Helen Brown Group

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Ode to the Checklist

This week we welcome my colleague Kristina Gropper to the blog. Kristina’s got a ton of terrific resource tips this week – and a handy reminder to make sure that you never forget to check those resources as you work. ~Helen

A few months ago, I sent a short profile update on a high net worth individual to a dedicated research client. (Dedicated clients are people and nonprofits that we work with one-on-one on a retainer basis as their outsourced research shop). Shortly after, I received an email from my client. The profile was great, but it did not include an apartment purchase from the previous year that they knew about. I apologized and sent a revised profile right away. It was a slip, and I was determined to understand why it happened. I had gotten in the habit of checking a handful of real estate sources, none of which listed the newly purchased property. I then thought of ways to check real estate more methodically moving forward. I recalled one of my most-liked podcasts has an episode that delves into checklists (Hidden Brain, “Check Yourself”, aired October 30, 2017).

In the podcast Shankar Vedantam explores the value of checklists in a variety of professions, including surgeons and pilots. My favorite excerpt was from a 1943 military training film:

 In the cockpit, you learn to follow the checklist because it helps you to keep your mind on your work. Detail’s important when you’re learning to fly a big bomber, and using the checklist means you don’t overlook a thing.”

While research and flying bombers don’t initially sound similar, they do have one thing in common: detail is important. Could a checklist be a valuable tool for a prospect researcher as well?

As an exercise, I created the following real estate checklist, personalized to my client:

Throughout the research process, I make sure to check my prospect against each resource while also staying on the lookout for any LLCs affiliated with the donor or family members, where they may be holding additional assets.

Expanding my list, I also checked in with a few of my HBG colleagues who are very knowledgeable about real estate. For New York City in particular, I reached out to Kelly Labrecque – our in-house New York City real estate guru – who suggested that I add the New York City Assessor, where you can search by address (https://a836-pts-access.nyc.gov/care/search/commonsearch.aspx?mode=address) or by Borough Block Lot (BBL) (http://nycprop.nyc.gov/nycproperty/nynav/jsp/selectbbl.jsp). Kelly also recommended RealtyHop (http://www.realtyhop.com/) and Real Direct (www.realdirect.com) as an alternative to ACRIS.

For prospects in larger cities where renting is common, Josh Ostroski noted that mortgage calculators may be helpful to understand what an equivalent mortgage payment would be compared to rent, but making sure to take into account taxes, fees, and down payment. He recommends Bankrate (https://www.bankrate.com/calculators/mortgages/new-house-calculator.aspx), Zillow or StreetEasy.

In my day-to-day work, I now focus more time on real estate transactions, including recently sold real estate, since I know they are important to my clients. It is time well-spent, as real estate is a key indicator of future giving. According to DonorSearch findings from 2015:

  • Donors that own $2+ million in real estate, which account for 1.4% of records analyzed, make up 25% of total monetary donations and are 17 times more likely to give philanthropically than the average person.
  • Donors that own $1-2 million in real estate, which account for 3.2% of records analyzed, make up 13.2% of total monetary donations and are 4 times more likely to give philanthropically than the average person.

My checklist was building momentum. I found I really enjoyed having the list to hold me accountable to each of our available resources, so I decided to expand it to include essential websites for foundations, philanthropic gifts and stocks. For foundations, I included:

When it comes to checking for individual philanthropic gifts, NOZA (https://www.nozasearch.com/), iWave or ResearchPoint are my go-to resources. A colleague also taught me a few creative ways to search for gifts that don’t show up in these well-loved resources by using quotations and an asterix. To search for Sam and Estee Palmer’s gifts, for example, do a Google search for “Sam * Palmer” site:.org or “Sam and Estee Palmer” site:.org.

To top it off, I added a few sites for stocks, including iWave, Nexis Mosaic (https://www.lexisnexis.com/en-us/products/lexis-securities-mosaic.page) and J3 (http://www.j3sg.com/) to my checklist.

Creating a checklist was a simple, yet empowering step in ensuring I’m providing the best possible service to my clients. This process also opened up communication with my dedicated client. As Helen Brown discusses in a blog post from last year, a two-way flow of communication helps to avoid missing out on information.

In case you would like to craft your own checklist, HBG has an extensive library of prospect research resources online to inspire you. These links can be customized to create a list specific to your own organization and the preferences of your colleagues.

Do you also find checklists helpful in your research? If so, which sources do you always check out?

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A snippet of usefulness from the World Wealth Report

Prospect research is an artfully scientific mixture of fact and conjecture. We spend a lot of time delving into sources of record like newspapers, SEC documents, real estate records, contact reports and other records from our own databases. Then we add informed opinion like white papers, rich lists, and our own experience. If we’re lucky, we can include some data science into the mix.

As we mature in the profession, what we become comfortable with is a curious amalgamation of truth and speculation that we use to rank, score, and predict which groups of people or individuals are likeliest to give to our organization.

It’s not a perfect science yet, but over the years we prospect development pros have gotten pretty good at uncovering useful information and helping organizations use it successfully. According to a recent MarketSmart major gift benchmark study, 84% of nonprofits that use prospect research meet their fundraising goals every year. Only 65% of nonprofits who don’t use prospect research meet their goals (which, you could argue is still pretty good odds, but why not be better prepared and 20% more likely to succeed?)

Last week I highlighted the Fidelity Donor Advised Fund Charitable Giving Report, which is worth adding to your reading list if you haven’t already (especially if your nonprofit type is in one of the top 5 giving priorities).

