Prospect Research

FYI – STRL

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2019 sees the the Sunday Times Rich List (STRL) go political. With the bright red front cover adorned by an image of British opposition leader Jeremy Corbyn, Editor Robert Watts’ introduction warns of a potential exodus of high net-worth individuals (HNWIs), fearful of a so-called “Corbygeddon”, from the UK’s shores. Right on cue, Corbyn himself chimed in to call the List “a stark reminder of the grotesque inequality that scars our society”. So far, so controversial.

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Away from politics, the 2019 list again sees a record high for top wealth in the UK. Despite significant losses for evergreen Listers like Lakshmi Mittal, Mike Ashley, Luke Johnson and the Schroder family, this year a whopping 151 billionaires feature in the top 1,000, with total estimated value of £524.8bn, (up from £480.5bn in 2018). Total list value is at an all-time high of £771bn, 68% derived from billionaire wealth, with entry to the list now requiring £120m, up from around £40m in 1989. At the top, a £241m drop in profits at his firm Ineos explained as having caused a £3bn drop in Sir Jim Ratcliffe’s overall wealth, pushing him from top spot to third. Private Eye, who had questioned his elevation to first place in 2018, will doubtless take note.

And the sharp-eyed reader will have spotted other methodological quirks. The ‘rules of engagement’ on p144 hint at the potential variability underlying the list’s published estimates. Landholdings – a critical part of so much wealth – are valued on a hierarchy atop which sits “London land with planning permission”. But this masks a tremendous variation even within the value of this region, especially when so-called ‘hope value’ – the increased price of land with secured planning permission – is factored in. Looking at assets, the listed sources of “identifiable wealth” seem to leave major categories unmentioned. Assets listed as having been considered are “land, property, racehorses, art or significant shares in publicly listed companies” – no mention of significant classes of collectibles like wine, jewellery, classic cars, coins, any one of which are considerable  stores of value whose prices have risen steeply in recent years. The list also omits sailing, odd when a single superyacht can cost eight figures. When the list was first published in 1989 such assets may have been intangible, but the standard of open source investigation has risen rapidly in recent years, as shown by the pioneering work of the Organised Crime and Corruption Reporting Project (OCCRP) and Bellingcat, among others, work which shows that identifying the value of assets has never been more possible. And what of the “computerised searches and analysis” used to track down owners of private companies? Data suppliers are mentioned, but no methods – a tantalising loose end for those interested in the STRL teams methods.

Even given that a generous dollop of art by necessity leavens the science of the lists’ affluence estimates, the sheer scale of difference between different publications estimates are notable. One eye-catching example is that of the Reuben brothers, whose wealth the Bloomberg’s Billionaires Index (BBI) reckons at $6.2bn (£4.8bn), while the STRL has them an order of magnitude away, at £18.7bn. I raise this not to nitpick at the undoubtedly slippery task facing the STRL research team, but to highlight the thorny job facing many fundraising researchers (and others) who seek to use these lists to understand the approximate order of magnitude to use in their recommendations. Many of our teams rely on our estimates to determine team activity, estimations which are made more difficult to make by such huge differences between the estimates of much-used resources like these.

Experienced List-watchers will find the absences almost as interesting as the presences. And no, I am not referring to the longstanding convention of absenting Rupert Murdoch from the list (though I can’t resist noting that his daughter Elisabeth’s £156m fortune derives from the sale of her former television production company to her father’s firm, News Corp), but to the elusiveness of the ‘missing wealthy’. Put to one side the growing academic literature on top wealth which is has driven up the standard of analysis in this area in recent years. But, when an experienced practitioner like Rupert Hoogewerf (creator and lead researcher of the Hurun Report) estimates that for every billionaire his team in China identifies a further two are missed, can we reasonably believe the STRL omits fewer HNWIs than this? Probably not. Maybe we will be in a better position to judge once the Institute for Fiscal Studies recently-announced five-year study of inequality in the UK, headed by Nobel Prize-winning economist Sir Angus Deaton, is completed. Let’s see.

