Helen Brown Group

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Due Diligence in Prospect Research

Due diligence is incredibly important for nonprofit organizations, especially these days. This week my colleague Michele Borucki shares all of the reasons why, and how to take on this key task. Warm thanks to our partner, iWave, for kindly allowing us to reprint this from their blog earlier this month. ~Helen

At the very core of what we do as non-profit fundraising professionals is the mission to leave this world a better place than when we inherited it. We cannot do the work we love without the generosity of donors who also believe in this mission, which leaves us with the question: Why would we ever say no to a gift?

Due diligence in brief

The term due diligence can be traced back to the 1930’s, but it most likely existed long before that. The legal term originated in the US Securities Act of 1933, where the process is referred to as “reasonable investigation,” but it’s practiced in almost every industry in some form, including fundraising.

But a reasonable investigation, or due diligence, should not be confused as the same thing as prospect research. There are some important differences.

Prospect research vs. due diligence

The goal of prospect research is to assess a prospect’s potential for giving, but the goal of due diligence is to protect the organization from potential harm. As Helen wrote in a recent blog post: “Prospect research asks if they can give, and due diligence asks what their giving says about them.”

The non-profit sector has seen its share of controversy surrounding gifts over the last several years. Recent news surrounding controversial gifts from well-known names has inspired a new push for non-profit organizations to establish due diligence protocols and strategies for their own donors.

Covering your assets

Non-profit organizations have numerous policies in place to guarantee the practice of ethical standards across the entire organization, especially when raising funds for their cause. When dealing with donations of any size, there is no question that organizations must maintain transparency and be accountable to donors and their intentions for giving. Development professionals have governing bodies that write and enforce codes of ethics that must be adhered to on top of internal ones for the entire organization. There are gift acceptance policies set forth by the Council for Advancement and Support of Education (CASE) and protections for anonymous givers. The missing piece is an across the board industry policy protecting organizations from possible risks associated with being connected to certain donors. Each organization must create their own.

In an Apra Connections post, Lindsey Nadeau, Senior Director of Prospect Development at UNICEF USA stated, “Prospect development’s ability to vet a prospect appropriately and thoroughly depends on an organization’s ethical standards.”

Our organizations protect donors through every step of the gift cycle because they are making an investment in our mission; however, policies protecting the organization and ethical standards for donors are rare.

Risky business

The Epstein and Sackler controversies are only a few recent and well-known ones to highlight the need for risk assessment within development organizations. Some prospect research shops are outsourcing their due diligence research to consultants or to firms whose specialty is this type of research. Other organizations are hiring researchers specifically for the task or including it as a part of their prospect research protocol for all researchers. While an organization can never mitigate all of the risks associated with a donation—and a researcher can’t necessarily predict the behavior of a donor—looking at past giving trends and behaviors can determine if a relationship between your specific organization and a prospect will reflect positively.

Getting started

When creating a due diligence policy within an organization, there are so many variables. The first key decision will be to decide whether to outsource this work or keep it within your research shop. Should your team have a designated researcher to complete the vetting process on all those chosen prospects and donors or would it be more cost effective to hire a consultant? That will depend on your organizations needs and resources.

There are many checklists to reference and use as a template once your organization has made the decision to create a due diligence policy. Our prospect research colleagues in the United Kingdom have been doing this type of research for much longer than we have here in the United States, and we can learn a lot from them. In January we published a post on this blog with tips and questions to ask when creating your due diligence policy, which includes links to several guides that our friends in the UK have created, and the Association of Advancement Services Professionals (AASP) released their Best Practices in Vetting Prospects last year. These are two excellent resources to visit when starting the conversation and process of creating a due diligence policy.

We’re in this together

There is no one size fits all approach when it comes to creating policies and structure for our organizations. What works for your operation may not work for the non-profit on the first floor of the same building. Due diligence research for your donors will be specific to what your mission and ethical standards are, but we are all in this together. Collaboration and workshopping with colleagues from other development shops is extremely helpful, and I think we can all agree on one thing: There are few things sweeter than a transformational gift for the causes we love.

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Questioning philanthropy

With so many nonprofit organizations needing funding fairly desperately right now, this might not seem like a particularly great time to critique philanthropy and philanthropists. That hasn’t stopped people like Anand Giridharadas, David Callahan, Rob Reich, Ben Soskis, Alan Cantor, the folks at Mother Jones, an anonymous op-ed writer in The American Conservative, and many, many others.

And the critics have a long list of grievance: Foundations have too much power. Foundations don’t give away enough. Billionaires are stingy. Billionaires are stepping up, but not enough. Wealth inequality is distorting philanthropy. It’s imperiling democracy. DAFs are the best thing since sliced bread. DAFs are evil.

