Prospect Research and Strategic Donors By Christopher Carnie, Factary Chris Carnie is the founder of Factary, an agency specialising in strategic funding for the nonprofit sector. Factary works with philanthropists, foundations, NGOs, cultural organisations and universities. Factary helps organisations to find and understand strategic donors, and to develop strategies for this market. Introduction Many fundraisers learn how to fundraise. But few learn where to fundraise. This article is about the people who find out the where prospect researchers. Finding out about donors and 'prospects' (people or organisations that are potential donors or supporters) is easier than you think. The conversational techniques you used this morning at the nursery when you dropped off the children ('Hi, how are things? Did Marie eat her lunch yesterday?') are precisely the techniques that you need to find the donors. Good fundraising research is about asking questions. Lots of questions, directed at your colleagues, at friends and at donors. This article is about prospect research for strategic donors. A strategic donor is someone who has done a substantial contribution to a not-to-profit organisation. There contribution is normally substantial in the financial meaning substantial in relation to the organisation s total of incomes; and substantial in the nonfinancial meaning- a substantial contribution to the organisation s strategy. We have an individual relation with are strategic donor because we have justified the purpose of this relation through the advantages for the organisation (thanks to the relation with the strategic donor.) Strategic donors live in three fundraising markets at once; they are themselves wealthy and thus potential individual donors. They are normally directors, or major shareholders in companies and thus have the capacity to give from their companies, and they are frequently on the boards of foundations, and can provide influence there too. With these donors it is better to think about the donor holistically than to try to categorise them as person, company or foundation. Factary has been working on strategic funders since 1990. Prospect Research means an organised, managed search to identify, evaluate and find out about potential strategic donors for your organisation. But who needs prospect research? YOU do! Yes, you, sitting there in the Metro reading this article. Why? Because it saves time. Prospect research techniques save time by helping you focus on the best donors Factary 2008 Page 1 of 7
Because it finds new, and bigger, donors Because prospect research will help you and your organisation to look professional in front of funders and donors Because if you don't find the donors then someone else will - and they will win the fundraising race There are more professional fundraisers in France today than at any time in the history of the Hexagone. Too many are chasing the same tired old funders. You can do better, go further, than that. With a well-organised search you can; Find the profitable mid-size companies Identify hundreds of wealthy people Find Government agencies that others have overlooked Track the news on a donor, so you know when to ask her Bear in mind that funders appreciate the time you put into finding out about them. Many hold the view that not-for-profit organisations are amateur collectives of disorganised enthusiasts. You can show them that you are not like that - that you understand the importance of careful preparation and a knowledgeable approach. (This is a theme that many people talk about, but few act on.) There is often enormous pressure from trustees and managers to simply mail a few hundred letters to the leading companies. Resist this pressure and organise your search for funding. You probably already spend time finding out about funders. Many fundraisers spend a quarter of their working hours simply finding out; phoning to check an address, reading through a directory, speaking to someone-who-knows-someone. Disorganised, those hours can be wasted. By organising your research you save time and increase productivity. Simple plans, checklists and techniques will help you do that. What is a prospect researcher s job? The first task of a new prospect researcher is, frequently, to build a possible prospect pool [vivier des prospects]. A prospect pool is a database of strategic funders. INSEAD s first seven year development campaign was built on good prospect research. In 1994 a team of four researchers built the best possible prospect pool [vivier des prospects]. The Pool comprised companies that had been part of a company training programme, past donors and companies or people in close relationships with faculty. According to one Development Director interviewed by me at the end of the campaign This was, and remained, the most useful information source for the campaign. That pool provided many of the names that, eventually, made the largest gifts to the campaign. Design Your pool First, design your prospect pool. You can do this in your database, if you have one that will cope, or you can start in Excel, Access or an equivalent simple logiciel. Your pool should contain contact and biographic information about prospects, and an analysis of their potential for you as a donor. You will be collecting this information from internal sources (your colleagues, databases and files) and from external sources (Who s Who, the internet, newspapers and magazines.) There is more about sources at the end of this article. Fill Your pool Now start gathering names. Here are two techniques that work; Factary 2008 Page 2 of 7
