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Prospect Development Pride and the Power of Elevated Service

By: Melissa Bank Stepno, President & CEO

Sometimes ideas need time to simmer.

Last March, right in the middle of Research Pride Month, I happened—by pure coincidence—to be reading Unreasonable Hospitality by Will Guidara. In short, it is a business and leadership book grounded in Guidara’s own experiences at the highest levels of the restaurant world.

As I read, I kept flagging passages with sticky notes. This might be something someday, I thought. I didn’t realize that “someday” would take a full year.

So, what does a book about restaurants have to do with Research Pride?

Everything.

 

The Sometimes Invisible Work that Shapes Outcomes

The restaurant industry is, at its core, a service industry.  Most service industries are thought of as “in the background” type of work that often goes unknown or underappreciated.

Guidara’s central argument is that when service is rooted in expertise, intention, and care, it becomes something more. Elevated service doesn’t just support outcomes; it shapes them. It provides for a better experience, empowers others to succeed and creates impact far beyond what’s immediately visible.

Prospect Development fits squarely in this idea of elevated service.

Our work is largely unseen by the donors that support the organizations we represent. It happens behind the scenes while gift officers and institutional leaders are out front.  And yet, when research is done thoughtfully and with purpose, it drives strategy, sharpens decisions, and makes everyone around us better at their jobs.

Like the best service work, the value of prospect development work isn’t measured by visibility. It’s measured by the confidence, clarity, and effectiveness it creates for others.

And, in my mind, this is what Pride is really about.

 

Defining Pride

According to Merriam-Webster, pride includes self-respect, confidence, and pleasure in work that’s worthy of honor. In our professional context, I will define pride as:

Pride is the recognition of the value, skill, and impact of work that is often invisible.

It’s not about ego. It’s not about being “out front.” It’s about understanding why the work matters—and claiming its importance without apology. It’s quiet confidence: knowing that even when the work happens behind the scenes, it shapes decisions, strengthens relationships, and moves institutions forward.

Lessons from Hospitality, Applied to Prospect Development

Guidara’s book offers several ideas that translate powerfully to our profession.

A year later, three of the passages I flagged with sticky notes seemed particularly appropriate for this post:

  1. Lifelong Learning

Guidara describes his mentor’s philosophy as a “constant, gentle pressure.”  It is a version of the Japanese philosophy of kaizen, the idea that everyone should always be improving, just a little, all the time.

This mindset feels familiar.  Prospect development is a field filled with lifelong learners, by necessity and by nature. Every new prospect introduces a new industry, a new context, a new set of questions. New tools promise to help us work smarter and more strategically.

Curiosity isn’t optional in this work—it’s foundational.

 

  1. Knowing Why the Work Matters

Guidara argues that service work can sometimes feel demeaning, unless people understand the importance of what they’re doing and the impact they can have.

No one would say prospect development is demeaning, but historically, we have been framed as “support,” sometimes even as secondary to front-line roles. That framing misses the point. Being in service of others is not something to downplay. When done well, it’s a point of pride.

We make gift officers better. We help them be more informed, more confident, and more effective. This helps bring more mission-critical dollars into the organizations that we represent.  Our work directly influences outcomes, even if our names aren’t always attached to them.

 

  1. Being Fundamentally Reactive

Guidara describes great hospitality as “fundamentally reactive”—responding to information gathered in advance, cues picked up in the moment, and patterns recognized over time.

This is prospect development in a nutshell.

We react not just to data, but to context. We look beyond the facts to understand the why. We set up news alerts, review giving patterns, flag moments that matter, and anticipate needs before they’re articulated by our gift officers. It’s part preparation, part intuition—and entirely strategic.

 

Claiming Our Pride

Prospect Development Pride Month isn’t about asking to be seen more or trying to make room for ourselves at the proverbial table.

It’s about seeing ourselves clearly and demonstrating through our actions the value that we bring.

It’s about recognizing that behind-the-scenes work can still be high-impact work. That service, when rooted in expertise and intention, is not “less than”—it’s essential.

And that’s something worth being proud of.

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What You Need to Know About Artificial Intelligence in Prospect Development

By: Melissa Bank Stepno, President & CEO

Artificial Intelligence (AI) has become one of the most talked-about topics in recent years. Rapid advances in generative AI, such as the release of tools like ChatGPT in late 2022, have accelerated conversations across industries. But here’s the truth: AI is much broader than these headline-grabbing tools, and many of us have been interacting with AI for years without realizing it.

 

What Is AI, Really?

There’s no single, universally accepted definition of AI. Ask ten people, and you’ll likely get eight-and-a-half different answers. At its core, and the way I like to think about it, is that AI refers to technology that enables machines or software to “think like humans.”  The ultimate goal is to perform tasks faster, more accurately, and more robustly than humans can.

Historically, AI systems were programmed by humans and performed the specific tasks they were programmed to do – but frequently on a more complex level or faster than a human could.  But modern AI leverages computing power to learn and improve on its own, without direct human involvement.

 AI as an umbrella term includes:

  • Machine Learning (ML) – systems that learn from data patterns and frequently uses algorithms to make predictions or decisions about future behavior/events.
  • Natural Language Processing (NLP) – enabling machines to understand and process human language, in the form of text or speech.
  • Generative AI – tools that synthesize, summarize and create new content, whether text, images, or music, based on existing content.

So, in some ways, machine learning and natural language processing are mechanical and facts-driven, producing results exactly as they are calculated by the AI tool.  On the other hand, generative AI is more creative and opinionated, making assumptions and drawing conclusions based on the inputs that it receives.

 

Historical Perspectives

The term AI was first introduced in the 1950s, but at that time, it was acknowledged that computing power wasn’t sophisticated enough to truly achieve “artificial intelligence.”

