Category Archives: Research in Fundraising

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gifts trend happening in organizations across the United States and it may well apply enough pressure to burst through outdated thinking and unleash the power of the missing major gift donors.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

 

desk with coffee and laptop and picture of jen filla

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

Research in Fundraising, Uncategorized, , , , , , , , , , ,

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!

 

Do you “get it” when it comes to wealth? Probably not.

Major Gift Teams, Research in Fundraising, , , , , , , , , , ,

Let’s test your wealth instinct and find out if you “get it” or not.

Pretend that your boss comes to you and says: As you know, leadership is taking the company public next year. You can choose how you want to receive your $100,000 annual compensation from the three options below:

  1. $25,000 in cash and $75,000 worth of the company’s new stock
  2. $75,000 in cash and $25,000 worth of the company’s new stock
  3. $80,000 in cash and $0 worth of the company’s new stock

Which one do you choose?

This choice is difficult for you and me!

If the only wealth you have is cash in your bank accounts, maybe some retirement funds like a 401(k), and you are renting or own the home you live in (probably with a mortgage), your options are very limited. Could you survive on $25,000 cash for a year? You are considering the options based on your disposable income.

If you have a dual-income household, a second home, or some reasonably liquid investments that you could cash-in, all three choices might become plausible options. You have disposable income plus additional investment wealth.

I know you know that the $75,000 worth of stock could take off and double or triple in value-or even more. You want that stock!

Now, what if suddenly your parents passed away and you inherited the house they owned for 50 years, which sells for $800,000. Would that make it easier to accept $25,000 in cash with $75,000 in stock?

Of course it would!

And this is the shift in thinking that you need to make when you are researching and cultivating major gift prospects.

You do not want a cash gift.

Check out the asset allocation chart below. This chart is telling you many things, but among them is that in the first quarter of 2021, the high-net-worth individuals (HNWIs) surveyed were holding 24% of all of their wealth in cash and cash equivalents. A cash equivalent is something like a certificate of deposit (CD) or money market account–things that you can very easily turn into cash.

Source: Capgemini World Wealth Report, 2021

When you ask your donor prospect for a gift, do you want her to think:

“Gosh, they want me to give $50,000 out of my $250,000 cash. That feels a bit steep. The kids private school tuition went up a lot this year.”

Or would you rather ask for a gift of appreciated stock and have her think:

“If I give $50,000 of appreciated stock out of my $750,000 investment account, I can take a charitable gift tax deduction for the full amount and offset the capital gains taxes. I’ve always wanted to have this kind of impact on this cause.”

But you shouldn’t just believe me.

What do I know? Instead, you should believe Dr. Russell James who took the time to review a million nonprofit tax returns filed between 2010 and 2015. Numbers don’t lie. Dr. James discovered that nonprofits that received asset gifts raised more money. Check out the figure below for a snapshot of his findings.

Source: Cash is Not King in Fundraising: Results from 1 Million Nonprofit Tax Returns, Professor Russell James III, J.D., Ph.D., CFP®

Note: If you want to find whether your organization has a history of accepting asset gifts, you can check Schedule Min its public IRS Form 990.

Evaluating your donor prospects for wealth

If you want to grow your fundraising in major gifts, a key strategy is to ask for non-cash gifts. Understanding the asset allocation model from Capgemini featured above allows us to quantify this shift in thinking. We can now estimate the relative size of the cash vs. non-cash wealth held by our donor prospect.

Once you have estimated the value of the cash and non-cash wealth of your prospect, you can better understand how your prospect might view your ask amount relative to those values.

Below is an example of what this allocation looks like if we use the Capgemini asset allocation percentages on someone research has determined has an estimated net worth of $5 million.

Assets Value
Cash and Cash Equivalents $850,000
Non-Cash $4,150,000
Total $5,000,000

Imagine for a moment that you want to ask the prospect for $250,000. How does that stack up against each of the two categories, cash or non-cash?

Lean-in to the psychology of giving

Why would you want to fight against human nature and continue asking very wealthy donors for cash gifts when you could switch to asking for non-cash and raise more money overall? Lots of reasons. Maybe you feel much more comfortable asking for cash gifts.