It feels like there’s a crescendo of criticism lately. And they’ve got a point – there is so much more need, the inequity gap is an increasingly yawning crevasse, and trillions are locked away in philanthropic vaults, ticking up interest and income for investment offices and institutional sponsors. And there are billionaires who could change the course of poverty/hunger/you-name-it with one check (and some, like MacKenzie Scott, who seem to be actually trying).

As they have for over a generation, medium and large nonprofits are focused laser-like on that top tier of prospects and those prospects’ assets are growing by the second, even during this pandemic. Some because of the pandemic. Sometimes I think that small triangle at the top of the pyramid is going to separate and blast off like the SpaceX Dragon.

A small voice in me wonders if prospect development has played some role in this problem of declining donor numbers. Because of our part in the fixation on that nose-cone.

And, to be fair, it has made practical sense, right? When bank robber Willy Sutton was asked why he robbed banks, he said “because that’s where the money is.” Well, yeah.

Have we been myopic?

So yes, we’ve focused on the richest of the rich because they’re the ones with the most money to give away. But is that one (of the potentially many) reasons why our nonprofits have shrinking donor pools? Because we haven’t spent the time to identify and involve the next generation of donors because the low-hanging fruit was just so much easier?

What about the next tier who may not be able to make 7-figure gifts now (or ever), but could make multiple 5 or 6 figure gifts over a lifetime? Have we in PD not done our duty to insist to leadership that those prospects are worth the work so we can ensure that fundraisers working at our organization in 10 years’ time have great portfolios to work with?

Is the scarcity mindset that deeply entrenched in our sector’s collective psyche that nonprofit leadership doesn’t feel it can take the long view to ensure that their nonprofit will be here in 50 or 100 years and needs to go for the quick wins now?

Or, to play devil’s advocate, in this increasingly unequal world is it more expedient (and ethical) for us to have stayed focused on the top of the pyramid to the…maybe not exclusion, exactly, but certainly decreased emphasis on that important second tier? I wish I was sure. That small voice gets louder these days telling me “no”.

Fortunately it’s not an either/or choice. Those critics are airing out the Third Sector’s dirty laundry and it doesn’t smell too rosy. So what we have here is an opportunity for all of us, particularly in prospect development.

So what can we in prospect development do?

We have to start involving people below the Forbes 400 level – now – for all kinds of reasons.

First of all, although their bank accounts are growing at astonishing levels and their numbers are creeping up slowly, ultra-high net worth individuals (UHNWI) are still a tiny subset of the general population. Also they tend to give their support exclusively to large, well-established institutions (the equivalent of the Forbes 400 of the nonprofit world).

Second, I don’t know of too many nonprofits whose constituencies are exclusively over 60, male, and white. All-white boards may have worked in the 1970s, but we all know that style of board should have died out long ago. The fact that the status quo has lasted this long is frankly lazy and embarrassing. Female and BIPOC representation amongst trustees, volunteers, donors, and fundraisers, has to increase and fast in order for nonprofits to stay relevant (and afloat).

And third, donors have an increasing number of giving choices that completely bypass nonprofits and go straight to the recipient. Let me repeat that – donors are bypassing nonprofits entirely (read the embedded-linked article in that last line). Or they give money to nonprofits through vehicles like Facebook, which cuts out the nonprofit/donor relationship. Right now, when people can’t get out to volunteer or to attend events, these options are a way for mid-level donors to make a direct impact. This makes prospect identification, philanthropic-interest research, and engagement all the more difficult for an increasingly important demographic.

And although they may not be 100% correct, the critics care enough about the success of our sector to venture an opinion and point out where we need to fix things.

As a prospect development professional, I can’t fix DAFs, or foundation payouts, or wealth inequality, or the tax code. But there are many things we definitely can do to make our sector – and our own nonprofits – better. And that starts with making the pie bigger.

Elbow-grease prospecting and segmentation are even more critical right now. There are opportunities in every single fundraising database to be found through analytics and wealth screening, peer networks and philanthropy. There are common-sense ways to find new or previously overlooked donors in the communities where we operate and that we serve.

As an industry, we need to figure out how to present newly-identified prospects in such a way that fundraisers will rush to set up a Zoom call. And managers need to find new ways to motivate fundraisers to do that. Great prospects sitting in a portfolio growing cold are the very worst kind of waste. Internally we need to discover ways to communicate excitement and opportunity.