Fast forward to the 1990s when IBM built a tool called Deep Blue that was able to defeat a human chess champion.  This is frequently considered one of the first “real” achievements in artificial intelligence.

Fast forward just a bit more to the 2000s, and like it or not, the prospect development field has been using AI ever since.  How can this be?  Even the simplest of Google searches incorporates the use of some AI via the algorithms that Google uses to produce your search results.

Many of our other common research tools employ AI as well: wealth screenings that use algorithms to provide scores and ratings, predictive models that are created to suggest future major gift prospects, the order of the posts in your LinkedIn newsfeed – all incorporate AI.

When I hear blanket questions like: “should we use AI in prospect development?” or “is AI allowed at your organization?” or “is it appropriate to use AI in our work?” I admittedly cringe a bit because all of us – every single one of us reading this article – have been using AI for years.

 

Current Events

A lot of hype today is about the new generative AI tools that are exploding onto the market.  And, somehow, when the generic term “AI” is thrown about, it is frequently referring specifically to generative AI, not the entire spectrum of artificial intelligence.

Because of this, when I am asked about “AI,” I immediately seek to clarify what the person I’m interacting with specifically means.

There’s also a lot of controversy around AI, much of it rooted in the political and societal implications of it.  These include concerns about regulation, potential workforce disruption, potential bias and misinterpretation of AI tools, and the broader impact these technologies may have on public trust.

Against this backdrop, prospect development professionals are being challenged to move beyond the hype and fear and toward informed, intentional decisions.  The most important questions are no longer about if prospect development should utilize AI, but about when and how it fits into their work.

 

Using Generative AI in Prospect Development

So, let’s talk about the elephant in room then: when and how should we be using generative AI in prospect development?

As you can imagine, in my role at HBG I interact directly with fundraising professionals at a lot of different organizations.  I also follow listservs like PRSPCT-L (aka: the Apra Exchange), keep up with related posts on LinkedIn, read articles in industry publications such as the Chronicle of Philanthropy, and generally try to stay up to date on the ‘chatter’ around this topic.

Well folks, here’s the truth: the jury is still out on this one.

Some organizations, and prospect development professionals by extension, are leaning into generative AI for its ability to do what it sets out to do: perform tasks faster, more accurately, and more robustly than humans can.  Some examples include:

  • Building an initial prospect profile
  • Creating a template that can be used for prospect management tracking purposes
  • Summarizing news articles that mention a specific organization’s name and suggesting the tone and tenure of the results
  • Indexing contact reports for donor themes across multiple gift officer portfolios.

Other organizations, and prospect development professionals by extension, are adamantly against incorporating generative AI into our work, typically citing data confidentiality and the lack of accuracy in the data as the two primary concerns.  Let’s look at each in turn:

 

Data confidentiality

Generative AI tools are designed to improve their responses over time by learning from the information they receive. This means that if you enter confidential donor data into one of the “open” tools available on the market, you are effectively sharing that information with the system itself — the underlying engine — which may then incorporate it into its ongoing learning process.

Beyond the ethical concerns with this, it’s important to recognize that much of the confidential data used in prospect research is also subject to data protection laws, such as GDPR, FERPA, HIPAA, CCPA and the myriads of state-level privacy laws that are popping up across the country.

It’s also important to note that “closed” generative AI systems can offer a safe environment that doesn’t expose sensitive data to external platforms.  A “closed” system is one that is designed with strict data governance and privacy protections.  In practical terms, “closed” systems are typically available only when an organization subscribes to a platform designed for this purpose.

 

Data Accuracy

  • Data Quality: with any AI application, not just generative AI, there is an old adage: garbage in, garbage out. What this means is that if you put data of poor quality or incomplete data into an AI tool, the results of whatever it is you are trying to accomplish with AI will be flawed, incomplete and sometimes entirely misleading.  Since the primary data source for most generative AI tools is the internet, and since we know that not everything we see on the internet is accurate, you can see where this can be problematic.
  • Data Bias: AI tools learn from the data that they have been previously fed, which means they can unintentionally produce bias responses if the data baked into them is bias itself.
  • Hallucinations: often related to data bias that is within an AI environment, hallucinations are instances when a tool produces content that sounds convincing but isn’t actually accurate. Essentially, it is jumping to the wrong conclusion based on faulty assumptions.
  • Timeliness: does the generative AI tool have the most up-to-date information on a topic? Maybe, maybe not. If it has only been trained on older data, then the output it provides may be outdated as well
  • Context: for me, this one – context – is probably the most important. This is also where I get on my soap box and talk about the value that prospect development professionals bring to our industry.  Even if generative AI could provide the most accurate data and even if confidentiality were not a concern, it does not interpret nuance, understand situational analysis or comprehend what the consequences of something could be.  For this, we will always need human intelligence and discernment.

 

In Closing

In 2024, I published a blog post suggesting that we rename our field from “Prospect Development” to “Prospect Strategy & Fundraising Intelligence.”  While my message was sincere, I wasn’t seriously suggesting that we adopt that phrase.  However, it is 100% relevant to today’s post.

We are still in the middle of the evolution from Prospect Research, to Prospect Development, to Prospect Strategy & Fundraising Intelligence.  We are positioned to be indispensable partners in fundraising success and that will not change.

Generative AI won’t replace humans, but it does have the potential to augment our capabilities.

The potential.

We can’t ignore the bullet train that has already left the station.  AI is here to stay and will revolutionize our world.  But we also don’t have to board the train, at least not quite yet.

We’re still at the beginning of the change curve, but just as the internet didn’t replace the need for (what was then called) prospect research, neither will generative AI.

And, just as the internet has become ubiquitous, so too will generative AI.

But, until we can trust that it can perform tasks faster, more accurately, and more robustly than humans can, and in a safe, ethical and confidential way, then we can’t simply just use it as a replacement for the work that we do.