I’m suggesting that it’s time to get comfortable with being uncomfortable.

To help you get more comfortable, check out this collection of work by Dr. James for more insights into the psychology of giving and techniques and tactics you can use in your work:

http://www.protopage.com/prospectresearch#Planned_Giving_(Dr._James)

Can you really hide LLC ownership? You betcha!

Research in Fundraising, ,

I was talking through a complex wealth situation with a member of the Prospect Research Institute. While the prospect was clearly wealthy, there were some transactions and entities mentioned in a public company filing that were curious. I said, “Why not look up the LLC to find the names of the members?” Wouldn’t you know… it was an LLC incorporated in Delaware.

“Sure, you have to pay for it, but the members of an LLC are public information,” I told her with certainty. So, she pursued the matter. The website told her that this information was available on the annual reports filed each year, and to obtain these documents you must call the Delaware Division of Corporations.

She called. The man who answered looked up the record and told her that the names and addresses were not on file. They would be known to the company itself (of course) and to the company that handled the registration.

What? Could this anonymity be legal?

Turns out that it is, and has been, legal to incorporate an LLC and have the owners remain 100% anonymous. “How is it accomplished?” you might ask.

I included a source below with states who do and don’t require public disclosure of LLC members, and I didn’t look into every state, but in the state of Delaware, when you form an LLC (limited liability company) there are three places where the members or managers might be listed and available to the public. However, if you authorize someone to create the LLC on your behalf, you can circumvent any public listing of the members or manager.

  1. Certificate of Formation: The person creating and filing the Certificate of Formation is the one listed in the public record. This person does not have to be the member or manager of the LLC, and Delaware does not require recording the members or managers anywhere.
  2. Registered Agent: Every incorporated entity must have a registered agent. The registered agent is the official representative of the company who can receive service of lawsuits or any other official business. It does not have to be a member or manager. The registered agent must have a contact at the LLC, but even that person does not have to be a member or manager.
  3. Franchise Tax: The owner of an LLC may elect an agent to pay the franchise tax so that there is no record of the member or manager name.

While a Delaware LLC can avoid any public listing of members or managers, this does not extend to creating a bank account. In order to prove ownership to open a bank account, the member can present an Operating Agreement for the LLC. The Operating Agreement is a legal, governing document and includes the names of the members and managers.

And while the members and managers of an LLC can remain anonymous to the public, officers and directors of corporations must be revealed when making franchise tax payments.

“U.S. Congress bans anonymous shell companies”

Tantalizingly, this headline appeared on Reuters.com just as the Institute member and I were investigating Delaware LLCs.

Could this be the end of anonymity? …not so fast!

Turns out that the Corporate Transparency Act passed the Senate and the House with a veto-proof, bipartisan margin in December, but it doesn’t really change anything for the general public.

According to the FACT Coalition, “The Corporate Transparency Act takes the simple, yet effective step to require corporations and limited liability companies (LLCs) to disclose to law enforcement and others with legally mandated anti-money laundering responsibilities (e.g. financial institutions) information on who is the real, natural person (a.k.a. beneficial owner) who owns and controls an entity at the point of formation and update such information upon any change.”

There are many reasons why the individuals behind an LLC might want to remain anonymous. Most often in the field of fundraising I hear people describe how donors are “hiding their wealth.” This has a negative connotation, and I would encourage you to consider and speak publicly in a way that recognizes that there are other reasons for being anonymous.

To name a few: family drama; competitive edge; and people who are private in every way, not just money.

And yet, there is at least one trick to finding those elusive LLC member owners. If the LLC is incorporated in Delaware – has a domestic incorporation record in Delaware – but is doing business in another state that does NOT allow anonymity, you might find the member names in a required foreign incorporation filing.

Of course, as prospect research professionals we like to be able to assemble as many of the facts as reasonably possible, but we know that the best information is going to come directly from the donor prospect.

Hopefully, this micro investigation into Delaware LLCs helps save you time by knowing whether you might be able to find owner member names… or not!

Wish you could be a member of the Prospect Research Institute, chasing questions down rabbit holes? You can! Become a member today!

