This week the Australian Financial Review published its 'Philanthropy 50', Australia's top individual givers in 2016, compiled by John McLeod: you can find the list and accompanying articles here
We’ve heard a lot recently from the UK about the discussion on privacy with regard to prospect research, so we thought it might be useful to summarise a few points and draw together some relevant web links.
The UK Information Commissioner's Office (ICO) fined two charities in December for data protection breaches. Both charities paid the fines while publicly disagreeing with the ICO’s assessments. The way these fines have been reported in some quarters have implied that activities such as data screening, or appending phone numbers to donor records, are not permitted under UK legislation, which is not the case. The key issues were about transparency to donors, and about whether these activities came within the definition of the data holder’s ‘legitimate interest’ and so constituted ‘fair processing.’ The ICO further outlined its position on these issues at a conference last month, and is considering possible penalties for another eleven UK charities.
Charities in the UK have expressed concern about the judgmental tone of remarks made by the ICO representative about charities’ practices which the charities felt were inappropriate and misleading and which lead to headlines like this “The UK Information Commissioner’s office (ICO) has slammed a number of big-name charities, including the RSPCA and the British Heart Foundation, for 'wealth screening' donors. “
As the UK prospect research firm Prospecting for Gold commented last month: Wealth screening is not and never has been illegal. Nor is prospect research. The key is to make sure you meet the requirements of the Data Protection Act so you can lawfully undertake these activities.
And the Commissioner herself in her speech to the February conference said:
“Let me be clear. It’s not that the activity is against the law but failing to properly and clearly tell your donors that you’re going to do it, is.”
UK charities are also concerned that the ICO’s views on these issues do not necessarily agree with those of the NCVO, as expressed in their guidelines on charities’ relations with donors published in September 2016
How much of this debate is relevant for us here in Australia?
As in Australia, the UK data protection laws require that data holders inform their data subjects if they intend to append to their records information provided by third party suppliers or sourced from the public domain. If you look at your telco supplier’s privacy agreement you will probably find a statement like this: We may also collect personal information from other companies that are able to disclose it to us, if it's not practical to collect it from you. For example, we buy or obtain personal information from trusted sources to help us identify people who might be interested in hearing about our products. (Optus privacy statement).
At FR&C we remind clients in our written materials of this obligation to disclose: the relevant Australian Privacy Principle information can be found in APP 5 at https://www.oaic.gov.au/agencies-and-organisations/app-guidelines/
What the ICO actually said
These are the links to the two penalties levied in December
This is the ICO’s page for the public about the practices they criticised
This is the ICO’s paper produced for the meeting they held with selected charities in February https://ico.org.uk/media/2013426/fundraising-conference-2017-paper.pdf
This is a recording of the Information Commissioner’s speech at the conference https://ico.org.uk/for-organisations/charity/
This is the link to the guidelines the ICO issued after the meeting
Some other good commentaries:
Factary’s posts on the situation here https://factary.com/category/fundraising-research/
And Chris Carnie’s blog here https://factary.com/category/chris-carnies-blog/
The UK Researchers in Fundraising Group’s newspage here http://www.institute-of-fundraising.org.uk/groups/sig-researchers/news/
The 2016 World Wealth Report from Cap Gemini is out and available for download here. Cap Gemini report that Asia-Pacific recorded robust HNWI population and wealth growth rates (9.4% and 9.9%, respectively), highest across the globe, and edged past North America to become the region with the highest HNWI wealth of $ 17.4 trillion. The population of HNWIs in Australia increased from 226k in 2014 to 234.4k in 2015
Find the wealth (and the PAFs) already in your database
We're constantly adding new names and data to our Wealthscan screening database: it now numbers nearly 45,000 prominent and wealthy Australians including many PAF trustees. We are also now including where available the latest information on PAF assets as well, so if you want to find out which PAF trustees are already in your database, and how much money that fund contains, consider a Wealthscan screening.