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Counting Down the Most Popular Intelligent Edge Posts of 2025

Tis the Season!

Whether you’re marking the 12 days of Christmas, the eight nights of Hanukkah, the seven days of Kwanzaa, or simply counting down to the New Year, this season invites both reflection and celebration.

Here at The Intelligent Edge, we thought we would join in the holiday spirit by using this final post of 2025 to revisit and re-share the posts that sparked the most interest with our readers this year.

So, with no further preamble, here are the Top Intelligent Edge posts of 2025:

  1. Kicking off our list is Heather Hoke’s deep dive into Philanthropic Private Equity, a concept that was brand‑new to many in our community.
  2. With due diligence becoming ever more essential in our field, it’s no surprise that Due Diligence in Prospect Intelligence: The Why and the How by Grace Chandonnet earned a top spot.
  3. Pushing us to look beyond the familiar, Melissa Bank Stepno introduced us to one of the newest fundraising reports in our field in Beyond Giving USA: Highlighting the DAF Fundraising Report.
  4. Chelsea Morin’s Demystifying the Forbes 400 and the Bloomberg Billionaires Index made sense of two of the most‑referenced (and often misunderstood) resources in our work.
  5. And, rounding out the list, Michele Borucki turned a notoriously dense document into a treasure hunt in Form 990s: Complex (Boring) Tax Form or Treasure Map?

With that, we wish you a festive season.  We’ll be back with fresh new content in early 2026!

 

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What Do Google and Kleenex Have in Common?

by: Melissa Bank Stepno, President & CEO

 

If I asked you for a Kleenex, you would intuitively know to hand me a tissue.  No further discussion needed.  It’s possible you would have handed me a Kleenex-brand tissue, or Puffs, or Seventh Generation, or Scotties, or one of the many generic house brands.  I might know the difference, I might not.

The term “Google,” not necessarily the brand name, has become even more ubiquitous.

In fact, Dictionary.com officially notes that while Google has a trademark and is “the brand name for a leading internet search engine,” it also provides two definitions for google, the verb:

“(often lowercase), to search the internet for information about (a person, topic, etc.).”

and

“(often lowercase), to use a search engine such as Google to find information, a website address, etc., on the internet.”

In the second definition, you’ll notice that Google, the search engine, is referenced as one way that a person might google as a verb.

There are probably more brands of tissues on the market than true search engines.  But, if I asked you for a Puffs, or a Seventh Generation, or a Scotties, you wouldn’t immediately hand me a tissue.  Just like if I told you to go “Bing it” you might be confused.  However, unlike google, Kleenex is not defined as a word in the dictionary.

It’s interesting too because the difference between search engines is probably far broader than the difference between tissue brands.  Sure, some tissues might be softer than others, and some might be more environmentally friendly, and I might prefer one brand over another when I have a cold.  But mostly, I don’t know the difference.

This is not the same with search engines – there is a markedly big difference between them.

Case in point, I recently googled (the verb) the term Melissa Bank (yes, my maiden name, but also the name of a NY Times bestselling author – not me) in three of the most popular search engines.  Compare the results:

  • Google = 109,000,000 results
  • Bing = 4,470 results
  • DuckDuckGo = unknown (this is not an available feature of the platform)

Doing the same exercise and searching for “kleenex” produced similarly different results:

  • Google = 11,400,000 results
  • Bing = 270,000 results
  • DuckDuckGo = still unknown

 

Methodological Matters

In both scenarios, Google, the search engine, far outpaced Bing in the volume of results.  But, quantity does not always mean quality.

The differences are largely due to the various algorithms, and methodology, that each company uses.

Google focuses on personalization and tries to highlight what it thinks is most relevant for you.  Its algorithm uses five factors: meaning, relevance, quality, usability and context, and the weight of each varies depending on your query.

Bing, uses an algorithm that combines six factors: relevance, quality and credibility, user engagement, freshness, location and language, and page load time.  So, to a laymen’s read (that would be me!), and for the purposes of this post, Bing’s methodology is similar enough to Google’s approach, even if different words are being used to describe the process.

Google’s search results are typically larger than Bing’s because Google has a larger search index.  It also has a larger market share, with some estimates suggesting that nearly 90% of all web searches are conducted on Google.  This probably helps explain why “google” is in the dictionary.

DuckDuckGo is the most differentiated of the three.  It has a privacy-first approach, meaning that it does not track your search history (or share your data with partners/advertisers), which typically means that search results will be more neutral.  In other words, DuckDuckGo does not offer personalization based on previous search history or other users’ data.

Interestingly, DuckDuckGo leverages Bing, but not Google, as one of its data sources, but also heavily relies on synthesizing results across what it calls “specialized” sites, like Wikipedia and Tripadvisor.

 

Location, Location, Location

For all three search engines, one of the biggest factors to weigh into search results is location.

I continued to play with my “Kleenex” search in all three tools alongside my VPN, switching between my hometown in NH, a VPN location in NJ, and a VPN location in the UK.  It was fascinating to see what stayed the same and what was different.

Most notably, across all three search engines, when logged into a VPN based in the UK, my search results featured the UK versions of company websites (such as www.kleenex.co.uk and www.amazon.com.uk) and local retailers that don’t have a US-based presence (such as Tesco and ASDA).  Prices were also displayed in pounds (£), not US dollars ($).

Google was by far the most “helpful,” with top results suggesting specific store locations “nearby” to purchase Kleenex, like my local Staples, just a few miles away from my house.

Aside from location specific changes associated with my various VPN locations, conducting the same search across three different search engines provided an unique view into the variation in screen layout, how much emphasis was given to Sponsor Results, and which ones did (or didn’t) offer some form of AI summarized results.