As it enters its 32nd year, the STRL is part of the landscape of our industry, and others. Current Editor Robert Watts and STRL founder Philip Beresford deserve credit for creating and sustaining such a bankable (excuse the pun) publishing phenomenon. Yet, as the team are no doubt aware, as the years pass so must methods evolve. In the age of Big Data, ever-sharper academic and journalistic specialism, and growing interest from companies and the public, the Rich List will need to evolve. We await to see the innovations Watts and his team will use to keep ahead of the field next time.

Roll on 2020.

#ResearchPride

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First, let me thank Helen for taking the initiative to start #ResearchPride (and also defining what should come after).  It’s a great and timely idea – I think for a number of reasons:
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  • Fundraised income in the UK and elsewhere will struggle to grow until prospect research is more incorporated into fundraisers work and until senior leadership take it more seriously as a strategic proposition.  Prospect research’s raison d’être is to help fundraisers go where the money is, and go there often.  Yet, too often we find conference agenda lacking prospect research content, and thought leaders not discussing prospect research.  #ResearchPride is our chance to change this and tell the world how important prospect research is to funding more of the vital work our organisations do
  • We cannot escape the fact that wealth an income in many countries is now more unequal than was the case 20 or 30 years ago.  This means we cannot trust our fundraising approaches to chance.  Those able to offer truly major support are a very elite group – and we must be directed in finding them among our supporter base.  Even a brief reading of the Sunday Times Rich List shows that 2% of the value of members of the list (in 2015 valued at £587bn) would double to amount of directly donated income going to UK Charities.  And the Coutts £m Report shows that the link between wealth creation and philanthropy in Britain is weak to the point of not existing. UK GDP is £1.5trn (trillion) per year, yet £m+ philanthropy is valued at £1.3bn.  The Big Society has failed to budge this trend – while the UK is by some measures the most generous society in the world, prospect research can and should help fundraising be strategically directed toward key areas of potential growth, including high-value giving.  Important within this is ensuring charities change their habit of not asking for enough, again, something prospect research can help to change
  • Researchers give the sector space to consider new ideas and cross-pollinate.  In an industry where the next deadline is never far away, we can also help our advancement offices to lift their heads, take a look beyond within-year targets to scan the horizon for trends and innovations.  In doing so, researchers can enable fundraising to move from being a short order cook to Feran Adria.  As we’ve seen from recent developments in the UK, this is invaluable – a week (or a couple of months) is a long time in fundraising, and inertia is often not an option.  We must respond to events, and prospect research should be central to this response.
  • Finally I’m hugely proud that researchers help to make the most of donor contributions.  The ROI for investments in prospect research often exceed 10:1, a truly outstanding return.  If nonprofits are ever to overcome perennial donor concerns over admin costs and impact effectiveness, prospect research will surely be at the heart of the answer.
I’ll leave it at that.  However, many others have blogged/ tweeted and commented this month as part of #ResearchPride – some of the relevant links are here, do check them out:

Looking forward to #ResearchPride 2017!

Clara Avery interview: “Where I’ve seen consistent success is where we’ve done the basics right”

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Clara A

Clara is Head of Supporter Insight and Development at Macmillan Cancer Support.  She joined Macmillan in 2003 and previously led their Direct Marketing and Sales teams.  She tweets at @claraavery.

Macmillan have been oneClara_Macmillan insight flow of the success stories of British fundraising in recent years, and Clara sets out why that is from her perspective. The diagram here sums up the process.  Evidence is required at each stage, from identifying the gap to assessing whether further investment is needed or the initiative has been successful.  Clara stresses in the interview that the challenge is not to never fail, but to make failure cheap, and to learn as much as possible from these ‘failures’.  As G. K. Chesterton said, “If it’s worth doing, it’s worth doing badly”.

Two things in the interview struck me as particularly significant:

First, decisive leadership.  Macmillan embarked on a “massive” restructure and investment programme in 2008, when many charities were cutting costs in the midst of the recession.  The results speak for themselves, with Macmillan’s voluntary income increasing by something like 50% since then.

Second, the importance of renewal.  The World’s Biggest Coffee Morning is now a byword for fundraising success.  But it really took off once Macmillan looked at what and who drove the event.  By integrating insight into the campaign it became what it is today.

However, we also talk about how the prospect research and insight teams are structured at Macmillan, how to understand donor motivations, and what one piece of information Clara’s team would like to have to raise more money.  Hope you enjoy the interview.