Last week I got a brand-new computer. I had put it off for several months a couple of years because it would mean that I needed to clean out my old one and decide what to keep and what to trash. [Read more…]
As you may recall, March is Prospect Research Pride Month.
It’s also Development Services Pride, Operations Pride, Relationship Management Pride, and Analytics Pride Month. It’s a time to celebrate each of us who work behind the scenes every day as part of Team Overhead to ensure our nonprofits’ fundraising successes.
Because there are still misguided folks out there who actually believe that the business of creating a better world can be done with donated chewing gum, dental floss and duct tape. MacGyver may have used that amalgam to fashion an escape from a sticky situation, but you never saw him pulling a million refugees over a border with them. [Read more…]
Back before I started my career in prospect research in 1987 at The University of North Carolina at Chapel Hill, I was the assistant to the director of finance for the development office at the university. My responsibility was to help my boss Jean track all of the money the university received; she had to make sure it went into the right bucket and was distributed correctly.
1. Take care of your gold. Chances are that your nonprofit received a larger-than-normal number of gifts last month, and many of them came from new donors. The money that came in will help you do your important work, but the gold I’m talking about is the information that came with each gift. You’ve just started a relationship with someone new that you hope will last a lifetime, right? Here are a few things that your organization should pay attention to:
You need new donors in major gifts, annual giving, planned giving, principal giving…okay, I understand: you need new donors in ALL areas of your fundraising operation. No worries. Here are just a few (of the many possible) remedies to help you identify and involve new donors.
Remedy #1: Have you taken care of donor attrition?
For many organizations, attrition numbers are scary-high right now. Do you know what percentage of your donors leave every year? It’s a lot easier (and cheaper) to keep a donor than it is to acquire a new one, so work at understanding how many are drifting away and why they leave. Then devise strategies to keep them.
Remedy #2: Do you know who your best prospects are?
It doesn’t matter if you work at an organization with less than 500 donors or one with a million. You need to get to know your donors better so you can find others like them. Data analytics – even basic queries – can provide characteristics of your best prospects to help you identify more people just like them. Slicing and dicing your data – even sparse data – will give you great answers. If you don’t have capacity to do it in-house, it’s very easy to find talented analytics experts to help you.
Remedy #3: Do you know what it is about your organization that donors love?
You may be surprised to learn that it’s not always a priority you’re pushing, but some other X factor that gets them jazzed. Ask them! Surveys are a great way to find out donor interests and opportunities you could capitalize on. (And don’t give me the old “but we’re not an alumni-based organization!” argument!) Alumni organization or not, don’t you have gorgeous t-shirts to give away as an incentive? Or what about a “Free ice cream cone in the splash park for donor survey responders appreciation day”? What do you have that prospects would value? Be creative and piggyback activities!
Remedy #4: Are current donors giving you what they’re giving other nonprofits?
An electronic screening can help you answer this question, and will help you elevate both annual fund and major gift numbers – probably significantly. Many of the vendors, in addition to providing asset information, also match the individuals in your database to donor honor roll lists of nonprofits across the US and United Kingdom. Someone who is regularly making gifts across town that are 10x what they give your organization needs to be asked for more.
Remedy #5: Maybe they don’t love you yet, but what about the ones who ‘Like’ you?
It’s a good bet that your nonprofit has some kind of social media presence at this point (and if not, it’s time to get a move-on). What have you done to convert those people who just Like you into future donors who love you? What can you offer them – of value – in exchange for their contact information? A study or white paper? Access to an invitation-only lecture? A free hour in the swimming pool? A ‘behind the scenes’ tour with the performers?
These are just a few of the many ways strategic prospect research can help you identify prospects. Thanks for reading – What ideas do you have for how you identify new donors?
If you’re not a prospect researcher, or if you’re new to the field, you might not know that we researchers have a running conversation going on every day on a listserv called PRSPCT-L (affectionately known as “the L”). Researchers, front-line fundraisers, and vendors to our industry post helpful resources, interesting articles, questions and the occasional “Friday Funny.”
Sabine Schuller (who always seems to have her finger on the pulse of what’s important in search) recently shared an article on the L, which she found in a monthly eBulletin published by the professional association of Strategic and Competitive Intelligence Professionals (SCIP). As we read it, Sabine suggests that we replace “competitive intelligence” with “prospect research”:
It’s an opinion piece by Dr. Ben Gilad, President of the Fuld-Gilad-Herring Academy of Competitive Intelligence, who – rather provocatively – claims that in-house competitive intelligence officers (prospect researchers) will soon be a thing of the past – made redundant by vendors and consultants who provide easier, direct access to information that decision-makers (front-line fundraisers) need. His thesis (for our purposes) is:
If fundraisers can get answers quickly themselves, or have it fed to them by push technology, why do they need an in-house person to do it?
