Helen Brown Group

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Companies House: a treasure trove of info on UK companies

Carrying on with the theme of prospect research and the UK for another week, I’m delighted to welcome Toby Savin as the author of today’s Intelligent Edge article on finding information about companies and company directors from Companies House. An experienced researcher and leader in the UK prospect development community, Toby is Development Research Manager at the University of Leeds. My thanks to Toby for sharing his knowledge! ~Helen

Over here in the UK, for all the challenges we face, including (and because of) a culture where it’s still seen by many as crass or taboo to discuss money even in the context of giving it away to a worthy cause, the prospect research community has one resource that our counterparts elsewhere can only dream of: Companies House.

Companies House is the UK registrar of companies and there are 4.4 million companies (and their associated filings) on the register, many of which are privately-owned. This includes not just limited companies, whether quoted on an exchange or not, but also limited partnerships (the legal business structure of choice for private equity funds and hedge funds) and limited liability partnerships (‘LLPs’), which have been astonishingly popular across many sectors of the economy since being introduced in the UK in 2001, thanks to the twin benefits of limiting partners’ liability and not incurring UK corporation tax. It also includes companies limited by guarantee (as opposed to share capital), a structure much used by charitable trusts and foundations.

What’s more, it’s free to access this data: in 2015, a Beta version of the register – freely available to anyone with an internet connection – was launched as part of the UK government’s commitment to free, open data. Sure, the register has its faults: one major issue, which was successfully used to push for a formal consultation on reforming the register last year, is that the information filed is not actually verified or checked by anyone at Companies House.

But, unlike data on non-quoted companies that many other countries are forced to rely on (typically, top line numbers self-reported to large data vendors within a voluntary and entirely unregulated framework), in the UK there is a statutory requirement to formally submit a whole range of filings and many of the accounts themselves are externally audited. Make no mistake: this is a treasure trove of public data that ought to make us the envy of researchers across the world, especially the US, where finding reliable, detailed information on privately-held companies can be difficult or impossible.

Want to know not just who owns a particular company but how much they own? Check.

Want to know the total compensation of the highest paid director? Check.

How about estimating the value of a privately-owned business? For sure, this is a tricky pursuit at the best of times (like a house, a business is only worth what someone is prepared to pay for it) but close to impossible – and perhaps even futile – if you have only sparse, unreliable numbers to hand. Here too, Companies House can help: businesses of a certain size are required file full audited accounts with a profit and loss account, balance sheet and cash flow statement.

And in addition to the hard numbers, Companies House provides an abundance of less tangible (but equally useful) information. A Chairman’s Statement on the company’s performance and strategy, for example, might be taken with a large pinch of salt by a forensic accountant looking for fraud but in the hands of a savvy prospect researcher, the salient points can be summarised and used by a frontline fundraiser to completely transform a discovery meeting with that top prospect who hitherto has been impossible to engage.

For anyone wanting to tap this most valuable of resources as part of their prospect research (or indeed gift acceptance due diligence), here are some things to take into consideration.

Firstly, if you intend to process any personal data, you’ll need to carry out an assessment as to what research is acceptable from a data protection perspective. There is an abundance of guidance available, from bodies like the Institute of Fundraising and CASE (the Council for Advancement and Support of Education).

Secondly, you’d do well to keep tabs on any changes to the legislation governing the information that companies are required to disclose (thankfully, these are widely reported across the blogosphere and beyond) as well as changes to the search functionality and other aspects of the free Companies House beta service itself (signing up to be a member of the user panel can help with this).

Last but by no means least, you really need to know what you’re doing: the proverb “a little knowledge is a dangerous thing” might as well have its origins in interpreting data in company accounts. This one is a bit trickier to address but I’d like to highlight a couple of initiatives that will help.

