Category Archives: Major Gift Teams

When Should You Look for Cold Prospects?

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It's COLD out there!

It’s easy to tell fundraisers to look at their donors first, but are there times when it makes sense to look outside the donor pool? If so, when and how should you do it?

This may sound obvious, but usually the best time to go after cold prospects is after you have looked in your donor pool and need more. Apart from general donor acquisition, this might happen for a few reasons including:

(1) You need more major gifts than your current donor pool can support

(2) You need qualified prospects to fill board member positions

(3) You are strategically reaching out to a new constituency

Branching Out

When you are looking for more major gifts or new board members, a great technique is Branching. This technique is described in Prospect Research for Fundraisers: The Essential Handbook (p.26) and you might also hear it described as Relationship Mapping (p.175). The idea is that you take your high-powered, well-connected donors and trustees and put them at the center, branching their connections outward.

A simple, but great example, of this technique is demonstrated by Dan Blakemore in his blog post, “How One Web Search Led to a $20,000 Gift”. When the board chairman passed away and he needed to find donors for a named fund in his memory, Dan branched out from the board chairman’s connections to identify a donor who made a first gift of $20,000. Dan started with his existing donors, but he took an extra step outward and was successful. You don’t have to start with a huge project to get results.

Strategic New Direction

Branching exercises sometimes result in more of the same prospects because you are working within a network of connections. There are organizations that do not want more of the same. They make a deliberate decision to reach out to new and different constituencies. This might take the form of populating the board of directors with people who are more similar to the people they serve. It might also be a concerted effort to engage an entirely new group with the organization in a meaningful way.

In the book, Prospect Research for Fundraisers, we tell the story of Jeff Lee at Wycliffe Bible Translators (p.164). He was hired to build stronger fundraising efforts in Asian countries where Wycliffe operates, but also to build engagement with the U.S. Asian-American community, hopefully at some point in the future linking that engagement back to the home countries. Some institutes of higher education and other organizations are strategically building engagement with countries where new wealth is emerging, such as China and India. When you are starting out new there are usually few existing donors and relationships, so how do you go about it?

Building Up and In

In the U.S. there are many sources of information specific to industries, ethnic communities and more. For example, local Business Journals usually publish a “Book of Lists” each year. You can build a list of the top philanthropists in your community, the top business leaders and more. You can ask a researcher to build you a specific list, or as a frontline fundraiser you might start by, for example, joining a local association of Chinese business owners and using a researcher to help you get more information after you have identified specific individuals.

First you build up your list of cold prospects (some people call them targets, but that often sounds harsh to a fundraiser’s friendly ears) and then you make the inside, face to face connections, getting prospect profiles on individuals once you have made a connection.

Cold Prospecting Takes Effort

No matter how you go about it, cold prospecting consumes a lot of time and resources. Make sure you set yourself up for success. Following are some tips:

Plan & Track:
Make sure you have a plan in place. You wouldn’t just show up on a plot of land and build a house willy-nilly. Draw up a plan and track your progress periodically.

Polish Skills:
You may find it takes a different set of skills to engage a new group of people. Be sure to get any training you need. Network with colleagues who have done similar work successfully.

Educate Yourself:
You may need to broaden your knowledge of the culture and history, inside or outside of the U.S. Researchers can help you gather this information as well.

There are good reasons to do cold prospecting, but it needs to be treated with careful respect because of its expense. Just as you nurture donors acquired through direct mail to ensure you raise much more money in the long-term than the initial cost of acquisition, likewise you need to plan your major gift prospecting projects to ensure that they lead to large gifts and deep relationships.

About the Author

Jen Filla is president of Aspire Research Group LLC where she works with organizations worried about finding their next big donor, concerned about what size gift to ask for, or frustrated that they aren’t meeting their major gift goals. She is also co-author of Prospect Research for Fundraisers: The Essential Handbook.

Warning! Did You Recognize Your Million-Dollar Donor?

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You are launching a campaign or pushing forward with a major gift initiative and finally have the budget to order some profiles. Yay! You pick the first name – a prospect you’ve met who comes across as wealthy – only to discover the capacity of the prospect falls under $100,000. So disappointing. What went wrong?

Even when an organization has performed a wealth screening, sometimes gift officers still gravitate toward lower-capacity prospects. Many times this is because they are not aware of the lifestyle and asset differences between affluent and high net worth. High Net Worth Individuals (HNWI) do not look like the typical fundraiser – you or me. They are different. And sometimes that can make us feel uncomfortable.

