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. To view this webinar please visit: https://www.blackbaud.com.au/notforprofit-events/webinars/past

1. Prospect research and major giving:
How can research inform your
major gift ask?
Conor McCarthy
Fundraising Research & Consulting

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. Australian wealth

4. Australian wealth
'The cold economic data shows
Australians today are as close as they
have been for more than a century to
being the richest people on earth.'
(AFR magazine, 25 May 2012)

5. Australian wealth
Credit Suisse's Global Wealth Report 2012 tells us
that Australia's median wealth per adult is
$US194,000 … the highest in the world.

6. Australian wealth
In 2011, Australia had the world’s sixth highest per
capita income:
IMF 2011 via Wikipedia
# Country
1 Luxembourg
2 Qatar
3 Norway
4 Switzerland
5 United Arab Emirates
6 Australia

7. Australian wealth
The Australian Bureau of Statistics tell us that the
wealthiest 20% of Australian households had
average net worth of $2.2m in 2009-10.

8. Australian wealth
• As you would expect, much of the average
Australian’s wealth is in housing.
• There’s a strong concentration in the top 10%

9. Australian wealth
There are several thousand people who have appeared
on one or another of the various rich lists by now:
• BRW (Rich 200, Executive Rich List, Young Rich List
etc)
• Mayne Rich List
• Forbes
• Courier-Mail WA Rich List
• Queensland Top 100
• Resources Rich List
• AFR remuneration reports

10. Australian wealth
And of course the price of entry keeps going up …
10
210
0
50
100
150
200
250
BRW Rich List entry level in AU$ millions

11. Australian wealth
Australia has an estimated 3,000+ uHNWIs
(worth US$30m+), many of whom have
appeared on rich lists.
But it also has a much larger pool of upper-
middle-class wealth.

12. Australian wealth
• Capgemini produce an annual World Wealth
Report and a regular Asia Pacific Wealth Report
• Looks at High Net Worth Individuals (HNWIs) –
worth US$1m (excludes consumables and
primary residence) and Ultra High Net Worth
Individuals – worth US$30m and more
• Gives a sense of global wealth distribution and
trends

13. Australian wealth
There’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 Report
0
50
100
150
200
250
2004 2005 2006 2007 2008 2009 2010 2011
Number of HNWIs (thousands)
Number of HNWIs (m)

14. Australian wealth
That said, this is a period of global uncertainty, and
people may not feel as rich as they really are …
“Falling house and equity prices have made many feel poorer despite strong income
growth. By RBA estimates, household worth fell by 6.5 per cent last year and is down 11.5
per cent from its 2007 peak.
When surveyed last year by The Boston Consulting Group (BCG), nearly half the
participating 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 per
cent).” (AFR magazine, 25 May 2012)

15. Australian giving

16. Australian giving
What percentage of Australian taxpayers
give?
35%
Source: Myles McGregor-Lowndes and Emma Pelling, An examination of tax deductible donations made by individual Australian
taxpayers in 2009 – 10 (QUT, 2012), (p. 4). 4.4 million taxpayers (35.55%) claimed a deduction for a donation in 2009-10. 4.65m
taxpayers (37.83%) claimed a deduction for a donation in 2008-09.

17. Australian giving

18. Australian giving

19. Australian major giving
A 2011 report from QUT says major gifts are still
an underdeveloped area of Australian
philanthropy
In the US, a Bank of America Merrill Lynch study
in 2010 showed that major gifts from individuals
account for around half of all charitable giving

20. Australian major giving
"Many wealthy Australians are perceived by
their peers to not be giving, or to be giving
significantly less than they might readily be
able to give."
Wendy Scaife, Katie McDonald & Susan Smyllie, A Transformational Role : Donor and charity perspectives on major giving in Australia
(QUT, 2011).

21. Australian major giving
Australian major giving is growing.
See FR&C’s list of the Top 200 Australian philanthropists
with giving of $1m to $500m.

22. Australian major giving
This is the Top 10 …

23. Australian major giving
1. Chuck Feeney – c. $500m in Australian giving via
Atlantic Philanthropies
2. John Kinghorn – Established Kinghorn Foundation
in 2005 with $300 million, $25m to Garvan Institute
(2009)
3. Talbot Family – Bequest from Ken Talbot to Talbot
Family Foundation of c. $300m (2010)

24. Australian major giving
4. Myer Family - $16m in 2009-10, $156m in total giving,
via the Myer Foundation
5. Estate of Sir Ian Potter – $14.2m in 2009-10 and over
$150m in total giving since 1964, including $8m from
Lady Potter to the Australian Ballet (2010)

25. Australian major giving
6. Andrew Forrest – c. $80m to Australian Children’s
Trust (2007), $2m to the launch of the Australian
Employment Covenant/Generation One initiative on
indigenous employment, and a further $50m in
shares to various charities in 2011 plus a further $5m
in shares to Murdoch University and four WA
performing arts organisations, and a $3m cash
donation to complete the Art Gallery of WA's $25m
campaign. Joined giving pledge in 2013 pledging to
give away half his wealth.

