Helen Brown Group

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Is There One News Alert to Rule Them All?

Are you the person on your team who sets up news alerts? If so, this week’s article by Angie Herrington is just for you. Angie has spent more time than she can count becoming an expert on news alerts, and in today’s article she shares all of her top tips and tricks with you. ~Helen

Senior Consultant Angie Herrington

Researchers have relied on news alerts for decades to help us avoid missing something potentially transformational for our organization. The problem is there isn’t one perfect resource to catch everything. Sophisticated algorithms are gamed to skew or create biased results. Most products are now curated for digital marketing professionals and focused on tracking brands, social media mentions, and analytical trends. This is great for marketing or public relations purposes but not so wonderful for what the traditional researcher needs.

I provide daily updates on board members for one of my clients. Fortunately, this is a top priority because it’s more time consuming than any other group I’ve tracked in the past 20 years. The board of directors is made up of 50 high profile executives ranging from chairs or board members of public companies, distinguished academics, public policy experts, and other daily newsmakers. In addition to the usual updates on employment or philanthropy, I look for public statements, interviews, awards, honors, published papers, op-eds, conference attendance, or speaking engagements.

I know that many of us spend time doing this, so I thought you might like a peek into how I do it.

Getting Started

Start with a plan and you’ll avoid a lot of duplicate work or wasted time. Talk to your development officer about who’s the intended audience and what’s most important to them. For example: do they want to know if Masrani Global Corporation’s 5-year bond YTM tumbled by 15.0 basis points? When Victor Newman sells $5 million in Newman Enterprises but not when he’s granted 5 Restricted Stock Units of Jabot Cosmetics? It’s inevitable you’ll still see these results in your feed but you can quickly scroll past them if you already know they’re not a priority.

In case your development officer doesn’t know (or say) specifically what they want to see, you need to think about their needs. Are they raising funding for specific projects (decarbonization or housing for veterans) or waiting for the right opportunity to solicit (the prospect sold their company)?

It’s also important to know you need to set up alerts with more than one service. It can take a lot of time upfront but it’s worth it in the end. Start with general searches and refine as you go. Keep track of your search strings as you’re using different products because one Boolean search isn’t equal to another. I also keep notes so I don’t accidentally overlook (for example) Tyler Durden who is a soap salesman in Los Angeles and owner of several Average Joe’s Gymnasium franchises but not the board member of Unilever or the restauranteur.

Consider their company, spouse, or anything potentially relevant. Search Elizabeth Holmes but don’t forget she’s commonly known as Liz and Betsy. See Marcy Phelps’s blog post, Not enough Google results? – Time to get creative or HBG’s Prospect Research Links Library for help to improve your searches. There are dozens of search engine optimization experts and librarians with blogs and Twitter accounts, including Tara Calishain’s ResearchBuzz – more on her in a minute.

There are some names with overwhelming notoriety. Take for example Jeffrey Epstein – no, not that one but Dr. Jeffrey S. Epstein, a plastic surgeon in Florida, or Disney’s publicist Jeffrey Epstein. Your development officer wants alerts on Mark Zuckerberg? Talk to them about what’s the best use of your time and manage their expectations. Sometimes you need to “let it go” (sorry, Disney Epstein) even if you try every creative Boolean string imaginable.

Lessons Learned

  • I was initially uncomfortable including negative news. I now see it as due diligence and one of the most important services I can provide. Your organization is going to want to know if someone representing or connected to the prospect is in the news and may reflect negatively on the organization.
  • Always verify news sources for legitimacy, extreme bias, or reputational history. I keep Media Bias/Fact Check on my toolbar. On the other hand, don’t let your personal biases affect what you do or don’t share. You may completely disagree with anything reported by Highlights magazine, but don’t automatically dismiss it if it has factual information or quotes and not conjecture. Check for another source to corroborate the information or include a note if you have a hunch it’s important.
  • Check. The. Date. An article may have today’s date but as you read through it you realize it’s an article from two years ago. I can’t stress this enough. Avoid any embarrassment or potential doubts about your credibility.
  • You’re going to run into articles behind paywalls. Search the headline or similar words to see if another site has the same article or comparable. Yahoo!News frequently includes full articles from Business Insider. BloombergQuint and BNN Canada have included full articles published on Bloomberg. Check your library or with your client to see if they have a subscription.
  • Make sure you have a good anti-virus security program on your computer. Trust me.

Products and Services I’ve Tested (alphabetically)

EDGAR/SEC Filing Notifications is free and provides an immediate heads up if your person filed with the SEC. You can do the same if you happen to already have a subscription to SECDatabase or similar.

Google. I know, I know. It’s not consistent and legitimately has a bad rep. BUT it’s a rare option with unlimited free searches and has often given me better results than products with selling points that theirs is better than Google. I’ve found the bigger the name you’re searching the better the results. When you set up your alert it’s possible you’re missing a key step by not double-clicking under the Sources drop-down menu. “Automatic” doesn’t include everything. If you are getting meh results from your Google alerts, make sure you read ResearchBuzz’s Backstop Your Google Alerts with Bing News RSS Feeds. She gives you a step-by-step guide on how to export your Google alerts and turn them into a Bing News RSS feed.

 LexisNexis is a subscription with unlimited searches and has a consistent number of useful results. If you need help setting up a complicated search, I’ve found our account representative is always helpful. Although full articles are generally included, some only have a link and are behind paywalls.

MarketWatch Alerts allows up to 25 emailed alerts for free. You can search by keyword, ticker symbol, industry, and price and volume. When you set up your alert, make sure to select ‘All Services’ to include CBS, CNET, AP, and others. I was most interested in searching a person’s name by keyword. Right when I was about to give up on MarketWatch, they emailed an article about a prominent name that I didn’t get from other products. I’ve found this is best to track public companies and monitor price/volume changes. For example, if your donor said they’ll make a gift once Berkshire Hathaway Series A stock goes over $421,000 per share.