HNWI According to Knight Frank

The recently released Knight Frank annual Wealth Report helps to illuminate some of those differences. Many groups define a HNWI as someone with $1 million in net assets, but Knight Frank cranks it up to an individual with $30 million or more in net assets. Let’s give those numbers some context. Suppose your prospect is passionate about your mission and wants to donate 5% of her net assets.

  • At $30 million, she gives you $1.5 million.
  • At $1 million, she gives you $50,000.

Among these elite, Knight Frank finds the following:

  • London and New York are the top destinations in the world.
  • HNWI’s in North America own an average of 3.6 homes.
  • The top 3 most popular investments of passion in North America: Fine art, wine and classic cars

Affluent vs. HNW – Some Examples

One prospect I researched was so interested in wine that he founded a vineyard and winery – as a hobby! His capacity was very different from his partner’s, who also invested in the winery and ran the operations. The partner invested his savings and was earning his living. The prospect was a HNWI and his partner was affluent.

Another finding by Knight Frank was that 25% of HNWI’s net worth is accounted for by their main residence and second homes that are not owned purely as an investment. I researched a prospect who owned four condos on the beach in Florida. One of them was his home and the others, some in the same building, he held as investments and rented them to vacationers.

That is a very different picture from a prospect who owns a few condos on the beach, all but one purchased during an economic downturn, as well as home and a New York City condo. The prospect living in the beach condo appeared to manage his properties personally and likely earned income of around $100,000 – that’s affluent. The prospect with the New York City condo is a top executive who saw an opportunity to own valuable beach-front real estate near his favorite vacation spot and used cash to purchase when the prices were low – that’s a HNWI.

In Your Own Backyard

You don’t have to be an expert on how wealth and assets are accumulated and managed, but you do need to be a student of wealth to begin recognizing the difference between a prospect capable of a $1 million gift and a prospect capable of a $50,000 gift. If you are in a mid-west rural community your HNWI is going to look different from someone in New York. It’s up to you to know your community – although a skilled prospect researcher can always help you out.

As a frontline fundraiser, recognizing and embracing HNWIs is a valuable skill that could make a tremendous difference for the cause you serve. You might be out of your comfort zone at first, but you can get through that with education, practice and a little help from your peers.

Other Wealth Reports You Might Like

2012 Bank of America Study of High Net Worth Philanthropy

2011 Capgemini-Merrill Lynch World Wealth Report

About the Author

Jen Filla is president of Aspire Research Group LLC where she works with organizations worried about finding their next big donor, concerned about what size gift to ask for, or frustrated that they aren’t meeting their major gift goals.

Got Software. Got Research?

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Many fundraisers know they need research on donors and prospects, but what is the best way to get it? Should you buy a software subscription? Are there any other options? Let’s answer those questions with a story.

A Software Tale
November has most of us thinking about Thanksgiving and other holidays around the corner. But many accountants are thinking about closing out the books and the approaching tax season. Imagine for a minute that you overhear two guests talking at one of the numerous holiday parties you find yourself attending. Bob Business Owner tells Ann Accountant all about how complicated his finances are for the past year now that his small business is growing and expresses some concern about how it will impact his taxes.

“What are you going to do to make sure your tax filings best reflect those changes?” Ann Accountant asks.

“Oh, I splurged and purchased the latest version of TurboTax this year,” says Bob.

Ann looks genuinely confused. “How does that help you make decisions?”

Important Outcomes
TurboTax is great software, but when your finances are complex a software package is not going to help you make key decisions about your tax filings. When the outcomes are truly important, software doesn’t usually make the grade. Software can’t think, strategize or get creative about its approach.

There are many wonderful software options that meet prospect research needs. I have my own favorite subscriptions and purchases. Software speeds up the time it takes me to research individuals by grouping important resources together. Software makes data analysis possible, and fast.

But software does not recognize that what seems like a random company incorporated by your prospect is likely to be a family limited partnership with at least $10 million in invested assets. Software does not recognize that you were not able to mail your usual spring appeal two years ago and that is why giving frequency went down.

What About You – The Fundraiser?
So how do you know when to buy software? Or when you need a person who has expertise? Or some combination? Whenever you have a fundraising goal or objective, ask any potential vendor or consultant whether their solution will get you where you want to go. The answers may surprise you. But let’s illustrate it with another story.

