All posts by Jen Filla

Public Company Insider. So What?

Prospect Research, , , , , , , , , , , , ,

Maybe no-one in your fundraising office would say “So What?” but that does not mean they are not thinking it. What is the big deal about public company insiders and how can you succinctly convey that relevance in conversation – or even profiles? I have three things to say about that!

1. Years of Growth (or not)

Especially during economic volatility, a 5-year or 10-year chart of stock performance can visually demonstrate whether your insider is experiencing heady wealth accumulation – or not.

Because your insider is likely getting paid a cash salary and a cash incentive/bonus, those stockholdings represent long-term incentive and they grow at rates your savings account can merely fantasize about.

That means that if the stock price chart is moving up significantly in value, your insider’s stockholdings are highly appreciated assets that are untouched by living expenses.

What is that stock price chart? Oh that. That is your insider with “excess” assets making great rate returns.

2. Gifts of Stock

I do not know what percentage of insiders make gifts of stock, but at Aspire, we find a good portion of the insiders we research make gifts of stock. However, it is not always to an operating nonprofit.

But many times the stock is gifted to a family foundation, which is significant, or to a family trust, which is, again, excess assets making great returns.

Regardless of who the stock is being gifted to, the key point here is that the insider has the knowledge and maybe even has the habit of gifting stock.

When you reach a deeper relationship and the insider is keen to make a significant investment in your organization’s work, gifting stock may be an option your prospect already uses – no education required.

3. Counting Cashed Out Stock

It is possible to skim through the insider’s Form 4 filings for specific file types that indicate which sales of stock resulted in cash in the insider’s pocket. But you have your work cut out for you untangling them from all the sales of stock used to exercise stock options, pay taxes, or other sale types.

Aspire recently subscribed to Kaleidoscope’s Insider Focus research tool and it is the perfect use for A.I. The software has no problem making the calculations to tell me exactly how much stock was cashed out during a specified time-period.

This is an amazing number! Did your prospect cash out stock to the tune of millions of dollars in the past year or two? Now you can know with a click!

Knowing that this cash is above and beyond salary and bonus gives you a snapshot of what kind of money is “psychologically” available. In other words, it is money that the insider is already comfortable cashing out of stockholdings.

Even if this cash is being invested elsewhere, it gives you a sense of how much money could be available if the insider is deeply motivated.

When someone is an insider it is a good bet there’s significant wealth

For at least the three reasons above, if you are trying to identify $1 million+ potential donors for your campaign, or otherwise trying to spot the most capable prospects in your donor base, do not underestimate the insiders!

Money is never enough, of course. Prospects need to have an interest, be philanthropic, and be reachable, but there is no doubt that big visions need big money.

Do you need to learn to read SEC filings?

If you are looking for training on how to assess public company insider wealth from Securities and Exchange Commission (SEC) filings, check out the training offered at the Prospect Research Institute!

Curious about compensation and beneficial ownership, but also how to incorporate into capacity and the profile? This 3-workshop bundle has you covered! Enroll Now

Additional Resources

Insiders and the Paycheck that Keeps Paying

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Most of us are familiar with getting a paycheck as well as the practice of receiving a bonus incentive for achieving top performance. And many people are familiar with investing in mutual funds to benefit from the stock market without having to manage a personal portfolio. But exactly how is it that public company insiders can accumulate such tremendous wealth? Is it just because the total numbers are bigger?

I have always thought of stock options and stock grants as the “paycheck that keeps paying.” If the company’s stock price continues to rise – and perhaps rise dramatically – the original option or stock value also increases.

In my head I imagine I have my Toyota at the starting line with the insider’s Formula 1 race car next to me. Sure my “Toyota” mutual fund rate of return is awesome, but the insider’s “Formula 1” performance stock units can go so much faster!

But how does the insider make incredible gains on their incentive awards in real life?

NVIDIA Corp. (NASDAQ: NVDA) chief financial officer Colette Kress is our obliging volunteer with a demonstration below.

The savings account is not even a real comparison is it? In that scenario, my Toyota is more like a beat-up, barely moving, 20-year-old Toyota compared to the insider’s Formula 1 – and that is with what has been a generous, harder to get 1% rate!

But when we get to a double-digit rate of return on the mutual fund – which is invested in the stock market – we see something close to a comparison to the NVIDIA stock rise — but not really. Why? Because NVIDIA stock rose in value faster and I had to make the initial investment. Ms. Kress was given the stock for her performance. Yup. The paycheck that keeps paying!

At this point someone usually reminds me that stock prices can go down, too.

This is true. But for a public company executive insider like Colette Kress, she earns a cash salary and bonus every year too, which has been around $897,000 from 2022 through 2024.

Her Performance Stock Units are a long-term incentive (i.e., long-term bonus). She receives her annual salary and short-term bonus in cash and her long-term incentive in performance stock units (PSUs), which vest into stock a little bit each year — adding a very generous layer of stock value.