Mention is a subscription service and frequently talked about as a go-to product. It’s one of the oldest social media monitoring tools and we’ve been using this at HBG for several years. Mention is described as “a product that enables brands and agencies to monitor the web, listen to their audience and manage social media.” You can limit your results to News, Facebook, Twitter, Instagram, Forums, Blogs, Videos, and/or Web. I’ve limited mine to only News and still get a lot of independent websites with opinionated news stories. A nice feature you don’t get with the others is you can block a source and never see something like Patrick Bateman’s Lifestyle Tips blog again. My searches are for daily newsmakers so I get a lot of “opinions.” Your results will depend on who you’re tracking. My colleagues have found it very helpful and the volume of results more manageable for less controversial or high-profile people. Meltwater and AlmaConnect are other popular subscriptions. Check with your communications or public relations departments to see if they’re already using one of these or a similar product organization-wide.

ObitMessenger is free and a quick way to enter your organization’s name to track any mentions in an obituary.

ProQuest is one I’ve been using for decades. It’s accessible through most public or university libraries. It picks up wire feeds and usually displays the full article, sometimes even subscriptions like the Wall Street Journal, the Economist, and Financial Times. A nice feature is you can download and save an article as a .pdf. If your person is an insider, it’s heavy on stock exchange and corporate earnings information but easy to scroll through the email digest if you want to skip “Sirius Cybernetics Corp. Buys 35 Shares of Hooli, Inc.”

Talkwalker is mentioned frequently on PRSPCT-L. I can’t speak to its subscription service but it allows 50 free alerts. You can limit your results to news, social media, discussion boards and/or blogs. Similar to Mention, its primary audience is for monitoring social media so you should know it’s also going to include biased and colorful results and the occasional reference to the deep state or a creative conspiracy theory. I may not personally agree with some of the political sites or opinions, but I questioned the product when 4chan, URLs with words that were clearly adult entertainment, and some URLs redirected me to spam. I emailed customer service to ask about their policies for including links like 4chan and they responded they do not have any site crawling policies. I’ve gone back and forth about using it but the pros outweighed my concerns and it’s given me several useful results I didn’t get from others. Although I still get some questionable links, I suggest limiting your results to News only. As you should do with any product, always verify the sources and think before you click.

I’m still fine-tuning my alerts most days, but the most important lesson I’ve learned is to not only manage my client’s expectations but also my own. Contrary to what you or your client might think, it’s not an automated process like some services advertise. You have to manually verify the results just like you would with a wealth screening. Keeping that in mind, I include a disclaimer section at the end of my news digest to remind everyone of the limitations with monitoring the internet. It comes in handy when there’s the inevitable question of how could I have ever missed Ron Burgundy’s op-ed in the bimonthly Weakley County Press on the binomial options pricing model???

Suggested Disclaimers

DISCLAIMER: Every effort is made to evaluate automated alerts efficiently and manually from multiple resources for the most accurate and relevant information. Please keep in mind:

  • Alerts aren’t guaranteed to capture all information found electronically on websites, news services, social media, discussion boards, blogs or similar.
  • Updated information from LinkedIn or personal websites won’t be captured through an alert.
  • Information from international sources or those not written in English aren’t guaranteed to be identified.
  • Some information may not be found immediately and/or delayed due to algorithms.
  • Some articles might be identified with a current date but are actually outdated information. Every effort is made to manually screen and remove these from the news digest.
  • Information provided in this digest comes directly from a source which could have bias or inaccuracies, specifically results from social media or discussions. Per request, Research can further validate or research through multiple resources any questions or concerns.

Focus: Employment, Boards, Awards, Honors, Speeches, Public Statements, Interviews, Significant Donations, Wealth Changes

Resources: Google, Lexis Nexis, MarketWatch, Mention, ProQuest, SEC Edgar, Talkwalker

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The overlooked generation

There’s a puzzle that I’m trying to figure out. Maybe you’ve got some insight and can help me.

When I got started in my career in prospect research, it didn’t take me long to figure out that we were concentrating on people (okay, mostly men) who were in their 40s to 70s. These were the donors who were in their prime earning years or recently retired, finally able to spend their spare time on volunteering and their spare cash on donating.

We didn’t ignore their kids, of course, but since there’s only so much time in the day, it was the Boomers that got the majority of our prospect identification and research attention. It’s just Sutton’s Law.

So, okay, those Boomers are aging out of prime giving now. Most are now fully in retirement mode, so it makes sense that we look to the next generation who are in their prime earning years or recently retired.

In the press (fundraising and general audience), you can’t open a newspaper or magazine without seeing articles like Millennials And Charitable Giving: A New Approach To Philanthropy, How Millennials Are Changing Philanthropy, and How to Appeal to Millennial Supporters.

Which is great.

But that’s not the next generation after the Boomers. Gen Xers are.

Mackenzie Scott’s generation. And Jennifer and David Risher’s. Also Pam and Pierre Omidyar. John and Laura Arnold. And probably at least half of the donors who are giving large gifts to your nonprofit right now. They’re Xers. Not Millennials.

In fact, when you look at the Forbes list of 25 most philanthropic billionaires, there are only two Millennials on that list and they’re married to each other – Zuckerberg and Chan.

 Sure, Boomers and Gen Xers are giving more in terms of dollars ($732 and $1,212 per year, respectively),” writes Justin Wheeler in Forbes, “but at an average of $481 given each year, Millennials are quickly gaining influence over the philanthropic space (source: The Next Generation of American Giving, 2018).

Considering that Millennials earn less than their counterparts did and are often riddled with student debt, years away from owning a car or a home, these numbers are significant. If people become more generous over their lives and are more likely to give if their parents give, Millennials will become the most generous generation in history. One can easily imagine this reaching 95 or even 100 percent by the time they reach midlife.”

So let me get this straight: Boomers and Xers are giving about twice as much per year right now, but we should be paying special attention to this generation that’s riddled with student debt and years away from owning homes? Who graduated college smack in the middle of the Great Recession and then, just as they were getting their feet under them, had to live through another economic tank-a-thon, with a pandemic thrown in for good measure?

Honestly, can we just give them a break for a few years? And (thanks for being patient on my getting to the point here) why exactly is the press (as well as several fundraising conference sessions) focused on Millennials to the exclusion of Gen Xers?

Please don’t misunderstand me. I am not saying that Millennials are not philanthropic and that they don’t volunteer and that they’re not super-involved with nonprofits and/or that we should ignore them.