An organization wants to launch its first campaign. They have campaign counsel to coach them through, but they need to prioritize their database and get detailed information on their best prospects. This campaign is very important to the future of their organization and they have a tight budget. The CEO is a visionary and she knows that spending a little more in the right places can have transformative results. She hires a prospect research consultant who makes sure they get as much out of their database screening as possible.

The consultant works closely with the fundraising team, including campaign counsel, to segment their best prospects and code them in the database to work in tandem with their relationship management system. Through this process the team recognizes that they need to restructure their approach based on the giving potential found. Instead of struggling near the end of the campaign, the team knows exactly when to change gears and re-focus their energy on a different prospect segment. It works!

At this point you might be saying to yourself:

“That’s all well and good, Jen, but how do I pick a good prospect research consultant? I’ve heard of organizations who have suffered with bad advice and bad information. I don’t want to be one of them!”

Choosing a prospect research consultant – any consultant really – can be confusing and risky. Take the time to communicate clearly what you want to accomplish. Is the consultant listening? Or doing all of the talking? Did you check references? Look for posts in the future on how to choose and manage a consultant.

Other Articles You Might Like

5 Ways You know You Need a Research Consultant

Mistakes That Nonprofit Organizations Make Hiring Consultants – Karen Eber Davis

3 Consultant Relationship Types that Succeed. Which One for You?

The Shocking Truth About Prospect Research Consultants

About Aspire Research Group LLC

Headquartered in Tampa Bay, Florida, Aspire Research Group was founded so that every development office could have the benefits of professional prospect research. Known for our creativity and clear communications, we work with organizations who are worried about finding their next big donor, concerned about what size gift to ask for, and frustrated that they aren’t meeting their major gift goals. Do you need to close more major gifts?

www.AspireResearchGroup.com 727 231 0516

So really…When do you use a prospect profile?

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Many of my clients have never used prospect research before. Many of them have used it. All of them have questions about what they need in a profile and how they can use it. If they have these questions, I figure lots of fundraisers out there might be wondering the same thing.

We know we use prospect profiles to inform cultivation and solicitation – to help us ask for the largest appropriate gift. In addition to sometimes finding surprising and new information about a prospect, profiles often confirm and validate the fundraiser’s assessment of the prospect, providing even more confidence in preparing for the ask.

Using Profile Levels

I like to leave it up to the fundraiser to decide just how much information she needs. You know yourself and your prospect the best. But I do like to give different levels of profiles to choose from:

Identification Profile – A brief profile to confirm the ability to give and look at giving history and community involvement. A major gift capacity rating is provided. This is for when you don’t know anything about the prospect or need to confirm wealth and inclination before spending your time.

Solicitation Profile – A long profile that searches for everything relevant to making an ask for a major gift. In addition to capacity ratings, this profile includes an executive summary to help you with strategy. As the name implies, this profile helps you prepare for a major gift solicitation.

The Customized Approach

These are the two most popular profiles among Aspire Research Group clients, but they are used in many ways and sometimes customized:

  • One client in a campaign preferred Solicitation profiles first on her prospects, with an update as she neared the actual ask. She knew her campaign volunteers had great connections and wanted a head start on her strategy. It worked.
  • Another client had budget restraints, but really needed more than the Identification profile. We came up with a custom profile that addressed her specific need-to-know items, but remained within her budget.
  • A consultant client needed a profile more basic than Identification, as a way of prioritizing donors for small organizations. We did it.

The Pitfalls to Avoid

It all sounds so easy, doesn’t it? Warning! There are some common mistakes that fundraisers make when requesting profiles:

  • Asking for profiles as a way of showing activity, when really you are just too afraid to call on the prospects
  • Asking for a profile when you have no way of connecting with the person and no idea if the person has any interest in your organization (e.g., the local version of pursuing Oprah Winfrey)
  • Requesting a standard profile when what you really need are specific questions answered

An Unbeatable Team!

The most experienced and successful fundraisers do something differently when it comes to prospect profiles. They communicate regularly with the prospect researcher!

  • When you talk to the researcher about your donor prospect and what information you need to move forward, she can give you a much better profile.
  • When you review the profile with the researcher to help you match your personal knowledge with the “paper” knowledge, you gain a much deeper and more colorful picture of your prospect.
  • And when you share the results of your visits with the researcher you create an unbeatable team!

Do you have an unbeatable team?

