Myth 2: The rich will save us all
Introducing the second blog from the 5 myths of arts & culture fundraising series (#5Myths) by Bernard Ross.
Even as the corporate myth slowly starts to fade it’s been replaced by another – if slight – variant. Rising over the crest of the hill, see the new Knight in Shining Armour astride a unicorn – Sir HNWI or Sir UHNWI.
This should be the upside of growing inequality in the UK. Sometimes dressed up as a ‘theory of change’, the argument goes, ‘The large number of individuals in the country with such great wealth, must surely be a bit sophisticated and will surely support culture.’ There is concrete evidence that this could happen. For example, high net worth giving in the UK, and indeed globally, is huge. In 2014-15 in the UK, of the £10B in total charity income, 18% came in significant gifts from just over 150 donors. And globally the estimate is that initiatives like the Giving Pledge mean HNWI charitable giving is probably around $45B globally.
There are a lot of rich people. The UK is home to more than 10,000 UHNWI – only the US (40,000+) and Germany (12,100) having higher numbers. And a study from the London-based research firm WealthInsight, predicts that the number of such individuals in the UK will rise to nearly 12,000 by 2018. Britain, BTW, is ahead of China and Switzerland, which are said to be home to 8,500 and 5,500 of super-rich individuals respectively. (And the Chinese super rich, it should be said, are super super rich. This is just about raw numbers of rich folks.)
Some of these rich people are philanthropic and generous – but not enough. If more were philanthropic it would make a massive contribution to achieving social equity. Here are some statistics from the latest reliable UK data – again 2014-15:
- £1m+ gifts from HNWI and UHNWI totalled £389m in 2014 – 25% of all £1M+ giving for the calendar year
- Of the 298 large donations made in 2014, London secured 192 totalling £1.05bn – two thirds of £1M+ giving (pretty London-centric)
- There were 243 total recipients of £1m+ in 2014. Of these, 214 received one large gift, 20 recipients received two, and 9 recipients received three or more gifts in the year.
Of these ‘beneficiaries’ the largest was a personal or company foundation. These secured £565m in 86 gifts. Apart from that the breakdown of these large gifts by sector.was:
- Higher Education: £485m, 65 gifts
- Health: £125m, 28 gifts
- International (international development): £97m, 25 gifts
- Overseas (recipient was based outside the UK): £66m, 22 gifts
- Human Services: £45m, 19 gifts
- Arts, Culture & Humanities: £45m, 23 gifts
While £45M wasn’t bad for arts, culture and humanities, you can see there’s lots of room for improvement. (And this UK breakdown broadly reflects the global statistics.) Notice Higher Education received 22% of the 25%. Again, I’m not against HE – but most of this money went – and continues to go – to the prestige universities – Oxford, Cambridge, Edinburgh – in return for naming rights on buildings or posts, honorary degrees, etc. They all have very significant reserves. But they were – and are – very very good at approaching donors.
And don’t get too excited for the future. The level of HNWI giving is only just back up where it was in 2006. It’s growing fast because it went down so much. We’ve been here before…
The learning from this myth? There’s clearly major donor philanthropy out there. BUT, and it is a big but, this money doesn’t go to the ‘most deserving’ causes. On that basis, arts, culture and museums shouldn’t be afraid to seek support – if you think you’re at least as good a cause as, say, Oxford University. But to be successful in this space, you will probably need to do three things:
- Offer high level engagement to these donors, allowing them to be part of your planning and development process
- Offer high level fulfilment – offering up naming rights and providing lots of love and attention
- Be prepared to sup with a long spoon – many major donors have made their money in ‘troubling’ industries and you need to make sure you hold on to your ethical principles
- Read the 3rd myth
- Go back to the 1st myth
- Follow @mcNAFS on Twitter to make sure you don’t miss out on the next myths and the response to them.
- Take a look at this article based on Bernard Ross & Clare Segal’s award winning book The Influential Fundraiser for insights on how to engage major donors.
- Check the National Arts Fundraising School modules section to learn more about how major donor fundraising is covered during the course.
- Contact us to speak to one of our fundraising experts about a particular challenge you’re facing.
 The most commonly quoted figure for membership in the high net worth club is $1million in liquid financial assets. An investor with less than $1million but more than $100,000 is considered to be ‘affluent’ or perhaps even ‘sub-HNWI.’ The upper end of HNWI is around $5million, at which point the prospect is then referred to as a ‘very HNWI.’ More than $30million in wealth classifies a person as a ‘ultra HNWI.’ Note that all these labels are quoted in US$
 A UHNWI (ultra-high net worth individual) is defined as someone with a wealth of $30m (£20m) or more. Technically this incudes business interests, investments and property, but excludes anyone’s main home. HNWI have a mere $1m in such assets.
 Oxford University took $70M from Wafic Said for a business school. Said was an important player in the sale of arms to the Saudi government. In 2016 even Barclays rejected him as a customer. But he does give money to a lot of good causes…