Which is a good question – if fundraisers are truly getting their questions answered. But I don’t buy into the notion that they are. Or that all in-house researchers will go the way of the dinosaur.
Some small-to-midsize organizations might end up eventually dissolving their prospect research departments because (in the long run, with strategically outsourced help), it may be cheaper and more efficient to do so. And by prospect research, I mean profile-writing, prospect identification and data analytics, which are easier to outsource. Prospect management, the other leg on the prospect development stool, is harder – although not impossible – to outsource.
But for large shops like universities and medical centers, research would still be more cost-efficient to keep in-house as part of a dynamic and effective knowledge center. Why?
Experience. Context. Strategy.
In the long-term, small to mid-sized organizations may not want to (or be able to) afford to train and sufficiently support a researcher to the level and years of experience that makes the critical difference when the rubber hits the campaign road. At some point, it is inevitable that a good researcher will want to leave for a more challenging assignment with better resourcing. And then the small shop is back at square one, rebuilding again. It’s a cycle that gets expensive for a shop with limited resources in the first place.
Universities, medical centers and large prospect research groups like HBG can afford to invest in training and resourcing staff to build that experience and strategic knowledge. It’s worth doing. Look at the huge impact it had on Brown University’s campaign.
How do we professional researchers set ourselves apart so that the difference between what can be gotten from technology and what prospect research can do is apparent?
It’s easy: Fundraisers are looking for more than just information, deeper than what’s found in Google.
They want answers to questions like: What does this job title mean? What kind of assets are we talking about? What is the prospect’s lifestyle like? Who do they know? What do they care about? How much should we ask them for? How can we connect with them? Who else should we bring into the pipeline?
Experience, context and strategy. These are the things we can bring.
Is technology going to make prospect researchers obsolete? I doubt it, at least for now – especially considering Google’s obsession with personalized search, which takes them farther away from being a reliable professional search resource. When computers reach Star Trek level, when they can provide strategy based on all of the information provided – then we’ll be in trouble. But based on how Watson fared on Jeopardy, I think we’ve got a couple of years yet before we have to worry about that.
BUT: In order to stay relevant, now and in the future, we professional researchers must provide what technology does not.
Look at what arrived by special delivery today!
It’s an advance copy, meaning that for all of you who pre-ordered (and thank you for that, by the way!), yours will be arriving very soon.
If you haven’t already ordered it, now’s the time to get your very own copy hot off the presses! Just click that little book cover over there on the right to buy it at a discount (!). It will be on your doorstep in no time. This book has got everything anyone working in fundraising needs to know about prospect research. You’re going to love it.
Thank you to everyone who was involved: those who agreed to be interviewed, who were the subjects of case studies, who provided quotes and who read (and re-read!) drafts and offered sage advice and suggestions. And the biggest thank you to my co-author, the awesome Jen Filla.
Tell me the top 3 things that you love about working here.
Now tell me the top three things you don’t like.
When I work with a client to audit their prospect research department, the answers to those two questions tell me a lot about both the nonprofit and the person I’m interviewing. When I review the answers of 10 or 20 employees, I start to see patterns of strength and gaps to be filled. Taken across several organizations, I hear a lot of the same things. From prospect researchers, I almost always hear
I wish they would let me work from home.
I would like flexible hours.
When I bring this up with their supervisors or leadership, I often hear “Yeah, yeah. Employees always say that. It’s never going to happen. They’re not living in the real world.”
Here’s Real World: A recent survey by career-management firm Right Management found that 86% of the people they polled said that they planned to actively search for a new job in the coming year, up 26% since 2009. A combination of work-place stress and doing more for the same salary were the major contributing reasons.
The reality of a typical prospect research professional’s work environment is that it’s a 90 percent computer-based job. If researchers and front-line fundraisers in medium to large shops communicate, it is mainly through email, forms, or on the telephone. Face-to-face time is generally a very small part of the relationship, maybe a couple of hours a week.
Research requires concentration – a lot of it. Have you ever tried to add up a column of figures while someone else is carrying on a conversation in the next cubicle over? It doesn’t matter if they’re discussing a work project or dishing about Downton Abbey, a constant background hum like that is distracting. The more distractions, the more on-the-job stress there is.
On Marketplace Radio, Stephen Dubner, the Freakonomics co-author, told the story of C-trip, the Chinese equivalent of Expedia. In order to save money on expensive office space, the C-trip CEO, James Liang, PhD (Economics, Stanford) decided to try an experiment. C-trip allowed 255 workers that wanted to work from home to try it out for 9 months. The company figured that they would save money on office space and attrition, but lose money on productivity. They hoped that those factors would balance each other out.
