One of the best bits of radio this year happened last week, when Rio Ferdinand phoned in to Key 103, a local station in Manchester, to donate to its Cash for Kids Christmas charity campaign on behalf of his Rosso restaurant in the city.
The media coverage of Rosso’s extraordinary donation will undoubtedly boost this year’s campaign even further, and the publicity it’s given to Key 103 will certainly strengthen its bond with the charity, but the longer-term prize for Cash for Kids could well be in developing a deeper relationship with Ferdinand, not as a donor and philanthropist, but as an entrepreneur.
By using Rosso as the vehicle for his gift, Ferdinand demonstrated two hugely important trends. One is the rapidly increasing cachet of social entrepreneurship. Ferdinand rightly and proudly wears it as a badge of honour, as do many of his contemporaries. The other, which is an increasingly dominant theme in most major reports on ultra-high-net-worth philanthropy, is the blurring of boundaries between corporate and individual giving, in this case between Ferdinand and Rosso.
These two trends are primarily being driven by young and middle-aged, self-made women and men, mission-minded business owners and wealth creators, who see their businesses, their foundations and their investment portfolios as tools that can be used interchangeably to make the difference they want to see in the world. And all the research indicates that these two trends will only accelerate as more millennial UHNWs come through, and more established philanthropists, families and foundations follow their lead.
This represents an enormous opportunity for charities.
Ferdinand’s initial gift via Rosso might have been purely financial, but there are many examples that go beyond cash – one of my clients is currently having a school built for it by a supporter who owns a construction company. These people aren’t offering money to tick a corporate social responsibility box or to associate themselves with a charity brand, they want to do great things, to create lasting change, and they’re willing to bring their wealth of commercial, technical and organisational resources to bear if they can see how it will help.
As an example, overheads and infrastructure are a perennial challenge for charities because they struggle to invest. Most charities have frustrations in at least one of these areas: service profitability, operational efficiency, project and performance management, IT infrastructure, customer relationship management processes, product development and marketing. Yet most self-made, high-net-worth people will have cracked most of those issues in their businesses at some point, and will probably have the people to help their charity partners crack them too.
What they won’t have is the knowledge, skills and infrastructure to achieve their personal ambitions for creating lasting social change. That’s what the right charity brings to the partnership, and that’s where the conversation has to start. To adapt John F Kennedy, ask not what a business owner can do for you, but what you can do to help them achieve their own personal social mission, by combining your resources with theirs. Which is why, most important of all, this is not a conversation for a fundraiser or even a head of corporate giving to have. This is a conversation for the chief executive.
Finding a suitable partner to have these conversations with isn’t easy. Alignment of your mission, ambition and personal values is essential, and it’s possible that Ferdinand isn’t the right match for Cash for Kids. But he could make an introduction to another socially minded entrepreneur who is, and that can only happen if Cash for Kids knows what it's looking for, asks the right questions and, most importantly, has the right people in the room.
Martyn Drake is the founder of the management consultancy firm Binley Drake Consulting