3-£20 per month) and Major Giving (cash gifts of around £5,000-£10,000 and up) is one which could receive more attention.  Factary estimate that this market could grow to be worth more than the £20m value they currently assign to it.  Many in this group would have featured in Rich Lists just a few years ago, but are now excluded by the explosion in top wealth.  However, they can still make a really significant contribution, and many will be passionate advocates of causes we represent.

Tennis is an extreme example of a handful of superstars driving revenue.  Those featuring in the Rich List will obviously play a crucial part in raising the overall amount given to charities in the UK — from the level spent on cheese to that spent on, let’s say, alcohol.  By broadening and deepening support from the wealthiest, and strengthening the base of so-called ‘middle donors’, charities can avoid tennis’s reliance on a handful of household names, and reach more of those in need of their services by raising more, more consistently.  If we agree that fundraising must change to survive, these opportunities are too important to miss.

Charity to serve.

PS: when will the Sunday Times publish another version of the expanded 2005/6 Rich List?  This is one of the most useful books in my library, especially as it now requires £100m to enter the top 1,000, excluding many wealthy people.  I have to assume they made a (big) loss on the expanded version, but surely 10 years is long enough to wait for another edition?

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