If you are considering using prospect profiles as part of your major gifts strategy, call Aspire Research Group to learn more about how we can help you reach your fundraising goals with research: 727 202 3405 or visit www.AspireResearchGroup.com

Other Articles You Might Like

Dating Donors, Data Mining & Donor Profiles -oh my!
Score a touchdown with prospect profiles
Is Prospect Research Too Expensive?

Prospect Profile Samples

Identification Profile (PDF download)
Solicitation Profile (PDF download)

Fundraisers and the Family Limited Partnership

Focused Fundraising, Major Gift Teams, , , , , , ,

On July 6, 2012, The New York Times ran an article talking about the family limited partnership and how more families are looking at this wealth planning vehicle now that the tax break allowing up to $5.12 million to pass to heirs tax-free is set to expire at the end of 2012. What’s it to you, a front-line fundraiser or research fundraiser?

For me it was an “Aha!” …another indicator screaming “high net worth possibilities here!”  So when you see a prospect with a family limited partnership (e.g., Filla Family LP), you want to take a second look.

How do high net worth individuals use family limited partnerships to manage their wealth?

Whether it is a married couple or includes extended family members, a limited partnership allows family members to pool assets, typically for a business purpose, and these assets are now discounted because the assets are less liquid – that means a lower tax rate. The New York Times suggested that a 25 percent discount was usually acceptable to the IRS.

According to the CPA Journal (July, 1999), there are three main advantages:

  • The general partner of the limited partnership can retain control and direction of the assets;
  • It aids in business succession planning; and
  • The assets can be passed between generations at the lowest permissible cost in estate and gift taxes

Consider your highly philanthropic entrepreneurs. Mr. and Mrs. Prospect start what becomes a very profitable business. They have four children, two are involved in the business and two are not. By placing the business interests into a family limited partnership, the couple can maintain control over the business while planning for succession and transfer of assets to their children – all this at a reduced tax rate.

The New York Times article also suggested that some families might use a family limited partnership to pool assets to reach the higher investment requirements that hedge fund and private equity managers require.

It so happened that just after I read The New York Times article, I was researching a donor prospect who was a very successful entrepreneur. He created family limited partnership each time there was a substantial financial change in his life – selling a company or realizing value to a patented medical invention. The New York Times article suggested that $2 million was a very low investment. Based on this I estimated that the combined value of his three family limited partnerships might be $15 million to $30 million or more. He and his wife were the only partners.

Do you have a donor prospect story that involves a family limited partnership? Do you have more to add about how high net worth families might be using this investment vehicle? I hope you will share!

Feel free to comment or email Jen at aspire research group.com

Other Links You Might Like:

6 Family Limited Partnership Developments In 2011 (Forbes blog post-FLP stories)

Investopedia Definition of Family Limited Partnership-FLP (webpage)

Capacity and Ask Amount – Magic Numbers! (blog post)

Mastering Moves Management: 3 Key Pieces

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Moves management is the process of moving a donor prospect from identification to major gift. Also known as prospect management, when you throw those terms into a search engine most of the results are for software companies, especially donor database companies. But I argue that moves management is not primarily a software solution but sincerely a *people* solution!

A database is a tool. Its importance increases as the number of an organization’s donors and friends increases. We need our donor database to keep track of gifts and all of the other information and tasks surrounding our donors and friends.

The more gift officers and the more major gift prospects you have, the more important it is to use your database in your moves management system. But beware! Anytime you spend more time typing into your database than you do talking with your prospects, you will struggle to raise enough money.

Moving a prospect usually requires a pretty intense relationship over a year or two. You need to discover her interests and motivations for giving and connect her in a very personal way to your organization. What if you have 100 prospects being moved? How about 300? And what if you have 3 gift officers moving prospects? Or 5, or 10, or more?

Now you seriously need a system!

Pretend you are an astronaut looking down on earth. Now pretend you are consultant looking at an organization from a distance. This organization has a moves management system humming along. You notice there are three gears in motion producing consistent relationships with prospects capable of making a major gift. These gears are:

Ratings – Each prospect is rated so you can stay focused on those who can help you reach your dollar goal.

Moves – Actions with prospects are deliberate and planned (and tracked in the database).

Reports – Regular printed reports are reviewed and regular meetings are held to build internal skills and keep all the moving parts in balance

Can you do moves management without a database? Of course you can! You could keep track of your gifts in Excel too, but it is rarely the best solution.