This is Why I Say That Long-Term Incentives are Like the Paycheck that Keeps Paying

Hopefully, this example gives you a better perspective of how stock is an outsized addition to salary and cash incentives in the compensation package. And it is not just the executives who receive stock as part of their compensation package.

Top executives are considered insiders and must publicly report their compensation, but management and other employees likely receive stock awards, too. Just not quite so many!

When your prospect is a public company insider this automatically indicates the potential for significant wealth.

To know how much – or how little – requires some knowledge and skill. This is where the prospect research professional steps in to clearly present the full wealth picture of a prospect.

If you are looking for training on how to assess public company insider wealth from Securities and Exchange Commission (SEC) filings, check out the training offered at the Prospect Research Institute!

Curious about compensation and beneficial ownership, but also how to incorporate into capacity and the profile? This 3-workshop bundle has you covered! Enroll Now

Want to know more about insiders? Check out “Why Insiders” by Elisa Shoenberger.

Most Popular Posts in 2024

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The change of the calendar year is a crossing. This makes it a great time to pause and look backwards before stepping into the new.  Whether you are checking how you performed relative to goals, celebrating what you did well, or seeking to ensure that what went awry can be mitigated or avoided altogether, I hope you take time to reflect and celebrate.

Since this is a blog, I thought it would be fun to see which posts were visited the most in 2024. May you enjoy them again or anew!

  1. Can you really hide LLC ownership? You betcha!
  2. If you say ‘no’ enough, you will probably get fired
  3. A Screening By Any Other Name Would Read As Rich
  4. Why Do Insiders Disclaim Beneficial Ownership?
  5. Upskill your Development Team with Research – Without Breaking the Budget!

 

Money and Messages: The Missing Major Gift Donors

Prospect Identification, Prospect Research, Reports and Trends, , , , , , , , , , ,

Did you know that your organization might be missing major gift donors? There is a major gifts trend happening in organizations across the United States and it may well apply enough pressure to burst through outdated thinking and unleash the power of the missing major gift donors. Will you and your organization be among the early innovators and adopters?

Fundraising leadership is waking up to the reality that technology keeps promising instant identification of major gift prospects, but is not delivering, especially when it comes to wealthy women and people of color. And some of the best, most transformative donors are missing – hidden among all the other donors.

Why can’t the tech companies wave their magic rating wands and deliver the prospects?

Because the very best data is locked up inside the donor. Because technology can’t create messaging and relationships with donors that will unlock the mega gift.

Who can’t help but love the story in the Chronicle of Philanthropy about the retired clarinetist, Edward Avedisian, who gave $100M to his alma mater, Boston University? The only meaningful data points were Avedisian’s giving history to the organization and his desire to give that he expressed to the development officer – who listened and acted. Is she ever glad she did!

But if the data can’t find and rate the next best megadonor from your organization’s donor list, what is a savvy development professional to do?

Remember that data supports fundraising relationship strategies – it is NOT the strategy.

Back in 2015, research professional, Preeti Gill, challenged me to research the woman first when profiling. It was a simple demand and it shook me out of my routine enough to realize how biased Aspire had been in its approach to researching households!

Read Preeti Gill’s story in “What About Women?” a free PDF download.

Preeti argued that there was a huge transition of wealth to women and fundraising was ignoring these women. And she was right. Conversations with researchers in the next few years were fascinating.

They expressed problems such as:

  • Sure, I can find women who look like good major gift prospects, but the fundraiser is asking for hard asset amounts and I don’t have them.
  • Our organization tried inviting women to a fundraising program that has been successful for us, but they didn’t come. Maybe women don’t really want to give?
  • We have so many records in the database and none of them are coded for gender. How am I supposed to even run a report to find women?

And slowly, things began to change. Organizations became aware of women as philanthropists through many channels, including the Women’s Philanthropy Institute at Indiana University and the “Women Give” research series with accessible infographics and presentations. Female prospects were encouraged to make naming gifts and to publicize their giving as a model for other women.

Most importantly, the messages to women donors began to change. Now we hear about a university’s women’s leadership group or an organization’s women’s giving circle that are successfully raising money and cultivating major gift prospects. Now, when a development officer visits a prospect, it’s a known strategy to include the spouse who likely influences and sometimes directs the household philanthropy.

These are not data strategies — they are fundraising messages and strategies – and they raise more money. Have data practices evolved? Of course! To support the fundraising strategy, but not to be the fundraising strategy.

Prospect Research Professionals can be prepared and share.

I was feeling BIG imposter syndrome when Yolanda Johnson asked me to be a panelist at the WOC Symposium this year. As a white woman, what could I know about inclusion in prospecting and research practices?

It turns out that I could add to the conversation. I have been learning and testing and caring about inclusion for a long time. Inclusion is a value and success story for the ages. As a research professional and a human being, I can continuously learn and share.