Here in the UK, Researchers in Fundraising (RiF), a special interest group of the Institute of Fundraising, has launched a major project to develop a Researcher’s Handbook (including a chapter specifically on estimating wealth and capacity). Work on this is in progress and in the meantime, one very enterprising former prospect researcher has been working with some of the best talent in the sector (and me) to launch a Community Interest Company called PyroTalks offering a wide range of (virtual) conferences and training sessions, including a number that are specifically aimed at helping prospect researchers navigate some of the data you can find on the Companies House register.

Companies House isn’t the only source of useful data on UK organisations and potential donors but it is an essential part of any researcher’s tool kit; and, for all its faults, we’re lucky to have it. Take a look and expand your UK company knowledge.

Toby Savin is Development Research Manager at the University of Leeds in the UK, having joined the Alumni & Development Office there in 2010. Prior to this, he spent a decade working for a leading business risk consultancy in London and then a Nasdaq-quoted fraud prevention company, carrying out investigative due diligence and background checks on employees and vendors for banks, hedge funds and FTSE 100 clients.

In between these two ten-year periods working as a researcher, he gained first hand experience of worker-controlled co-operatives at two food co-ops in Manchester and volunteered on a number of different food and environmental projects. This experience formed the basis of a dissertation on the co-operative movement as part of a Master’s degree in Food Policy at City University in London, which he successfully completed with Distinction in 2011. Toby also holds a Bachelor’s degree, with Honours, in Hispanic Studies from the University of Birmingham, UK.

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A bigger boat

My brother-in-law’s voice had a huge smile in it when I picked up the phone. He might not even have bothered with a “hi.” Just: “You’re going to love this, Helen.”

As part of his and my sis-in-law’s kayak and outrigger tour business in Jaco, Costa Rica, Neil captains the Ashuma, a trimaran that guests book for day sails in Herradura Bay.

Neil’s also got a pretty good nose for prospect research, and every once in awhile he comes across a tip or resource he knows I’ll like, usually related to Central American sources or to yachts and/or the people who own them.

“I’m standing on Ashuma looking at the Hodor. Nice helicopter on the back. I’m going to send you a picture.” 10 seconds later, this pops up on What’s App:

Hodor. Photo by Neil Kahn

Now, Ashuma is not exactly a small sailboat – she’s 7.6 meters (25 feet) long, but Neil tells me she’s a dingy next to the Hodor, which I later learn is 66 meters long (216 feet).

As Neil is talking about what she looks like, I click the link to the article on the building of the Hodor on Super Yacht Times that he sent after the photo. It’s got lots of nice pictures which I start to scan through.

I see a helicopter, three or four boats on the deck, a winchy-crane-looking thing, three dune buggies, a gorgeous cabin and galley…

I’m skimming, skimming, mainly looking at the pictures, not really reading because he’s still on the phone…and that’s when I see it.

“Wait! Neil??!?”

Neil chuckles at the tone of my voice: “I was waiting for you to find that.” Simultaneously he and I both say, “SHE’S THE SUPPORT YACHT.”

My exhale turns into an almost-silent “holy cow.”

Lonian. Photo by Neil Kahn

Hodor is essentially a floating carriage house carrying the 20 support crew and toys that don’t fit on – or that they don’t want crowding up – the $125 million, 87 meter (285 foot) superyacht Lonian. Lonian is owned by 51-year-old Las Vegas billionaire, philanthropist, and art collector Lorenzo Fertitta and his wife, Theresa. The megayacht only has room for 12 guests, so you can imagine how big each stateroom is.

There are lots more resources

As we were about to hang up, I mentioned to Neil that two weeks ago my colleague Rick Snyder (no relation to this fine craft) wrote an article chock-full of resources that can help us think about (and estimate) the additional costs that a wealthy lifestyle entails. Nannies, housekeepers, family office managers – all of the people needed to keep the small village of everyday high net worth life running smoothly.

Neil’s call was another reminder to me (and to all of us) not to take things we see at face value, but to look behind the cost of the big yacht (or house, or island) to see if there’s an even bigger one to consider. Fortunately, there’s lots of information about these wealth indicators if you know where to look for them.