 

So, what are the takeaways here for prospect research? 

First, if you haven’t done so in a while, I encourage you to test out a couple of different search engines using the same search string in each, but maybe with something that is more professionally relevant than tissues, like a prospect’s name whom you are researching.  There are things that I liked – and didn’t like – across all three. Like test driving various cars before determining which one to buy or lease, you may find yourself gravitating to different feature sets in one of your alternative search engines.

Regardless of which search engine you decide to use, keep in mind that the features that are designed to be helpful to us as individuals and consumers can sometimes be problematic, limiting and misleading in a professional research setting.  Search engine optimization is simply not going to be your friend.

One option, of course, is to use DuckDuckGo or another privacy-focused web browser that is designed to not track user behavior.

But, if you still prefer using Google, Bing, or something similar – tools that pride themselves on a personalized experience – then consider the following within your preferred web browser:

  • Log out of your email and any other services that you typically use
  • Turn off your location settings and disable any other personalization settings
  • Clear your cookies and browser history
  • Use an Incognito (Chrome) or InPrivate (Edge) or similar setting on your web browser

Or, even better, consider using one web browser (say: Chrome) for your normal day-to-day activities and another web browser (say: Edge or Safari) for your prospect research activities.  This way, you can have all the personalization and convenience you want, while maintaining your secondary browser for professional research purposes.

 

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The Giving Journey: From Training Wheels to Purposeful Impact

by: Melissa Bank Stepno, President & CEO

I’ve had the privilege of hearing directly from several philanthropists about how they’re approaching the concept of multi-generational giving. These conversations have been candid, reflective and revealing, not just how families think about legacy, but how they actively shape it through intentional choices, shared values, and evolving strategies.

These conversations feel especially timely given the pending intergenerational wealth transfer, a shift that my colleague Heather Willis explored in her recent Intelligent Edge post, Next-Gen Donors and AI: Changing the Game of Philanthropy Forever, noting that the scale of this transfer is unprecedented.

The pending transfer is also prompting many donor families to ask deeper questions: How do we prepare the next generation not just to inherit wealth, but to steward it wisely?  What’s clear is that multi-generational philanthropy isn’t just about passing down assets—it’s about passing down purpose.

I’ll share the sentiments and stories from a few of these families, all anonymized:

The Adlers are a first-generation philanthropist couple—by which I mean a couple with self-made wealth who are now figuring out how to give it away with intention.  They have reimagined the Hanukkah tradition which typically involves parents giving their children eight gifts, one to represent each night of the Jewish holiday. But in their home, the couple’s children receive seven gifts. On the eighth night, the spotlight spins: instead of receiving their own gift, the children are invited to select a charity for their parents to support on their behalf.  For them, it is a simple but powerful way to make generosity part of the family rhythm.

Barbara is a second-generation philanthropist, whose father built and sold the family business.  Before he died, he told her something like, “It was hard to make this money—but even harder to give it away.” That stuck with Barbara.  Now Barbara and her husband take a thoughtful, strategic approach to their giving, and they always include their young son. Their guiding question is: “What kind of family do we want to be, and how do we want to show up in the world?” It’s not just about writing checks—it’s about shaping values.

Charles, a third-generation philanthropist, grew up in a philanthropic home and remembers conversations around his grandparents’ dining room table similar to the ones Barbara is now having with her son. Fast forward to today, Charles chairs the family foundation that his grandfather created. It’s grown so much that most of the board members aren’t even family anymore.  His role reflects a shift from intimate family stewardship to institutional leadership, that still honors his family legacy.

What ties the Adler family, Barbara, and Charles together is a shared understanding that becoming a philanthropist isn’t automatic—it’s something you grow into. Each of them shows, in their own way, that thoughtful preparation matters. Whether it’s through family traditions, strategic planning, or early exposure to giving, they’ve all embraced philanthropy as a journey, not just a role.

A helpful analogy might be learning to ride a bike. You start with training wheels, then move on to a basic bike with foot brakes, eventually graduating to a ten-speed, and maybe even a racing bike. It takes time, practice, and intention—just ask anyone who’s trained for the Pan-Mass Challenge or followed the path of a professional like Lance Armstrong. In the same way, many philanthropists see their journey as a gradual build: learning, refining, and growing into the role.

But what happens when someone’s handed a racing bike before they’ve even learned to pedal? Barbara and Charles both shared examples of next-gen’s who were “voluntold” they’d be joining the family foundation board (or similar), often without being asked if they were interested. When that happens, philanthropy stops feeling like a privilege and starts feeling like a chore.

For Charles, soon after he graduated from college, he found himself on the board of his family’s foundation.  A requirement of being a trustee was that he attend twice-yearly in-person board meetings.  For him, this meant using approximately half of his vacation time in any given year to travel home for board meetings. This can be something that is difficult for a younger person to truly embrace.

Barbara said it best when she articulated that giving should always be a “joy.”

Charles echoed Barbara’s sentiment, with more weight.  He spoke candidly about the weight of his grandfather’s legacy, and the pressure he feels to honor it well. While he’s deeply aware of the privilege he holds, he also feels the burden of stewarding money he didn’t earn, and the responsibility to distribute it in ways his grandfather would have respected.

Dana: in one final example, a fourth-generation philanthropist’s great-great-grandparents set up a private foundation with the purpose of providing charitable dollars within the local community where they lived.  Now, a century or so later, Dana and her cousins, who are the current trustees, are spread across the country, no longer tied to that original hometown.

Rather than letting geography dilute their connection to the foundation’s original purpose, they have found a creative way to honor it.  Each cousin has opened a donor advised fund at the community foundation located near their great-grandparents’ home. They make grants from the family foundation into these DAFs, ensuring that the money first flows through the original community, just as intended. Then, from those donor advised funds, each cousin supports causes in their own local community—bringing the spirit of the original mission into the places they now call home.