It just seems that Millennials are the press’s shiny object and, for some reason, despite all of their truly radical global-changing philanthropy we’re not talking about Gen X as the great philanthropic generation they are.

I mean, great Scott, look at them! Melinda Gates is an Xer, too!

According to a report by Fidelity Charitable, Gen Xers volunteer 8 hours on average per month (Millennials 9 and Boomers 6).

57% of Millennials say they give to a broad range of causes, while 63% of Gen X focus their giving on a limited number of nonprofits. Maybe Millennials are still looking for that special cause or two that they want to devote their time to, but what that says to me is, if you have a Gen X donor/volunteer involved with your nonprofit, chances are you will have them for life if you pay attention to them and steward them right.

Also, Gen X donors are more focused on their local communities, according to Fidelity Charitable. So for prospect identification purposes, that provides some helpful geographical focus for you to consider, too.

In prospect development, we have to remember Sutton’s Law. Today’s shiny objects may well be tomorrow’s philanthropists, and, yes, we should always keep our eyes on the periphery and pull it into focus over time. But we need to stay focused on what will work for our nonprofits now, and keep the philanthropic power generation in focus. Because that’s where the money is.

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Making remote work work

They’re calling it “The Great Resignation.” Millions of folks who have worked from home productively through the pandemic aren’t ready to give up their new quality of life for employers who will require them to go back to an office. According to the US Labor Department, a record 4 million people quit their jobs – and that’s just this past April.

For some professions it’s really not an option. It’s difficult for a surgeon and her team not to be in the presence of the patient, although not impossible, apparently.

But for fundraising, it’s a no-brainer. Old school ways of insisting that everyone has to be in the office all the time are losing their credibility. And for good reasons.

Keeping great staff

Staff retention, particularly for talented frontline fundraisers, is a perennial problem. When the average tenure of a fundraiser is 18 months and the average time from hello to major gift is 2 years, it doesn’t take a math degree to see that there’s an inherent problem in that equation. Offering flexibility gives your nonprofit a strategic staff retention advantage, and not just for frontline fundraisers, but for the rest of the team as well. Losing a talented data entry officer, or a campaign strategist, or insightful prospect development pro leaves a huge gap, creates recruiting and onboarding costs, and leaves you with weeks or months of lost opportunities.

True connections

The myth that you can’t foster a sense of team or build relationships with donors remotely is nonsense. You just have to create an infrastructure that supports connection, and encourage everything you can that helps people bridge those distances in large groups and small pods. Just because colleagues or fundraisers and donors are not in the same room doesn’t mean the relationships they build are any less meaningful.

Our team is 22 strong and growing, and we’ve been a remote company since 2005. I feel lucky that we have lots of experience in successfully working from home, but that doesn’t mean we’re not constantly thinking about ways to better support communication and foster that sense of team. It’s never perfect, but keeping an open mind and experimenting with the technology available are two secrets to our success.

One example I’ve mentioned before: we use Zoom for group and side chats. We have an all-team chat room which is basically like the running commentary going on in any open-plan office, except in silent mode.

On any given day there will be discussion of an interesting article, a mega donation, some good-natured teasing, celebration of a work anniversary or birthday (love the Zoom rain of cakes!), lots of gifs, really bad puns, kid pictures, puppy pictures, cake pictures…it’s a lot like being in an office. Except kind of better, somehow. Everyone’s in on the joke. Nobody’s left out.

We also have project-specific and topic-specific chat rooms, like the one created in March 2020 for the parents on the team they dubbed “New Reality.” HBG parents banded together in that room to provide advice, sanity, and a helpline early on in the pandemic when they were figuring out home-schooling and activities to keep kids occupied during the work day.

The group continues to be active during the pandemic’s long tail. “I like hearing about how my colleagues have navigated challenging situations with their families when everything is in flux” shared Kristina. Jen added: “As difficult as it was at times finding a balance between work and being a parent, I took comfort in knowing not only that others on the team were in the same situation, but that they were always readily available to listen if (when) I started to feel overwhelmed.”

Besides Zoom, we also encourage relationships by partnering new employees with a buddy who isn’t their supervisor – someone they can ask those real questions as they find their way around their new job. For prospecting projects, we ask that the lead consultant gather a ‘Council of Three’ to help brainstorm ideas before beginning. And we mix-and-match small teams to work with clients on special projects so that everyone has a chance to work closely with others they might not have worked with before.

And finally, we do fun non-work stuff, too. For example, Jayme is our Manager of Fun Swaps. She’s organized swaps of coffee, pastries, and jams-and-sauces – and it’s a little like getting a Secret Santa care package. You delight in packaging goodies up for someone (or ordering them to be delivered) and then receiving them from someone else. Not everyone participates in each swap, but they’re a great way for us to get to know each other through our favorite things.

What about building strong donor relationships – virtually?

Think you can’t forge real relationships with donors when you work remotely? I attended the RAISE conference last week by Evertrue, and when I saw this video telling the story of a connection built by a donor experience officer (DXO) with a prospect who became a donor because of their virtual relationship, I knew that technology has gotten us to the place where we can create meaningful donor relationships and experiences beyond just the top of the donor pyramid.

Not only did they forge a strong bond, but the proof of concept also created a new job, and you can’t help but smile when you watch it. (Full disclosure: I’m not an Evertrue client or partner and they didn’t pay me to write this. I think their DXO concept is forward-thinking for this new remote world we’re living in.)

Using a combination of technology that helps us communicate and encouraging and supporting a strong personal work ethic, we can build and expand our donor-facing teams with a new corps of fundraisers making those connections and provide new leads for the prospect development team to discover, research, rate, and assign into portfolios.

Side benefits to a remote team

As I think about other incidental benefits that remote work brings that help retain employees (like quality of life) one thing springs to mind that’s a major benefit to the employer: office space. Chances are good we won’t need as much of it anymore going forward, and it’s a major budget sink hole.

Wouldn’t you rather put the office-rental budget line toward hiring staff, funding initiatives, sending people to a conference where they learn something, providing benefits that help retain staff, buying resources for your team to be more efficient, doing a once-a-year all-staff blowout picnic… instead? Maybe the space you need for essential on-site work or shared desks could be a third or a quarter of the size. What could you accomplish with that budget savings?