26. Australian major giving
7. Fairfax family – over $97m in total giving via Vincent
Fairfax Family Foundation since 1962; Tim Fairfax
gives over $3m per annum through Tim Fairfax
Family Foundation including $1m+ to National
Portrait Gallery
8. Clive Palmer - $100m for medical research and
remote WA communities (2008), $6m to Duke of
Edinburgh Awards Program (2010)

27. Australian major giving
9. Estate of William Buckland – the William Buckland
Foundation distributes around $5m per annum,
with total giving to 2010 reaching $74m
10. Greg Poche - $40m to melanoma research (2005) and
$20m to indigenous health (2008, 2010)

28. Australian major giving
• You’ll notice how many of those really big gifts
are recent
• A majority of those donors in our estimated Top
200 had made one or more very substantial gifts
in the past five years
• Not nearly where the US is yet, but growing
nonetheless

29. Australian major giving
In 2009-10, 3,760 taxpayers made gifts of
over $25k.
They gave $481m - almost 25% of all
individual giving that year.
Source: Myles McGregor-Lowndes and Emma Pelling, An examination of tax deductible
donations made by individual Australian taxpayers in 2009 – 10 (QUT, 2012)

30. Australian major giving
• PAFs - Private Ancillary Funds
• Trusts that receive tax-deductible donations and
distribute a defined percentage to DGRs.
• Originally set up as PPFs in 2001; PAFs since
2009.

31. Australian major giving
There are now 1,050 Private Ancillary Funds (PAFs) in
Australia – vehicles for charitable giving managing over
$2bn in funds. Some are corporate, but many are vehicles
for individual and family giving.

32. Australian major giving
PAF distributions to 2010
Source: ATO, JBWere Australian Giving Trends 2012

33. Australian major giving
In addition to distributions already made,
$2bn in PAF funds under management
means a large pipeline for future giving.

34. Key objectives in prospect research

35. Key objectives in prospect research
It takes more than just wealth …
Linkage
Interest
Ability
Propensity
to give

36. Key objectives in prospect research
Prospect 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. Key objectives in prospect research
Or to put it another way:
• What can we learn about the income and assets
of a potential donor?
• What is their philanthropic history with us and
with other organisations?
• What is the full extent of their relationships with
our organisation?

38. Rating
0 1 2 3 4 5
Ability to give Unable to rate Cannot give a
major gift
Could give at
major gift level
Could give
$100k+
Could give
$500k+
Could give
$1m+
Inclination to
give
Unable to rate No known
giving
Gives
elsewhere
Low level
donor to us
Lapsed major
donor to us
Current major
donor to us
Relationship
to your
organisation
Unable to rate No current
relationship
Family
connection
One of:
alumnus /
member /
patient /
donor
Two of:
alumnus /
member /
patient /
donor
Current
committee or
staff member

39. The major gift cycle
Cultivatio
n and
Engageme
nt
Solicitatio
n of Gifts
Identificat
ion
Stewards
hip and
Recogniti
on
Identification Cultivation
and Engagement
Stewardship Solicitation
and Recognition of Gifts

40. Researching wealth

41. Estimating wealth
• We’re usually asked – how much is
someone worth? $5m? $10m? $20m?
• It’s a fair question ...
• But we may not have an absolute answer!
• What we most often give are wealth
indicators ...
• And remember that income rather than
assets is often more important for major
giving

42. Estimating wealth
This from a profile we wrote for a client:
“Total wealth unknown.
Publicly available data on remuneration and shareholdings
follows – remuneration currently at around $330k in 2010
from director’s fees, but has been much higher in previous
years – salary plus options in 2002 alone were over $2.5m.
Identified public shareholdings, if still held, would be
worth $3.7m, but this is an indicator rather than an
estimate. On these indicators, total wealth should be
considerably higher.”

43. Rich Lists
• BRW (Rich 200, Executive Rich List, Young
Rich List etc)
• Mayne Rich List
• Forbes (multiple countries)
• Queensland Top 100
• Resources Rich List
• Hurun Report (China)
• Asiamoney
• AFR remuneration reports

44. Annual reports
• Public company annual reports – directors’
report gives remuneration and shareholdings for
directors and senior executives
• Report will also contain details of major
shareholders

45. Annual reports
Qantas Chief Executive Officer Alan
Joyce’s remuneration for 2012 was $2.28m
(of which $2.109m was base pay).
In 2011 it was $4.071m (of which $2.045m
was base pay).
He held 2,531,188 Qantas shares in 2012.
(Qantas also provide a set of statutory
remuneration figures which are higher
than this).

