Development Research: An Overview

1. DevelopmentResearch: AnOverview Independent Education Summer Development Conference June 20, 2011

2. DevelopmentResearch: AnOverview Cindy McCarthy & Jon Thorsen, The Nature Conservancy

3. The Basics Prospect research, also known as development research or fundraising research, is a process in fundraising wherein a researcheridentifies and provides relevant information about potential donors to an organization… Organizations generally employ prospect researchers to find and qualify potential "major" donors who have the resources to make a large gift to the organization. A prospect researcher will assess an individual's, company's … or foundation's capacity and propensity to donate. Prospect researchers use a variety of resources, including public records, business and financial publications, and Internet databases.” - From Wikipedia

4. Prospect Research Products • Identification of New Prospects • Individuals, Corporations, Foundations • “Major Gift” donors • In-Depth Research • Capacity • Propensity • Connections

5. Circles in the Stream • “Development” implies a continuum • Research has applications across this continuum • Different needs at different stages of the relationship • Different information to drive decisions • Researchers ensure strong donor pipelines • Major gifts • Middle donors • Planned gifts

7. Convergence • Maintaining a strong base of donors • Pipeline for future major gifts • Pipeline for future planned gifts • Constituents with present value: involvement, advocacy, community, connections

8. Divergence • Looking for the “big fish” • Moments in time • Data and its application • Clear and present values • Predictability

9. The “AIR” Approach • Successful research establishes three important criteria for prospective major gift donors: • Assets – The ability to make a major gift (according to your organization’s definition) • Interest – Philanthropic priorities that align with your funding opportunities • Relationship – An established connection to your organization, preferably to a key leader, volunteer or staff person

10. The Researcher\Gift Officer Partnership • Leveraging distinct skill sets • Valuing information as a commodity • Establishing the two-way street • Investing in shared success • Understanding the gift process in order to request and supply the right information at the right time • Strategic vision • Tactical application

11. Scenario One • At your organization’s annual fundraising gala, you meet Joe Jones, a longtime friend of one of your trustees. Joe shares that he grew up in the Shenandoah Valley, and is in town helping settle some family affairs related to his father’s death several months ago. In chatting with Joe, you also learn that he and his wife live on the West Coast, where he has built his business, but plan to relocate to the Shenandoah Valley after he retires next year.

12. Scenario One: Questions • Who was his father? (Mother?) • Is there family land? Home? • Are there siblings? • Business on West Coast? • Who does Joe know? • Possible Wealth events?

13. Scenario One: Answers • Trustees and volunteers • Internet • Google, Business bios, Linked In www.google.com • Newsmeat (political contributions) www.newsmeat.com • Gives address , Employer, Title – view actual filing • NY Times archives (Local library) • Obituary Information • www.legacy.com • Real Estate databases • UVA Portico site • http://indorgs.virginia.edu/portico/personalproperty.html • Lexis/Nexis

14. Scenario Two • In reviewing your monthly giving report, you notice a new donor name—The Prospect Family Foundation. Come to find out, it is the newly established family foundation of Peggy Prospect, a longtime annual supporter of your organization. Peggy usually gives $250 per year for general operating support, and this gift from her foundation is at the same level. • Why is this significant?

15. Foundations • Family Foundations • Indicator of wealth-difficult to set up/manage • 5% distribution of assets each year • Form 990 filed annually • More control – investments and giving • Corporate Foundations • Community Foundations • Donor Designated Funds • Donor Advised Funds • Anonymous giving • Easy to set up

16. Foundations • Guidestar: www.guidestar.org • Foundation Center: http://fconline.foundationcenter.org/ • Foundation’s website • Foundation 990 reports: • Assets • Contributions – discover source closely held or publicly traded stock ownership • Giving Totals • Grantees • Types of charities they support • Gift ranges • Determine particular interests of individuals through designations • Trustees - and contact information

17. Scenario Three • You receive a call from Bill, one of your most loyal volunteers. Bill is calling to tell you that he won’t be able to help organize this summer’s charity golf tournament. He is in the process of selling his software development company to a corporation in the Silicon Valley, and the negotiation process will require extensive travel in the upcoming months.