There are lots of ways to turn the reality of remote work into an advantage for your department and your nonprofit. If others are terminating creative employees because they choose not to work in an office, your potential talent pool will grow and so will your nonprofit’s opportunities for innovation.

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Shadow banks

Dark Alley. Image by Petr KratochvilThis week I watched another fascinating/informative/alarming/stellar PBS Frontline documentary called The Power of the Fed, which I highly recommend if you want to get a well-explained idea of what is happening with US financial markets right now.

One of the phrases that came up repeatedly during the program was shadow banking. It’s one of those terms I delved into pretty intensively during and after the 2008 financial crisis, but it’s one I haven’t heard come up again until recently.

I thought it was time to explain what shadow banking is here on The Intelligent Edge because it’s becoming relevant again and is more in the news. Which maybe isn’t such a good thing, you know?

What are shadow banks?

They’re called shadow banks because, in the flow of money globally, there are some financial institutions that operate outside of (or under the radar of) traditional banking regulation because they do things that traditional commercial banks don’t do.

On a very simple level, commercial banks (like Bank of America, or Fleet Bank, or Watertown Savings Bank) exist to store money from the public, invest it, and lend it back to the public. You can go into any commercial bank and deposit money in a savings or checking account. They will take that money and lend it to others and give you back some of the interest from those loans. Or they’ll take your money and hold it for you until you spend it using your debit or credit card.

How banks do what they do is intensely regulated by federal and international laws and agreements. There are things that commercial banks are not allowed to invest in, like junk bonds for example, because they’re too risky. Also, they’re required to hold a certain amount of money in reserve and to guarantee your deposits up to a certain amount. If you give them $25,000 to hold in an account for you, they are required to have insurance that guarantees that you’ll get it back.

Shadow banking is pervasive in the world and most of the activity centers on the creation and re-selling of collateralized loans and repurchasing agreements used in short-term lending between (non-bank) institutions and broker-dealers. There are no reserves backing the investments, and there’s no insurance to cover any losses. Which is why, when deals go well, investors can make a l-o-t of money because they take on a lot of risk.

Because of their description, it sounds like the participants are hiding in some shadowy back alleys, but you’ve probably heard of (and maybe even used the services of) some of them. Some of them even have banks as subsidiaries (yes, that’s as weird as it sounds). Here’s a list of examples of shadow banks:

  • investment banks, like Goldman Sachs or Morgan Stanley
  • mortgage lenders (ever taken out a Quicken Loan? In 2018 they surpassed Wells Fargo as the largest mortgage holder in the US.)
  • money market funds (here’s an example of a hybrid: Schwab is a broker-investor for money market funds that also has an affiliated bank)
  • insurance/re-insurance companies
  • hedge funds
  • private equity funds
  • payday lenders
  • peer-to-peer lenders, like LendingClub

Shadow banks move money around in the background. They bundle and invest in things in aggregate, like thousands of mortgages, and sell them on to others. They invest in start up companies (which banks can’t/won’t do). They invest in repossessed assets, and flip them for profit. They buy, re-bundle, and sell commercial bonds (including junk bonds). Amongst many other ways, they make money from their management fees and from betting that interest rates will go up (or down) on the assets they’re buying or selling. And by making risky deals that work out.

These money-movers use short-term, quickly-raised money to fund longer-term assets, so if the market goes bust in the long-term asset area, the shadow bank needs a bailout from somewhere or it goes bust, too, since there is little regulation and no reserve funds to guarantee the investments.

Anticipating that happening (and preventing it) is one of the jobs of the Federal Reserve, and their skill in watching the mile markers whip by on this current economy’s journey (and deciding where the economy should exit or put on the brakes) is where the Frontline program was particularly fascinating. I love hearing insights from people who either are on the inside, or recently were, and Frontline’s interviews pulling out what we should see next from regulators (and what might happen instead) was a real education.

How big is the shadow banking sector?

According to the Financial Stability Board’s (FSB’s) most recent Global Monitoring Report on Non-Bank Financial Intermediation released in December 2020, the shadow banking sector accounted for almost half (49.5%) of the global financial system in 2019. Almost half of money moving around right now is unregulated. What could possibly go wrong?

The US is the global leader in shadow banking asset holdings with China not far behind; this sector makes up nearly one third (29%) of China’s total banking assets, according to a recent article in The Banker. China’s banking regulators are currently working to keep the sector in check by banning banks and wealth managers from holding sub-investment grade assets, and time will tell how effective the legislation is. The shadow banking sectors in Brazil, Canada, and India are also growing apace. Our economies are all interconnected, so it’s important for us to understand this as we research ultra high net worth prospects involved in these sectors, and estimate their future potential giving.

And not only that, of course. It’s important to understand because we may not even realize how deeply shadow banking impacts our own daily lives and personal assets. If you have 54 minutes, I recommend spending it on the Frontline documentary this week.

 

 

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How much is that private company worth?

Finding information about public companies is so easy! Unfortunately, the majority of companies in the world are privately-held, so finding information about them – especially how much a company is worth – is a daunting task. Thankfully, today my colleague Grace Chandonnet provides a huge hand up for those of us who aren’t professional company valuers with this enormously helpful article. ~Helen

Grace Chandonnet

                Grace Chandonnet

It’s an age-old prospect intelligence challenge. Especially if you’re new to our field, placing a value on a privately held company, and on your prospect’s stake in that company, can seem daunting. Publicly traded companies are required to report their financial information to the SEC, and that information (things like market capitalization, revenue, number of employees, and insiders’ stock holdings), is then available to the public. Privately held companies are not under the same legal obligations, so getting at their financial information is a bit trickier and less straightforward. The good news is that there are some pretty simple tricks that can help a researcher arrive at a reasonable guess as to the value of a private company.

You will need a couple of pieces of information, and the fact is that sometimes you will not be able to know enough information to make a realistic estimate. But there are some resources to help.

If you can uncover a reliable estimate of the company’s revenues, that’s a great start. The unicorn is to find a news article, often published in business or industry publications, that is talking about the company’s industry and uses your prospect’s company as an example. In this article, the exact amount of revenue is not reported, but enough information is provided about the company, a provider of solar energy, to figure it out. The company “reported a 124% gain over 2018 gross sales – an increase of $42.4 million” – when you do the math, you will arrive at 2019 gross revenue of about $76.6 million.