One of my favorite characteristics of inclusion is that even when the focus is on a subgroup, inclusive actions and messaging means everyone gets pulled in. I can include the spouse in my meeting and I have the opportunity to get the big splash naming gift and a program gift.

Spotlight on a Resource

One of the speakers at the WOC Symposium I attended was Doria Josma, Development & Fundraising Specialist at Cool Culture Inc. The panelists were clearly stating things that needed to be spoken: yes, there are very wealthy donors of color and yes, they are philanthropic and want to give big.

Doria told us about the Donors of Color Network and their newest report, Philanthropy Always Sounds Like Someone Else: A Portrait of HNW Donors of Color.

So many gems in this report for strategy, messaging, and research!

Philanthropy Always Sounds Like Someone Else: A Portrait of HNW Donors of Color

The Study:

The study conducted research interviews with 113 individual people of color with high or ultra-high net worth. Nearly a quarter of the sample reported they had net liquid assets of $30M or higher.

Some Gems:

(Quoted directly from the report with my notes added in parenthesis)

  • The universality of the experience of racism, discrimination, and bias reported by each interviewee is a striking finding of this project. (You have to be mindful with strategies and messaging for this group.)
  • Many shared a visceral contempt for the idea that people “pull themselves up by their bootstraps,” and did not see their prosperity as the result of individual effort alone. For many interviewees giving was an expression of gratitude. (Messaging opportunity!)
  • All donors expressed a desire to be more effective as donors, but very few had worked with professional philanthropic advisors. (Your organization could offer networking and educational options.)
  • They expressed great excitement about the possibility of new networks that could connect them to other HNW donors and donors of color. The overwhelming support for the formation of a new donors of color network was striking — support that has translated into the successful launch and formation of the Donors of Color Network.
  • Donors gave most often to educational institutions which many credited as critical to their success, and to racial and social justice causes. (Hello researchers! Data point.)
  • Their giving styles, priorities, and vehicles were diverse: they gave through giving circles, donor advised funds, community foundations, or other pooled strategies, occasionally through their own foundations, and often, directly through their checkbooks. (Research and find and share how we see prospects giving.)
  • However, they belong to an impressive array of civic, professional, and other civil society organizations. (You can usually find this easily online and in bios.)
  • HNW donors of color interviewed were mostly first-generation wealth creators, and often the people in their families of origin who had crossed into a new socio-economic class. (This speaks to messaging and the psyche of many first-generation wealth creators as well as data point to find in occupation.)

How can Prospect Research support finding the next layer of missing major gift prospects? Work smarter AND harder.

When data is the fundraising strategy, the urge is to collect, collect, and collect more data. If only we knew who was a person of color! If only we knew the gender! If only we knew…the clarinetists? Chasing the data points first is a mistake.

In past misguided attempts, I have tried looking for people based on their identity and it is a truly humiliating experience! Trying to define what makes someone Black vs. African American vs. immigrant vs. refugee vs. white vs. European American vs. all the ways a person might identify does not build a better list.

I’m suggesting a prospect approach like this:

  1. Identify the fundraising strategy. Do you want a more robust major gift pipeline overall? Do you want to broaden your donor base specifically to include a certain type of donor? Do you need billionaires? Once the strategy is crystal clear and the activities are sketched out, then research can…
  2. Begin testing the data. Can you pull reports and manually research key points to yield lists that respond to development officer outreach? This is iterative and takes many, many months overall. You may need some data enhancement/appends. Maybe not.
  3. Repeat and evolve your prospect sourcing strategies. Sometimes a report that worked well for the first three rounds dries up. Can you change the list-building criteria? Is there a messaging problem with the organization’s donor acquisition activities? Can you try a new source? Do you need to go outside the donor database?

The tried and true approach to prospecting, when it follows the fundraising strategy and when the organization is engaging and messaging in ways that appeal to the desired audience, works well. It’s a long-term strategy, but it works. But remember that Research and data are not in control of fundraising strategy or messaging. If the strategy and the messaging ignore the needs of the intended audience, that is a problem that no amount of data collection can solve.

Don’t Misfile your Major Donors!

It is not easy to be inclusive – for anyone. Our brains are hardwired to categorize and find patterns. This generates implicit bias, which is what happens when we automatically assume someone works at a store even though their attire or behavior should clue us in otherwise, for example.

As you seek to qualify prospects for wealth and giving, ask yourself critical questions all the time, such as:

  • These two donors have a similar career path but I gave them very different wealth ratings. Am I missing something?
  • First-time wealth-creators might live modestly. Did I check on the size and scope of the company my prospect founded? For example, a trash hauling company isn’t glamorous work, but when that company has a multi-state presence it could be a recession-proof wealth catalyst!
  • What assumptions am I making about the lack of data found? No giving found doesn’t mean the prospect doesn’t give. No second home doesn’t mean a person in a high-income occupation isn’t making a high income.

When research and fundraising leadership partner together, so many good and inclusive things can happen that result in higher fundraising support – regardless of how a major gift gets defined.

