Money, money, money!
One story that cut through all the rest last week was the Euro Lottery winners in Ayrshire who won £161 million, instantly making them the 430th richest people in the UK. This created massive media coverage and was the talk of the town across the UK. I suspect many charities took more than a passing interest and probably some of the smaller ones even tried to get in touch with Mr and Mrs Weir. Whatever your views on this, it really is fascinating that it caused a thousand times more interest than the release of the 2011 15th World Wealth Report by Merrill Lynch/Capgemini at the end of last month.
How many of us have stopped to absorb the report, which is truly mind blowing in terms of what is happening to wealth in the world? Not only is the global picture of world wealth shifting with massive increases in the Asia-Pacific region (300,000 new millionaires in 2010) but even in the UK things are stabilising with an increase in High Net-Worth Individuals (HNWIs).
The report headlines were summarised as follows:
‘Global HNWI population and wealth growth reached more stable levels in 2010, with the population of HNWIs increasing by 8.3% to 10.9 million and HNWI financial wealth growing by 9.7% to reach US$42.7 trillion. The global population of Ultra-HNWIs grew by 10.2% in 2010 and its wealth by 11.5%‘.
The last two years, coming out of ‘full on’ recession, we have seen a major renaissance in the sector in major gift fundraising and many charities have chosen to invest in this area, reviewing their needs and potential case for support and above all looking closely at their databases, networks and contacts. Against this background, there is a visible increase in the demands for skilled staff in this area, so the message is clear: “let battle commence…”
If you move one small step back from the mega and significantly wealthy, other reports are showing the general increase in private individuals with greater personal wealth, so the field is expanding at every possible level. The next five years will be critical for the sector to carve out its influence and market share with the HNWI community however an individual charity defines that segment.
So much to think through, but in my mind the most important new thought to work through in developing or sharpening your strategy is ‘who you are talking about?’ I now try to avoid the term ‘major donors’ as this is a reflection of an individual who has already given and, frankly, as a single term it is too narrow in keeping our minds open to a whole range of segments that could broadly be described as HNWIs. Most charities should think about a range of inter-linked programmes that can either stand alone or form a ‘mini-journey’ for HNWI in strengthening their relationship and investment in an organisation. If you have regular or committed giving the first entry point for HNWIs should be middle donors, then high value donors, major donors and potentially mega donors. These are set to the expected investment levels but outwardly they all serve to inspire and engage the HNWI community that a charity can access.
If you are ready, having a new HNWI programme in your sights is certainly a priority area as the time is most certainly right, but this area really does require a very detailed and original look at how you are going to develop it strategically if you want to join the battle! A tactical approach is guaranteed to lose the day!