Something that’s been exciting for me is a project we’re working on right now within our Data Insight team: identifying the ways that the research tools we use don’t identify (or appropriately weight) female and BIPOC prospects and building up our own custom appends and methods to counter those deficiencies for our clients.

I’d love to hear your thoughts about any or all of this.

 

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Credit where credit is appreciated

On occasion, a prospective client will ask “How much money has your company helped your clients raise?”

That’s a tricky question, because the truly honest answer is, “I don’t know.”

Some clients hire us simply to provide profiles and we don’t usually hear what happens after the fact.

If we’re working with clients on a dedicated basis – meaning that one of our team works with them side-by-side over a period of months or years – it’s a lot easier. We can trace the donations of the people we’ve identified for them and come up with a figure. Or, as happens more frequently, the fundraiser we’re working with calls to celebrate the donation – and that’s like the sun beaming through after a full week of rain. Pure joy.

We also do prospecting projects, of course, by hand and through our Data Insight team. But again, we rarely hear the long-term results of those projects 18-24 months down the road (the usual time from identification through cultivation to gift).

We would love to hear, of course, but as is the way of things, our clients are focused forward, not back.

And also, (going back to the original question), when you work in prospect development you’re entirely at the mercy of the action and skill of the fundraiser, dean, executive director, volunteer, etc., to convert that prospect to a donor. You could identify the Gates Foundation for a world-class malaria and TB charity with a connection to a program manager, but if the fundraiser doesn’t act on the prospect, that research work had zero impact.

Of course, prospect development often does have a huge impact, and there are lots of ways we can measure it, including…

  • Number of new prospects identified
  • Number of prospects identified who went on to make a gift (and why? what did they have in common?)
  • Estimated capacity of newly-identified prospects
  • Number of reports completed
  • Number of prospects rated and assigned

…and more. But those ways are presented in statistics, produced at our desk, provided monthly or annually in a report. Not the most super-exciting reading for the recipient, nor is the report something that generally causes the reader to call the research manager to exclaim their praises. But, you know, those stats can be kind of a big deal.

What we need, especially now, are examples of ways to communicate and celebrate the impact of prospect development.

Many times staffers will hear exciting news about a big gift in office kitchens or hallways before the monthly announcement at the all-staff or major gifts meeting. But with a pandemic going on and all of us working remotely, those moments of shared joy aren’t happening. We’re cut off from colleagues, physically isolated, and working in a vacuum. It’s hard for those moments of celebration to happen. Which means it’s even harder for staff to stay motivated and feel part of the big picture.

So especially now, when those gifts happen, how can leaders share them? How can fundraisers help prospect development folks feel valued? How can PD managers keep their teams motivated? We need to find every way we can. And honestly, the endorphins that flow with sharing that kind of joy is good for all of us, sharer and recipient alike.

How does your team creatively share celebrations now? How do you as a manager make sure that your team stays inspired – and credited – for their part in making those moments of success happen?

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Silver linings

So here we are, week nine hundred and twenty-whatever, working from home, wearing a mask when we’re out, socially distancing, all that good stuff. We’re w-a-a-y past the novelty and deep into the “Seriously I cannot binge-watch yet another series” portion of this Pandemic-a-thon. And that’s if we’re lucky.

[PSA: Now is the time when it’s really easy to break down and do something that honestly doesn’t seem like it would be that risky but three months ago would have freaked you out. Don’t. You’ve made it this far and we’re all counting on you to keep being a strong link in this virtual chain. Also you’re awesome and cherished].

But, yeah, this is still 17 kinds of awful. I’ve been trying to keep a gratitude list to stay positive, and I wanted to share with you some positive things I noted that wouldn’t have happened if it weren’t for this pandemic.

For one thing, no one is saying “It’s impossible for prospect development folks to work from home!” anymore. There is an element of “be careful what you wish for” here, but if you’re one of the millions who’ve discovered that working from home really is a wish come true, well, there’s good thing #1 to come out of this.

Another good thing happened a couple of weeks ago. My university held a virtual stewardship event for donors to the student COVID emergency relief fund, and one of the speakers said “of course, we’d ideally be all together now so we could thank you in person.” Since my university is across an ocean, the likelihood of my being there in person would be approximately nil, but because the event had to be virtual, there I was, one happy square among many on several pages in a Zoom room. How many great opportunities will nonprofits be able to take advantage of to engage with distanced constituents (who want to be more engaged) because we’re separated?

And speaking of the benefits of virtual gatherings, here’s another good thing: All of the free and low-cost webinars this spring were great, right? Especially in the beginning when we were trying to figure out how permanent or temporary this was all going to be. But if you’re like me, right about now you’re longing to be part of a real discussion again with other prospect development folks. Conversation. Back and forth, not just being talked at.