For example, if you ever happen to be walking down a wharf and see a yacht in a slip (or slipping down the waterway you’re walking by) you can check it out on the very handy MarineTraffic.com. The website/app doesn’t go into detail about a watercraft’s ownership, but you can get a lot of information for free about that ship sailing by.

Besides that and the other sources linked in this article, help yourself to lots more yacht (and art, and horse, and jet) resources which can be found in the “Wealth Indicators” section of the HBG Prospect Research Links (Americas page). Access is free; we just require your email address (which we don’t use to mail you) to register to access the pages.

If you have other favorites, don’t be shy – share them here with all of us, and I’ll add them to the links page for everyone to use.

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Fact-checking the fact-checkers

My research mentors drilled into me the importance of verifying information that I put into a profile by checking at least two (and preferably, three) separate sources to fact-check.

You might not do that for every single piece of information, depending on the original source, but especially for the things that needed to be right. Address, for example. Spouse and children’s names, for another.

And by verifying the facts, they also meant that if the information was found in three different newspapers, I needed to be careful that it wasn’t one Associated Press report that was simply re-published in three media outlets.

A question came up amongst my team this week that adds another dimension to this verification imperative.

How do you know that you can trust the resource itself? Especially if it’s from a source you’re unfamiliar with, or located in another country?

You certainly don’t want to cite authoritatively from what you later discover to be the Dutch or Japanese or Saudi equivalent to InfoWars, right? If you don’t know the language, and you’re unfamiliar with the culture, honest mistakes can happen, but it’s best to avoid them in the first place.

On the other hand, it’s possible that the resource you cite is fairly reliable, but tends to lean to the left or right politically. That’s not such an issue, but it’s always good to consider the source in your reporting, and to make sure you’re transparent when citing information.

Earlier this week the HBG team shared with each other some of the resources we use to have confidence in the information we’re reporting, and I thought you might be interested to know about them, too.

MediaBias/FactCheck (MBFC) is a free source to check the political slant of US periodicals. Plug in the name of a periodical and Media Bias/Fact Check will tell you if the newspaper or magazine has a left- or right-leaning slant or if it is a questionable resource. As I mentioned, it’s free, so be prepared for an onslaught of ads on the page.

Media Bias Ratings from AllSides is another great resource for checking the bias of over 600 news sources in the United States and around the world. AllSides also provides a homepage with the top stories with links to reporting from the left, center, and right to give everyone an opportunity to step out of their own filter bubble.

Not quite sure what constitutes a bias to the left vs. right? This infographic from Information Is Beautiful simplifies things quite a bit (well, it is an infographic after all), but it’s generally a good overview of the differences in political-spectrum viewpoint.

Want to know more generally about how you can battle the onslaught of fake news? (I don’t mean fake fake news, but real fake news). A joint study by researchers at Dartmouth and the University of Michigan provides several new insights about the most effective ways to counter fake news on social media, and this article by Journalist’s Resource from Nieman Lab describes the results of their research (and several other studies in the same vein) in plain English.

What resources do you use to fact-check the fact-checkers?

 

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7 Highlights from the Knight Frank Wealth Report

One of the yearly reports that sends a tingle up the collective spines of the prospect research community is The Wealth Report from Knight Frank. The 2019 edition came out this week, and my copy is already highlighted and sticky-noted – how ‘bout yours?

If you haven’t had a chance to download and read it yet, here are seven highlights I didn’t want you to miss… [Read more…]

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Don’t miss this new report

Nobody has ever scientifically measured the role of prospect research in major donor fundraising before. Sure, we researchers have always been confident in our knowledge that research is important for fundraising success, but how do end-users really feel? How exactly is it important? What parts are most useful? How do fundraisers actually use the information they receive?