It is a balancing-act: staying true to the letter of the foundation’s founding vision while also embracing its deeper meaning.

For many of us in this field, our day-to-day work can often feel distant from the human beings who are donors.  Focused on data, capacity ratings, and business summaries, it is sometimes easy to forget that behind every profile, every spreadsheet, every analysis, there is a real person with a story. With these examples, I hope to bring the living and breathing individuals back into view.

The people represented in our work are often deeply thoughtful about their giving. For them, philanthropy isn’t just transactional.  Rather, it’s intentional, strategic, personal, and powerful. And more often than not, they’re thinking not just about their own impact, but about the families they come from, the legacies they carry, and the futures they hope to shape.

 

For more reading: https://ssir.org/podcasts/entry/building-trust-and-managing-conflict-in-family-philanthropy (note that none of the interviewees in this podcast are The Adlers, Barbara, Charles or Dana!)

 

Image Credit: Toy Bicycle Rider, Smithsonian American Art Museum, Gift of Alan and Ann Rothschild (found at: https://www.si.edu/object/toy-bicycle-rider:saam_2011.37.11)

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Diamonds (or Rubies) on the Soles of her Shoes

By: Melissa Bank Stepno, President & CEO

Let’s channel Paul Simon for a moment and talk about shoes. That’s probably not the lead-in that you expect from a blog post that’s supposed to be about philanthropy.  But, I promise you it is!

In Simon’s song Diamonds on the Soles of her Shoes, he sings about a woman that is so rich that she literally has diamonds on the soles of her shoes.

Or, if you would prefer, let’s remember Dorothy from the Wizard of Oz, who wore what is perhaps the most famous pair of shoes – Ruby Slippers.

Closer to our work, I am reminded frequently of this very old cartoon from the Chronicle of Philanthropy.  I liked it so much that I clipped it out of the printed publication more than a decade ago and I still have it on my desk:

Maybe Mark Litzler, the cartoonist, heard the same real-life story that I heard, told by a salesperson who was on a trip to see a potential client with the CEO of the public company where he worked.  As he tells it, the evening before “the Big Meeting,” the CEO broke one of his shoes and wasn’t traveling with a spare pair.

I get it – stuff happens when you travel.  We’ve all been there.

There’s an HBGer on our team who broke her shoe at the beginning of our annual retreat earlier this year.  She took an “emergency Uber” to the closest DSW to buy herself a pair of new shoes.

I was once walking down the street and had the strap of my sandal snap off.  Conveniently, I had just walked past an independent shoe store.  I immediately turned around, walked into the store, and bought myself a new pair of shoes.

I also realize that the luxury of “just buying a new pair of shoes” is not something that everyone can afford to do.  But, let’s get back to the public company CEO for a moment.

At most organizations, finding a public company insider is a clear path to major gift prospect potential.  At the very least, I would argue that every single Insider could “afford” to buy a new pair of shoes.

So, what did this CEO purchase?  He didn’t.

What he did was reach out to the hotel’s maintenance department and ask for some duct tape, which he used to hold his shoe together.  The next morning, the CEO and the salesperson arrived at “the Big Meeting” with one shoe clearly held together with duct tape.

I was just as surprised as you might be when I first heard this story.  Or, perhaps, you aren’t surprised at all?

My point is that whether a person is wearing last season’s Ferragamo shoes* or has duct tape holding their shoe together, the way people present themselves with or without materialistic luxuries could have very little to do with their philanthropic capacity.

*Side bar: for those of you unfamiliar with Ferragamo shoes, a quick check of their website as I am writing this shows that the least expensive pair of shoes they are currently selling is $565, with the most expensive being $2,900.

In the book The Psychology of Money by Morgan Housel, the author lays out 20 principles that he believes are the most important factors related to … well … the psychology of money.  Or, to put it another way, how a person’s psychology, philosophy, background, goals, circumstances and behavior can have a tremendous impact on their financial situation.

One chapter focuses on “Wealth is What You Don’t See” with the subtitle “spending money to show people how much money you have is the fastest way to have less money.”  Now, I’m not suggesting that my colleague and I shouldn’t have bought new shoes when ours broke at an inopportune time.  But, keep in mind that neither one of us bought “emergency” Feragamos either!

Housel uses cars, not shoes, to make his point and shares a story from when he was a valet at a hotel in Los Angeles.  A frequent guest who typically arrived in a Ferrari (major gift prospect?) showed up one day in a Honda.  When asked about it, the guest told Housel that the Ferrari was repossessed after defaulting on a car loan (No, probably not a major gift prospect).

Housel states: “we tend to judge wealth by what we see, because that’s the information we have in front of us.  We can’t see people’s bank accounts or brokerage statements.  So, we rely on outward appearances to gauge financial success.  Cars.  Homes. Instagram photos.”  Maybe even shoes.

Housel isn’t advocating for this approach.  Rather, the chapter is designed to completely rebuke it.  His point is that the people who are the wealthiest are often those that don’t buy the expensive car, or the luxury shoes, or are dripping with diamonds.  The wealthiest are often the most outwardly modest.  And those who are the most “showy” are sometimes the most leveraged with no disposal income or invested assets to spare.

While not a book about philanthropy, Housel proves the point of why more sophisticated prospect research and analysis is needed to estimate what someone’s philanthropic capacity might be.  No, prospect development professionals still can’t see a person’s bank account balance or brokerage statement.  But we certainly have the tools and resources to be more sophisticated than relying on materialistic or outward appearances.

This also reminds us that even with the best prospect research techniques, sometimes a person’s true capacity will elude us.  We’ve all heard stories of the surprise multi-million-dollar bequest that shows up after a person with a seemingly humble background passes away.  The schoolteacher.  The nurse.  The janitor.  The gas station attendant.

