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August 25, 2016 By Helen Brown

Brexit, 2 Months Later: The undercover fundraiser (with apologies to Tim Harford)

We’ve been somewhat distracted here in the US with our own looming election, so perhaps we can be forgiven for forgetting that another monumental, electrically charged election nicknamed ‘Brexit’ happened two months ago this week in the United Kingdom. If your nonprofit has constituents in the UK or Europe, this will be much on their minds because it has likely already had a significant impact on their personal finances. Now that the dust has settled a bit, I asked my colleague Marc Whitmore at More Partnership (that’s him in the photo) to give us some insight on what’s happening with Brexit through the philanthropy and fundraising lens. It’s a fascinating read – enjoy! ~Helen

Marc Whitmore, More Partnership

What the hell happened, Britain?

Quite. Well, in May 2015, the UK elected a Government with the manifesto pledge to hold a referendum with a simple question: should the UK remain in or leave the European Union? That referendum took place on 23 June 2016, and 51.9% of those who voted, voted to leave the EU.

Crikey! That was a turn up for the books.

Indeed. And the surprise extended to many including: the then Prime Minister (David Cameron), stepped down on the morning of the result and was replaced by Theresa May; those associated with the Leave campaign find themselves tasked with delivering it (our Foreign Secretary – Boris Johnson; our BrExit minister  – David Davies; our foreign trade minister – Dr Liam Fox); and some others declared that their life’s work was now over (Nigel Farage, leader of the UK Independence Party).

Alongside all of this, the official Opposition to the UK Government (the Labour Party) is going through a drawn-out leadership contest and while the United Kingdom has overall voted to leave, there are calls from some of the component parts of the United Kingdom (Scotland and Northern Ireland) to stay. Our European friends are, understandably, none too pleased either (see “From gloomy to glad, Europeans respond to Brexit vote,” Financial Times 4 August  2016, here).

I thought you were supposed to be all “keep calm and carry on”? So you’ve left?

No. Not quite. Apparently that requires us to notify the European Union that we’re leaving (that we wish to activate “Article 50”) in line with our somewhat fuzzy constitutional requirements. How we do that, given our constitution isn’t written down anywhere handy, is proving tricky, and opinion remains divided between those who want a quick exit and those who favour activating Article 50 in Spring/Summer of 2017. What we do know is that from the moment the button is pressed, we will have two years to work out the terms of the separation. During that time, the status quo will remain.

All we know for certain is that, as the Financial Times noted on July 7,  “Brexit seems set to consume Britain for years to come” echoing the words of the Bank of England that “it will take time for the United Kingdom to establish new relationships with the European Union” (Bank of England Financial Stability Report, 2016).

So we’ll need quite a lot of tea for some time to come.

Sounds like bad news for the economy …

I’m a fundraiser. Economics is above my pay grade. And I voted to Remain, so maybe my opinions are coloured by my politics. However, reading the mainstream financial press, views continue to be strongly divided about the medium/long-term impact (with views about whether it’ll be positive or negative diverging largely along the voting lines of the referendum). What does seem relatively certain is the consensus about the short-term impact:

  1. It looks like we’re in for another slowdown. The Bank of England has predicted a slowdown as a result of the vote to leave the EU (“BoE set to cut rates to avert predicted Brexit slowdown: Bank predicts slowdown following vote to leave EU,” FT 11 July 2016: here)
  2. Which means wider austerity is unlikely to go away any time soon. The financial crisis of 2008 resulted in a period of austerity for the UK and while it looked as if growth might have been about to return, BrExit seems to have put a stop to that. The cut in corporation tax from 20% to 15% announced last past week (to keep UK Plc competitive) alongside the withdrawal of EU funds and the ongoing uncertainty, collectively mean that austerity seems highly likely to continue (for example, see “Councils prepare for years of hardship,” FT 8 July 2016: here and “Scientists urged to look for positives: experts warn Brexit will cost about £1bn a year in research cash from EU programmes,” FT 30 June 2016: see here).
  3. Households have been spooked. Household confidence has taken a hit (“UK consumer confidence: what the analysts think,” FT 8 July 2016: see here) and analysts are expecting this to feed directly through into the economy over the next 6-12 months.
  4. The likelihood of a spike in inflation is high. Sterling dropped 13% and while this may help UK exporters, others doubt it will be positive (“Harsh realities of a weakened pound: sterling’s malaise set to hit households harder than they expect,” FT 8 July 2016: see here). Commentators in particular have noted that the drop in sterling means petrol is more expensive and imported goods will be too (“Brace yourself for the toxic mix of falling interest rates and a spike in inflation,” Daily Telegraph, 4 July 2016: see here). Resulting from this, inflation is predicted to spike in the short term and therefore the Bank of England is worried that this, coupled with high levels of household indebtedness, will weigh on household disposable income (Bank of England Financial Stability Report, 5 July 2016: here).