New service - Prospect Rating
Constraints on time and resources make it vital to be able to prioritise your prospects once you have identified them; with this new service FR&C will assess the linkage, interest, and financial ability of the people in your prospect pool, enabling you to set priorities effectively. Contact us for more information
JB Were recently published their latest review of giving in Australia, looking in particular at the trends shown by the NAB Charitable Giving Index, and noting the continuing growth in the number of PAFs registered (now totalling almost 1400). The report can be accessed on their website here
We've been writing about what's happening in major gift fundraising in FR&P and here on their website (subscription only, sorry)
Our website list of Australia’s $1m+ donors has grown to over 250 names: the list now includes 10 donors who have given more than $100m in donations, 57 who have given more than $10m, and a further 190 who have given $1m+, as well as a number of estates which are distributing $1m or more each year. You can find the list here on our website
Many of those donors will be among the 226,000 High Net Worth Individuals the 2015 Capgemini World Wealth Report estimates can be found in Australia.
Capgemini’s World Wealth Report for 2015 (figures for 2014) came out in June, showing continued but slower growth in the world’s population of wealthy individuals, and that for the first time the number of high net worth individuals in Asia has overtaken the number in the USA. Key growth countries are India and China. Australia showed some growth, with the total population of individuals meeting Capgemini’s criteria rising from 219,000 in 2013 to 226,000 in 2014.
The report defines a ‘High Net Worth Individual’ as someone who has US$1m or more in investable assets; figures exclude the individuals main residence but do not exclude superannuation.
The most interesting feature for our sector is the increasing attention the WWR has been giving to the question of social impact and philanthropy over the last few years. In this edition of the report, they highlight advice on social impact as one of the key things that investors, and especially younger investors, are looking for from their advisors. More on this topic here https://www.worldwealthreport.com/Social-Impact-for-Wealth-Managers
You can access and download the 2015 report here
The NAB's latest annual report on charitable giving says that
Giving to charity grew by just 2% over the year to February 2015, down from 10% at the same time last year. Growth slowed in most age groups (except 65+), in all regions and there was significant divergence in the rate of charitable giving growth across charity categories. The slowdown in giving mirrors some key findings from our Consumer Anxiety Reports which shows that Australians are responding to heightened stress by cutting back spending on “non essentials”, including charitable donations. Slower growth in charitable donations has also occurred against a backdrop of below trend economic growth and rising unemployment.
Despite these challenges, the average donation size for all charities increased by $2 over the past year to $336 per donor, with nearly all charity sectors experiencing an increase in average donation size.
You can read the rest of their summary here
And download the full report here
JBWere's latest report on Private Ancilliary Funds finds record distributions in 2014
Some key findings
· There are now 1,240 PAFs operating across Australia with a post GFC record number established in 2014.
· New South Wales saw its highest ever year of new PAFs and now has 42% of all PAFs.
· Family involvement and particularly the engagement of children is proving an important driver for the use of structured giving such as PAFs. This extends to all areas of their operations including distribution and investment decisions and it provides an ideal broad learning environment, often for both generations.
· Distributions from PAFs have grown to record levels reaching $251million in 2012 and estimated to exceed a cumulative $1.7billion in 2014. The strong and consistent growth in distributions has highlighted the value of having a dedicated philanthropic corpus through variable financial market conditions.
· PAFs continue to distribute around 9% of assets annually, well in excess of the minimum 5% required, with the average PAF distributing around $250,000 each year.
· Welfare still dominates as the most popular cause for distributions with a 28% share in 2012 and an estimated total to date of $500m since PAFs began. Health and research enjoyed good gains in 2012 while culture slipped although it still sees support from PAFs well above the proportion seen in broader giving measures.
· The overall PAF corpus jumped to $2.9billion in 2012 and with an increase in new PAFs established since, plus financial market gains, is estimated to be currently around $4billion.
We try to keep up to date with news on developments in and reports on philanthropy in Australia and post it here: if you have something to share, please send it to us!