Additional Resources

 

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Upskill your Development Team with Research – Without Breaking the Budget!

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When people hear “prospect research” they often assume that prospect research is a software or using Google to find things like company bios or, sometimes, that it is an employee that creates prospect profiles. Usually, the definition relates to the kind and scale of development operations they have been exposed to. And, really, everyone is as correct as they are wrong!

When we consider the growth of an organization from start-up to raising billions of donor dollars, the core of prospect research is the act of better understanding your donors through data and information.

Even if you have the luxury of a full-time, prospect research professional, everyone on the development team needs to be good at some basic prospect research skills. And if you don’t have the luxury of having a prospect research professional on staff, there are great ways to upskill existing staff to provide additional research support.

Finding contact and occupation

When it comes to personally asking a donor for a gift – most often in a mid-level or major gift program – the first thing you need is contact information: address, phone, email, or social media.

Hand-in-hand with contact information is the donor’s occupation. Occupation is useful for a few reasons:

  • Finding business contact information is easier and usually more accurate.
  • Psychologically, at work we probably expect to be contacted by people we don’t know more than at home.
  • Especially in higher education, development officers can connect with donor prospects on LinkedIn, if appropriate.
  • Occupation is a quick and easy indicator of likely wealth.

Everyone on the development team needs to be good at finding basic information about donors and this is why Aspire and the Prospect Research Institute created the booklet, Search Tips for Fundraising Research.

Search Tips book cover

This 15-page booklet introduces the five fundamental building blocks for fundraising research and gives you tips, tricks, and resources to find what you need. Purchase your copy today!

Information is great – when it’s accurate!

Once everyone is upskilled on basic search —  from the president’s assistant to major gift officers to the database administrator and beyond – it’s time to address whether the information everyone is finding is correct.

The proliferation of misleading and outright erroneous information can be overwhelming. As anyone who has clicked through a scam email knows (and c’mon, we’ve all fallen for one at least once!), when you’re busy, stressed, or preoccupied, it’s difficult to maintain a critical, watchful eye for discrepancies or take the time to double-check information.

At Aspire, we were once asked to perform due diligence research on a donor prospect with whom the organization was in negotiations for a major gift. Beyond reputational risk, the question was whether he actually had the wealth he claimed to have.

It was super challenging! Why? Because the information we sourced seemed to be in a perpetually unconfirmable loop. For example, what appeared to be a published interview was really his own blog article. Live media interviews only seemed to cite information that he had seeded in his biographies and multitude of websites.

And the worst? He claimed to have bought out dozens of bankrupt companies – all incorporated in Delaware with no owner information published!

After hours of creative searching, we finally found the fatal flaw and it was in plain sight. If you tried to purchase any of the products or services on offer through the various companies there was either no option to purchase on the website or no physical address to visit.

Finding accurate information is so important, the Prospect Research Institute created a FREE course to educate your development team (and anyone really) – Solid Intel.

Solid Intel Course

Solid Intel is a multi-module course teaching you how to evaluate sources critically and feel confident in the accuracy of the information you present. Fun quizzes test your comprehension. Share with your team and Enroll Today.

Wealth and philanthropy indicators

If your organization needs deeper research to support major gifts and hasn’t had this support previously, you may want to upskill an existing staff member, such as a development coordinator or database administrator.

You probably have a few specialty tasks you’d like this person to accomplish, such as the following:

  • Identify major gift prospects from the database
  • Provide prospect profiles prior to solicitation
  • Help coordinate moves management for the team

Leveraging your existing staff member or hiring someone at entry level can be economical and helps build internal capacity for upgrading donors and moving toward major gifts. In the past, training a staff member on prospect research support for the growing nonprofit was challenging.

Prospect research industry conferences are expensive and dominated by sophisticated healthcare and higher education environments. Webinars and local conferences offer tidbits, but usually don’t give your researcher key skills with step-by-step instruction on how to apply the skills to their work.

Recognizing the need, Aspire developed a course at the Prospect Research Institute specifically for the nonprofit researcher that needs to do all the research things – and at an economical price.

The Essentials for Successful Fundraising Research course is at least 7 to 8 weeks of on-demand content with a downloadable textbook, homework feedback, ability to earn a digital badge demonstrating competency, and 12 months of monthly group coaching. Give your organization the research edge. Enroll Today!

Growing your Fundraising with Research

When your development team has the information it needs, big things – and gifts – can happen!

  • Routine stewardship can happen with better contact information
  • Stewardship calls can turn into major gift prospect qualification
  • Donors can be moved more methodically toward larger gifts
  • Deeper information can give development officers greater confidence to ask for larger gifts

Upskilling your development team doesn’t have to break the bank. Aspire, through the Prospect Research Institute, has created a variety of training options to meet your needs at affordable prices.

What are you waiting for?
Visit the Institute now!

