Tag Archives: prospect profiles

Insiders. Profiles. 3 Tips to Keeping It Simple.

Profiles, Prospect Research, , , , , , , , , , , , , , ,

Whether you are trying to improve your profiling skills on public company insiders or whether you need to upskill your research team, when it comes to insiders, it pays to keep it simple! Because once you master the core skills, it is much easier to tackle more difficult financial concepts. Following are 3 tips to keeping it simple.

1. Get really good at the two key wealth indicators first, and then keep adding to your expertise.

When it comes to public company insiders, whether they are top executives or directors, there are essentially two types of wealth information to find first: (a) annual cash (non-equity) compensation, and (b) stock (equity) holdings. Yes, there are all kinds of other equity compensation, such as stock options, performance stock units (PSUs), and more, but mastering cash compensation and stock owned right now is a big step. If you don’t have a subscription tool like KALEIDOSCOPE Insider Focus to make it easy, you can always find the Proxy Statement (Form DEF14A) by searching the Securities and Exchange Commission (SEC) database named EDGAR at www.sec.gov From the Proxy Statement you want to master two tables: (a) Executive (or Director) Summary Compensation Table, and (b) Beneficial Ownership Table. Following are some tips for you:

  • On any table in the Proxy Statement, be aware of whether the number is a count (#) or a dollar amount ($).
  • Read all the footnotes! Especially on the Beneficial Ownership Table, this is where you often discover how much of the count of are actually shares of stock and how much of the count is potential stock, such as options or units.
  • If you don’t understand the word, look it up or let it go, but don’t add something to the profile that you don’t understand. Because of course that will be the one thing the development officer asks you about!

2. Drop the jargon for your end-user.

As I type this up it makes me cringe to realize how much jargon we still use at Aspire when we present insiders in our profile! It sounds easy, but it is a challenge for researchers who want to be accurate and correct to drop jargon. Of course we need to be accurate and correct, but how we present our accurate and correct information can be in plain language. Consider the difference between the two compensation tables below. Complex Non-Equity Compensation

  Salary Bonus Non-equity Incentive Change in Pension Value Other Comp Total
Year1 $852,000 $0 $4,000,000 $450,000 $760,000 $6,062,000
Year2 $845,000 $1,250,000 $3,500,000 $125,000 $725,000 $6,445,000

This table includes all compensation that is non-equity (no stock). I have been very guilty of this for decades! (Thank you to Elise Lynch at Kaleidoscope Insider Focus who asked me why I was reporting on compensation that is not cash.) Does your development officer really need to know the change in pension value that was realized during the company’s fiscal year? Of what value is it to the development officer to know the type of other compensation, such as use of the company jet? If you are wondering whether to include information, ask yourself if it has any relevance or meaning for fundraising. If it doesn’t, drop it. Keeping It Simple Cash-Only Compensation

  Salary Bonus Total
Year1 $852,000 $4,000,000 $4,852,000
Year2 $845,000 $4,750,000 $5,595,000

This table only includes the compensation that puts cash into the insider prospect’s pocket. Even better, the table consolidates the bonus and non-equity incentive compensation. Why? Because for the everyday person, they are the same thing. Bonuses got a bad reputation during the Great Recession when insiders were paid their performance bonuses even as companies went bankrupt. If the insider met their performance obligation, then they were entitled to their bonus. To counter this negative publicity, creative professionals created a new category of “non-equity incentive” that is simply a performance bonus by another, more obscure name that the general public is less likely to understand.

3. Emphasize the context.

If you want to be a truly valuable intelligence asset to your major gift team, you need to do more than find, understand, and present the numbers. Even if you are an insider novice and just beginning to master cash compensation and stockholdings, you can provide key insights that could make all the difference for your development officer. Following are three simple things you can assess – especially in times of volatility or uncertainty like recession, pandemic, or political chaos – to give your development officer context for the compensation and stock values you provide in the profile.