46. Connect4
• Good for executive / director remuneration and
broad searches of annual reports

47. Morningstar DatAnalysis
Holds an archive of 45,000 annual reports
for ASX 2000 companies.

48. Businessweek
• Comprehensive background on major public
companies
• Also covers executive remuneration
• http://investing.businessweek.com

49. Directors’ transactions
• http://www.directorstransactions.com.au/
• Or via Factiva

50. Salary surveys
• Media reports may be helpful for
professional salaries (e.g. AFR’s annual
review of legal salaries)

51. Salary surveys
• If you know someone’s position, a salary
guide can help you estimate income

52. Property
• State Land registry

53. Property
• Property prices – Domain, CBA property
app, or media search

54. Property
• Onthehouse.com.au lists last sale price for
properties …

55. Directorships and shareholdings
• ASIC data
• Multiple brokers available
• Can search on persons or companies

56. Media / web search
• Tools used for more general
research may be of use for
wealth information
• An historical media search
(via Factiva) might reveal
family wealth, sale of
business, sale of property
• LinkedIn can reveal career
path

57. Australian Bureau of Statistics
• Statistics (including wealth information)
by suburb

58. Foundations
• Many Foundation websites have details of
budget and priorities

59. Foundation lists
Philanthropy Australia database
www.philanthropy.org.au

60. Foundation lists
• Strategic Grants offer a giving calendar
product listing deadlines for foundations
who give to your sector

61. PAFs
Global Philanthropic’s Guide to PAFs
http://www.pafguide.com.au/

62. 62
Private and publicly unlisted
companies
Type Small Pty Large Pty Public
unlisted
Public ASX
listed
Approx
number
1.59m 20,000 20,000 2,500
Shareholders Max 50
Can’t
approach
public for
money
Max 50
Can’t
approach
public for
money
50+ 50+
Lodge
financials
No Yes Yes Yes

63. D&B Company 360. Covers 50,000 Australian
public and private companies
Private and publicly unlisted
companies

64. Researching giving

65. How much do people give?
Source: Myles McGregor-Lowndes and Emma Pelling, An
examination of tax deductible donations made by individual
Australian taxpayers in 2009 – 10 (QUT, 2012)

66. How much do people give?
Source: Myles McGregor-Lowndes and Emma Pelling, An
examination of tax deductible donations made by individual
Australian taxpayers in 2009 – 10 (QUT, 2012)

67. How much do people give?
Source: Myles McGregor-Lowndes and Emma Pelling, An
examination of tax deductible donations made by individual
Australian taxpayers in 2009 – 10 (QUT, 2012)

68. Giving elsewhere
• Google search for donor name + relevant
keyword
• Example search terms:
donor, donation, philanthropy, benefactor, non-
profit, foundation
• Note that not all donor
rolls are online

69. Giving elsewhere
FR&C’s GiftSearch database lists donations
to Australian charities:

70. Giving elsewhere
• Governor General’s website
www.gg.gov.au
• Posts detailed
biographies of honorees,
often including
philanthropy
• Search via Google
Advanced Search

71. Research and the major gift ask

72. Research and the major gift ask
Research can help to advise on:
• Interest
• Timing
• Who should ask
• The ask amount

73. Interest
• Have they given to this area before, either
here 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 that
affects them, or someone close to them,
personally?

74. Timing
• Has their financial position changed
recently?
• Have they made a major commitment
elsewhere?
• Are there other circumstances making an
ask appropriate / inappropriate at this time?

75. Who should ask?
• Principle is ‘peer to peer’
fundraising for major gifts
• Research can help to
establish networks

76. How much to ask for?
• For major gifts, the gift will normally be from
income rather than assets
• If there’s a foundation or PAF, of course, that’s
different, and seek to estimate the foundation’s
assets as well as previous gifts
• For bequests, assets are more relevant

77. How much to ask for?
It depends on the individual …

78. How much to ask for?
As a guide amount
1-5%
of gross household income

79. How much to ask for?
• Take account of wealth information
• Take account of previous giving
(to us and elsewhere) and known
commitments
• Have things changed since those
previous gifts?
• Can you accept a pledge over multiple
years?
• How much is needed for the project?
• Better to ask for too much than too
little!

80. More information
Resources list on our website:
http://www.fundraisingresearch.com.au/
also:
http://www.fundraisingresearch.info/
http://www.aprahome.org/
http://www.supportingadvancement.com/
Blackbaud’s prospect research blog at:
http://www.npengage.com/
Training via:
http://www.artfultraining.com/

81. Regional resources
• Guides to prospect research resources in China and
India from Beth Bandy (International Fundraising
Intelligence): http://www.ifintelligence.com/
• Asian prospect research services from Gnosis:
http://gnosis.com.sg/
• Global wealth lists from Helen Brown Group:
http://www.helenbrowngroup.com/services/wealth-lists/
• Regional wealth and philanthropy lists from the Hurun
report: http://www.hurun.net/usen/
• Regional wealth report from Capgemini:
http://www.capgemini.com/resources/asiapacific-wealth-
report-2012--english-version

82. Questions?

83. Thank you
conor@fundraisingresearch.com.au