What they found was that productivity from the work-from-home group was actually 13% higher than their in-office peers. Employees’ stress from commuting was eliminated, they took fewer sick days and they got to work on time more often than their office-commuting colleagues.
In fundraising, we all know that it’s always cheaper to retain a donor than it is to acquire one, and the same is true for workplace talent. Some people prefer (and thrive in) an office work environment, and working from home is certainly not for everyone. At-home workers have a responsibility to track and maintain their same (or increased!) productivity levels, and the arrangement does require a commitment to communicate well. But for the manager of a valued, reliable prospect researcher, the flexibility of offering that worker the opportunity to work from home even a few days a week might be just the perk that not only retains them, but increases their job satisfaction, their loyalty to the organization, and their overall health.
Here at HBG, we have a new and beautiful main office where I and two other colleagues work most days, but the rest of my senior staff work from home. It works out well for all of us, and I think it’s one of the reasons why my staff work hard, produce great research, and stay with the company.
Does your nonprofit allow you or others to work from home? If so, what are the positives and negatives that you’ve found?
For further reading:
The Brown university white paper on the C-trip experiment can be found here.
Richard Branson’s recent blog post: Give People the Freedom of Where to Work
Forbes blog guest post by Gary Swart, CEO of oDesk: Marissa Mayer Is Wrong: Freedom For Workers Means Productivity For Companies
I hear a lot of comments from fundraisers at small shops that they simply can’t afford prospect research. I participated in a terrific Twitter chat for fundraisers earlier this week on the topic of prospect research where a few folks underscored this refrain: “We’re small, we have no money, and prospect research is just too darned expensive.”
But isn’t that like saying “That Maserati is one sweet ride, but it’s too fast and expensive so I’m going to walk instead”?
Not all prospect research costs like a Masarati. Some of it does, but most of it doesn’t. If you work in a small organization, you probably don’t need the Masarati research anyway. But it’s hard to know what to purchase if you don’t know what you need. And there are a lot of tools available in prospect research that can help, from prospect identification to profiles to relationship management to data mining and more. Lots more!
Knowing what kind of research you need and using it smartly and efficiently will get you to success a lot faster. And by success, I mean that you’ll be able to draw a direct line from research well used to increased dollars and pounds in the door.
So here’s one solution: If you’re a fundraiser who isn’t sure what prospect research can do for you, or if you think that the only thing it has to offer is expensive profiles or databases that cost a lot, then you really need to read this book. If you don’t find that it gives you solutions that help you increase donations, let me know and I’ll refund the money you spent on it.
Prospect research is useful for all sizes of organization, from teeny tiny Mini startups to super huge land yachts, like Harvard. Read the book and network with researchers to help draw up a plan to include prospect research in your budget.
This year’s AFP/Urban Institute Fundraising Effectiveness Project reported that for every 100 new donors that supported a small-to-medium sized nonprofit in the United States last year, 107 donors left. Even more starkly, “every $100 gained in 2011 was offset by $100 in losses through gift attrition.”
Every year small-to-medium nonprofits are working harder just to break even.
Overall the study found that the largest gains come from new donors and the largest losses came from lapsed new donors.
Lapsed new donors.
These are the friends that should be easiest to keep. You’re still in the honeymoon phase. They’re excited about your organization enough to make a first gift. Sure, some of them will have given because of a road race or a golf tournament or in memory of someone. But most of those new donors should spell opportunity, not the promise of future loss. And as we’ve been told a hundred times, it costs less to retain a donor than it does to acquire one.
For larger nonprofits (organizations raising $500,000 and more) the figures are very different. For the most part, the more money an organization raises per year, the less likely they are to have donors leave them. Their losses due to attrition are cut by half.
So what’s the difference between small organizations and large ones? How are the larger ones able to keep their new donors?
A stronger fundraising infrastructure makes a big difference; overhead isn’t a bad thing when it is used effectively. The report strongly recommends building internal capacity overall and then annually providing extra budget support to the areas showing the greatest opportunities and success. Most of the larger organizations use prospect research to identify the new and renewing donors that have the highest potential to be upgraded. If yours doesn’t do that already, now is a good time to start.
What can you do now?
We’re swiftly coming up to year-end and your organization will, with luck, have an influx of brand new donors that you don’t want to lose next year.
This January, use prospect research – do an electronic screening of those new year-end donors. Apply data analytics to find the hidden gems in your database. Research the ones with the most potential to find their interests and philanthropic capacity. If you don’t have internal capacity, hire a professional. Prospect research may be an overhead expense, but it’s more expensive to keep treading water year after year.
Resolve to keep more of your new donors next year. You can start now.