And – scary question to ask – could fundraisers do as well raising funds without prospect research? [Read more…]

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A rising delta: China, women, and philanthropy

This week, my colleague Tara McMullen shares her interest in philanthropy in China, and her delight in the impact that a small but growing cohort of women change-makers are having on the philanthropic landscape in Asia. These women are diverse in their backgrounds, corporate specialties, and philanthropic priorities; their outlook is currently mainly within China but their philanthropic scope is increasingly global. How is your organization planning to involve this new generation of influential donors? ~Helen

Over the past decade, there has been a surge in charitable giving in China – a surge which appears to be a consequence of the rapid wealth creation observed in the country. Several decades of rapid economic expansion have led to explosive wealth accumulation, resulting in a record number of billionaires. As of 2018, mainland China was home to 338 billionaires (with an additional 93 in Hong Kong). The only country in the world that has more billionaires is the United States – with 680 – but the Chinese mainland had the highest number of new additions to Forbes’ 2018 billionaire list with 89 – almost twice as many as the U.S. (at 45). [Read more…]

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GDPR and you

This week’s article comes in the form of a podcast that I just recorded with two of the most knowledgeable and generous GDPR-whisperers that I know in the fundraising community, Adrian Beney of More Partnership and Nicola Williams of The Factary.

Click image to access the podcast

Both Adrian and Nicola have been researching and consulting with other experts to understand the law for months, and they’ve written many articles, have been speaking at loads of professional conferences, and have provided useful resource lists for all of us to find guidance on the General Data Protection Regulation that comes into effect on May 25th. If the rest of us are not up on the new regulation, it’s not through any lack on their part to get the word out.

But because of that, they’re very busy people, so I was especially excited when they both said yes to a podcast interview. I know that you’re going to find the conversation we had to be well worth your time. I’m sincerely grateful to them for their generosity to our community, and for their willingness to be a resource to help nonprofits in the US figure all of this out.

GDPR Generally

As I’ve mentioned before, this is a European-based piece of legislation, but every company and nonprofit in the world will have to comply with it if they have EU-based constituents in their database. The GDPR regulates (amongst many other things) WHAT data you’re allowed to hold, HOW LONG you may hold it, and the WAYS you must communicate to your constituency their rights regarding that data. There are certain pieces of information you CANNOT hold in your database (without explicit consent), and many of them are demographic data we here in the US take for granted as being relatively harmless.

Ignorance of the law is no excuse, and fines for noncompliance will be steep: up to €20 million ($25 million) or 4% of an organization’s total revenue, whichever is greater.

If you’re unsure what GDPR is and how you should be ready, log in* to our learning media area to listen to this informative podcast with Adrian and Nicola. We’ve also included a number of useful resources with the podcast for further information.

*Registration to the Resource Library is free. It gives you access to a number of useful resources including podcasts, presentations, wealth lists, research resources, and our weekly newsletter. You will be asked for your name and email address. You may unsubscribe at any time and your information will not be retained.

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Freeports: The Purgatory for Art

As the HBG Book Club group read about tax-free zones called freeports last week in Jake Bernstein’s page-turner, Secrecy World, it was a perfectly-timed coincidence that this fascinating Planet Money podcast came out on that very topic. [Read more…]

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Are the rich less philanthropic than we thought?

When we try to estimate a potential donor’s gift capacity, the fundraising tradition has been to use statistics from the IRS that show that, on average, Americans give around 2-5 percent of their income annually to charitable organizations.

That average is derived from people who itemized charitable deductions. Even though that’s an average, for those of us in prospect research that’s been a reliable percentage to use because, by and large, only people who benefit from itemizing actually bother to do it – and that’s wealthy people. [Read more…]

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Trouble in Paradise

Over a year ago, an anonymous “John Doe” sent an encrypted message to a newspaper in Germany called Süddeutsche Zeitung. The conversation unfolded like this:

That 2014 cache of data, the equivalent to about 38,000 average-sized books, make up what became known as the Panama Papers.

It’s a trove of documents obtained from the files of a Panamanian law firm called Mossack Fonseca, which helped create shell companies and other complex financial instruments in order to assist companies and individuals to evade paying tax in their home countries.

Journalists from nearly 100 news outlets around the world in a collaboration called the International Consortium of Investigative Journalists (ICIJ) worked together nonstop for months under tight security and complete secrecy. [Read more…]

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