We’re not alone. Coffee talks are springing up everywhere. Last week Apra-MN had a great coffee hour conversation featuring Janna Lee and Mark DeFilippis on the topic of the legality of using FEC data in prospect research. Lori Lawson (who helped write the guidelines on this for APRA) was able to chime in from her home in Florida. Bonus!

Next month Apra-MN will host another interactive kaffeeklatsch on the topic of New York real estate, and they’re also doing evening happy hours just for conversation. Apra-Carolinas and Apra-PA are also hosting social gatherings…maybe your chapter is doing something, too? If not, volunteer to lead one yourself! It’s great that distance doesn’t have to be a factor – we can share a beverage and talk to peers everywhere! (oh, and hey: chapter membership chairs? Members don’t need to be in your geographic area anymore! Just saying.)

What other good things are happening because of this very bad thing that you can think of?

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Companies House: a treasure trove of info on UK companies

Carrying on with the theme of prospect research and the UK for another week, I’m delighted to welcome Toby Savin as the author of today’s Intelligent Edge article on finding information about companies and company directors from Companies House. An experienced researcher and leader in the UK prospect development community, Toby is Development Research Manager at the University of Leeds. My thanks to Toby for sharing his knowledge! ~Helen

Over here in the UK, for all the challenges we face, including (and because of) a culture where it’s still seen by many as crass or taboo to discuss money even in the context of giving it away to a worthy cause, the prospect research community has one resource that our counterparts elsewhere can only dream of: Companies House.

Companies House is the UK registrar of companies and there are 4.4 million companies (and their associated filings) on the register, many of which are privately-owned. This includes not just limited companies, whether quoted on an exchange or not, but also limited partnerships (the legal business structure of choice for private equity funds and hedge funds) and limited liability partnerships (‘LLPs’), which have been astonishingly popular across many sectors of the economy since being introduced in the UK in 2001, thanks to the twin benefits of limiting partners’ liability and not incurring UK corporation tax. It also includes companies limited by guarantee (as opposed to share capital), a structure much used by charitable trusts and foundations.

What’s more, it’s free to access this data: in 2015, a Beta version of the register – freely available to anyone with an internet connection – was launched as part of the UK government’s commitment to free, open data. Sure, the register has its faults: one major issue, which was successfully used to push for a formal consultation on reforming the register last year, is that the information filed is not actually verified or checked by anyone at Companies House.

But, unlike data on non-quoted companies that many other countries are forced to rely on (typically, top line numbers self-reported to large data vendors within a voluntary and entirely unregulated framework), in the UK there is a statutory requirement to formally submit a whole range of filings and many of the accounts themselves are externally audited. Make no mistake: this is a treasure trove of public data that ought to make us the envy of researchers across the world, especially the US, where finding reliable, detailed information on privately-held companies can be difficult or impossible.

Want to know not just who owns a particular company but how much they own? Check.

Want to know the total compensation of the highest paid director? Check.

How about estimating the value of a privately-owned business? For sure, this is a tricky pursuit at the best of times (like a house, a business is only worth what someone is prepared to pay for it) but close to impossible – and perhaps even futile – if you have only sparse, unreliable numbers to hand. Here too, Companies House can help: businesses of a certain size are required file full audited accounts with a profit and loss account, balance sheet and cash flow statement.

And in addition to the hard numbers, Companies House provides an abundance of less tangible (but equally useful) information. A Chairman’s Statement on the company’s performance and strategy, for example, might be taken with a large pinch of salt by a forensic accountant looking for fraud but in the hands of a savvy prospect researcher, the salient points can be summarised and used by a frontline fundraiser to completely transform a discovery meeting with that top prospect who hitherto has been impossible to engage.

For anyone wanting to tap this most valuable of resources as part of their prospect research (or indeed gift acceptance due diligence), here are some things to take into consideration.

Firstly, if you intend to process any personal data, you’ll need to carry out an assessment as to what research is acceptable from a data protection perspective. There is an abundance of guidance available, from bodies like the Institute of Fundraising and CASE (the Council for Advancement and Support of Education).

Secondly, you’d do well to keep tabs on any changes to the legislation governing the information that companies are required to disclose (thankfully, these are widely reported across the blogosphere and beyond) as well as changes to the search functionality and other aspects of the free Companies House beta service itself (signing up to be a member of the user panel can help with this).

Last but by no means least, you really need to know what you’re doing: the proverb “a little knowledge is a dangerous thing” might as well have its origins in interpreting data in company accounts. This one is a bit trickier to address but I’d like to highlight a couple of initiatives that will help.

