NPT Blog: Prospect Research: It’s More Than Net Worth

November 8, 2013       Maria Semple       (0)       0

Developing a successful major gifts program is part science, part art. Building relationships with individuals and understanding what motivates them to give is the cornerstone to making an individual gifts program successful.

Without knowing more about a donor’s interests and their giving capacity, it would be difficult to have conversations around growing an organization, raising money for capital campaigns, building endowments, and legacy planning through planned gifts. That’s where prospect research comes in.

We all have only so many hours in a day. Knowing where to focus your major gift efforts and who your best prospects are can sometimes be a mystery, especially if the database has never been mined to find the hidden gems. Sometimes those gems are in the form of long-time, smaller gift donors. Sometimes those gems are corporate executives capable of donating gifts of appreciated securities. And, sometimes those gems have connections to foundations.

But, should you focus solely on ascertaining someone’s net worth? Remember: Net worth implies knowing about someone’s liabilities in addition to their assets. As prospect researchers, we only have information available to us, which is in the public domain. For example, we never access credit reports, meaning we don’t have access to the debt that is carried by an individual. Therefore, a true picture of net worth is not really possible.

So, where do you start if you’ve never done prospect research? Many nonprofit executives reach out to me and say: “I need you to help me find more new donors.” My response usually centers on a discussion about their current donor base. Have they done enough to learn more about the people already contributing to them? Are there some hidden gems in their current pool? Who is capable of elevating their giving, if only you knew more about them?

The board and staff can run peer review sessions in an attempt to determine who might be able to donate more. But, in many cases, if the database is largely unknown and this is the first time you are attempting a major gift campaign, then you might need to do a screening of the entire database.

Let’s focus on learning more about the people who are already committed to us before we try to proactively identify new donors without any prior giving history with our organizations. There are several companies that specialize in database screenings and I often recommend this as a first step.

You might be wondering what type of information is gleaned from a screening. Typically, screenings are derived from data sources that focus on both wealth capacity and past donor history to other organizations. Data points include:

  • Real estate property values;
  • Business affiliation;
  • Insider transactions for stock holdings of corporate insiders;
  • Political donations;
  • Charitable gifts;
  • Plane ownership;
  • Yacht ownership;
  • Links to foundations as a Trustee;
  • Corporate board membership; and,
  • Nonprofit board membership.

Do you think these points of information would help you before you make your next major gift ask? Don’t allow your tax status to stop you from adequate preparation for this all-important meeting with a major gift prospect.  The for-profit world would never dream of entering a business transaction without doing their due diligence. And, you shouldn’t either.

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Maria Semple is founder and chief executive officer of The Prospect Finder LLC., Bridgewater, N.J. Her email is maria@theprospectfinder.com

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