  • Stock price trends: Check the price of the stock over at least 5 years as well as the past 30 days. The stock price may have climbed quickly over 5 years and your prospect is now sitting on significant stock value. This is great! But if it just had a drop in the past 30 days – even though it doesn’t greatly affect the prospect’s wealth – it could certainly affect the prospect’s outlook on giving! When there is price volatility, including a picture or graph speaks volumes.
  • How many years in public companies: If your insider prospect is sitting on his first ever public company board and has no other public company history, their wealth picture is likely to look wildly different from someone else’s 30-year public company career collecting stock the entire journey.
  • Industry outlook: If you follow the business news, you will probably know when big things are happening, but regardless, it never hurts to look at recent news coverage of the company on a site like marketwatch.com You don’t want your development officer to be caught by surprise in a meeting.

Get out of your own way and get started!

If you are intimidated by SEC financial filings, you are not alone. But if you keep it simple and master the basics first, you will find it is not nearly as difficult as you thought it was. And you will be providing your development officers with fundraising intelligence they can quickly understand and act on. Hungry for more training on public company insiders? 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!  

Additional Resources

Organization Loses Donor Trust – With Data Breach!

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keyboard-895556_1920Whether it’s a personal story or a media headline, we’ve all heard of incidents where data was mishandled or misunderstood and donors felt betrayed. And yet, many development and advancement offices continue to place little value on their information and data.
When I followed up with one of the beta testers for the Prospect Research Institute’s first-ever online class, Introduction to Prospect Profiles, she told me how thankful she was for the opportunity to take the class. Now she knew for certain that prospect research was NOT for her and she would seek a different career. Why? She couldn’t delve into other people’s lives that much. Privacy was sacred to her.
I didn’t think too much of it, but since then two more students have expressed discomfort about privacy issues. Because, of course, we cover this in the class; we walk right out there to examine the legal and ethical edges of privacy in fundraising research.
Why are prospective prospect research professionals nervous about privacy?
Could it be they don’t trust organizations to do the right thing with information? You know fundraising is predicated on trust – donors trust us to use their money for the greater good. Staff must also trust the organization to use its data and resources appropriately.
When prospect research is treated as a clerical function, anyone can do it, low-paid, and not heard – that translates to the same message about the information prospect research finds. Quite a few of my course participants are self-paid. And then they learn how deep we researchers can go. And then they see the dark edges of ethics. And they get uncomfortable.

If you are in the development or fundraising office, you are in a position to begin changing the culture of respect and trust toward your organization’s data.

You can leverage prospect research to (a) manage information legally and ethically, (b) lead with diversity and inclusion, and (c) use data persuasively to raise more money. How? Let me count the ways!
  1. Data Management: Prospect Research Professionals are uniquely positioned to research and be a part of the team creating information management policies that ensure your data is used and maintained effectively. This is the era of Big Data and your researcher is versed in mining the gold from it.
  2. Data Protection:The more important data becomes, the higher the risk that it will be breached and erode your donors’ faith in your organization’s ability to protect their information. Your prospect research professional is your trusted guide, helping you to navigate and translate vendor and IT products and jargon. S/he is also the voice helping you to create different levels of data access, such as who can print profiles, with how much information in them, and do what with them.
  3. Non-Traditional Donors: We’ve been using wealth screenings effectively, but it’s time to recognize that this identification method is limited. Encourage your researcher to work with you to identify non-traditional indicators of wealth. That means conversations, but it also means assigning and actively pursuing those minority prospects, too. If there is wealth there, why are you ignoring them?
  4. Relationship Mapping: This is a broad term for what requires a great deal of sweat equity, but software is inching forward to make it better and faster. Understanding the relationships among your major gift donors could be a healthy disruption to your usual processes. Understanding and learning to leverage the power of your other donor groups’ relationships could transform your organization’s fundraising reach! If you are not building the capacity for fundraising analytics to discover patterns such as these relationships, you will be left behind.
  5. Persuade with Data: Yes, you can work with your prospect research professional to illustrate the data that answers questions and use this to persuade donors to give. Infographics are particularly popular. But let’s use data to put a stop to fickle fundraising. How many times do you change strategies based on “I feel” or “s/he said” or “they say”? Use your prospect research professional’s analytical prowess to methodically gather data of all kinds to help leadership form a strategy it can stick to – and win. Jason Briggs outlines this brilliantly in his article on international research.
I’ve had clients learn the hard way. Initially shocked by my prices, they come back when they receive shoddy work from someone who has low rates, but lacks the skills and resources. The value of really good prospect research becomes clear when you receive synthesized information that gives you direction to raise more money.
Your organization needs a well-trained prospect research professional with an excellent ethical compass. Are you driving your best hiring prospects away by sending the message that information is cheap and anyone can turn that information into fundraising action?

