Tag Archives: philanthropy

Prospect Research: The Breakthrough Guide to the Basics

Prospect research can be a complex subject, but it’s vital to growing and developing your nonprofit’s donor base.

With over $373 billion donated last year, giving is on the rise, which means that prospect research is more important than ever for capitalizing on your donors’ generosity and building strong relationships with them.

In this guide, we’ll cover all of the basics, from the definition down to the nitty-gritty details of how prospect research can work for you!

Specifically, we’ll answer these questions:

Let’s get started!

What is prospect research?

Prospect research is the process of learning more about a specific donor or a group of donors so that your nonprofit can cultivate and manage them more effectively.

Prospect research is often used to identify and learn more about potential high-level donors who are giving below their true capacity. Major donors and planned gift donors, in particular, are often the subjects of this research.

To actually perform this important research, nonprofits can either:

  • Pinpoint an existing donor and fill in missing information that can give the organization a better sense of the donor’s giving capacity.
  • Screen a group of supporters, such as event attendees on an RSVP list, to identify new donors who may have high giving potential.

In both cases, the nonprofit seeks to gain a better understanding of their contributors by finding and assessing key data fields. Let’s talk about this point in more detail.

What data does prospect research target?

Nonprofit CRMs are full of data fields that compose your donors’ profiles (or those of your volunteers and board members). Some data points can be quite telling when it comes to understanding your donors.

Specifically, you’ll want to learn more about a donor’s ability and affinity for giving. That means that you need to understand how much your donors can give and their willingness to do so. Both of these factors are vital for gaining a comprehensive understanding of who your donors are.

We can break down these characteristics into specific data points.

A donor’s giving ability can be understood through:

  • Real estate ownership.
  • SEC transactions.
  • Business affiliations.
  • Political giving.

While this information could be captured in a wealth screening, it’s not enough to know how much your donors can give. It’s also important to know how invested they are in your cause, so that you can make an appropriate ask (and in the case of a new prospect, ensure that they want to give to your nonprofit in the first place!).

That’s why it’s important to analyze a donor’s giving ability in tandem with their affinity.

A donor’s affinity for giving can be understood through:

  • Past gifts to your nonprofit.
  • Past gifts to other nonprofits.
  • Philanthropic involvement.
  • Personal interests and connections.

With this data, your nonprofit can better understand your donors’ value to your organization so that you can make targeted asks that don’t leave money on the table.

Prospect research takes the fear out of fundraising; not only will your team know who to ask, but they’ll also have a better understanding of how much to ask for. This insider information can inspire confidence in your frontline fundraisers.

Now that you understand what prospect research is and what kind of information it identifies, let’s outline how a nonprofit can actually perform prospect research.

How does prospect research work?

To actually perform prospect research, your organization will need to invest time, resources, money, or a combination of the three. There are several strategies to choose from, depending on the size and stability of your organization.

To get started, let’s outline your options!

Prospect Screening Company

A prospect screening company can be ideal for larger organizations with the means to handle a lot of data.

Screening companies compare your donors against thousands of databases to fill in gaps in your prospect profiles and reveal information that you wouldn’t have known.

Then, these companies rank your prospects according to their potential, so your nonprofit can start strategizing.

This DonorSearch resource breaks down the questions you should ask before seeking out a screening company, so that your organization is as informed as possible!

Consultants

Consultants are experts who can lead prospect screenings or otherwise advise your nonprofit about all things prospect research.

Consultants are ideal for organizations who need to analyze a large batch of data all at once.

Since they’re temporary hires, your organization can save money in the long run by working with consultants only when you need them.

DIY

If you’re a small or new nonprofit, you may need to take on the task yourself. Public databases and resources can be utilized by talented team members to find out more information about important donors.

Though this method can be time-consuming, it saves funds where they’re tight.

In-House

Established organizations may have a full team assigned to prospect research that works internally.

This model is popular with universities, where donor pools fluctuate with every graduating class.

Why is prospect research important?

All of your donors are valuable, and you should be grateful for their gifts! However, developing your donor base is vital to making progress toward your mission.

It’s much more cost-effective to retain your donors than it is to acquire new ones; prospect research can help you make the most of the donors you already have and reach out to only your most likely prospects, saving your resources.

Plus, major and planned gift donors really keep nonprofits afloat. Their gifts will constitute a large piece of the fundraising pie, and prospect research is key for finding these high-impact contributors in the first place.

After all, major donors may be hidden in your database. It’s not unusual for donors with high giving capacities to give smaller gifts to online fundraising campaigns, such as large scale crowdfunding initiatives. This is often the case because they’re not comfortable sending large gifts over these channels.