18. Researching Companies • Public vs. Private • Public • Stock is bought/sold on the public marketplace • Government regulated • Private • Company is owned by a sole individual or small group of investors • Financials not disclosed

19. Public Companies • Insiders • Stock holdings • Yahoo Finance http://finance.yahoo.com/ • SEC/Edgar www.sec.gov • http://sec.gov/edgar/searchedgar/companysearch.html • DEF14A • 10K Wizard http://www.10kwizard.com/ • Salary • SEC documents • Salary.com • Glassdoor.com • Salary Surveys – industry • Set up alerts in Google using industry specific publications • Company profile • Google Finance (Reuters) www.google.com • Hoovers www.hoovers.com

20. Privately Held Companies • No government disclosure required • Often family owned • Value of company • Percentage ownership • Dun and Bradstreet • Self reported sales and net worth • “Comparable” financials • Public Records look up – varies by state • News articles, listings (e.g. Forbes) • Trustees -- bios sometimes found through SEC search

21. Company-related Wealth Events • Mergers and Acquisitions • Terms may be publicly disclosed • SEC documents/annual reports – 8K would report merger activity • Initial Public Offerings • Private Company selling stock to general public to raise capital • News Alerts

22. Donor Reports • Targeted Internet Searches • “prospect name” and “donor” • Use .org and .edu domains • “name” and “million” and “gift” site:cornell.edu • Searching annual reports • Paid databases • NOZA/Prospect Research Online www.nozasearch.com/ • DonorSearch.net • http://www.donorsearch.net/

23. Inclination • Affiliation to your organization • Alumnus, Donor, Volunteer • Donor to like-minded organization -- use “site” search above for gifts to like minded orgs • Volunteer or director at similar organization • Other • Expressed interest in your organization

24. Affiliations • Muckety www.muckety.com • Little Sis www.littlesis.org • SEC Filings – http://www.sec.gov/edgar.shtml • ZoomInfowww.zoominfo.com • Guidestar • Subscription service; search by person • BoardEx www.boardex.com

25. Political Contributions • Federal • Newsmeat www.newsmeat.com • Campaign Money www.campaignmoney.com • State Level (Virginia) • Virginia Public Access Project • www.vpap.org

26. Prospect Identification • Data Mining • Existing donor base • Real Estate (wealthy zip codes) • Predictive Modeling • Electronic Asset Screening • Peer Screening • Who do your trustees know? • Sphere of Influence Analysis

27. Predictive Analytics/ Data Mining • Why is it happening? • What opportunities am I missing? • How do we do things better? • Finding patterns in large historical data sets that can be usefully applied to predict future behavior

28. Predictive Analytics • Applying the characteristics of your best donors to the larger pool of potential donors • Activities • Involvement • Participation • Engagement • Create and test models for their predictive precision

31. Modeling Major Gifts • What behavior do we wish to predict? • What variables will we use? • Levels and types of previous involvement (affinity) • Demographic factors (capacity) • Linkages (relationships)

32. Results • Used a model that created multiple analyses of multiple factors • Internal data, wealth screening information, demographic data • We were able to predict at very high rates whether a donor would make a future major gift • Checking the model against real data in the database produced a correlation of over 80% for our top two prospect sets

33. Major Givers Predicted

34. Debunking Some Common Myths • Research is Not: • A magic bullet • A substitute for relationship building • An excuse to delay a visit or ask • An “other duty as assigned” • A clerical task • Typing a name into Google • Research cannot be done in one’s spare time • …because “spare time” is an extinct concept

35. Research & Development • Just as in the for-profit world, Research requires an immediate investment to produce future results • We need to be realistic about what we are trying to achieve and what it will take to achieve it • Budget & Resources • Training & Supervision • Time & Patience • A true major gift program requires – and deserves – an honest investment in Research

36. The Research Profession

37. APRA Code of Ethics • Integrity – be truthful and respectful • Accountability – protect donor privacy • Practice – be accurate and appropriate • Conflict of interest – protect your organization • Write reports as if the donor is reading over your shoulder • Be prepared to show any donor any information you’ve collected

38. Advanced Services

39. Networking • Association of Advancement Services Professionals (AASP): http://aasp.camp8.org/ • Best practices project: http://aasp.camp8.org/Default.aspx?pageId=330908 • Association of Professional Researchers for Advancement (APRA): http://www.aprahome.org/ • Association of Fundraising Professionals (AFP): http://www.afpnet.org/ • Prspct-L: http://listserv.apra-prspct-l.org/ • FundSvcs: http://www.fundsvcs.org/

40. Questions? • AASP: • Best Practices site: • APRA: • cmcarthy@tnc.org • jthorsen@tnc.org