3 Strategies to Choose a Research Tool

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austria-sign-2-1489248Whether I’m teaching the Introduction to Prospect Profiles course at the Prospect Research Institute or talking to an Aspire Research Group client, I get asked the impossible question: “What’s the difference among research tools and which one should I buy?”

Information technology has been good to the prospect research profession and that means we have a wild array of tools from which to choose. And equally wild can be the price ranges! This makes it tough to assess the value of each and if they will meet your needs.

My crystal ball is in the repair shop so I can’t predict the perfect suite of tools for you, but I can give you three strategies to approach your decision-making challenge.

Strategy 1: Linkage – Ability – Inclination (“LAI”)

In prospect research it boils down to three key categories of information you want a tool to help you with:

  • Linkage: How can we connect to this prospect through peers? How is our organization linked to this prospect?
  • Ability: Does this prospect have enough wealth to make a large gift or increase her/his giving?
  • Inclination: Is this prospect philanthropically inclined? Is s/he willing to give her money to nonprofit organizations and institutions?

You already know about LAI, right? But have you considered narrowing down your research tool choices by those three categories? If you had to number them in order of priority in your fundraising efforts and/or weakness in your ability to research, how would those categories shake down?

Whether you need a tool to help you with all three LAI categories or just one can help you narrow the field considerably.

Strategy 2: The Five Profile Building Blocks

Once you know how the LAI categories rank in importance, you can begin to dig into exactly what types of information you want to find in a particular category.

This is where the five building blocks of the profile come in handy. No matter how your profile template is organized, there are five major categories of information a fundraising profile might have. Check out the Anatomy of a Profile illustration below to see if you agree.

AnatomyOfProfile.White

  • Linkage would fall under the Institutional Information Is the prospect an alum, donor, or volunteer? Is s/he serving on the same company board as your trustee? Vendors you evaluate might include ProspectVisual, RelationshipScience, and WealthX, among others.
  • Ability can be found in the Occupation and Assets What kind of wealth is being earned and how is acquired wealth being held? You might evaluate vendors who aggregate sources such as iWave PRO, Lexis Nexis, DonorScape, DonorSearch, ResearchPoint and WealthEngine, as well as specific vendors for ability such as LinkedIn or J3DonorWatch.
  • Philanthropic Inclination is in the Biographical and Community Involvement Did her child die of the disease you are on a mission to eradicate? Does he make gifts to other organizations or organizations like yours? You might evaluate the same vendors above who aggregate sources, as well as specific vendors such as Foundation Center Online, Guidestar, NOZA, and NewsBank.

Examining your needs in more granular detail through the profile building blocks will identify whether a potential product can give you the information you need most. For example, if you have a lot of public company insider prospects you may need a subscription tool that can make your research faster and better. On the other hand, if you are a lawyers’ association, you might shell out for the current AM Law 100 from The American Lawyer to make better estimates of capacity.

Strategy 3: Free Trials and Peer Review

Even after you know exactly what you want in a tool you will want to evaluate its usability. Taking advantage of free trials and asking your peers for their candid comments is a great way to test the user-interface of a product and what information you will really get from its sources. One of my favorite places at conferences is the exhibit hall so I can learn about new products and tools on the spot.

You might have questions such as:

  • Will it integrate with my donor database?
  • Can I print a reasonable looking profile right from the tool?
  • Can I look at the “raw” search results or will it only show me results matched with its proprietary filter or algorithm?

And, of course, you always have to consider what kind of learning curve users will likely have. Is it easy to figure out? Is there live and DIY training available? What is customer service like?

The Process of Choosing Never Really Ends

Choosing the right product or suite of products doesn’t happen just once and then you are finished forever. Instead, it’s more like eating. Sure, you have your favorite recipes, but you go to restaurants or cook new dishes. Sometimes the new meal – or the new research tool – becomes a new favorite.

Information technology is an ever-growing field globally, not just in fundraising research. We can’t hope to keep up with every tool that enters the market, but we can be strategic about evaluating whether a tool is likely to be a good investment.

More Resources

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Click here to get your copy of the Profile Search Tool Comparison Chart. Be smart. Choose well.

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