 

A Screening By Any Other Name Would Read As Rich

Prospect Identification, , , , ,

Apologies to Shakespeare, but when it comes to the communication between major gift officers and prospect researchers, “What’s in a name?” is an important question worth paying attention to!

“What’s in a name? That which we call a rose by any other name would smell as sweet…” -William Shakespeare in Romeo and Juliet

I didn’t realize how important words are until I became a consultant and needed to clarify what services we offer our customers. If I fail in that communication, the consequence is either no work or an unhappy customer.

As it happens, wealth screenings are one of the most frequently misunderstood tools – and words – we use for major gift prospect identification at Aspire.

Notice how I defined that?

A wealth screening is a tool for major gift prospect identification.

However, all too frequently Aspire Research Group’s potential customers and current clients define it more like: Wealth screenings provide accurately matched profiles on prospects.

Why is there such a discrepancy in the definitions?

As much as I am indebted to the big vendors for flooding the nonprofit market with advertising and education on using wealth screenings, they have also perpetuated the myth of accurate electronic data matching and scoring. It makes for healthy sales revenue!

As a business owner I respect that simple marketing messages make sales. But as a prospect research professional it drives me nuts because you can have the very best, most amazing data-matching algorithms and scores and ratings and all things analytics – but it will not be enough!

It will not be enough because ultimately we are dealing with humans, not data.

Do any of these kinds of scenarios sound familiar?

  • Visits with donors that are recorded in the database as actions with text, but no specific coding to know they were qualified or disqualified.
  • Donors with common names, such as Robert Smith, but is it the billionaire or not?
  • Researchers wanting to preserve data and not deleting things like gift opportunities on records when there was never a single two-way exchange.
  • A great structure for coding prospect management in the database – that has old or just completely wrong information.
  • Contact reports that indicate the prospect is ready for a solicitation, but no gift opportunity or prospect status was ever entered or updated, and in the hundreds of names in portfolio the prospect was unwittingly dropped like a hot potato.
  • The data integrity team won’t allow development officers to update contact information on the record and now actively engaged prospects lack the basics such as current addresses or working telephone numbers.

I could go on and on. It’s all so human!

So, what now? Are wealth screenings worthless?

Heck no! Wealth screenings are an important and economical tool for major gift prospect identification. They are designed to help you segment and prioritize large groups of records and they perform better and better as the matching algorithms and accessible data improve.

The auto-matched profiles available with most wealth screenings are also really good. It’s just that they are not anywhere near 100% accurate. They were never meant to be! Matching algorithms keep getting better, but they can’t be perfect. They are good enough to get a great segment to focus on.

Because once you have a top major gift prospect segment, research can prioritize that much smaller list with quick research to confirm the information, and can deliver prospects to the development officer that have current, actionable data.

A screening by any other name would read as rich.

It doesn’t matter if you define a screening as an electronically matched algorithm or a researcher quickly scanning sources to confirm the algorithm’s findings — or both. Bottom line is that screenings help identify new major gift prospects.

One way to avoid confusion over the choices of words used is to describe the desired outcome.  If you are a development officer and want to identify new major gift prospects, say that. If you say “I need a wealth screening” but a different technique would work better, you may not get the best outcome.

As Elisa Shoenberger describes in Top 5 Misconceptions of Prospect Identification, prospect identification is “using the knowledge of an organization, its best prospects, as well as an understanding of wealth and philanthropy to determine which prospects are the best ones.”

This goes for prospect research professionals, too! When someone wants new prospects identified, it’s not always wise to assume a wealth screening will be the best technique. Instead of focusing on a tool or technique, start asking questions about what they will do with the names, or how many names do they need, or other questions to widen the conversation.

And once everyone knows what is desired, then the discussion can progress to the tools and techniques that would best deliver the outcome of identifying major gift prospects.

Are you tasked with doing the work of major gift prospect identification? Check out the Prospect Research Institute’s workshop, Profiles vs. Screenings, where we dive into the difference and research for the desired outcome!

Profiles v Screening 14 Nov 2024 workshop

launch your prospect portfolio; rocket

Add Speed to Major Gift Portfolios with RPM

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When a current client created a job posting for a Research and Prospect Management position a light bulb went off!

Research and                                  Revolutions
Prospect                                            Per
Management                                   Minute

More frequently you’ll see this type of combined role posted as Prospect Management and Research (PMR). But if you reverse that to Research and Prospect Management (RPM) …can you get more speed into your major gift portfolios?

Which comes first – research or prospect management?

Unlike a similar question about chickens and eggs, there is a pretty definitive answer to this question. Research usually comes first in the form of prospect identification.

Most organizations grow into major gifts. A common nonprofit story begins with institutional funding, such as foundations and corporations, who want to support early and continued nonprofit growth. Along the way, nonprofits attract small dollar individual gifts and refine their individual giving program to the point where larger gifts receive more personalized attention and individuals are personally asked for larger gifts.