Mastering moves management requires learning the balance for your organization between the three moving gears:

  • How many ratings do you need to stay on path with the most capable prospects?
  • How will you plan for moves, make your moves, and record your moves?
  • What measurements should you report on to keep you accountable?
  • How often should you meet and who should meet to keep your major gifts program growing?

Everything in our world is in constant flux. Moves management requires re-balancing as your major gifts program grows and changes. If you keep the emphasis on the moves – on the in-person interactions with your donor prospects – everything else will find its place.

Have you mastered your moves?

Identification to Discovery Visit: 5 Fun Questions to Ask

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Once you have identified your donor prospect, the next step is usually to make a discovery visit. Sometimes this happens over the telephone, but ideally it will be a visit at the person’s choice of location. The goal is to meet her where she feels most comfortable and qualify her as a major gift prospect.

Most often we aim to determine or confirm the following:

*Affinity, or how close she feels to our organization
*Inclination, or how philanthropic she is to us and others
*Capacity, or whether she has the ability to make a major gift

Confirming Affinity and Inclination

No matter how much or how little time you have in your first visit, do NOT walk away without finding out about the individual’s giving, passion, and movement to the next step:

1. Why does the prospect give to our organization?

You can begin your conversation with a “thank you” for past giving and a natural curiosity for how the prospect first discovered and began giving to your organization. If there is no giving to your organization, or even if there is, consider asking if she is involved with any other organizations.

2. How does the prospect feel about the relationship?

Next, you can guide the conversation naturally to ensuring that the prospect likes the mailings and other information received or if you need to make adjustments. Maybe you need to add or change the type of mailing to cater to the prospect’s specific interest.

3. Would the prospect like a tour, visit a program, etc.?

Now that you are talking about what the prospect likes about your organization, you can make an appropriate suggestion about a tour, talking with a program director, or some other activity that would interest her.

Confirming Capacity

To confirm or verify a prospect’s capacity to make a gift, guide conversation toward the primary source of wealth:

4. What a wonderful award this is! It looks like your business has been doing well…

You do not have to have constant eye contact with your prospect. Take a look around you and ask normal, curious and fun questions about what you see on the walls or on the shelves.

5. I’d love to learn a little more about your business. How many employees do you have here?

Don’t be afraid to change the conversation. Keep track of time and be sure to bring the conversation around to answer your questions before the visit is over!

Discovery visits take practice.

If you find yourself back in the office wondering how you spent an hour talking and still don’t know anything new about your prospect, forgive yourself and replay the visit in your head or talk it over with a colleague until you recognize where you could have done things differently. Then schedule another visit.

Once you become adept at your discovery visits, you will find that you are able to shorten the time between identification and actually asking for the gift. Discovering a prospect’s true interest in your organization prepares you to deepen that interest into passion. And once you have passion, in-depth research on your prospect prepares you to ask for the right amount.

Best wishes to you on your next discovery visit!

Click here to register for the 6/14/2012 webinar: Savvy Conversational Research Techniques for Fundraisers

Other blog posts that might interest you:

3 Steps to Major Gift Mojo!

Will Your Donors Talk to You?

How to get from $250k to $40m

How safe are you at your donor prospect meetings?

Focused Fundraising, Major Gift Teams, , ,

Everyone loves online research, right? You can find out so much about a person online! But is all that information helping you in your donor prospect meetings?

Whether you are a frontline fundraiser prepping for your next meeting or a prospect researcher preparing a donor prospect profile, you need a plan *before* you start looking for information.

Ask yourself these questions:

*  Where is this prospect in the gift cycle? How close is she to making a gift?
*  Do I know what her passions are?
*  What is my best guess on likely capacity given what I know right now?
*  Do I know how she is connected to our organization?

Once you have answered these questions you are ready to do some research! Or are you? At this point you should know what you want to accomplish during your next contact with the donor prospect. Do you? I encourage you to be very specific about it. Here are some examples of specific goals:

At the next visit I want to…

  • Discover whether the prospect has an interest in our organization and is otherwise a good major gift candidate.
  • Confirm the information we know and solidify the next step.
  • Deepen the prospect’s engagement with a special invitation that matches her interest.
  • Ask her for a transformational gift!