Here in the UK, Researchers in Fundraising (RiF), a special interest group of the Institute of Fundraising, has launched a major project to develop a Researcher’s Handbook (including a chapter specifically on estimating wealth and capacity). Work on this is in progress and in the meantime, one very enterprising former prospect researcher has been working with some of the best talent in the sector (and me) to launch a Community Interest Company called PyroTalks offering a wide range of (virtual) conferences and training sessions, including a number that are specifically aimed at helping prospect researchers navigate some of the data you can find on the Companies House register.

Companies House isn’t the only source of useful data on UK organisations and potential donors but it is an essential part of any researcher’s tool kit; and, for all its faults, we’re lucky to have it. Take a look and expand your UK company knowledge.

Toby Savin is Development Research Manager at the University of Leeds in the UK, having joined the Alumni & Development Office there in 2010. Prior to this, he spent a decade working for a leading business risk consultancy in London and then a Nasdaq-quoted fraud prevention company, carrying out investigative due diligence and background checks on employees and vendors for banks, hedge funds and FTSE 100 clients.

In between these two ten-year periods working as a researcher, he gained first hand experience of worker-controlled co-operatives at two food co-ops in Manchester and volunteered on a number of different food and environmental projects. This experience formed the basis of a dissertation on the co-operative movement as part of a Master’s degree in Food Policy at City University in London, which he successfully completed with Distinction in 2011. Toby also holds a Bachelor’s degree, with Honours, in Hispanic Studies from the University of Birmingham, UK.

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Who is doing well now in the UK?

Back in April, I wrote a blog post about companies, individuals, and sectors in the United States that were doing well despite (or in some cases, because of) the coronavirus pandemic. Today I want to offer some research that I’ve done on the same topic, but focused across the Atlantic. For everyone who has prospects in the United Kingdom, this one’s for you.

Just as everywhere, the economy in the United Kingdom right now is on a slanting slide into sure recession. However, that doesn’t mean that every company or sector is in the red along with it. As I go through the individual companies and sectors that are doing well right now, think not only of those who are executives or major shareholders that are in these companies, but the companies themselves and others in that sector that may be prospects. Also consider if they have a corporate foundation with funding priorities that your nonprofit might fit.

Basic goods

Just like here in the States, the major supermarket chains are experiencing solid sales right now: Tesco’s sales are up 12.7% and Sainsbury’s and Waitrose are both up 12.5%. Discount grocery chain Co-op is up 30.8% and sales for mainly-frozen-foods grocer Iceland are up 29%.

In order to get those groceries, many people are relying on the UK’s main delivery service, Ocado, which is reporting sales that are up nearly 33%.

Companies and manufacturers

According to Make UK, the professional organization for the UK’s manufacturing sector, 90% of UK manufacturers have continued to operate fully or partially since March, although around 20% have furloughed or laid off staff.

Which manufacturers specifically are doing well?

Any company manufacturing Perspex (plexi-glass), for example. Every person operating a cash register or sitting at a customer service window has (or will have) a sheet of plastic between themselves and the customer, so those manufacturers are operating on all cylinders.

The same goes for anything medical related, including PPE manufacturers/suppliers (face masks, gowns, visors, aprons, thermometers), medical equipment parts and materials (beyond just respirators to the base materials like plastics and sheet metals), and companies that make household and institutional cleaning supplies, including Reckitt Benckiser, the maker of Dettol, and hand sanitizer manufacturers.

And of course early on in the lockdown just as in the United States, UK television streaming services, games, and other forms of entertainment did (and continue to do) really well, too.

Who does well all the time?

Grocery stores usually operate on fairly thin margins, but people always need groceries so they tend to be fine no matter the economic circumstance. Banks, energy companies (those delivering heating oil and gas, for example), internet and phone companies, and the infrastructures that support them do well, too.

Right now, in addition to ecommerce (like UK-based companies selling must-have items like Argos, B&Q, Curry’s, Screwfix, office suppliers, etc.), shipping (and supporting industries) are also doing well because all of those ordered items have to be delivered.

Which companies and industries are having a moment?

And speaking of delivery, a new-ish form of vehicle is increasingly important, with drones supplying medicines and PPEs in half the time over the Solent to the Isle of Wight and from mainland Scotland to the islands. Look for companies like drone operator Skyports and defense and technology companies like Thales that manufacture these useful technologies.