For Housel, his example comes from a gentleman by the name of Ronald Read, who was both a gas station attendant and a janitor.  Yet, when he died, his will contained two bequests totaling more than $6 million.  At the time, the bequests were the largest gifts that the Brooks Memorial Library and Brattleboro Memorial Hospital, both in Read’s local VT community, had ever received.

How did Read do it?  He lived frugally and invested very well.  We don’t know if he used duct tape on his shoes but we do know that he held his winter coat together with a safety pin and even at 90+ years old, parked his 14-year old Toyota Yaris further away than he had to just to save the cost of a parking meter.

The moral of these stories is simple: the way people present themselves, with or without materialistic luxuries, could have very little to do with their philanthropic capacity.  As a profession focused on prospect strategy and fundraising intelligence, it serves as serves as a very distinct reminder for us.  While in rare instances some prospects will surprise us with assets that we will never be able to find, more importantly, it demonstrates why the work that we do is so important – our organizations can’t afford (literally) to make capacity assumptions based on solely on a person’s outward appearance.

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Image Credit 1: Smithsonian Institution, Ruby Slippers, https://www.si.edu/object/ruby-slippers-worn-judy-garland-dorothy-wizard-oz:nmah_670130

Image Credit 2: Mark Litzler, Chronicle of Philanthropy, circa 2014

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Looking Back & New Beginnings: One Year Later

By: Melissa Bank Stepno, President & CEO

One year ago, I published a blog post titled Looking Back & New Beginnings.  The post was part of a carefully orchestrated communications plan that coincided with my acquisition of The Helen Brown Group from Helen E. Brown the previous week.

One year later, there is no communications plan at play, and we don’t have any big announcements to share.  But I have been feeling very reflective about this journey.

In that previous blog post I stated that: “one week into my new role I can share that some things feel exactly the same as they did a mere week ago and yet they are incredibly different.”

And now, a year in, I find myself sitting with that same paradox. Perhaps that’s no surprise—I’ve always been one to focus on the details, sometimes missing the forest for the trees.

Here at HBG, the rhythm of our work – our commitment to excellence; deep respect for our clients; and a collaborative team spirit – remains steadfast. Our key pillars – fundraising ethics; continuous learning and knowledge-sharing; and delivering outstanding quality and value to our clients – have not changed either.

But beneath the familiar surface, so much has shifted. The decisions feel weightier. The wins feel more personal. Challenges, while not new, carry a different kind of responsibility.  This probably feels familiar to many of you who are also in a leadership role.

This year has been less about bold announcements and more about quiet evolution. We’ve accomplished a lot in a short period of time.  None of it is necessarily flashy and much of it isn’t even client-facing.  But we have strengthened the core of who we are as a company, following the path that Helen laid out for us, one where HBG continues to be a place of thoughtful innovation, shaped by new perspectives, new questions, and a continued sense of purpose.  I remain humbled to be leading this next chapter.

As I reflect on this first year of ownership, I’m struck by how much change and progress happens in the in-between moments. Not just in the milestones, but in the daily decisions, the team huddles, the client conversations, and the quiet persistence of showing up with intention. It’s in those spaces that our identity has deepened and our direction has sharpened.

Looking ahead, I feel energized by what’s possible. We’re not chasing transformation for its own sake—we’re building on a strong foundation with curiosity and care. There are new ideas percolating, new collaborations forming, and a continued commitment to serving both our community and our profession with insight and integrity.

So, while there’s no big announcement today, there is something worth sharing: gratitude. For the trust, the encouragement, the partnership, and the shared belief that thoughtful, ethical prospect strategy and fundraising intelligence make a difference. Here’s to the continuation of the next chapter—quiet or bold, familiar or new, and always guided by purpose.

 

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Beyond Giving USA: Highlighting the DAF Fundraising Report

By: Melissa Bank Stepno, President & CEO

For those of us who track trends in philanthropy, June has always been a big month. That’s because it’s typically when Giving USA releases the topline findings of its annual report—though the full version doesn’t arrive until July.

Giving USA is widely considered the most comprehensive source on giving data in the U.S., and as the longest running report it offers unmatched longitudinal data on U.S. philanthropy.

It is the O.G.  It is the legacy report.  It is the source that everyone relies on.

So much so, that its release sparks a flurry of webinars, blog posts, and analyses from consulting firms and other entities eager to share their take on the headline numbers. That content is out there, so I won’t rehash the details here.

Instead, I want to turn your attention to another important report that dropped just a day after the initial Giving USA stats were released — and it may have flown under your radar.

 

Introducing the DAF Fundraising Report 2025

Now in its second year, the DAF Fundraising Report 2025—a collaboration between Chariot and K2D Strategies—is a welcome addition to our philanthropy toolkit.

While Donor-Advised Funds (DAFs) have been around in the U.S. for nearly a century, their influence on the philanthropic sector has surged in the past decade. One reason? There are now roughly 10 times as many DAFs as there were ten years ago.

Since 2012, the National Philanthropic Trust (NPT) has produced the most comprehensive annual report on DAFs, based on data from sponsoring organizations. I rely on it regularly and eagerly await its November release each year. But as valuable as it is, it tells only part of the story.

Until now, we’ve lacked a large-scale report focused on donors who recommend DAF distributions and the nonprofits that receive them.

With the DAF Fundraising Report, we now have our first view into donor behavior, which is fascinating and perhaps more helpful to non-profit organizations looking to understand DAF giving.

 

Why is this so?  And, why do we need so many reports on philanthropy anyway?

Simply stated, every study or report offering trend analysis provides a different lens on the sector, shaped by its data sources.