Usually with the first capital or other campaign, there comes a need to more methodically or reliably identify donor prospects who can give lead campaign gifts. Enter prospect research with major gift prospect identification!

When there are just too many donors requiring personal attention to keep track of in one person’s head, the CRM database comes to the rescue with prospect management. Prospect management provides a systematic way of tracking prospect’s progress from identification to a gift and stewardship.

But what happens to research when prospect management becomes a separate specialty in-house?

Sometimes research and prospect management get out of sync, prompting major gift portfolios to get as stubbornly stuck as a zipper out of alignment!

When research is disconnected from the management of major gift portfolios, various things begin to break down. Sometimes the criteria that research is using to identify prospects does not fit with the funding priorities or the development officer’s views on what makes a great prospect. Research might not be aware of specific regions or development officer portfolios that need more or different prospects than others.

When prospect management is disconnected from research, important information learned from development officers is not passed along. For example, a development officer might learn critical information about a wealth event for which research could provide capacity insight. Also, the prospect manager might not be aware of the criteria used to source new prospects and then they cannot explain it to the development officers.

Adding research in at the “front” of prospect management – the RPM perspective – recognizes that the smooth coordination of prospect identification with portfolio management is where major gift speed is generated.

When the zipper is not aligned, movement is difficult and slow. When there is alignment, the zipper zips easily and quickly.

Similarly, when research and prospect management are aligned, development officers zip through qualifying and disqualifying!

(This all assumes, of course, that development officers are trained in qualification techniques and have a disciplined work process. But that is a different subject!)

Major gift fundraising: Can’t have one without the other

Whether you like to call the work PMR or RPM, the bottom line is that you can’t have one without the other. Without research, pipelines eventually run dry. Without prospect management, development officers lack support to move prospects effectively and efficiently toward a larger, major or transformative gift.

Additional Resources

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The Magic Rainbow of Prospect Identification

Major Gift Teams

Major gift prospect identification is often the overlooked “middle child” of the prospect research family. Somehow it lacks the glamor and clamor of prospect management and prospect profiles. It doesn’t possess the tech geek clout of data science, either. It’s somewhere in the middle – critically valuable and perhaps the true “artist” of the prospect research field.

Identifying major gift prospects is a remarkable talent, as it blends all the skills of other research tasks and tools and creatively applies them to find good prospects.

Our story begins with the fundamentals of a good major gift prospect.

A good prospect will have a combination of (1) affinity or love for the organization, (2) capacity to make a major gift, and (3) philanthropic inclination to make a gift.

The debut of wealth screenings in the late 1990s and refinement through the early 2000s suddenly made this balanced triangle of criteria a relatively simple matter of matching algorithms, expressed into Excel spreadsheets, and segmented through sorts and filters. The resulting, suitably-sized top segment can then be served up to be validated by manual research.

When the fundamental triangle of criteria are in the donor database as fields, the identification project can grow rapidly! Well, this depends upon how much other information is found inside your donor database. It could be paired with volunteering, occupation, interest codes, degree earned – the possibilities limited only by the data collected by your organization.

When the 2000s ushered in statistical data modeling on a robust database of donor information, it almost felt like an explosion of quality major gift prospect identification hit the nonprofit sector.

But did it?

Statistical modeling – and now A.I. – attracts a LOT of attention, but what about the many thousands of nonprofits that don’t have a lot of data beyond giving history? The ability of A.I. to employ big data to improve its algorithms holds promise, but could it also be a distraction from applying a clever human mind to major gift prospecting?

Sometimes the most expensive scores you can purchase feel as helpful as telling a store owner that the data show that when her parking lot is full, she sells the most product. What that store owner really needs to know is how to fill the parking lot!

And all those splendid software solutions are limited.

The pursuit of profits demands that software tools be developed that will be desirable to the largest customer base possible. But when it comes to major gift prospect identification, the local animal shelter is quite different from a national nonprofit news outlet focused on climate change, which is quite different from a regional healthcare system.

So, what does the clever prospector do?

Use everything to create the magic rainbow of prospecting!

Whether you want to find prospects for lead gifts to the largest campaign to hit your region or fund your current fiscal year budget, if you keep an open mind and creatively employ all of your research skills and tools you can find the prospects you need.

Beyond the typical wealth screening or scoring, you might do things such as:

  • Routinely read the best media – blog, podcast, news, journals – that is specific to your organization, cause, or project. Because inevitably you will start to find the people, companies, and foundations highlighted in those outlets that could be potential prospects.
  • There are so many digital tools that provide alerts based on a variety of options, such as name, keywords, and more. Creating a fast and efficient routine to evaluate and act on this information yields results over the long term – and sometimes the short term too.
  • Relationship mapping can take many forms. You can ask people directly to introduce you to their social networks. You can build lists from tools, which can include paid subscriptions, LinkedIn, your own donor database, and others.
  • Generating “wish lists” of the top donors to causes like yours or in geographic areas where you want to grow provides the opportunity to submit the names to key players at your organization for connection pathways, and also keeps the names in the front of people’s minds so they recognize connections when they come to light.