Without prospect research, you’ll never know which donors have more giving potential. It’s highly unlikely that they’ll reveal themselves without a direct ask. That’s why it’s important to look into your database, especially as online fundraising grows in popularity.

Most importantly, nonprofits can use prospect research to build stronger donor relationships. You need your donors to accomplish your mission; the least you can do is meet them halfway by learning about who they are.

How can I use prospect research?

Aside from identifying major donors, prospect research can also enhance your fundraising strategy on the whole. After all, the more data you have, the better you can take your donors’ preferences into account.

Let’s break down the ways in which prospect research can elevate your fundraising strategy.

Determine your campaign

Understanding your supporters can help you create engaging fundraising campaigns and events that will bring in a lot of donations.

Prospect research can reveal donors’ interests to provide these insights. For example, if you notice that donors have given substantially to charity auctions hosted by other organizations, then you might want to adopt this event into your annual campaign.

As such, prospect research can help you narrow down your fundraising ideas and determine the campaign that works best for your donors.

Maximize your communications

Part of prospect research is filling in important data fields that tell you about your donors.

These data fields include a donor’s communication and giving preferences. In other words, how do donors want to interact with your organization and how do they want to give?

You can send donors more effective communications that they’ll actually respond to if you pay attention to their preferences.

For example, donors may prefer to communicate with your organization via:

  • Email.
  • Traditional mail.
  • Phone calls.
  • Your website.
  • Text messages.
  • Social media.
  • In person conversations.

Knowing how your donors want to speak with you can help you send them the most targeted, effective appeals.

Additionally, you can also use prospect research to determine your donors’ preferred giving methods so that you can craft the most effective multichannel marketing.

If, for example, a donor prefers to send checks to your organization, but enjoys the ease of online communications, you may find that an e-check or direct debit strategy would work well for this individual. If you find these giving patterns across your donor data, then you can use what you’ve learned to appeal to your donors on a mass scale.

Build your donor network

Some of the most important data that prospect research can uncover are your donors’ personal and professional relationships.

If you learn that your donors are friends with other high-value prospects, then you can leverage those relationships to gain an “in” with a new donor.

Similarly, a donor’s business affiliations can help you identify opportunities for corporate philanthropy. Donors who work at matching gift-eligible companies can be informed of the application process, so that they can double the impact of their future gifts.

Even more so, your organization can seek out partnerships with companies who can support your future fundraising events.

If many of your donors work for a company, then the CEO may be more inclined to lend a hand with in-kind donations, event support, or traditional (but invaluable) monetary donations.

To learn more about the top matching gift companies, check out this 360MatchPro resource!

Now that you have the basics of prospect research down pat, it’s time to apply what you’ve learned so that you can develop your understanding of your donors.

Then, you can take an informed, data-driven approach to fundraising, build stronger donor relationships, and and ultimately raise more for your cause!

The Alford Group is pleased to partner with DonorSearch, a prospect research, screening, and analytics company that focuses on proven philanthropy. This article was contributed by Ryan Woroniecki, Vice President of Strategic Partnerships at DonorSearch.

Giving USA Numbers and Beyond

TAG group photo2Photo: Alford Group staff at As Good as It Gives: America’s Philanthropy Today on June 17, 2016 at Mesirow Financial in Chicago.

 

The Alford Group co-sponsored As Good as It Gives: America’s Philanthropy Today with Mesirow Financial in Chicago to share this year’s Giving USA numbers and discuss what the numbers mean for not-for-profit organizations.

Here are the main takeaways:

  1. Giving is on the rise

The Alford Group’s Executive Vice President Sharon Tiknis and Senior Consultant Diane Knoepke presented to the room and reported that 2015 was America’s most generous year ever, as donors collectively gave over $373 billion. Slide 7Giving is on a two-year increase, as 2014 was previously charted as the most generous year of giving. Since the Great Recession ended in 2009, giving has increased by 23 percent. Individuals continue to represent the majority of giving in America at 71 percent of total giving in 2015.

 

  1. Today’s donor looks less like Ned Flanders and more like Montgomery Burns
Flanders-Burns

Dr. Daniel Hungerman from the University of Notre Dame spoke to us about long term giving trends. Even though giving to religion-affiliated organizations currently makes up approximately one-third (32 percent) of all giving, the trend is that as religion declines in the U.S. so does giving to religious organizations (fewer Ned Flanders donors).

[Simpsons characters Ned Flanders (left) and Montgomery Burns (right).]

At the same time, there is a rise in the inequality of giving. Dr. Hungerman reviewed the findings in his research showing what has long been the 80/20 rule now looks more like a 90/10 rule in philanthropic giving where 90% of the funds raised come from just 10% of donors (more Montgomery Burns donors).