Both Giving USA and the NPT report draw primarily from IRS Form 990s—tax filings submitted by nonprofits. Giving USA supplements this with econometric modeling and other datasets, but ultimately, both reports reflect macro-level trends. They don’t provide insight into donor behavior within individual organizations.

And while the sector has talked about becoming more “donor-centered” since Penelope Burk’s Donor Centered Fundraising came out over 20 years ago, the tools we use to analyze philanthropy haven’t done the same.

 

The Data Behind the Report

To be clear, I understand the challenges of benchmarking data across nonprofits. From inconsistent gift entry practices to varying definitions of key terms, even basic data can be messy. And some CRM systems don’t make the exporting and reporting process easy.  Conversely, IRS 990s offer a standardized (and easier) dataset —but “easy” doesn’t always mean “complete.”

The beauty the DAF Fundraising Report 2025 is that it leverages data provided by nonprofits, directly from their CRM databases, at the donation transaction level.  Among other data points, this includes details like an individual donor’s gift dates, amounts and channels (DAF or non-DAF).

To my earlier comments on the challenges with standardizing data, I know that the researchers of this report painstakingly ran quality checks and standardized the best that they could across participating organizations.

While only 32 organizations participated in this year’s report, it is a 60% increase in the number of participants from last year’s report.  The participating organizations represented a nice cross-section of sizes (by annual revenue raised), however it should be noted that most participants were from cause-based and/or advocacy organizations, not from other sectors like higher education or health care.  As such, my advice would be to use the findings as directional indicators and not absolutes for your specific organization.

 

Besides its growth in popularity, what makes DAF giving so important to nonprofits?

Let’s just highlight a few of the DAF Fundraising Report’s findings:

  • DAF donors have higher retention. On average, they were retained at a rate 13% higher than non-DAF donors.
  • Most DAF gifts are not major gifts. In fact, 69% of DAF gifts were under $1,000.
  • Donors who switch to DAFs give more. Median giving doubled for donors who converted from non-DAF gifts in previous years to DAF giving.
  • DAF gifts are significantly larger. At participating organizations, the median DAF gift was 12x higher than non-DAF gifts.

 

Closing Thoughts

Though still young, the DAF Fundraising Report 2025 is growing fast—and it’s already walking, if not running.  It serves as an important partner for its bigger siblings and I’m hopeful it will continue to evolve, broadening its scope and deepening its insights. In the meantime, I encourage you to take a close look. It offers a rare, donor-level view into one of the most important vehicles in modern philanthropy.

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Time to Take Your Temperature: Warm vs. Cold Prospecting

by: Melissa Bank Stepno, President & CEO

In the past few months, The Helen Brown Group has seen an uptick in the number of nonprofit organizations interested in finding new major gift prospects for their organizations.  In brief, we call these “Prospecting Projects,” and they typically involve identifying net-new potential donors, based on some combination of potential capacity and previously demonstrated mission alignment.  Sometimes, these are called cold prospects.

This is a common type of project for prospect researchers but before you decide to journey down this path on behalf of your nonprofit, I would recommend taking a giant step back and asking yourself: Why?

While I understand that there are some instances where cold prospecting is the best path forward, fully evaluating your current database first is typically a more successful strategy.  This is typically called warm prospecting.

 

“Warm” vs. “Cold”

Warm prospects are in your database for a reason.  Maybe they graduated from your school, attended a performance at your theater, was a patient at your medical facility, signed up for your newsletter, volunteered, etc., etc.  Any one of these demonstrates some connection to your organization, even if it is a loose one.

Cold prospects have no prior relationship with your organization.  They might not even have any awareness about your organization.  Any outreach you do will be … well… cold.

Okay, now I’m going to sidebar for a moment and ask you: do you like cold calls?  Do you respond to emails from random people that you don’t know?  Are you as annoyed as I am about the amount of spam I receive from people thinking that I “must” be interested in what they are selling?  Now, put your cold prospect donor hat on and let’s return to my post…

 

Prioritize Warm Prospecting

Simply put, working with warm prospects typically has a higher conversion rate, meaning they are more likely to respond to your outreach and ultimately give.  It is also easier to build a relationship with someone who has a baseline understanding with what your organization is and who you represent.  Warm prospecting is about identifying and nurturing potential donors who already have a foot in the door.

So, the next time you hear someone say: “we need more prospects,” look no further than your own database.  There are dozens of ways to do effective segmentation and data mining in your database, from simple RFM analyses, to wealth screenings, to sophisticated predictive modeling exercises, to relationship mapping, to looking at engagement data, and the list could go on.

If you want to read more about how to warm prospect, check out my colleague, Jen Turner’s blog post from earlier this year: A Field Guide to Prospecting Within Your Database.

 

Use Cold Prospecting Strategically When Appropriate

Only once you have exhausted your internal connections, or when you are looking to fundraise for something completely new/ancillary to your core mission, should you consider external prospecting.  Here are five quick examples of where cold prospecting makes sense:

  • Historically your research-focused organization has relied primarily on federal funding, you are concerned that those funding channels will dry up (or they have already been cut), and you do not have a database of previous donors
  • Your geographically focused social services agency is expanding into new territory – maybe the next county or state over – and you are looking to build a donor database within that region.
  • You are building a new museum, literally and figuratively from the ground up. You’ve been provided with initial funding from a handful of benefactors – mostly the board members – and you have been tasked with identifying potential funders for the rest of the project
  • You work for a large and sophisticated organization with a natural constituency base. The organization has a ground-breaking program or initiative that would appeal to donors familiar with the topic area, even if they are not connected to the larger institution
  • You are looking to diversify your donor database, maybe because it is primarily corporate and foundation focused with few individuals, or because your individual donor population is aging rapidly

 

Summary

Many nonprofits are seeking new major gift prospects, but before diving into cold prospecting, it’s critical to fully explore the warm prospects already in your database. Warm leads—those with prior engagement—typically convert at higher rates and offer better long-term potential. Cold prospecting has its place, but it should be used strategically and only when appropriate.