If you are a prospect researcher you will want to have a conversation with the frontline fundraiser that exposes the motive for the visit and the research request. You can try to get the person to be specific by repeating what she says to you. For example, you might say things like:

  • Oh, so you are trying to find out what the prospect is passionate about so you can figure out which program to talk about?
  • Aha, her secretary is blocking your calls and you need to find another way to connect with the prospect. I can help with that.

Now you really are ready to do some research! But you are still in danger of being ill-prepared for your donor prospect meeting. How is that? Because online research is like visiting the witch’s house that Hansel and Gretel happened upon in the woods. Everything is so yummy you might crawl right into the oven without even thinking about it. You might follow so many different trails of fascinating information that you sit down with your donor prospect and lack the vital information you need. Yikes!

Maybe you have been diligent and answered the questions mentioned above. You also know specifically what you are trying to accomplish at the next visit. Here are three research pitfalls to avoid as you embark on your online research journey:

(1)  Not documenting the information you collect. If you don’t have a template or a spot in the database for the things you learn, you assume the risk of selective memory. As humans we remember what we hoped to learn instead of what we really found out. And worse, we completely forget everything the next time round.

(2)  Spending too much time on the wrong things. Let’s face it. Our prospects are fascinating people. But we need to find specific answers and then move on. Once again, templates help to keep us focused. Your job is either to get away from your desk and raise money or help your frontline fundraiser get away from her desk and raise money. Period.

(3)  Not answering important questions thoroughly. Once you have collected your information and feel you are finished and ready for the visit, take a few minutes to imagine yourself at the visit. This goes for prospect researchers too. Pretend you will be on that visit. Now look at the information you collected again. What is missing? Are you wondering if she still sits on that board? Go back and answer the (now) obvious questions.

Online research is a powerful tool. As we apply our research prowess to fundraising we need to keep a razor-sharp focus on our donor prospects. We are not playing Jeopardy, we are playing Family Feud and it is up to your development shop to work as a team to effectively and efficiently answer the fundraising questions that will lead to more and larger gifts.

Other blog posts that may interest you:

How to Take Charge of Your Moves Management System

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Managing Moves is a Workout!

So you want to implement a moves management system to ensure you are focusing on your best major gift prospects. Or you have a system, but you want to make it better. Good for you!

Moves Management is a Workout!
First, recognize that a moves management system is not a magical system where elves enter all your data and print reports whilst you sleep. Using a moves management system to track donor prospects is like getting physically fit – you have to workout! It requires you to:

  1. Enter information on each donor prospect record – at least:
    • Capacity rating, target ask, prospect stage, affinity/propensity
  2. Record your visits – you want to be sure:
    • Outcomes met the purpose
    • Advanced the prospect relationship
    • Something new was learned or
    • Contact resulted in a next step
  3. Periodically review your progress and start over at #1
    • Regular, internal prospect review meetings (at least monthly)

Assess Your Needs and Resources
Sometimes when you first start exercising, you find that you are so, so tired and wonder if getting fit will ever give you more energy and finely-toned muscles. It will! But you have to slog through the first bit of work. That said, you can’t swim across the English Channel tomorrow if today you are struggling to swim across the pool. Assess your needs and resources:

  • Are you starting from scratch or have you already been tracking prospects somewhere?
    • Tweaking a system is often easier than starting new
  • Will gift officers be tasked with entering tracking info plus their prospect actions, or is there another staff member available?
    • Assigning some data entry to other staff, especially on newly identified prospects, keeps down the grumbling and frees up your gift officers to go and get those major gifts – no excuses!
  • Do you have many solicitors, or just a few?
    • When the office is small, it’s best to keep things as simple as possible
  • Is this for ongoing major gifts or a campaign?
    • While similar, a campaign may warrant a higher degree of tracking

You Will be Tweaking
As you choose a combination of database fields and database reports (or maybe Excel lists and calendars if you are very small) together with your regular prospect reviews, you *should* find yourself tweaking the moves management system. For example, you might realize you are re-visiting disqualified prospects and decide to change your prospect stage like this:

First Method Second Method
Identified

Cultivation

Solicitation

Stewardship

 Identified

Qualified

Cultivation

Solicitation

Stewardship

Disqualified

This is a natural progression in your use of your system. Or maybe you find that it takes forever to enter the information in various fields around your donor database record and decide to limit your tracking to a few key pieces all in one easy-to-enter place in the database. Or maybe you find that monthly meetings are not enough and weekly meetings would keep everyone where they need to be with their prospect list.