Modelling Working with your database of donors, supporters, volunteers, visitors or alumni, create a model for your ideal potential donor. The model will depend on what you have in the database. One leading French NGO with whom we worked recently, for example, selected Current donors who had given more than 1.000 Current donors living in high-value Paris addresses Current donors who were also volunteers, or who had made a testament in support of the NGO This is a model. Use the model to extract relevant names from your database. Interview Go and talk to people in your organisation. Ask lots of questions, and be ready to share information too. I like to interview a selection of people not just the boss, but also the finance department, the person who manages your volunteers, the public relations manager, Board members, project staff Make sure you include long-standing members of staff; dear old Florence who has managed the reception desk for the last 20 years has seen all sorts of people come through your organisation s door. She will remember that Bernard was SUCH a nice young man when he volunteered with you as a teenager; she may even remember that his surname is Arnault And tell them that you will return. This process, of interviewing, and interviewing again is an effective technique in building up a good, long-lasting prospect pool. Build Your Pipeline Get prepared for fundraising by building your Prospect Pipeline. This is a simple concept, incorporated in some fundraising databases, to help you track progress with your prospect. Here are some key stages in the Pipeline; Qualify When you build your first Prospect Pool it is likely to be too big. A good ratio to consider in major gift fundraising is that one fundraiser can manage an intensive, face-to-face relationship with around 50 donors. So if your fundraising team is two people, and you have 2.000 prospects in your Pool you are going to have to find a way of cutting some of them out. Even if you have only 50 prospects you need to know who to ask first. There are many different ways of doing this. At the recent AFF conference on fundraising in Higher Education, Barbara de Colombe (HEC) and I talked about evaluating prospects based on; The donor s holdings, his motivation and his links with your NGO The RFV numbers An estimation of the probability of a donation (value donation x % probability) His relation to your NGO (solicitation (Cultivation, sollicitation, clôture ) Factary 2008 Page 3 of 7
First Meeting Once you have selected your best prospects you will want to start to meet them. Here, the job of the researcher is to; Prepare a briefing on each prospect, for the fundraising team Capture, fully, the information that comes back from the first meeting The second of these two jobs is MUCH more difficult than the first; Oh yeah, it was a great meeting. We had a glass of wine and talked about the weather and the football. Then there was dinner and then I went home. If your fundraising team talks like this you must retrain them. They should be able to give you a clear, concise, description of the meeting and should cover, especially, three points; What was the prospect s MOTIVATION in favour of your NGO What are the prospect s CONNECTIONS with your NGO What evidence is there of ASSETS (money) This information will help you to re-qualify and update your prospect. Your Prospect Pipeline will have many more stages reflecting your strategies for developing the interest of the potential donor ( Cultivation ), the ask, and the follow-up after the gift. Each stage has specific research requirements that you, as a researcher, would have to complete. More Research Tasks If you take an interest in research and start to find out about it for example by reading the material at www.aprahome.org, or by joining a research discussion group such as http://groups.yahoo.com/group/prospect-research-uk/ - you will see that there are many other tasks that researchers undertake for their fundraising colleagues. Amongst these is researching prospect profiles. Prospect Profiles A prospect profile is a detailed description of a potential strategic donor. Typically, 3-5 pages of information about the person, their company or foundation, their interests and their links to your organisation. A good profile includes an analysis of WHY the person might want to give to your organisation, and a recommendation on HOW you are going to approach them: Full Names and Titles Home Address Business Address Business Telephone Date of Birth Birthplace Education Current Directorships, with company information Investments Foundation and Philanthropy Family and Children History with our Organisation Analysis of Wealth Analysis of Motivations Analysis of Connections to our Organisation Overall Prospect Assessment Factary 2008 Page 4 of 7
Recommendations for Action Profile Prepared By Date There are suggestions on where to find this information in the Sources list below. Profiles aid the process of research management. By setting up standard profiles in conjunction with your database (as a database report) or your word-processor (as a blank template,) the researcher is able to work quickly and efficiently. Consider the types of information that your organisation needs, and create profiles accordingly. Competitor Research Competitor research will also give you ideas for new types of donor. Get the annual reports of six other organisations working in the same field, and read them carefully for supporters names. Set up a Google Alert to track changes in your competitors websites; http://www.google.com/alerts. A Research Brief The hardest part of research is knowing what you should be looking for. Before you start searching, spend three minutes writing