If I have information like this, the first thing I will do is try to find one or more publicly traded companies with a similar line of business and similar revenue, and then compare the public company or companies to the privately held one that I am researching. To find similar public companies, I use a stock screener like this one, which is a free resource.

Select Create Custom Screen and then pull down on Select Category to Current Financials and select Revenue. Enter the revenue criteria (I use a range of values, in this case between $60M and $80M). Once you’ve entered that and clicked in the box to activate the search, go back to the pull-down menu. Pull down to Company Overview and then click on Industry (scroll down in the box, it’s slightly hidden). For this example, I picked “Alternative Electricity”. As you’ll see in the image, there is only one search result, but it’s a good one – click on View Screen Matches to see results. The piece of information to look for in those results is the market capitalization or market cap, which is the total value of the publicly traded company because it is reasonable to assume that there is some similarity between the market capitalization of the public company ($373.1 million) and the value of the private one.

If I have multiple companies in my search results, I will use the average market cap for the companies in the list that are the most similar to my prospect’s company. When doing this, I leave out any outliers – where the market cap is a lot lower or higher than most of the companies in the list.

If, however, you know that your prospect is trying to sell her company or that she already has, the value you want to look for is the enterprise value rather than the market cap. Enterprise value is the amount that a company could fetch in an acquisition. You can find this number by looking up the comparison public company or companies at any number of free sources. I like Yahoo Finance, where you can find the enterprise value under the Statistics tab.

Of course, a good deal of the time, you won’t find an article that tells you exactly what your prospect’s company’s revenues are or there just won’t be good comparison public companies in your search – sometimes a close industry match isn’t available or (if you do have an estimate of revenue), there won’t be any companies with revenues in that range.

My second go-to in cases like this is the Business Reference Guide, which is a paid resource, but not terribly expensive. This resource is available as an online subscription, a book, or both. It is focused on pricing businesses and franchises and is geared toward entities that are seeking to buy a company or franchise.  It is chock full of industry benchmarks and trends, rules of thumb when assessing certain industries or franchises, and ways to assess a ballpark figure for what a company is worth using a host of different data points that you may have. If you have an estimate of the number of employees a company has, for instance, you can often find a simple multiplier to use to estimate a company’s valuation.

This of course brings us back to whether you have that information and where to find it. I like to look at my prospect’s company in several different resources, including Dun & Bradstreet and ZoomInfo, both of which are included in a Lexis Nexis for Development Professionals (LNDP) subscription, and see how these resources’ results compare to one another. If you have access to LNDP, you not only have access to both of these resources, but also to a host of others, including Gale Group Company Briefs, IAC Company Intelligence, and Lexis Nexis Corporate Affiliations.

iWave is another great source of aggregated company information. Dun & Bradstreet has often been maligned in our profession for not containing trustworthy information because its data is frequently based on self-reported numbers and/or modeling, so it should be taken with a grain of salt. I’ve been finding lately that ZoomInfo often returns data about revenues and number of employees that seem pretty accurate to me. With practice, you will be able to identify which information is probably wildly inaccurate versus information that seems quite reasonable. D&B Private Company Insight (also available in LNDP) often has information about what percentage of the company is owned by whom, and this is great to know. Estimating the value of a company is one thing, but knowing how much of the company your prospect owns is the next (and important) step to including these numbers in your capacity score.

The more you do this kind of research, the more you will trust your instincts about what seems to be relatively accurate numbers, both for revenue and number of employees. There will always be things we can’t know abut a privately held company, such as the value of inventory or machinery and other hard assets, and debt/liabilities, but I believe that we should at least attempt to understand what a privately held company could be worth when assessing a capacity rating for a business owner, and I also believe that these relatively simple calculations can result in a strong estimate.

Some additional things to consider:

  • What percentage of the company does your prospect own? If you don’t know, estimate conservatively – I like to use 10 to 25 percent ownership.
  • Is it a multi-generation family business? This could indicate that there are minority shareholders (family members) and should be taken into account when assessing your prospect’s true stake.
  • Did your prospect found, grow and continues to head the company? This could indicate 100 percent ownership for your prospect.
  • Is it venture funded? Investors will own some stake in the company if so. Sometime the percentage of company owned by the investors can be found in a news search, but not always. If not, be conservative when estimating what your prospect’s ownership percentage is.
  • A company’s valuation is not a liquid asset for your prospect until/unless she sells it, but it is an asset that should be included in your capacity rating, just as real estate values are.
  • It is conventional wisdom that privately held companies are often not as valuable as publicly traded ones, so as for all the other steps, be conservative in your estimates.

Good luck – and remember: sometimes you just will not have enough information to make a reasonable guess about a company’s valuation and this is not a bad reflection on you or your research skills!

 

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The search for intelligent information about compensation

ALMA and a Starry Night, ESO/B. Tafreshi (twanight.org), CC BY 4.0 , via Wikimedia Commons

When you’re researching an individual prospect, what are some things you find most difficult to uncover?

One thing that’s always been pretty difficult for most of us is finding someone’s compensation. For ultra-high net worth individuals (UHNWIs) and high net worth individuals (HNWIs), compensation may not be important to determining their total visible assets; at some point they may start taking a token salary in exchange for more equity in a company, or their net worth may simply be amassing and appreciating assets.

But for the rest of the prospect pool (which is the largest tranche), finding or estimating someone’s compensation can be lot like fumbling around in the dark, so I thought I would share a few tips on making it a bit easier.

For most research questions, I try to ask myself first “who would be most likely to care about reliably gathering and publishing this information?”

BLS

One good place to start is with the US Department of Labor Bureau of Labor Statistics (BLS) website, which publishes a very large array of information, tables, charts, graphs, etc. on more job types than you even knew existed. But even better, you can just use their handy lookup feature if you already have a job title to search for. There are 25 occupation groups to choose from, but you can also do a general search; search by job title; search by compensation; and more. Check it out:

Professional associations

Next, I like to check professional association surveys. Professional associations don’t usually share their entire survey results outside of their membership, but it’s not unusual to find top-line information on the association’s website or in its publications.

