Prospect Research on a Shoestring Budget AFP February 13, 2009 Ali R. McLane Consultant, Dini Partners amclane@dinipartners.com Giving in the Current Economy Giving 2009 Survey Report, Dini Partners, January 2009 Survey Respondents The December 2008 survey represented the opinions of individuals, id families, corporations and foundations whose annual gifts consistently exceed $100,000 per year. Most of the respondents have contributed gifts of $1 million or more in any given year. All have made major gifts over $1 million All are multi-millionaires and several billionaires What to do? Most important factor in giving is existing relationship to organization Focus attention on existing donor relationships. Prove the genuineness of your relationships with your existing base of support with attentive stewardship and transparent communication 1
The New York Times, June 2005 New Wealth Growing minority segments New Trends Small businesses Successful entrepreneurial women Millionaire Woman Next Door By Thomas Stanley Portfolio: Business Intelligence Growing Philanthrocapitalism The Bill Gates effect ($2.8 billion) The $100+ million dollar gifts Items to Remember The fastest way to get wealthy is still inheritance The most common way to get wealthy is to start and sale a business 80% of your Major Gift donors are repeat donors Philanthropy is learned 2
New Trends Women recently surpassed men as the more prolific givers Gifts from women topped those from men by almost $5 billion in 2005, the last year for which the IRS included gender information in its publicly-available gift tax return data. That's a reversal from the ratio in the IRS's last study of gender in 1997, when men gave nearly $3 billion more than women. Single women are twice as likely to donate to charity as single men. These statistics are especially significant given experts' predictions that women will control about 60 percent of all wealth in the U.S. by 2010, over $22 Trillion. (MarketWatch.com, September 15, 2008) Women are the primary decision makers for healthcare for the family. 1 out of 10 Gen X women have a graduate degree; over ½ have a 2 or 4 year degree. (AHP Journal Fall 2008) New Trends Millionaires top concerns about retirement is the rising cost of healthcare (40%) 34% report health of self or partner 46% of Gen X Millionaires consider cost of healthcare as top concern Gen X donors are most generous in annual giving Gen X $22K; Boomers $10K; Silent $9K Millionaires volunteering on the rise 80% volunteer; 22% increased time in 2007 over 2006 Wealth in America 2008: Findings from a survey of millionaire households January 2008, Northern Trust Corporation 3
Purpose Prospect Research Gather information relevant to the solicitation process Manage prospect information so that it is current, accurate and useful Prospect Management Turning data into Actionable Intelligence Creating institutional history Determine exactly what you are looking for and don t stray Use the data to help segment and focus your time and energy on the prospects that match up to goals Data Optimization = Optimal Prospect Communication and Relationship Investor Contributor Targeted, Strategic, High Touch and Personal Communication Cultivate, Mindful Communication Inquirer Identified Automated Communication 4
Where to Start Your Database A donor who consistently gives $5K can often make a $100K+ donation A donor who starts at the $1K level can be testing the organization Donors who have given three or more years in a row are showing significant interest Are there major donors in your area that should be giving to your entity? Is there a reason to believe they would be interested in your cause? (giving at lower levels?) Can work with the philanthropic or teach philanthropy Donor-Centered Relationships Website/ Interactive communities Newsletter/email list Web store purchases On line giving Web community participant Facebook/LinkedIN Database Constituency code Giving history Giving designations Donor activities Address information External Screening Real Estate Business information Board memberships Gifts to other organizations Interest Membership Alumni activities Student activities Volunteer activities Relationship Management Prospect Manager Call reports/contacts Correspondence Moves information Communications Mailings Magazines Annual reports Event participation Invitation RSVP/attended Guest Season or single tickets 5
Acquiring New Names External data points to ID prospects List purchase Mailing list services Donors to other like organizations NOZA Rich zip codes New to community Top executives Friends of board members and other prospects Peer screening External Data What data can you acquire? Geo-Demographic Screening Codes Match on area or zip code range Screening Data Wealth Screening Hard assets; matched on exact address Interest Screening Memberships; foundations; matching exact and partial addresses Prospect Research Look up the same or similar data one at a time 6