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Additional Resources

7 Resources That Keep My Fundraising Loaded!

Careers, Research in Fundraising, , , , , , , , , ,

Keeping my skills current and keeping up with the field of fundraising and prospect research is critical to my role as a prospect research consultant. Slowly I have been shaping my favorite reading list, trying to get it to represent what I need to know most – because I don’t have the time to browse aimlessly!

I run a small, virtual business and that means, like many of you, my head is piled high with hats! I manage to juggle all the hats pretty evenly, catching each one and passing it along … until something new gets thrown into the mix. Then I start playing catch-up. One hat falls down and I let it stay there until I can get used to the new hat in the mix. Once I adjust to the new rhythm I can grab the lost hat and keep going. In this case, I dropped my blog writing while I adjusted to some new skill building.

Now that I am back on track and blog writing is in the mix, I thought it might make a lot of sense to share with you my favorite sources for prospect-research-biased fundraising news and clues. Since readers are of a mixed variety, I’ve kept the really technical research reading out of the mix. I hope you will chime in and comment in whatever platform you find this article. What am I missing? I’m always looking for the best, must-have reading favorites!

1-Chronicle of Philanthropy

Not having been in a traditional “office” for years, I had neglected to subscribe. As soon as I did, I realized once again the Chronicle’s charms. First, they send me paper. Love that. So I can catch up on the weekends or over lunch on the balcony. The Chronicle prints a great mix of information and I get good clues about changes and trends. The October 18th edition, especially the articles on the Missouri Arts center and The Y, really had me thinking about fattening the middle $1,000 to $5,000 donor pool and how that translates into approaching the data.

2-AFP’s Advancing Philanthropy and APRA’s Connections

These are my two all-time favorite associations and I love, love, yes love, their magazines. Okay, so AFP is moving digital and APRA is already there. I have a printer. And paper. Every issue of these magazines goes beyond the how-to and gives me something real that changes my thinking or expands my ideas.

3-Advancing the Nonprofit Sector

This blog is written by a number of different fundraising consultants. I like it because it reminds me that the fundraising world is bigger than prospect research and it helps me stay in tune with the practical needs front-line fundraisers face daily. I like that it covers local Florida topics too.

4-CoolData

Kevin MacDonald does an amazing job of making me want to read his blog. Not only is he having a conversation with me, but he uses lots of pictures and graphics to demonstrate what he is talking about. Okay, so it’s pretty technical stuff. But it is the kind of conversation that every fundraiser needs at least a cursory understanding of. The power of data analytics is as earth-moving as the power unleashed when our donor index cards turned into relational databases or the horse was replaced by the tractor. It is the kind of conversation that is deciding our future. And if I’m going to participate, or just eavesdrop, I’d prefer to do it with Kevin. And his cool guest bloggers like Peter Wylie too.

5-The Agitator

No, it’s not a washing machine cycle! This is another blog where I get practical, but a little more in-your-face, fundraising cents. What I really like is that it talks intelligently about direct response fundraising, which might just be the black sheep of the fundraising family. Yes, everyone loves major gifts, but getting broad support is more than money. It’s the community giving credibility to your mission and how you are performing. And if you do it well, it means you treat all of your donors well. That’s special in my book. Which brings us back to that great article in The Chronicle of Philanthropy about the Missouri Arts Center…

6-Well Planned Web

I have followed a lot of different marketing and social media and other technology blogs, but this one has been the most relevant to me. It’s not too technical. I get a good feel for a topic. It makes me feel smart and current instead of dumb and behind the curve. Most of us have to operate in a constantly evolving online world. At some point we all wind up being impacted by or responsible for at least a piece of our organization’s online face. The Well Planned Web will make you feel good about it.

7-Hootsuite

When data analytics guru, Audrey Geoffrey at the University of Florida Foundation first showed me this website at an APRA-FL board retreat I thought it looked like the most confusing, most complicated website that I would never use. I just couldn’t understand why I would want to keep track of things that way. Now I am a convert. I love being able to customize the way I view and participate in social media. I can narrow my focus to the topics and people who provide me with exactly the content I need to see.

I hope you found a gem among my 7 favorite resources, but I really hope you will share yours too!