yourself a Research Brief. Your Research Brief should include: What is the background to this piece of research? Why do we want to know this stuff? What are our objectives? What do we want to do with the information that we find? What outputs do we want to see at the end of the process? Half a page of notes? A Powerpoint presentation? Or five pages of detailed analysis? What are the constraints on our research? How much time have we got, and how much money can we spend on research materials? Whether you are doing the research yourself, or working with a colleague who will do the work, the Research Brief explains precisely what is needed, and when. A good Brief shows you what your priorities are, and where you should focus your effort. Researching Companies in France There are plenty of sources of information on companies in France. Bear in mind the important differences between public companies whose actions are traded on the Stock Exchange and private companies typically owned by families or groups of investors. Here are some places to start looking; ACFCI Assemblée des Chambres Françaises de Commerce et d'industrie Ce qui motive les Entreprises Mécènes. Philanthropie, investissement, www.acfci.cci.fr Association of French Chambers of Commerce. Includes useful news and recent reports. Links to all French chambers of commerce. Editor; Autrement, France. Analysis of the motivations of companies in philanthropy, investment and corporate social responsibility (CSR). Factary 2008 Page 5 of 7
responsabilité sociale? Diane www.bvdep.com Online database of French companies Infogreffe www.infogreffe.fr Official source of company information in France. Institut de Mécénat de Solidarité http://www.imsentrepre ndre.com/ Database of members with contacts and principal areas of community activity (CSR). Kompass www.kompass.fr Business directory Les Echos www.lesechos.fr Financial newspaper Novethic www.novethic.fr Information on the social economy including statistics and links to company and NGO directories. Their focus is on sustainable development ("développement durable.") Societes.com www.societes.com Web based business directory Researching People in France Before you reach for your mouse, and click on www.google.fr, think about how people find out about other people in France. The internet is often the least good source on people. Mainly, people find out about people from other people. So start your search for peopleinformation by talking to your colleagues. Then, when you start your web searches you can direct your search much more accurately. A selection of people sources includes; Challenges www.challenges.fr Publishers of an annual wealth list (there are others, such as Le Point also.) Copains d Avant http://copainsdavant.linternaute.com/ 6m people, they claim, are listed here. Who s Who in France www.whoswho.fr/ Leading online biographic directory Learning about Research At present, almost all training in research is in English. There are good online courses on research at www.sharetraining.com (an organisation that I helped to create) and at www.aprahome.org. We have included many of our recent handouts and PowerPoints in the Factary website at http://www.factary.com/weblog/index.php; some of these are in French and relate to France specifically. And, of course, Factary offers one-to-one training in research techniques in France. And Finally, the Message to Fundraising Managers Include Research as part of your Strategy Research in fundraising is simply a tool to make your fundraising more efficient, better targeted and more productive. A full fundraising strategy must include research in the same way that a business plan for a profit-making company would include Research & Development. Factary 2008 Page 6 of 7
If your fundraising strategy is wholly focused on direct marketing, then your R&D strategy will be targeted at developing new products, testing new markets, trying new media. But if your fundraising strategy includes an approach to strategic donors major donors, foundations, companies then you should include prospect research. Bear in mind that your fundraising team are probably already using prospect research techniques. For example, I spent part of last year working with a development cooperation NGO based in Paris. Their fundraising was partly driven by direct marketing, but they also organised a series of events each year. Preparation for these events involved building lists of invitees. The NGO used its internal database, interviews with board members and staff, Who s Who and the society pages of magazines to build up these lists. That work building a pool of prospects is prospect research. Including this work in your fundraising strategy allows you to; Create a budget for materials and information Appoint a person to lead the research work Get proper training and skills for the people involved Plan your research Coordinate different research actions to maximise efficiency Measure results Your Research Strategy allows you, as manager, to control and direct the research effort. It increases the efficiency and productivity of your team. Searching for Perfection Prospect Research an organised, managed search to identify, evaluate and find out about potential strategic donors for your organisation is a very new profession in France. I know that for you, in your organisation, it may be hard to imagine having a full-time researcher working with you in fundraising. But you can learn from the skills, the strategies, the sources and the management of prospect researchers in other organisations and make your own search for donors fast, effective and well-targeted. Enjoy the search! Factary 2008 Page 7 of 7