Ask any fitness freak – taking the time to understand the best times and types of exercise for yourself makes all the difference in achieving your goals. Taking the time to get your system customized to your fundraising culture and constituents will make all the difference in whether you achieve your major gift goals. Not everyone has washboard abs and not every nonprofit has an efficient, high-performing major gifts program!

Give Yourself a Generous Year
Give yourself at least a year from your first effort to get the system really working smoothly. If it’s not working after a year, take a hard look at whether you (a) really need a system or (2) have put the right kind of effort into it. If you are a one-person shop cultivating ten people across the year, you can keep a lot of that in your head and your calendar. If you have multiple solicitors and/or need to boost your total prospect numbers (those under identification, cultivation and stewardship), you won’t be effective without a system.

Consider Getting a Coach
Olympic athletes wouldn’t dream of training and competing without a coach. Even the most dedicated athletes find themselves tired and frustrated, unable to “see” what is holding them back. A coach can keep your spirits up, redirect your efforts to keep you performing, and, step-by-step, help you reach ever higher goals.

If you are determined to reach your major gift goals, but find yourself unable to wrap your hands around moves management or even identifying good prospects to track, contact Aspire Research Group. We specializing in helping fundraisers reach their goals, guiding you comfortably every step of the way. Call (727) 231-0516 or email jen at aspireresearchgroup.com.

For more blog posts on moves management, click here: Moves Management

Meg Whitman agrees to work for $1 – or does she?

Discussion, Major Gift Teams, , , , , , ,

by Kate Rapoport.

Compensation structures for highly paid executives in public companies are often a tangle of legalese, difficult to parse. The Security and Exchange Commission (SEC) requires that all public companies detail the compensation of their highest paid executives, but that doesn’t mean that what the companies report is straightforward. In recent years, many companies have gone from giving executives large sums of money each year, regardless of company performance, to trying to create a compensation structure that depends significantly upon the actual performance of the executive and the success of the company.

One example of this is the compensation package that Meg Whitman received when she joined Hewlett Packard in September 2011 as Chief Executive Officer. The former CEO of EBAY, Meg Whitman ran an unsuccessful campaign for California Governor in 2010. She was brought on as CEO at HP after a year on their board.

Ms. Whitman will receive $1 a year in salary. According to the Wall Street Journal, the $1-a-year CEO isn’t uncommon at tech companies. Eric Schmidt, Larry Page and Sergey Brin at Google and Apple CEO Steve Jobs have also worked for $1 a year.

However, one dollar is just the beginning of her potential compensation. She will also receive an annual bonus of at least $2.4 million with the possibility of increasing that bonus up to $6 million depending on the cash flow performance of the company.

The biggest percent of her compensation package involves stock options. Stock options have been around quite a while as an executive incentive tool. Options require the executive to purchase the stock with her own money at a predetermined “exercise price”. The options are only valuable if the market value of the stock she purchases is greater than her exercise price. If the market value of the stock has gone down from the exercise price, she earns nothing or could lose money by choosing to exercise the option.

Ms. Whitman received an option to purchase 1.9 million shares of HP. The exercise price will be equal to the market value of the shares on the date she received the options. The options will vest over an eight-year period; however, they will only be considered fully vested if HP’s share price rises by 40 percent or more. In September when she took the job, that number of shares was worth $45.2 million.

100,000 of those shares will vest on each of the first three anniversaries of her hire date if she stays with the company. 800,000 shares will vest after the first year, IF HP’s share price has risen 20 percent and stayed that high for at least 20 days. The final 800,000 shares will vest on the second anniversary of her hire, IF HP’s share price has risen 40 percent for more than 20 days. If she succeeds in raising HP’s share price 40 percent in the next eight years, she would make profit of $17 million.

This type of compensation package reflects companies’ desire in recent times to compensate executives based on what they can do for the company, not just because she is friends with the directors on her board. Ideally, this should save the company money in the short term and encourage high performance from the executive in question.

Hewlett Packard also included an incentive for Ms. Whitman to stay with the company for the long haul, making her severance benefit payment 1.5 times the sum of her annual base salary, or $1.50 plus the average of her bonuses paid in the last three years. If she left before the first year was out, she would receive less than $2 in compensation. That would certainly make me want to stay!

Here’s hoping the company has learned a lesson from its handling of Ms. Whitman’s sacked predecessor, Leo Apotheker, whose severance was $9.6 million and $3.5 million in stock even those his performance was dismal.