It’s not just corporations and UHNWIs doing well: Local bike shops can’t keep stock on the shelves – especially bikes under £500, and they can’t keep up with repairs, either. Electric bike sales are up 96%! Britain has re-discovered biking in a big way, and it’s healthy for the bikers and for the bike sellers, from local shops to chains like Halfords.

The UK is a gardener’s paradise, of course, and garden centers which have now reopened are experiencing the same sort of panic-buying (and associated boom in sales) as we Americans had with toilet paper in late March. There’s an 8-week wait for certain plants as sales at some centers have exploded 75%.

Who will be doing well moving forward?

Because of COVID-19, demand is also beginning to rise for contact-free items like touchless faucets, flushers, and dispensers, so watch those manufacturing spaces as well.

Property investors with deep reserves like Great Portland Estates, one of the largest property owners in London’s West End, bought up bargains during and after the Great Recession. They purchased nearly 60% of their current portfolio between 2009 and 2014, and according to an article in the Financial Times (paywall) they plan to do it again.

As in the United States, look for managers and investors in contrarian hedge funds. Some that shorted the market back in January and February have made hundreds of millions of dollars.

Any company with a contract to supply to the government should do well in the next year (or more) as well. Once awarded a contract, a company can expect steady payments from a reliable source. Look for connected companies like Liberty Global, (no relation to Liberty of London) which signed a deal with the UK government to provide on-street charging points for electric vehicles.

Finally, although it would be easy to think that private equity and venture funding would be completely dried up, it’s not always the case. I spent a little time spent in Crunchbase and found that startups and young companies in the UK received $3.9 billion in the period between March 1 and June 1 of this year. A quarter of those companies are outside of London, too, so it’s not all invested in the south. Both the funders and the companies funded are worth a look to see if there are prospects for your nonprofit.

What other companies and sectors do you know of that are doing well in the UK right now? Please share in the comments for all of us to benefit from!

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On Being a Prospect Research Possibilist

Over the past two months the HBG Book Club has been reading Hans Rosling’s Factfulness and, considering what’s going on in the world around us right now, the timing couldn’t have been more perfect. I asked my colleague and fellow book clubber Jayme Klein to share her perspective about the book for our blog in today’s article. Thanks, Jayme! ~Helen

People often call me an optimist, because I show them the enormous progress they didn’t know about…I’m not an optimist…I’m a very serious ‘possibilist…,’ someone who neither hopes without reason, nor fears without reason, someone who constantly resists the overdramatic worldview. As a possibilist, I see all this progress, and it fills me with conviction and hope that further progress is possible.” -Hans Rosling

During April and May, the Helen Brown Group Book Club read Factfulness: Ten Reasons We’re Wrong about the World- and Why Things are Better Than You Think by the late Hans Rosling. While our meetings are always virtual, spanning homes and offices across the globe, these gatherings felt different. We were all at home universally quarantined.

As we logged in each week, we admired the various Zoom backgrounds that book club members had chosen. All of them were drastically different places than our kitchen, office or living room. They sparked conversations about personal interests, old vacations, or something calm and pleasant to look at.

No matter what the background, we all had a desire to go somewhere else, to stop focusing on the current struggles all of us were a part of in the pandemic.  Many of us expressed overwhelm with the deluge of Covid-19 news. As we dove into the book and started to look at our thoughts more objectively with Rosling’s guidance, it became clear how much our backgrounds and belief systems shape our worldviews.

Rosling had a decades-long career in medicine and international health. Through anecdotes highlighting his own bias, he showed the challenges and rewards of changing viewpoints after experiencing different cultures and opinions.

By describing 10 instincts that affect how we see data, Rosling explained how those beliefs, and how data is shaped by them – keep us from seeing how much progress civilization has truly made in the past few centuries. We learned that although some of what shapes our thoughts and feelings are unique and personal, some of these are more universal and deep-rooted than we may have thought.

His “Factfulness Rules of Thumb” deftly summarized the book with hints that would prove helpful no matter what the situation when faced with personal or professional interpretation. I’ve adapted them for our prospect research needs:

  • Look for the Majority: Sometimes looking between categories is where the largest common denominator is. For example, alumni, parents, and staff all have the same thing in common: a relationship with the school. While the nature of the relationship may differ, the school still holds value for all of them.
  • Expect Bad News: It is easier to find a negative story than a positive one about a prospect. Keep digging and see what else exists about them beyond something sensational. When reading negative contact reports, look at the history of the prospect’s relationship with the organization. Was the negativity related to a person or story? Was it an outlier amongst years of positive contacts?
  • Resist the straight line. Lines might bend: Sometimes the prospect with the highest net worth may not be the best. Look for other data trends that show a dedication to your cause, such as consistent giving and regular, positive interactions.
  • Calculate the Risks: How much work will a project take to get the results that your team needs? Is the new, shiny resource going to help your workflow?
  • Get things in proportion: Is the prospect’s million-dollar house the biggest in town, or just a small cottage in a high-wealth area?
  • Generalization: Just as Rosling advised in the first point, resist the urge to assume that your top prospect is the wealthiest. What categories do you automatically consider? What lesser-considered factors could help you identify someone?
  • Slow change is still change: Our field is constantly evolving, and it sometimes takes time to adapt. Learning a new resource, evaluation technique or piece of software isn’t easy, but is always valuable. Give yourself credit for adapting- no matter how small it may seem.
  • Get a toolbox: Keep a running list of resources to help you in your work. HBG regularly updates our list with input from staff. Additional lists, such as APRA’s, can further guide your work.
  • Resist blame: Why didn’t you get the results you wanted? Maybe the search criteria for a foundation search was too specific for a long list of funders. Think about how you can change the keywords, loosen the search terms, or re-examine the request to find better results.
  • Take small steps: Faced with an overwhelming list of prospects to screen? Try sorting the results in different ways to reveal different population segments. Using variables such as confirmed assets, number of philanthropic gifts given or the prospect’s largest gift could reveal new and interesting prospects.

In an industry such as ours, facts are paramount to our success. Rosling’s book helped us look more objectively at how data is presented to us, as well as how we take it in and use it in our work. We highly recommend it, especially now, if you’re interested in how data is presented to us and how our perspectives change how we receive it.

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Lockdown Learning

If your inbox is anything like mine, I imagine that you have been receiving a lot of webinar invitations lately. I’ve probably attended more webinars in the past two months than I did in all of 2019.

It’s been really nice to see other people, many of them familiar faces, in the Brady Bunch layout. But this week I realized that the selections I’ve made up to now have been more about being with my community than personal education. And that is going to change.

My change of heart came because my exceptional alma mater is doing a series called “Lockdown Lectures” featuring star professors like Brian Cox. The first “lecture” wasn’t a lecture really – Cox was simply interviewed by a student and talked about a wide range of things including what made him decide to transition from touring rock band keyboardist to astrophysics professor in the first place. (I mean, really, what a story!).

In answer to one of the student’s questions, Cox mentioned that in the process of writing a new popular book about black holes he’s discovered that some of the ABCs of his field have bumped up against each other in his head, and not in a comfortable way. It made him realize that he needs to go back and look more closely at certain scientific theories and re-test some of his assumptions so he can understand his field better.

The guy is a brilliant scientist and communicator, and he’s unsatisfied with his knowledge about his field. I found that really inspiring.

So inspiring, in fact, that I signed up for a terrific webinar that happened yesterday sponsored by the Colorado Nonprofit Association called “What You Need to Know about Navigating Nonprofit Mergers, Partnerships and Acquisitions.” I knew nothing about nonprofit mergers (which was kind of the point of me signing up), and had honestly never given them a minute’s thought before, but now I’m much better informed about something that (I learned) is fairly commonplace in our sector.

So what am I saying here? Until the stars re-align and life goes back to whatever “normal” ends up looking like, we’re probably not going have another opportunity like this (let’s hope) to take advantage of all of the related and tangential learning that is available for free or low cost right now. Working from home now, we actually have flexible time to be able to fit learning into our day.

So I encourage you to take this opportunity to re-learn what you thought you knew, or to learn totally new stuff that will help you be better informed and become a more well-rounded employee, boss, or just…person.

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New White Paper! Who Is Doing Well Now?

A month ago I wrote an article for this blog called Who’s Doing Well Now? which highlighted several companies and individuals that were doing well financially due to their prescience about the market or because of the goods and services that their company is manufacturing, shipping, or selling during this pandemic.

Since then, a number of other companies and individuals have been added to that list, and I’ve gotten overwhelmed (in a good way!) with articles about philanthropists stepping up right now. It was too much important, good information not to be shared to help our sector.

So we wrote a white paper to pull this information together for you. We hope that it helps you and your nonprofit identify prospects and industries that will help you get through this time.

It may be that the specific individuals and companies you see in this white paper aren’t in your database – but people like them, or industries they represent, might be. You may be in the UK or EU or South America and the company names are all different but use this as a creativity lab for prospecting.

The white paper is here in our Learning Media Library and it’s free. Let us know if you find it useful, and add any articles or resources in the comments that you’ve found to be helpful.