Any of these kinds of scenarios (and so many more) means subscribing to newsletters and other content and then when you find a name or list of names, then using internet search, research tools, and generally all the “things” to confirm wealth, find community involvement, motivations and interest, and connections to your organization.

The more you do prospecting, the more you learn.

You learn things such as…

  • The “tells” your best prospects have that identify them, such as various patterns of giving to others, belonging to a particular group, or living in a specific neighborhood.
  • All the key data points that quickly disqualify someone as a good major gift prospect for your organization.
  • All the places your best prospects congregate in the wild, such as clubs, associations, organizations, companies, and more.
  • Reasons why gift officers won’t contact prospects, such as not having information to build rapport in early outreach, no contact information, needing a connector to introduce them, and others. Now you can adjust your research to find this information.
  • Reasons why gift officers will contact prospects, such as belonging to the same organization but a different chapter, both owning the same breed of dog, alumni from the same school, or being an athlete in the same sport. Now you can recognize this information and include it when you find it.

Some researchers are disheartened by what can feel like endless hours spent searching for what feels like so few good prospects, but the more practice you get, the more those few good prospects start looking and behaving like magic beans, growing into massive bean stalks, that ultimately lead to the golden goose!

Okay, maybe that’s a bit of a stretch, but it underscores the distinctive talent of great prospect identification. It is a creative effort that is honed with practice and skill. It is much like the artist that spends 10,000 and more hours practicing, learning, producing, and promoting …to become the next Frida Kahlo.

Because some of your organization’s wealthiest and most likely major gift prospects will not show up in your wealth screenings for a variety of reasons, including:

  • Their record might have bad or outdated data in your database.
  • They are not listed on any of the “top” wealth lists because their wealth is private.
  • Although wealthy, they live modestly and don’t own or spend lavishly.

But they might be found:

  • Lurking in a Wikipedia page of your most successful alumni.
  • On the front-page in the “Rural Times” featuring the modest company owner who is the region’s biggest employer and whose child attended your special camp in the city.
  • In LinkedIn with their occupation as CEO and founder of a company with hundreds of employees.

The next time you are working on finding new major gift donors, remember that you are painting a magic rainbow of prospecting, which like all artistry takes time and practice to become magical.

P.S. For the researchers reading this, you might find that some of your most successful major gift officers outperform you on identifying wealthy prospects. Don’t take it personally – take notes!

If you say ‘no’ enough, you will probably get fired

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I have been known to say: “If you say ‘no’ enough, you will probably get fired.” But what if you are a solo researcher and the development team comes at you with a tidal wave of requests? How can you create healthy work boundaries and avoid drowning?

Following are three ideas to help you stay in the moment while also giving yourself time to figure out how to get ahead of the problem.

1. Don’t fight the current.

Many solo researchers start off as database managers or development coordinators with the capability of doing much more. Some researchers come into the first research role created – with or without prior experience.

As you build a positive reputation it can lead to a strong current of research requests that feel random, disjointed, and extremely time consuming. What starts out as flattering can become overwhelming!

Do you have to start saying ‘no’? Sometimes you do.

But before you go there, give the following or some variation a try:

  • “If I could get you what you want, what will you do with it?”

When you ask this kind of question you are floating with the current instead of trying to swim against it. It reduces the tension of having to commit to a ‘yes’ or a ‘no’ and allows you to discover things such as:

  • They want to send out emails, not call each person individually – so you really don’t have to spend a lot of time qualifying the list. Can you pull an internal list with records that have emails? Can you purchase an external list of prospects?
  • They just want to know what other places the prospect has given to (or something else specific) – so you really don’t need to do a full profile.
  • They are planning ahead (woo hoo!) and don’t really need the work for months – so you can plan ahead too!

But what if it is yet another request for you to find prospects in the community and there is no clear strategy behind the request? Because we all know this happens A LOT.

For now, keep floating with the current and say something like: “That sounds interesting, but I’d really like to think it through some more. Is that okay?” And then…

2. Step back and take time to evaluate.

I’m going to continue with the prospecting example because it really is a common issue. Development officers have a very difficult job. They need to build relationships with humans and put money into the bank. These are two very different and sometimes conflicting goals.

Under pressure to bring money in, a development officer needs to get good at prospecting. Yes, they need to build relationships, but if they do it with people who are solid prospects, they can be more efficient and bring in more money.

If a researcher is being asked to prospect – especially outside the database – the assumption is that there is not enough value inside the organization’s base of donors. Or there may be a fear that the major gift pipeline is going to be running dry soon.

When you get asked to find prospects outside of the database, and you’ve gone through the “what will you do with it” and you need to answer, consider saying ‘maybe.’