Take for example, dentists. The American Dental Association shared information from its recent survey about both gross billings and dentist (actual, average) income on its website. There we learn:

Neat, hunh? Now, what’s also interesting on this page is that the ADA not only shares what they gathered about a dentist’s average net income…

… but they also show that their data differs from information provided by the Bureau of Labor Statistics. So now you know that the BLS’s data may be a bit on the conservative side.

Glassdoor

Have you checked out Glassdoor yet? To get the most out of it, you have to register and give them some serious information about your job title and compensation (which is likely as confidential as is possible these days), but once you’re in, you can see actual salaries at actual companies.

You can also see salary ranges for specific job titles at specific companies, and get a sense of how much people actually like working at a company or organization. If you’re having a tough time sourcing salary information, this may be a good resource for you.

However, I saved the best for last.

HBG Salary and Compensation reference page

If you’re looking for a one-stop shopping free compendium of the above sites and more, we’ve got you covered. Maybe you already know about our Prospect Research Links Library, but just in case you don’t – this is a resource that we’re constantly adding to here at HBG. We started out by creating a shared page of bookmarks within the team, and it grew to several pages chock full of research resources. It didn’t seem right to keep this resource just for ourselves, so we opened it up for anyone to use.

On the salary and compensation page, (major thanks to Tara and Kelly for their work on this!) there are well over 100 links to salary information about everyone from attorneys to wellness consultants, including the BLS, Glassdoor, tons of professional association sites, and recruitment firm reports. The majority of these resources are for US-based compensation, but if you want to know how much a private equity investor in Norway or Africa makes, you’ll find links for that.

Check back often on these pages – we’re always updating and adding new resources as colleagues send us great finds (hint hint!) that you want to see included.

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Prospect research on a tight budget – schools edition

Yesterday I spoke on the topic of “Prospect Research for Fundraisers” at the excellent virtual annual conference for the Institute of Development Professionals in Education (IDPE) in the UK (which is still going on, so if you’re a fundraiser for an independent, private, K-12 and/or secondary school, jump on that train).

One of the questions I was asked during the Q & A was, how can we identify prospects on very little budget? It’s a perennial (and good) question, so I thought that I would share my response here.

RFMD

The first thing I’d suggest is some very basic data mining. If there’s someone on your team who is good at downloading information from the database and manipulating it in Excel, you’re going to get a lot out of this project: it’s called RFM analysis. Don’t let the name scare you, it’s really just a bunch of sorting. It’s not a speedy project, but it is guaranteed to give you some really good insight.

What you’re looking for is people who have given to your nonprofit most recently; those who give most frequently; and those who give the highest amounts of money.

You should really have about 5 years’ worth of good giving information recorded in your database for this to work well. You will want to download your donors’ names or ID numbers and all of their giving for the past 5 years into a spreadsheet.

Now the fun starts. Add columns to create a points system. At the end you will sort by those with the most points and the most giving.

Each time they gave, put a point in that column. If they gave multiple times in a year, that’s multiple points in the frequency column (so if they made two donations, they’d get a 2, for example).

You can be as creative as you like when you set up your scoring system – how in-depth you go is entirely up to you. Once you get the points in, then sort away by top scores: who gave the most recently? Who gave the most frequently? Who are the top donors? Now who is at the nexus of all three columns?

Chances are you will see a lot of familiar names at the top, but as you go down the list a bit further, what surprises do you see?

Maybe you want to go back further – 10 or 15 years if you have that amount of data. If so, you can get a look at RFMD, where D=Duration. Who has given to you most loyally over the years?

The cost of a project like this is your time, which certainly isn’t cheap, but at least you don’t have to add anything to a budget to do it.

This is just one way to do an RFM analysis; there are certainly more sophisticated ways to do it, and more factors you can add into the mix. Be creative and don’t be afraid to experiment.

SEARCH AND ALERT

Head to your favorite search engine, and do a search similar to this:

(alumnus OR alumni OR alumna OR graduate OR “old girl” OR “old boy” OR …you get the drift) “name of your school here” (donor OR philanthropist OR donation OR million OR billion)

If your graduates go by the term “Old Wycombiensians” (for example) then by all means use that in your search string. Be creative in the words you add in the parentheses at the end of the string; for example, instead of the word donor, you can use a phrase like “sold her company” or “hedge fund” or “yacht” or “ponzi scheme.”

Once you have a string that gives you good results, you can save it as an alert and have the results delivered to you when something new comes through. Voila! You just learned about that alumna who sold her company to a hedge fund and bought a yacht!

REPORT

I love this report I’m about to mention – we used it at every nonprofit I ever worked at, and it always bubbled up great prospects. Maybe you already use it – if so, you know what I’m talking about.

The report is as simple as this: you already know what level of donation makes you sit up and take notice at your school. Maybe it’s £/$250 or $/£500 or £/$1,000, but whatever it is, that’s the amount you use for this report.

Every week on a Monday morning, ask your database (or your very kind database administrator) to automatically run a report of everyone who gave a gift of whatever-that-level-is last week.

Maybe there won’t be any surprises in there, but every once in a while, there will be. The report flags up great opportunities for stewardship, to be sure, and also great pointers for a little more in-depth research.

FREE RESOURCES

Don’t miss the free HBG Research Resources here on our website. There are pages and pages of links, and I know that you’ll find some great tools and ideas there to help you identify new prospects.

 

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Musings on the digital economy and what it means for prospect research

Rick SnyderThis week we welcome HBG Senior Researcher Rick Snyder to the blog. I always appreciate Rick’s thought process and insight, and this week he shares what he’s been thinking about – about the economy, people who find themselves newly high-net-worth as a result of their investments in digital currencies, and what’s happening with all that money. ~Helen

In my last blog post I mused about my career in prospect research and the enjoyment I continue to find in learning about a broad variety of topics that shed light on how our prospects earn and spend their money.

A year ago, I was looking at the cost of hiring domestic staff.

Fast forward to today and researching the salary of a nanny seems downright quaint compared to what I’ve been reading lately. I’ve been focusing a lot on the economy and some of the changes we’ve seen over the past year. It seems that the pandemic has not only upended many parts of our personal lives, it’s also scrambled and rearranged how people are spending their money. It’s grabbed my interest and I’m trying to make sense of it all. What I’m offering here isn’t an explanation (I don’t have one), but a few observations and thoughts about what’s going on.