Goodness me.

Quite. All this politics and economics is making my head hurt. And the August holiday season has taken most of our political leaders off the scene, so economic and general news has been thin on the ground. Frankly, I’d much rather be talking about the difference those we work with are making to the lives of others – in education, in the arts and cultural, and in the wider not-for-profit sector.

Alright then, so surely all this will surely impact fundraising income?

Almost certainly, yes.

But all this talk of economics reminds me of something Ronald Reagan once said … “oh for a one-handed economist.”

So … on the one hand:

  1. As fundraisers we know we make our own luck, and a continuing faith in the impact of the institutions we serve will stand us in good stead;
  2. The wealthy continued to give in spite of the financial crisis of 2008 (see the Barclay’s Wealth report on Tomorrow’s Philanthropist, here) and research from the Centre for Philanthropy, Humanitarianism and Social Justice at the University of Kent looked explicitly at the question in 2009 (see here);
  3. We know from our analysis of data on giving to the Higher Education sector as a whole (see here) that while the overall level of giving took an immediate dip post 2008, the numbers of donors rose steadily; indeed, during 2010-14 while the numbers of donors participating in regular giving activities (gifts <£10k) rose a modest 0.1%, the value of the gifts these donors gave rose annually from £6.5M to £10.6M (see here).
  4. Furthermore, Nick Hillman (former advisor to Conservative ex-Universities Minister David Willetts) suggests that Higher Education institutions might find themselves better off as a result (see here) and others such as the National Council for Voluntary Organisations have noted that while income to not-for-profit organisations from the UK Government took a dip in 2009/10, the sector as a whole has returned to largely pre-crisis levels, but with a significant change in its income streams towards earned income (through contracts) and away from direct grants from Governments (see here).

The optimistic argument therefore goes that the great strength of British institutions is their resilience and flexibility, and while there may be a short-term shock and a re-orientation of priorities, good organisations will make the most of the opportunity in the end.

But, (with apologies to The Gipper) on the other hand:

  1. None of the scenarios predicted by forecasters for the next 2-3 years are ones in which it is expected that UK Plc will take a financial hit as a result of the shock;
  2. 67% of the £1M+ gifts given in 2016 came from donors based in London (see the Coutts Million Pound Gift report 2015, here). Although London’s pre-eminence in financial circles is unlikely to be devastated, uncertainty surrounding the role the City of London will play is likely to be high for some time (see here). The number and scale of gifts from hedge funds and others in financial services, a traditionally strong source of large gifts in the UK, therefore looks set to take a knock;
  3. The financial pressures for everyone else – an uptick in inflation, downward pressure on wages, pressures on property prices, and flat interest rates – suggest that disposable incomes will flat-line at best, and, at worst, drop for some time; evidence from the financial crisis shows that incomes didn’t recover their 2008/9 levels again until 2014/15 (see here).
  4. Low interest rates and higher inflation are likely to continue to impact older donors disproportionately; donors who have traditionally been the most generous both through cash terms and through legacies.

So those with a more pessimistic frame of mind see years of further financial trauma, at both a national and individual level.

So what does that mean for me and my team?