If you tell someone ‘maybe’ then you have time to spend thinking through the bigger picture of prospecting at your organization. You can run some exploratory reports to find out things such as:

  • Of the major gift prospects identified, are they being contacted? If not, asking why not is valid and there could be a good reason why not, which will help you do better prospecting.
  • Has the donor base been rated for wealth and philanthropy or a predictive score for major gifts? If so, what is the unassigned potential of high affinity, high wealth prospects?
  • What are all the prospect ID tactics that are underway now or happened in recent past? Were they successful?

Now you can schedule time to discuss the request and explore the bigger picture of how you can help the development officer focus on the best prospects to raise more money. You can re-state the need, review what makes a best prospect, and offer ideas on how to find those best prospects. Ideally, each step of the conversation is a two-way learning experience.

And in the end maybe you just have to do the prospecting request as asked. Either way, you will have learned a lot about prospecting, that development officer, and your organization’s constituency.

And if you are still being overwhelmed…

3. Talk ‘big picture’ with your manager.

Now that you have stepped back and evaluated the prospecting strategies and tactics as a whole and whether they have worked or not, you are ready to have a conversation with your manager. You need your manager to help manage the team’s expectations about what you can do, which means you need to get your manager on board with the best path forward.

Looking at the bigger picture usually makes for a better conversation with leadership. Do your best to stay out of the details of how you do the work and focus on the outcomes. In this kind of conversation, you start by walking the through the same steps as above:

  • What are the fundraising goals?
  • What does a best prospect look like for those goals?
  • What are the ways prospecting has happened and how has that worked?

And then you get to ask…

  • Should I be doing all of them? How should I prioritize requests?

Hopefully, this two-way conversation helps your manager advocate more effectively for you with the team.

Either way, be sure you are writing up each research project with the goal, tactics, delivery, and results. You can present these reports at staff meetings when you update the team on what you’re doing. It could help the development team hold themselves accountable for acting on your work.

Accept the things we cannot change.

Sometimes the development team or the fundraising culture at your organization just isn’t ready for your research prowess. If development officers simply don’t contact the prospects, then it doesn’t matter how many prospecting projects you perform, or profiles you create, or any of the research you are providing.

It might be time to say ‘no’ judiciously, or ask your manager to give you direction on how to prioritize requests.

Regardless of your situation, if you haven’t already, it is definitely time to consider what you want for your career and make sure you plan your next steps.

 

How connected is your major gifts team to its donors – really?

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Do you really know how well your major gifts teams is performing? Maybe they are raising millions of dollars every year and hitting the targets set for them — but are those the right targets? Evaluating donor engagement could help you answer those questions.

If you are one of those organizations that fundraises your budget every year and has grown to command a major gifts team, you have my deepest admiration! Scaling a nonprofit organization is not an easy task. Neither is growing and scaling a major gifts team.

At Aspire, we work with fundraising leaders who are tasked with taking their major gifts team up to the next level of performance. It can be surprisingly difficult for even an experienced major gifts officer, trained at a larger institution, to make headway with a legacy major gifts team.

Donor Engagement as a Framework

Having major gift officers assign their prospects a donor engagement level is one way to find out what’s happening on your team and in their portfolios.

It has been a common practice to focus on portfolios through the lens of the gift cycle — identification, qualification, cultivation, solicitation, and stewardship. And this works very well for gift proposals, but human relationships don’t fit very well into those process-oriented terms. Donor engagement is different.

Many major gift officers intuitively view their portfolio through the lens of donor engagement – discovery, early cultivation, and deep cultivation.

It also fits the rule of three, which means when major gift officers show up to work, they only have to remember three categories of donors in their portfolios. This can help them manage their time and prioritize the right people.

Honest Discussion Leads to Real Change

When you ask each major gift officer to assign a donor engagement level to every person in their portfolio, surprising conversations may arise and lead you to what’s really happening.

For example, you might learn that someone on your team is struggling to find contact information, leaving them with only snail mail letters to communicate. You may also discover that some team members don’t know how to build a deep relationship with a major donor, which is why they have stagnant, lower gift sizes.

To create fertile ground for these kinds of discussions, it’s important to clearly define the donor engagement levels. It’s also important for each major gift solicitation to be recorded and tracked as a proposal or gift opportunity on the donor record.

Major gift officers also need routine portfolio reviews. This is time-consuming, but it’s where all the stories start pouring out. And when you combine portfolio reviews with monthly team meetings, now you have a platform for coaching and developing process and policies.

Which Comes First – The Process or the Outcomes?

If you are like most fundraising leadership, you need more dollars raised and now. Using donor engagement as a framework isn’t for every organization, but it can help you assess the reality of your team’s performance while you are working to identify and assign new prospects.

And there is an added bonus with this framework. It is within the full and complete control of each major gift officer to categorize their relationships with the donors in their portfolios – as it should be. When major gift officers have ratings of all sorts assigned to their donors it can feel like their relationships and the information they have gathered are ignored.

With a donor engagement framework, it’s about the relationship first, ratings second.