Disheartened by this news? Don’t be. Despite this fact, philanthropy continues to be quite democratic in the United States, according to Dr. Patrick Rooney at the Lilly School, and when you consider that there are more American donors than American voters, those small gifts add up to make a meaningful difference.

  1. The way forward is through mission alignment

What does this all mean for you and your organization? The most effective way forward is to think strategically about mission alignment. This means aligning your operations with the outcome-focused vision from which your organization was built.

Specifically, this means aligning your strategy and tactics with your mission to ensure you are efficient and effective. This also means aligning your impact measurement with your mission to measure the outcomes of your work versus the outputs of your work. Finally, this means aligning donor messaging with your mission so that you are appealing to the donors’ passions rather than only the organization’s needs. The key is to always have your mission and your donors in mind.

To go even deeper and tackle these topics and more, please join us for The Alford Group Summer Webinar Series where we will explore bold strategies to advance philanthropy. We hope you can join us!

Giving USA: The Annual Report on Philanthropy is the seminal publication reporting on the sources and uses of charitable giving in the United States. The production and release of Giving USA is the result of the collaborative efforts of Giving USA Foundation, a public service initiative of The Giving Institute, and Indiana University Lilly Family School of Philanthropy. The Alford Group is a founding member of the Giving Institute.

One Key Practice of Today’s Leading Cause Marketers

Feature Image 5 Midway through last week’s Cause Marketing Forum (CMF), during Katrina McGhee’s great talk on personal branding, I noted that a significant number of the CMF presenters—representing both causes and companies—were explicitly emphasizing one key practice. These cause marketing leaders focus on their strengths. They understand their organizational strengths and partner with others to mitigate their organizational weaknesses. In contrast to the trends earlier this decade when it started to feel like major cause marketers were shifting to owning self-made cause platforms over building partnership portfolios, this strengths-based approach is facilitating significant creativity and impact.

Instead of adopting a certain trend in structure or activation, today’s cause marketing leaders are focusing on what will work for them. For some, that is creating an owned national platform with local and agency partners providing support. For others, it is forging one or more partnerships of complementary opposites who each bring what the other needs. Through collaboration, they are then able to achieve the business and social impact results that they could not have achieved on their own.

Four Examples from Cause Marketing Forum 2016:

A few examples (of many, many more) that I found particularly instructive from last week’s event:

Youth1) Aria Finger, CEO of DoSomething.org, highlighted how they use their deep understanding of what makes young people tick to ensure that their partnerships are meaningful (and hip).

  1. 2) Ido Leffler, Co-Founder and CEO of Yoobi, spoke of Yoobi’s core competencies (product, design, and creativity) and their need to find retail and cause partners to bring their vision for business and social impact to life, saying “We do what we do best and we partner with others to do the rest.”

Uber

3) Michael Meyer, Vice President of Donated Goods Retail and Marketing at Goodwill Industries International, spoke about how the organization is using its brand strength and retail footprint to provide value for partners, in return for the new audiences and distribution channels that partners like Uber and The Container Store provide.

4) 2016 Halo Award Best Digital Campaign Gold Winners Samsung and Autism Speaks Canada provided countless examples including the profound use of Samsung’s technological strength along with Autism Speaks Canada’s expertise and credibility in serving families living with autism. Together, they created and promoted an app that uses the rear-facing camera on a mobile device to help children with autism practice working on eye contact.

Whether we are designing a platform, portfolio, or single partnership, we must first get real about the strength of the currencies, competencies and capabilities that we have in the context of what we want to accomplish. Then, we need to fill the gaps through custom alliances that both expand on others’ strengths and fill a gap for them.

Thanks and kudos to each of the phenomenal cause marketers who presented and won awards at last week’s event.

diversity art showcase

Diversity Art Showcase at AFP International

There were three remarkable winners of the Diversity Art Showcase at this year’s AFP International Conference. Laura, Oscar and Tali’s work depicts how they view philanthropy. The winners, all from Art with a Heart and Lakeland Elementary/Middle School in Baltimore, explored the ideas of diversity and philanthropy through mixed media creations. Local artists judged the student’s artwork to award a first, second, and third place. The winning pieces were displayed in the Diversity Youth Art Showcase during AFP’s March 2015 International Fundraising Conference at the Baltimore Convention Center. The students were recognized throughout the conference, including at the opening plenary with 3,500 conference attendees in the audience.

Watch the video below to hear Brenda Asare, President & CEO of The Alford Group talk about our firm’s calling to engage the sector around diversity, and what the Diversity Session and Diversity Art Showcase bring to the artists, conference attendees and the broader AFP community.

See the photo gallery of the 2015 Showcase winners below.