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Donors that are stepping up right now

While it becomes increasingly easy to believe that the nonprofit sector’s glass is half empty at the present moment, the reality is that people want to help nonprofits, and they are stepping up. If you don’t believe it, I thought I’d share some of the many places you can go to get some really good, heartening news.

At the same time that 80 percent of US nonprofits surveyed were telling the BBB Wise Giving Alliance that they expect revenues will be down in 2020, Fidelity Charitable announced that giving from its donor-advised funds was up 36% this March compared to the same time last year.

Fidelity surveyed its donors who had given at least $1,000 during the second half of March. Over half had no plans to decrease their giving this year, and 25% said that they planned to increase their giving.

Including support just for COVID-19 related giving (which was $160.7 million as of yesterday, and up $20m since last Friday), total giving from Fidelity’s DAF donors so far in 2020 is well over $2 billion. This month Fidelity issued a “COVID-19 Relief Challenge” to its donors to give $200m before #GivingTuesdayNOW on May 5. This is clearly having a positive impact on their giving numbers.

If you haven’t yet read the Chronicle of Philanthropy’s April 9th article by Michael Theis titled “Giving From Donor-Advised Funds Surge as Pandemic Spreads” you should get on that now – it’s a barn-burner full of hope and a call to action. From the article:

 Money is not simply flowing out of the funds. Donors are also contributing to their accounts, even though the slide in the stock market and the tumbling economy might have caused some supporters to pause their giving.

Deanna Spaulding, a spokeswoman at Fidelity Charitable, declined to provide figures for incoming gifts, but she added that the number of new fund accounts opened has also grown since the start of the year.”

And it’s not just Fidelity. DAF sponsors large and small all over the country are reporting the same thing.

Giving from funds at Schwab Charitable were up 21% February 14 – March 31 compared with the same period last year. Schwab “asked the Center for Disaster Philanthropy for a list of organizations responding to the pandemic globally and highlighted them on its website. Those organizations saw a nearly 450 percent increase (emphasis mine) in grant dollars from Schwab account holders.”

Over the past few weeks, the new CEO of the Silicon Valley Community Foundation, the place where tech millionaires and billionaires send their philanthropic dollars to DAF, has been calling donors asking them to spend at least 5% of their invested funds now. And she says they’re seeing donors answering the call.

Even smaller DAF sponsors are seeing a huge uptick. ImpactAssets DAF reported to Barrons that by the end of the second quarter of 2020 investments in its fund will exceed $143 million, more than total investments made in the fund for all of last year. Their DAF donors made more than 1,000 grants totaling $11 million from their DAFs last month, two times the number made in a normal March.

If there was ever a moment for DAF donors to allocate those funds they were saving for a crisis, it’s now, and they seem to be stepping up.

Who else is giving right now? Startups.

Earlier this month, Crunchbase reported that a number of startups had accelerated their philanthropic giving due to the pandemic. Their initial article listing 24 startups grew so fast that they abandoned adding to the article and embedded a running spreadsheet of companies, which is now up to 140. Check out the interactive list to see if there’s a company donating in your area.

Also, private and family foundations, companies, and LLCs

Candid reports on their new popup COVID giving/tracking webpage that total coronavirus giving they’ve counted so far stands right now at nearly $8 billion.

Just like the number of coronavirus cases out there, there is likely lots more giving that just hasn’t been counted yet.

Donors are eager to give and, as we pointed out two weeks ago, there are plenty of companies and industries that are doing really well right now. We may have to adapt or throw out some old ways of doing things and adopt new technologies and strategies, but it appears that as the need for funding has risen, so have the numbers of donors who want to be helpful.

FURTHER READING

Charity is off the charts amid the coronavirus. Is that a sign of America’s strength or weakness? By Laurence Darmiento, LA Times, 4/20/2020

Community Funders Balance Priorities in the Face of Overwhelming Needs, by Paul Karon. Inside Philanthropy, 4/22/2020

Special Report: Covid-19 and the Charitable Sector. Give.org BBB Wise Giving Alliance

Want to see some fascinating stats on email solicitations right now? NextAfter has created a web page chock-full of real-time analysis of 90 nonprofits with lovely charts and graphs showing

  • The types of verticals in the analysis
  • Median monthly visitors for each vertical (the top nonprofit type has 4x the visitors of #2)
  • How has the average number of gifts changed Jan-April this year vs last?
  • How has avg. revenue been affected in recent months? (Spoiler: it mostly hasn’t)
  • How has each vertical changed their volume of messaging in recent months? (these numbers were really interesting).

ABOUT HBG

The Helen Brown Group was formed in 2002 with a goal to be different.

Allow me to explain my personal philosophy to you.

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