Image credit: Melissa Bank Stepno

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The Importance of (Dis)Qualification

by: Melissa Bank Stepno, President & CEO

Many years ago, I read a study that indicated that the human brain can only effectively manage 150 person-to-person relationships at any given point in time.  This statistic has stuck with me over the years, especially when thinking about some of the typical practices within our industry.  While the study was focused on all relationships – personal, familial, professional, etc. – I consistently draw a parallel to the typical size of a major gift officer’s portfolio.

If you ask anyone in major gift fundraising what the average or typical portfolio size is, you will get a myriad of responses.  The most consistent is: “it depends,” followed by some concrete number that usually ranges from 75 – 250.  That’s a big range.  And, those are big numbers.

Regardless of the specific ‘ideal size’ at your organization, it is safe to say that when you add 75 – 250 prospects to the rest of the relationships a gift officer is managing (again, personal, familial, professional colleagues, etc.), every gift officer is above the 150-person threshold.

Yet, every organization that I encounter is in the process of identifying new major gift prospects.  This creates a conflict because unless your organization is planning on hiring an unlimited number of gift officers to match the prospect pool (which I bet it’s not), what are you doing with all of these new prospects?

This conundrum is exactly why I’m such a big believer that Disqualification (yes, with a capital “D”) is just as important, if not more important than Qualification.  Removing prospects from existing portfolios is frequently the only way to make room for new prospects that are being identified. That is, of course, unless you are aiming for the bloated portfolio.

So, before continuing to assign new prospects to your gift officers’ portfolios, let’s take a step back and ask a few questions:

First, start with the gift officer, your overall major gifts program and your expectations of both:

  • What is the personal capacity of the gift officer? Is their full time role managing prospects? If not, how much time are they spending on other responsibilities? And, conversely, what percentage of their time do they spend managing prospects?  The more “other things” the person is responsible for, the fewer prospects that they should manage.
  • How experienced is the gift officer? Newer gift officers might benefit from a smaller portfolio that allows them to gain experience, whereas more experienced gift officers are frequently able to manage larger portfolios.
  • What type of prospects are in the gift officer’s portfolio? Warmer, more engaged prospects may require a shorter timeline from Qualification to Solicitation, whereas colder, less engaged prospects will require more time for relationship building.
  • What stages of the Development Cycle (Qualification, Cultivation, Solicitation, Stewardship) are gift officers responsible for? In some organizations, gift officers are responsible for all stages, whereas at other organizations, gift officers are responsible for only some.
  • If you expect gift officers to make in-person visits, what is the geographic dispersion of their region? How long will it take to travel to and from and in between?
  • What capacity level prospects are they managing? $10K+?  $100K+?  $1M+?  $10M+?  Larger gifts typically require more time to develop and close, requiring a smaller portfolio.

Then, turn to the prospects currently in a portfolio to determine who should stay and who should go:

  • Has there been any recent contact between the gift officer and the prospect? If not, why?  Has the gift officer attempted to engage and the prospect is unresponsive?  Or, has the gift officer not even tried to engage? If the prospect is unresponsive after several attempts to engage, it’s likely worth removing them from portfolio to make room for a new prospect.
  • Do you have a data-driven reason to keep the prospect in a portfolio? Have you assessed the prospect’s capacity to give at the major gift level?  Do you have any internal engagement scores or indicators that can help assess their inclination?  Has a predictive model indicated that they may have potential to give more?
  • What stages of the development cycle are prospects currently in? A prospect in perpetual Stewardship takes less time to manage than a prospect in active Cultivation.
  • Are there extenuating circumstances that a data-driven and metrics-focused analysis cannot decipher? There may be specific reasons that an individual prospect should remain, or should be removed, from a portfolio.  These circumstances should be reviewed carefully to assure exceptions reasonably fit the expectations of the organization.

Here are a few practical examples:

  • A small community hospital might determine that the ideal portfolio for Gift Officer Smith should include 100 prospects, split such that 25% is in each of the four main Development Cycle stages (Qualification, Cultivation, Solicitation and Stewardship). Upon review, it is determined that Smith’s portfolio has 150 prospects and more than 50% of them are in Qualification.  Most have been stagnant for over a year with no contact by the Gift Officer Smith.  A decision is made to remove most Qualification prospects and assign them to another gift officer with more bandwidth.
  • A national advocacy organization has determined that they want their most seasoned gift officer focused exclusively on cultivating $10 million+ gifts. It is acknowledged that doing so will require nationwide travel and significant coordination with the president’s office and other high-level stakeholders.  It is determined that an ideal portfolio is only 50 prospects.
  • A prestigious research university has a very large major gifts team that benefits from a high retention rate in their development office, with many young alums joining the team and spending their entire career at their alma mater. They recently hired three new junior team members and decided to create new portfolios of 200 prospects each, all in need of Qualification.  The initial Year 1 goal for these officers is not to close a gift, rather it will be to work the pool.  Over time, Disqualification will naturally drop the portfolio to a more reasonable size for long term Cultivation and Solicitation.
  • An emerging regional arts organization with one major gift officer is launching its first campaign. After their feasibility study is completed, a gift officer settles on 90 top prospects, which includes 20 “top-tier” longtime supporters with strong capacity and inclination, 40 “warm” connections who have consistently supported the organization at lower dollar levels but have a clear philanthropic commitment to the arts, and 30 “new” prospects including community arts patrons with business and personal connections to board members.

As these examples demonstrate, there is no one-sized-fits-all answer. But, a thoughtful approach can help you determine the right size portfolio for your major gifts team, and what steps might need to be taken to ensure portfolios are optimized.

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