Whether you are a Tigger or an Eeyore, it really does look like everyone’s in for “a squeeze.” As such, it will pay to be prepared for the challenges of the next few years. Now is a time to act defensively and there are five actions to take to ensure you are best positioned for whatever happens in the short to medium term:

  • Sharpen your story and make it ever clearer; focus relentlessly on the impact of your organisation. No organisation – university, charity or museum – has a right to exist. Each does so because of the difference it makes to the lives of others. There has never been a more important time for organisations to articulate the impact they have in as clear and compelling a way as possible. Demonstrating this will be the single best way to keep existing donors loyal and engage new supporters in your work. Practically, this includes ensuring that the story you tell your existing and potential donors is as sharp as it can be, through to confirming that new hires develop fluency in the subjects for which they are fundraising as soon as possible.
  • Build participation. If yours was a cause worthy of support on the day before the referendum, it will be a cause worthy of support the day after. While your overall level of support might take a hit, a focus on deepening participation will pay dividends in the medium-term. Review your regular giving programme in depth, and develop concrete steps to increase the numbers of donors who give across your donor base.
  • Review the international opportunities available to you. A HKD$1M just increased in value from £87k to around £100k. That’s good news for donors: their gift is going further and doing more for the institutions they support. At the same time, while securing international gifts has long been a goal for UK institutions (especially in Higher Education), it’s fair to say that performance has been patchy. Now would be a good time to take a vigorous look at how best to engage with your international supporters: from really focussing on building a good picture of your international prospects through to reviewing the best structures for facilitating gifts (how’s the under-supported “Friends of …” working for you right now?).
  • Focus relentlessly on high performance. Review previous performance and plan interventions to deliver improvements; perhaps seek an independent outside view on how your performance stacks up against others (I know a good firm …) and take a good look at how you report on both progress and success towards your goals.
  • Engage the boss(es). Just as institutions have no right to exist, the same is true for Development Departments and fundraisers. And now, more than ever, you’ll need Trustees and CEOs/Vice-Chancellors to understand what the likely impact of BrExit will be in the short-term on your income, and the actions you’ll be taking to ensure you’re best placed to weather the storm.
  • Keep the team cheerful. No one said fundraising was easy, and certainly the past few years have been challenging for many. At the same time, we know that an unhappy team doesn’t raise money. For the boss, that means you’ll need to be Cheerleader in Chief – for the team, as well as the institution.

 That sounds like plenty to be getting on with …

… indeed. Can I have that cup of tea now? I’m trying to keep calm and carry on.

Marc Whitmore is a Partner at More Partnership. Recent clients have included US-based Climate Central, the University of Helsinki in Finland, the Natural History Museum in London and Aiglon College in Switzerland. You can read more about Marc here and follow him on Twitter here. Don’t miss the infographic-version of this article posted here on the More Partnership website.

Filed Under: International prospect research, News, Non-profit trends Tagged With: Brexit, fundraising, impact, Marc Whitmore, More Partnership, philanthropy

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David’s career in prospect research began in 2009, as a graduate research assistant at the Shippensburg University Foundation. In 2011, He became a development researcher for the University of Virginia. In 2015, David became assistant director of prospect research at the University of Baltimore, serving for 3 years. Recently, he was the director of development for Trees Forever. David Joined the Helen Brown Group as a research assistant in January 2020. He earned a B.A. in Theater at Indiana University of Pennsylvania and a M.A. in Applied History at Shippensburg University. David is a member of APRA and APRA Great Plains.

Kenny has worked in development since 1999 and has been involved in prospect research since 2002.

Prior to joining The Helen Brown Group, he was the director of donor and prospect research at the United Way of Massachusetts Bay. Kenny is a member of APRA and NEDRA.

Tara first began her career in development in 2002 supporting the Major Gifts department at Simmons College, and ultimately went on to serve as Assistant Director of Prospect Research. Since that time, she has also worked as a Senior Research Analyst at MIT, as Associate Director of Prospect Management and Research at the Harvard Graduate School of Education, and as Director of Development Research at Combined Jewish Philanthropies (CJP).

Tara originally joined the Helen Brown Group team in 2007 and served as a Research Associate and ShareTraining coordinator until 2008 – she rejoined the company as a Senior Researcher in 2013 and was promoted to her current role in 2018.

She has been an active volunteer with NEDRA for many years and served on the board of directors from 2010-2016. During her time on the NEDRA board, she served in many different roles, including terms as Vice President, Secretary, Chair of the Website and Technology Committee, Chair of the Volunteer Committee, and as Chair and Editor of NEDRA News. She is currently a member of the NEDRA Bootcamp faculty. In addition, Tara has also been involved as a volunteer with Apra, serving stints on the Membership Committee, Chapters Committee, and Bylaws Task Force.