Wealth, Can we Locate? Real Estate Identified from tax assessor database Inside Stock Officers, directors and/or owns more than10% of public company Private Business Interest (Self disclosed) Dun and Bradstreet ($$$) & business journals (media) Liquid Assets IXI s Echelon Wealth Segments wealth code based upon liquid assets at a zip code +4 level ($$$) Hard Assets Tax Assessor Databases Assessed Value can be different from Market Value Can search by Name Almost all communities available (some missing) Website: http://indorgs.virginia.edu/portico/personalproperty.html Link Zillow Market Value available Information on Neighborhood You cannot search by name Website: www.zillow.com Link Remember: Common Asset among Major Donors 7
What does it Mean? Sacrificial gift level is at 5% of net worth Most individuals spend 6-8% on their home Question pursuing someone with a home under $250K Exceptions Home value depends on the region and timing Multiple home owners/real estate developers Insiders - Hard Assets Public Stock Holdings Quick listing of current Inside stock holdings List of all insiders for a company Officers, directors, 10% owners Recent stock sales Does NOT list stock options!!! Remember: Look at Stock Sales as well as current Website: www.marketwatch.com/tools/quotes/insiders.asp 8
Insiders/Public Companies SEC Filings Scanned copies of forms http://www.form4oracle.com/welcome com/welcome Company Individual SEC Form What does it Mean? Officer: Likely primary source of wealth Director: Connections to others Not the full picture All inside stock information available Not all stock holdings Only about 500,000 current and former stock insiders Other Public Company information Salary and bonus, can give 10% a year 9
Private Companies Private Company Texas Comptroller p http://ecpa.cpa.state.tx.us/coa/index.html Texas Secretary of State http://www.sos.state.tx.us/corp/sosda/index.shtml Fee services Hoovers http://www.hoovers.com Fee service Dun and Bradstreet http://www.dnb.com/us Free Look up cost for full record Access to MDD for State only about $1,400 Interests & Linkages Information gathered from researching biographical and past giving information or soft assets leads you to determine, interests, who they know and who knows them. Sphere of Influence 10
Foundation Information Guidestar 990s (Free for three most recent years) Board of Directors (past and current) Assets/Asset Growth or Decline Giving/Changes in Giving Are they multi-year donors? Website: www.guidestar.org Foundation Directory Online (pay source) Improved Searching Interests/Timelines Geographic Scope Website: http://fconline.fdncenter.org/?li_messagefdncenter org/?li Foundation Website History Grant Guidelines Best Information if available Remember: Check Multiple Years/Comfortable Giving What does it Mean? Prospect has philanthropic intent Strong indicator of specific interests Often a predictor of giving levels based on similar funding (know your comparison) Shows roles of the board, decision makers Introduces timelines to process 11
Google and NOZA Google and Other Search Engines Gives you a quick feel for the prospect Search name and gift, donation, donor, etc Google News Alerts Be Careful what you trust (verify information) NOZA Past giving information gathered from the internet Search for free; complete record cost $$$ Remember: Looking for Landmark Events Website: http://www.nozasearch.com/default.asp link results Biographical Information Public Records http://www.searchsystems.net/ All Texas Check the State, County and City links, you may find other databases to search small cost for direct access Federal Election Commission Database Political affiliation and donations back to 1980 http://www.tray.com/fecinfo/ ZoomInfo Founded in 1999, a Web-based service that extracts information about people and companies from millions of published resources http://www.zoominfo.com/ Results Profile 12
News Sites http://news.google.com Searches recent news Recommended http://newslink.org Find Local paper and search archives http://www.bizjournals.com Find local journal and search archives What does it Mean? Landmark event is a great indicator of wealth Giving to others show possibilities and interests Be careful not to misinterpret When in doubt ask Can help with timing issues Does the prospect feel wealthy? Be sure to personalize the approach for your organization Don t assume, do your homework, be strategic 13
Next Steps Research What information do you need to know to take the next action? Review all internal files!! Wealth indicator? interest? past giving? past relationship Where is that data? How long will it take you to find it? Use screening data Be mindful of the primary source Exact matching best; look for hard assets and business information Create a research system Define the sources you will use; record what you find The return on investment on prospect research and management is time saved! Contact the prospect; make the next experience a positive one! Research Resources http://www.google.com/ Search fname lname http://www.nozasearch.com/default.asp Past giving i information i gathered from the internet http://indorgs.virginia.edu/portico/assessors.html Tax Assessors database http://www.zillow.com Real Estate information market values http://www.bizjournals.com http://newslink.org Find Local paper and search archives Find local business Journal search archives http://www.dnb.com/us/ http://www.hoovers.com/free/ Business look-up; reverse phone directory; executive search http://indorgs.virginia.edu/portico Web site with links to specialty sites http://www.aprahome.org/ Association of Professional Researchers for Advancement look for local chapter 14