A recent cover of New York Magazine captured the spirit of our current times with the title “Can I SPAC My Stonks With NFTs?” The article inside, “There’s Nothing to Do Except Gamble”, referred to the “new money weirdness” and I can’t think of a better way to describe our current economy and our increasingly strange relationship to money. I believe that we are living through a transformation of our economy that is both exciting and a little bit scary, at least to me.

The SPACs and NFTs mentioned in the magazine were covered well by Helen in these pages already, so I won’t travel that road again. Not only did she explain them better than I can, but I have to admit that, try as I might, I still can’t wrap my head around NFTs well enough to offer a cogent explanation of them. I’m also not going to dive into the world of Reddit-driven “stonks,” though that’s also intriguing and entertaining. These are relatively new phenomena and indicative of how fast our economic world (and the language used to describe it) is changing.

My personal and professional interest in today’s economy is two-fold: First, I want to understand how we’ve reached the point where a person can spend $69 million for a piece of digital art (the buyer, a cryptocurrency billionaire who goes by the name MetaKovan, said he was prepared to pay even more and thinks it was a steal since it should be worth $1 billion).

Second, I can’t help but think the indicators are flashing red that we are somewhere near the peak of a bubble economy and wonder when that bubble is going to burst.

The first interest is almost voyeuristic – I can’t tell if we’re watching the prelude to a car crash or a butterfly emerging from its chrysalis – but the second is more serious and existential.

There are scores of brilliant people who understand the economy far better than I ever will and they don’t all agree on what we’re seeing. Some are warning that we’re cruising for a bruising and others are claiming there’s little to be concerned about.

The traditional indicators – things like the U.S. Treasury bond curve or the P/E ratio of stocks – either don’t apply any longer or aren’t as reliable as they once were. Unemployment is decreasing and GDP is rising, but there are still millions of people struggling with the economic effects of the pandemic. And in the midst of all of the good news/bad news, we’re seeing the creation of new ways for people to spend astronomical amounts on things that barely existed just a year or two ago.

The easiest explanation is that the economy is awash in money and it all has to go somewhere. Billions of dollars have been injected into the system over the past year. We are still living under varying forms of COVID restrictions, but that isn’t stopping us from spending what we’ve got.

The New York Times reported that Deutsche Bank analysts have estimated as much as $170 billion from the most recent round of federal stimulus will go into the stock market. Mortgage rates are at historic lows and house prices are rising. Redfin reports that 42% of homes have been selling for more than their list price – 16% higher than the same period last year – while at the same time Google reported that the search “When is the housing market going to crash?” had spiked 2,450% in the past month.

Bitcoin was trading at $6,853 a year ago. As of writing, it is at $53,545 and by the time this posts it could be thousands of dollars higher or lower. I assume that a good bit of what is driving the NFT market is that people are sitting on mounds of crypto that has appreciated wildly since they bought in. As a personal example, a few months ago I realized that I’d forgotten about a crypto wallet I’d left a small amount of money in a number of years ago. When I looked at it, I literally laughed out loud at the value. It wasn’t enough to be life changing, but for people who invested earlier than I did and paid just a few bucks for some Bitcoin, I can easily imagine why they’d have no problem spending some highly appreciated digital currency on a piece of digital art.

I also discovered that people are breeding and selling digital horses on the NFT market – one sold for $125,000 – and they’re participating in digital races. I had to check the date on the article to make sure it wasn’t an April Fools’ joke. If this isn’t a sign that people have more money than they know what to do with, I don’t know what is.

Along with the sea of money sloshing around in the system, we’ve seen over the past year that life is short and it should come as no surprise that people are willing to make riskier financial bets than before. Might as well YOLO your stimmies into some stonk while you can.

What does any of this have to do with our work? I can think of at least several ways.

First, the top tier of earners has done extraordinarily well over this past year, so we need to keep tabs on what they’re doing – that’s what we do every day, so there’s no change there.

Second, the flow of money into SPACs, NFTs, and retail stocks shows that there are a number of new players who are spending freely. How are we finding, researching, and qualifying them? Are you developing new ways of looking at people with names like MetaKovan and Roaring Kitty? We know they have millions to spend, so how can we add them to our prospect pools?

Third – and this is what I was thinking the most about when I began writing – if we are indeed in a bubble economy, that bubble will burst at some time and quite possibly in a very dramatic fashion.  Though we can’t really predict when the economy will take a downturn, it most certainly will.

When it does, it will affect charitable giving* and that affects each of us in our jobs as researchers. When development budgets shrink, prospect researchers may seem to some as an extravagant expense to some managers. It behooves us all to be proactive in researching or at least giving some thought to those in our donor pools who work in sectors that fare better than others in a down economy. Helen wrote about this in blog posts in April and December of last year, as well as in a white paper. They merit re-reading as you ponder economic trends.

* The Lilly School of Philanthropy and Vanguard Charitable wrote a 2019 report, “Changes to the Giving Landscape” [PDF], that shows a decline in charitable giving that began in 2000, but the drop accelerated at the time of the 2008-2009 recession. From 2000 to 2008, roughly 65% of households reported giving to charity. Total giving dropped by 7.2% in 2008, then by another 8% in 2009.

 

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Fundraising data privacy goes before the Supreme Court next month

Photo of a square boulder leaning on another on Stanage Edge.

Stanage Edge boulder. Photo by Julie Kahn

Maybe you already knew about this but it was a total surprise to me this week: Right now at this very moment there’s a case in front of the US Supreme Court that directly impacts the amount of information – private information about our major donors – that nonprofits may have to share in order to be able to raise money in the state of California.

The Association of Fundraising Professionals (AFP), four of its chapters, and more than 120 nonprofits have filed an amicus brief in the case to prevent this from happening, and there are at least 35 other amicus briefs filed on behalf of 275 more nonprofits country-wide.

If that weren’t enough action, 22 state attorneys general, Senate Minority Leader Mitch McConnell, and the U.S. Solicitor General have also filed briefs in support of the petitioners.