Angie began her career in development in 1999 at Virginia Tech in Corporate and Foundation Relations and later in prospect research at the University of Connecticut Foundation.

A graduate of the University of Tennessee at Martin, her experience includes grants management at the University of South Carolina, program evaluation for South Carolina Research Authority and human resources analysis for Nissan North America.

She returned to development in 2007 and worked in various prospect research positions at Vanderbilt University, including Associate Director. She was named Director for Vanderbilt University Medical Center’s research office in 2015, and joined The Helen Brown Group in 2016.

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Josh began his career in development as the Phonathon Coordinator at Keene State College. He then worked at non-profit consulting firm Schultz & Williams in Philadelphia.

He started his research career at the University of Pennsylvania as a Research Assistant in 2005. He then moved over to the Wharton School of Business, where he became the Associate Director, Research and Prospect Management. Josh joined the Helen Brown Group in 2016.

Josh is also a Colorado licensed Realtor and graduate of Lehigh University.

In March 2017, Kristina joined the Helen Brown Group as a Research Associate. Before joining HBG, she was the Research Manager at Pratt Institute in Brooklyn and an Associate Manager of Prospect Research at City Harvest, a food rescue organization. Kristina started her non-profit career as a legal assistant at the Metropolitan Museum of Art in 2004.  She is a member of Apra and Apra Greater New York. She was Apra Greater New York’s Director of Programming from June 2014 to May 2016. Kristina graduated from The University of Chicago and the Bard Graduate Center.

Grace began her career in development in 2001 as Executive Assistant to the Chief Development Officer with Brigham and Women’s Hospital (BWH), a Harvard Medical School-affiliated academic medical center.

In 2003, she became a prospect researcher for the BWH principal and major gifts team and spent the next 11 years in various research positions with BWH, culminating as Assistant Director of Prospect Research. She has been affiliated with The Helen Brown Group since January 2014.

Heather began her career in 2002 as a prospect research coordinator for the Rocky Mountain Elk Foundation and then moved to Carroll College in 2004.

In 2005, Heather began working on her own as a freelancer and eventually started her own consulting firm, Willis Research Services, in 2007. She joined The Helen Brown Group in 2012.

Heather is a member of the Association of Professional Researchers for Advancement and the Montana Nonprofit Association.

Jennifer began her career in development at her alma mater, Wheaton College, where she was an administrative assistant for the major gifts department.

She joined The Helen Brown Group in March 2008. She earned a master’s degree in library science from the Southern Connecticut State University in May 2009. Jennifer is a member of APRA and NEDRA.

Rick has been a member of the Helen Brown Group team since 2005. Prior to joining HBG, Rick was director of research at St. Paul’s School in Concord, New Hampshire. Rick has worked in development since 1996, both in prospect research and major gifts fund raising. His experience includes the University of Vermont, Phillips Exeter Academy and St. Paul’s School.

Rick is past president of NEDRA and is a member of and frequent volunteer for APRA.

Josh began his career in development as the Phonathon Coordinator at Keene State College. He then worked at non-profit consulting firm Schultz & Williams in Philadelphia.

He started his research career at the University of Pennsylvania as a Research Assistant in 2005. He then moved over to the Wharton School of Business, where he became the Associate Director, Research and Prospect Management. Josh joined the Helen Brown Group in 2016.

Josh is also a Colorado licensed Realtor and graduate of Lehigh University.

Mandi has worked in prospect research and management since 2006. She began her development career as a research analyst in development research at City of Hope, an NCI-designated comprehensive cancer center in Los Angeles. From there, she became the manager of prospect development at Huntington Memorial Hospital, a community hospital in Pasadena, CA. Most recently, she was the associate director of prospect research and management at Occidental College, a private liberal arts college in LA.

Mandi has a BA degree in print journalism from Southern Methodist University and a master’s degree of library and information science from UCLA.

She joined the Helen Brown Group in May 2019.

Kelly began her career in development in 2008 as an administrative assistant in Major Gifts at Wheaton College.

In 2010, she became a research analyst at Dana-Farber Cancer Institute in the Division of Development & Jimmy Fund as part of the prospect identification team. Kelly joined The Helen Brown Group in 2013.