Diversity Art Showcase at the AFP 2015 International Fundraising Conference, March 29-31, 2015, in Baltimore, Md. from AFP IHQ on Vimeo.

The Alford Group has been a proud sponsor of Diversity at the AFP Conference for 16 years. We hold a strong commitment to diversity as one of our core values, and continue to encourage conversation about diversity in the not-for-profit sector through many different lenses.

 

women leading philanthropy

Diversity in Fundraising: Women Leading Philanthropy

The Diversity Session at the AFP International Conference this year focused on Women in Philanthropy. This was the first time the session had revolved around that aspect of diversity, and the session was very well attended.

The session was introduced by Brenda A. Asare, The Alford Group’s President & CEO. A panel offering insight into their own experience as female philanthropists and researchers in the field included:

  • Una Osili, Director of Research at the Indiana University Lilly Family School of Philanthropy
  • Sylvia Brown, Principal of Brown Capital Management, Inc.
  • Ann Allston Boyce, President of the board of The T. Rowe Price Associates Foundation

The trend our firm has seen, and that many researchers and practitioners have seen, over the past decade, is that women are becoming more influential in charitable giving and leveraging their power to influence philanthropic decision making. This trend guided the conversation for the panel, which focused its energy on helping attendees understand how women are changing the philanthropic landscape, how to shape strategy to effectively engage women philanthropists, and how to cultivate and steward women donors for maximum impact in their organizations.

In the past, most organizations focused their fundraising efforts on male donors, given the traditional assumption that women were not making philanthropic decisions for their households. As women have begun to increase their rates of college enrollment, women enter the workforce and into higher paying jobs, and as women increasingly outlive men, the philanthropic sector has begun to see an increase in the visibility of female participation as major donors. Whether by accumulated wealth through their own work, or inherited wealth from family or spouses, female donors are having a significant impact on philanthropic initiatives. And more frequently, couples are making philanthropic decisions together.

Women give in many ways. Researchers are finding that across income levels, there is a real interest in philanthropy among women. But it’s not just through treasure that women are looking to contribute – women are increasingly becoming involved through their time and talent. Women are present in leadership for philanthropic organizations, helping to lead fundraising campaigns, plan events, and offering their expertise on governing and auxiliary boards and as staff.

Dr. Una Osili, a member of the panel, oversees research into how and why gender matters is the Director or Research and Chair of the research council of the Women’s Philanthropy Institute at the Lilly Family School of Philanthropy at Indiana University.

“There are some really powerful examples of the dynamic role women are playing in philanthropy. A few examples include Women Moving Millions, the American Red Cross’ Tiffany Circle and Indiana University has a Women’s Philanthropy Council. In order to cultivate women donors, organizations have to think about how female donors might differ – how do they want to give, what do they want to give to, does being part of a network impact their giving?

“Establishing philanthropy through gender lines and understanding motivations is relatively under researched. As women play a more visible role, especially in leadership around the world, there is more interest in asking what are some things about my organization that can reduce barriers for women being involved? What is working elsewhere and how can I apply that to my own organization?”

The challenge of identifying how women want to engage in to the philanthropic landscape corresponds to the challenge of addressing diversity in philanthropy more broadly.

Dr. Osili says that “one size doesn’t fit all. When engaging with diverse communities, ethnically, religiously, multi-racial and multi-cultural donors, similar to female donors, you have to determine what are the barriers – how to ask, how to cultivate, what language and style is important to them. You have to use new approaches to bring new donors in – what worked in the past might not work for donors with different backgrounds, beliefs or cultures.”

She continues, “The broader message about women and diversity in philanthropy is that as the world become more connected and we interact much more with people of different backgrounds and characteristics, there are more opportunities to engage different types of donors – but you have to adapt to make your organization more inclusive of different types of donors.”

The Alford Group has been a sponsor of the Diversity Session and the Diversity Art Showcase at the AFP International Conference for 16 years. We hold a strong commitment to diversity as one of our core values, and continue to encourage conversation about diversity in the not-for-profit sector through many different lenses.

The Unfortunate Lure of Small Not-For-Profit Governing Boards

pic_Committees1Over the past several years, many not-for-profits have begun to shrink their boards to sizes ranging from 9 to 12 people.  Both board and staff leaders have argued that a smaller board is more productive and easier to manage.  This model seems to be coming from the for-profit board where smaller boards are the norm (comparably) and chief executives are also the board chair (though this trend is changing as more corporate boards are choosing an independent director to be the chair of the board).

I would contend that the size of the board should be based on the amount of community engagement the organization wishes to have.  If a not-for-profit organization does not require significant community engagement then it does not need to structure itself with a large amount of community interaction.  However, if philanthropy is to play a role in the organization, then community engagement at the volunteer leadership level is essential.

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