So yeah, this is kind of a big deal. Here’s what’s at stake:

The background

As you probably know, nonprofits have to file an audited income tax form called a Form 990 each year with the Internal Revenue Service (IRS) which outlines (among other things) that nonprofit’s mission, its board members, and its income and expenses. This form becomes part of the public record about the nonprofit so that the government (and any potential supporters) are provided transparency into the nonprofit’s finances.

What you may not know is that one part of the form is the “Schedule B,” on which the nonprofit is required to share the names and addresses of all of its donors who have given more than $5,000 or 2% of that nonprofit’s income over the year. This information is usually redacted from the public record when it’s shared with searchable sources like the Foundation Directory Online or ProPublica’s Nonprofit Explorer, which is why it’s generally not seen.

The hitch

Nonprofits are required to register in every state where they raise money. In 2013, the California Attorney General’s office ruled that every nonprofit from that moment forward would have to share their Schedule B (in confidence) as part of their registration process.

There are at least three problems with this:

1) By sharing confidential information about supporters with their contact information, nonprofits could potentially subject their donors to political reprisal based on the change of political opinion and/or incumbent attorney general. Before the middle of the last decade we might not have thought too much about this, but since then nonprofits and causes previously thought of as relatively apolitical suddenly became so.

2) Data gets hacked. Even if it’s kept in confidence, there’s no guarantee that information stored electronically by the California AG’s office won’t be accessed illegally by bad actors and published (or used for other nefarious purposes).

3) Accidents happen. The state of California has already disclosed more than 1800 donor names accidentally from Schedule Bs that it published on its website. Once it’s out, you can’t put that toothpaste back in the tube.

California has no logical reason to need this information, particularly for nonprofits outside of its legal jurisdiction. And as AFP president and CEO Mike Geiger has said, there’s a real fear that major supporters won’t want their home addresses and gift amounts shared electronically, so they could stop giving. (Or, alternatively, it could push them toward making gifts through donor advised funds).

These cases, called Americans for Prosperity Foundation v. Becerra and Thomas More Law Center v. Becerra, have made their way to the U.S. Supreme Court and very soon we’ll see what the Supremes have to say about nonprofits, politics, and donor privacy because it’s going to be argued a month from now – April 26th.

Stay tuned and watch this space (Scotus blog) and the AFP website for more information.

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Celebrating Research Pride Month: Elevating Prospect Development & Celebrating Community

Happy International Prospect Research Pride Month! This week to officially kick off Pride month I am beyond delighted to invite my friends and colleagues, Misa Lobato and Melissa Bank Stepno to cut the virtual ribbon and to share what Research Pride means to them and to our professional association, Apra. Welcome and thank you, Misa and Melissa. ~Helen

March 2021.  Some might be marking this month as the one-year anniversary of when COVID rocked our world and began to turn 2020 into one of the most tumultuous years in modern history.  Rather than focusing on the profound misfortunes that challenged us over the last year, as the current President and President-Elect of Apra, and Trustees of the Apra Foundation, we would rather focus on the 7th anniversary of Research Pride month.

To celebrate, we could not find a more appropriate place to do so than on the blog that birthed International Research Pride.  On March 6th, 2014, Helen proclaimed: “I officially declare that from now on, March is International Research Pride month.”

We are Apra

For readers who are unfamiliar with Apra, Apra is the association for all professionals who strategically harness information and data to drive fundraising for philanthropic institutions. This, of course, includes Prospect Researchers but also people who work in data science and data management, relationship management, annual giving, advancement services, consulting, campaigns, and many, many others who serve data intelligence functions within fundraising and philanthropy.

Comprised of more than 1,800 members across the globe, Apra is committed to serving, representing and advancing both the professionals and the practices that enable the philanthropic success of institutions that rely on fundraising for achieving their missions. Apra fosters a collaborative environment for sharing and discussion, while leading the development, dissemination and advancement of best practices, resources, thinking and trends.

Why is Research Pride so important to us?

In an age where so many in society move around from job to job without finding a meaningful career, how many could say that they find their chosen path invigorating, energizing and stimulating? We would venture a guess that a higher percentage of Apra members would choose these words than in many other professions. We are mission-driven professionals who show up with passion, intelligence and focus in our interactions with each other and to our work in the fundraising industry.

As a community, we are advocates for the vital role of data in informing the future of philanthropy, and we continually evolve and learn to meet changing demands and technology.  As a community, we have supported each other through comradery, mentorship and training. We have both learned, and continue to learn, so much from Apra leaders, volunteers and mentors.  Even when we chose to follow a less-than-traditional career path, Apra still continued with us on our journey. We find fulfillment in giving back to the community that supported our professional growth.

Apra is a uniquely collaborative community of lifelong learners, where members are always willing to share best practices and help one another problem solve. This community orientation was on full display over the past year, when Apra members immediately stepped up to help one another navigate personal and professional hardships, connect and build networks, and master new skills. Apra members have shown up for one another in ways that are both inspiring and inspired.

These are the reasons we choose to serve on the Apra Board, these are the reasons we celebrate Research Pride month, and these are the reasons that we choose to give back financially to support our fellow Apra members.

Giving Back

Earlier this year, the Apra Foundation launched the Apra Foundation Professional Development Assistance Fund, initially established from the sales of our digital cookbook, Data Driven Deliciousness: The Apra Cookbook. The fund has a singular goal: to support prospect development professionals who have experienced financial hardship due to COVID-19 or other factors.  The fund will provide grants of $200 for Apra members to use toward any Apra-hosted educational event or Apra University content. The Foundation Board is currently reviewing the first round of applicants and will be providing the first awards this month. We plan to award another round of awards later this year.

We want to support as many Apra members as possible through this fund, so the Apra Foundation has set a fundraising goal of $2,000 for Research Pride Month. This will fund 10 Professional Development Assistance awards!

And now the appeal (since we are fundraisers, after all!): We know that many of you have experienced the learning and community benefits of Apra. Would you show your Research Pride by donating what you can to help support your fellow Apra members?

100% of Apra Foundation Trustees have pledged commitments. Join us in providing professional development opportunities for Apra Members and DONATE NOW! Thank you!

Misa Lobato

President, Apra

Director, Prospect Management & Analysis, Rhode Island School of Design

 

Melissa Bank Stepno

President-Elect, Apra

Director, Analytics & Business Consulting Services, Blackbaud

The Helen Brown Group LLC
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