She is a member of APRA and NEDRA.

Jayme began her career in development in 2008 at the Rutgers University Foundation, where she spent the next seven years, first in prospect management and then prospect research. She spent several years at Monmouth University as their senior prospect research analyst, working with the fundraising staff, university president, and top leadership. She has worked as both a volunteer and consultant for non-profits in the areas of research and writing.

She earned a bachelor of arts degree from Drew University and a master of communication and information sciences from Rutgers University. She is a member of APRA.

Jayme joined The Helen Brown Group in April 2019.

Julie has managed finances for The Helen Brown Group since its founding.

In her spare time, she is an editor for the PBS series Masterpiece at WGBH. Julie was nominated twice for an Emmy award for her work on the PBS show Zoom.

Heather began her career in development in 2001 as a prospect researcher for National Wildlife Federation (NWF). She was with NWF for more than thirteen years, including nearly five years as director of research and analytics. Heather is a former secretary of the board of directors of APRA-Metro DC.

She joined The Helen Brown Group in October 2014.

David began his career in development at The Gunnery school in northwest Connecticut in 2011, where he worked in database management and prospect research. Subsequently, he joined the College of Saint Rose as a development research analyst before leading Albany Medical Center Foundation’s prospect research efforts as Associate Director of Prospect Research. He has a Bachelor’s Degree in Sociology from Siena College and is a member of APRA and CASE.

Michele began her career in development in 2012 when she joined the UC Berkeley corporate and foundation relations team as a development analyst. She spent a year and a half at Cal before returning to UC Davis as a prospect analyst. She was with the prospect management and relations team at UC Davis for almost three years prior to joining the research and relationship management team at George Washington University as a Senior Prospect Analyst in 2016.

Michele received her BA in creative writing from Florida State University and her MA in higher education leadership from CSU Sacramento. She currently resides in Northern Virginia, is a member of Apra International, and serves as the social media chair for Apra Metro DC. Michele joined The Helen Brown Group in July 2018.

Angie has worked in development since 2002, partnering with a wide range of nonprofit institutions. She began her professional career at Vanderbilt University in research and prospect development.

She has also worked with a number of community nonprofits in front-line fundraising, grant-writing, and event management. Angie holds an MPA in Nonprofit Management from the Indiana University Lilly Family School of Philanthropy and a BS in Journalism from Middle Tennessee State University. She resides in Nashville, Tennessee, and is a member of AFP Nashville and APRA MidSouth, where she has been active on the executive team.

She joined The Helen Brown Group in October 2015.

Maureen has been a part of the non-profit world since 1991. She started out in annual giving at Harvard Law School and continued her career as director of annual/special gifts at UC Santa Cruz.

In 1999 she made the switch from front-line fundraising to serve as director of prospect research/management at Bentley University and in 2001 began her role as administrator for the North American Foundation for the University of Manchester. She became part of the HBG team in September of 2011.

Helen has been a development professional since 1987. Her previous experience includes The University of North Carolina at Chapel Hill, the Albert Einstein Institution, Boston College, the Harvard School of Public Health and Northeastern University.

Currently she works with a variety of clients to establish, benchmark and re-align research departments; identify major gift prospects; and train researchers and other fundraisers through on-site and web-based training services.Helen is a former member of the board of the Association of Professional Researchers for Advancement (APRA) and is past president of the New England Development Research Association (NEDRA). In 2006 she received the NEDRA Ann Castle Award for service to the prospect research community.

Helen is Special Advisor on Fundraising to the North American Foundation for the University of Manchester and is a member of the board of directors of Factary Ltd. (Bristol, UK). She is a member of NEDRA, APRA, the Association of Independent Information Professionals (AIIP), Women In Development, the Association of Fundraising Professionals (AFP) and Researchers in Fundraising (UK).

Helen is a frequent speaker and has led seminars for a number of professional associations, including Action Planning, AFP, APRA, the Council for Advancement and Support of Education (CASE), NEDRA, RIF, the Planned Giving Council of Central Massachusetts, the Georgia Center on Nonprofits, the International Fundraising Congress and Resource Alliance.

Helen is also co-author (with Jen Filla) of the book, Prospect Research for Fundraisers (Wiley & Sons, 2013).