This week I want to highlight a key graphic in the 2019 Capgemini World Wealth Report (WWR) and add a little context.

In the graphic we can see the different categories of assets that high net worth individuals (HNWI) worldwide tend to hold, and the percentage of their assets that each category is.

How can we use this?

Research on people who live outside of the US is traditionally more difficult than domestic research, so any piece of information on international prospects is potentially useful. But specifically, let’s say you know one piece of the puzzle; that your French prospect has two properties beside their home. Once you find the value (or relative value) of those two properties, you know from the chart that those properties make up 14.5% of their total wealth. Calculate a back-of-the-envelope total visible asset figure et voilà.

No, it’s not hard, specific, factual, information about the individual you are researching, but it is another piece of the puzzle that you can use to get a less fuzzy picture of your prospective donor.

Something else I found interesting in the report was the discussion on how those asset allocations have changed since last year. Nervous HNW investors (whose wealth decreased last year) are moving their money out of equities and into cash, cash equivalents, fixed-income investments, and alternative investments like commodities and private equity. Does this point toward another global recession? Maybe not, but it sure doesn’t suggest that they’re bullish.

I’d love to hear your thoughts on the World Wealth Report, and if you found anything interesting in it that you’d like to share here.

 

 

 

 

 

 

 

 

 

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Hidden gems in the 2019 Fidelity DAF report

Today I’d like to draw your attention to the Fidelity Charitable Giving Report, 2019 edition. You can download it for free here. The report summarizes Fidelity’s donor advised fund activity for the past year, and there are some important opportunities I noticed that I wanted to share with you.

In case you’re not familiar with Fidelity Charitable(™), it is the largest sponsor of donor advised funds (DAFs) in the United States. Fidelity is cagey about the total assets under management, but donations made last year from the superfund’s 204,292 (and growing) DAF donors totaled $5.2 billion.

While you might expect that a super-large fund of funds would be a great place for privacy-seeking billionaires to cache their philanthropic dollars, the median DAF size at Fidelity is $17,670. Just 8 percent of Fidelity DAF accounts hold over $250,000 in money waiting to be donated, but even so, that small slice of funders gave over 582 donations of $1,000,000+ last year.

That $5.2 billion in donations last year was an increase of nearly 20 percent over 2017. Fidelity says that the majority of donations – 60 percent – were specifically unrestricted. Normally with a DAF gift distribution, a donor can suggest a gift designation but the DAF sponsor – Fidelity in this case – can choose to honor or ignore the restriction.

Of course, they’d be operating at their peril to ignore the donor’s wish in all but the most outlying cases, so DAF managers generally pass that restriction along to the nonprofit. The fact that this growing number of Fidelity DAF donors largely gives unrestricted money is good news, considering that most foundations won’t cover overhead and major gifts from individuals tend to be restricted.

The report breaks down giving by recipient type and a companion piece slices the data by geography, and I found these two breakdowns fascinating:

Recipient type

DAF donors give differently than average Americans do (as described in Giving USA). Year after year, their pie charts show us that religious organizations receive the largest piece of the pie in terms of dollars. Last year, religion received 29 percent of total giving, which amounted to $124.52 million.

But although Fidelity’s DAF donors gave the highest volume of gifts to religion, the segment which received the most dollars was education, which at 29 percent of all giving was nearly double the amount of religious gifts, at 15 percent. Religion actually came in third place, just after ‘society benefit,’ which was 18 percent of DAF giving at Fidelity.

And that’s not unusual. In fact, according to the report:

 Since Fidelity Charitable launched the Giving Report in 2013, education has regularly received the most yearly grant dollars; religion has received the greatest grant volumes.”

From a prospect identification / donor segmentation perspective, that’s pretty interesting, eh?

Geography

A companion piece to the report provides a closer look into what Fidelity calls the 2019 Geography of Giving, where you can drill down on each of Fidelity’s top 14 markets as it compares its “Top Cities for Giving“. They are:

Atlanta, Boston, Bridgeport, Chicago, Cleveland, Dallas, Denver, Los Angeles, Miami, Minneapolis, New York, San Francisco, Seattle, and Washington, DC.

There are all sorts of interesting statistics for you to find in each city’s one-sheeter. Take a look at Chicago, for example. Human services, religion, and education may be the top 3 charitable sector priorities for all Fidelity DAF donors in that city, but nestled among the top five most popular recipients of donations are two public media nonprofits.

Hmmm, that’s interesting! What about New York? The top three priorities are education, human services, and health, and (well, look at that!) at #1 for donations is New York Public Radio and at #4 is WNET. Again, two in the top five.

So of course I had to check out my home town, Boston. Top three priorities for Boston DAF donors? Just like New York, the top three are education, human services, and health. But look here: at number 3 for largest dollar support is the WGBH Educational Foundation (yay Masterpiece!) and at number 4, Boston University (which beside being a university also houses Boston’s other major public media station, WBUR).

In San Francisco, the number one spot for donations is KQED. In Atlanta, public media is at #4 (under the guise of the Atlanta Educational Telecommunications Collaborative).

If I were working in public media, I’d be paying a lot of attention to my Fidelity DAF donors right now (or maybe these numbers point to the fact that they already are…)

But even if you’re not in public media, there’s a whole lot more in these reports of interest to all organization types that can help you think creatively about donor engagement strategy. These are just two areas that I wanted to highlight that grabbed my attention. Take a look and see what information you find that’s relevant to your nonprofit – and if you find something that grabs you as fascinating, share it with all of us in the comments!

 

 

 

 

 

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