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Chuck Janus Development Research: An Overview Independent Education Summer Development Conference June 20, 2011

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Chuck Janus Development Research: An Overview Cindy McCarthy & Jon Thorsen, The Nature Conservancy

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The Basics Prospect research, also known as development research or fundraising research, is a process in fundraising wherein a researcher identifies and provides relevant information about potential donors to an organization Organizations generally employ prospect researchers to find and qualify potential "major" donors who have the resources to make a large gift to the organization. A prospect researcher will assess an individual's, company's or foundation's capacity and propensity to donate. Prospect researchers use a variety of resources, including public records, business and financial publications, and Internet databases. - From Wikipedia

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Prospect Research Products Identification of New Prospects Individuals, Corporations, Foundations Major Gift donors In-Depth Research Capacity Propensity Connections

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Circles in the Stream Development implies a continuum Research has applications across this continuum Different needs at different stages of the relationship Different information to drive decisions Researchers ensure strong donor pipelines Major gifts Middle donors Planned gifts

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Convergence Maintaining a strong base of donors Pipeline for future major gifts Pipeline for future planned gifts Constituents with present value: involvement, advocacy, community, connections

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Divergence Looking for the big fish Moments in time Data and its application Clear and present values Predictability

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The AIR Approach Successful research establishes three important criteria for prospective major gift donors: Assets The ability to make a major gift (according to your organizations definition) Interest Philanthropic priorities that align with your funding opportunities Relationship An established connection to your organization, preferably to a key leader, volunteer or staff person

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The Researcher\ Gift Officer Partnership Leveraging distinct skill sets Valuing information as a commodity Establishing the two-way street Investing in shared success Understanding the gift process in order to request and supply the right information at the right time Strategic vision Tactical application

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Scenario One At your organizations annual fundraising gala, you meet Joe Jones, a longtime friend of one of your trustees. Joe shares that he grew up in the Shenandoah Valley, and is in town helping settle some family affairs related to his fathers death several months ago. In chatting with Joe, you also learn that he and his wife live on the West Coast, where he has built his business, but plan to relocate to the Shenandoah Valley after he retires next year.

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Scenario One: Questions Who was his father? (Mother?) Is there family land? Home? Are there siblings? Business on West Coast? Who does Joe know? Possible Wealth events?

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Scenario One: Answers Trustees and volunteers Internet Google, Business bios, Linked In www.google.comwww.google.com Newsmeat (political contributions) www.newsmeat.comwww.newsmeat.com Gives address, Employer, Title view actual filing NY Times archives (Local library) Obituary Information www.legacy.comwww.legacy.com Real Estate databases UVA Portico site http://indorgs.virginia.edu/portico/personalproperty.htmlhttp://indorgs.virginia.edu/portico/personalproperty.html Lexis/Nexis

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Scenario Two In reviewing your monthly giving report, you notice a new donor nameThe Prospect Family Foundation. Come to find out, it is the newly established family foundation of Peggy Prospect, a longtime annual supporter of your organization. Peggy usually gives $250 per year for general operating support, and this gift from her foundation is at the same level. Why is this significant?

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Foundations Family Foundations Indicator of wealth-difficult to set up/manage 5% distribution of assets each year Form 990 filed annually More control investments and giving Corporate Foundations Community Foundations Donor Designated Funds Donor Advised Funds Anonymous giving Easy to set up

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Foundations Guidestar: www.guidestar.orgwww.guidestar.org Foundation Center: http://fconline.foundationcenter.org/ http://fconline.foundationcenter.org/ Foundations website Foundation 990 reports: Assets Contributions discover source closely held or publicly traded stock ownership Giving Totals Grantees Types of charities they support Gift ranges Determine particular interests of individuals through designations Trustees - and contact information

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Scenario Three You receive a call from Bill, one of your most loyal volunteers. Bill is calling to tell you that he wont be able to help organize this summers charity golf tournament. He is in the process of selling his software development company to a corporation in the Silicon Valley, and the negotiation process will require extensive travel in the upcoming months.

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Researching Companies Public vs. Private Public Stock is bought/sold on the public marketplace Government regulated Private Company is owned by a sole individual or small group of investors Financials not disclosed

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Public Companies Insiders Stock holdings Yahoo Finance http://finance.yahoo.com/http://finance.yahoo.com/ SEC/Edgar www.sec.govwww.sec.gov http://sec.gov/edgar/searchedgar/companysearch.htmlhttp://sec.gov/edgar/searchedgar/companysearch.html DEF14A 10K Wizard http://www.10kwizard.com/http://www.10kwizard.com/ Salary SEC documents Salary.com Glassdoor.com Salary Surveys industry Set up alerts in Google using industry specific publications Company profile Google Finance (Reuters) www.google.comwww.google.com Hoovers www.hoovers.comwww.hoovers.com

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Privately Held Companies No government disclosure required Often family owned Value of company Percentage ownership Dun and Bradstreet Self reported sales and net worth Comparable financials Public Records look up varies by state News articles, listings (e.g. Forbes) Trustees -- bios sometimes found through SEC search

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Company-related Wealth Events Mergers and Acquisitions Terms may be publicly disclosed SEC documents/annual reports 8K would report merger activity Initial Public Offerings Private Company selling stock to general public to raise capital News Alerts

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Donor Reports Targeted Internet Searches prospect name and donor Use.org and.edu domains name and million and gift site:cornell.edu Searching annual reports Paid databases NOZA/Prospect Research Online www.nozasearch.com/ www.nozasearch.com/ DonorSearch.net http://www.donorsearch.net/http://www.donorsearch.net/

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Inclination Affiliation to your organization Alumnus, Donor, Volunteer Donor to like-minded organization -- use site search above for gifts to like minded orgs Volunteer or director at similar organization Other Expressed interest in your organization

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Affiliations Muckety www.muckety.comwww.muckety.com Little Sis www.littlesis.orgwww.littlesis.org SEC Filings http://www.sec.gov/edgar.shtmlhttp://www.sec.gov/edgar.shtml ZoomInfo www.zoominfo.comwww.zoominfo.com Guidestar Subscription service; search by person BoardEx www.boardex.comwww.boardex.com

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Political Contributions Federal Newsmeat www.newsmeat.comwww.newsmeat.com Campaign Money www.campaignmoney.comwww.campaignmoney.com State Level (Virginia) Virginia Public Access Project www.vpap.orgwww.vpap.org

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Prospect Identification Data Mining Existing donor base Real Estate (wealthy zip codes) Predictive Modeling Electronic Asset Screening Peer Screening Who do your trustees know? Sphere of Influence Analysis

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Predictive Analytics/ Data Mining Why is it happening? What opportunities am I missing? How do we do things better? Finding patterns in large historical data sets that can be usefully applied to predict future behavior

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Predictive Analytics Applying the characteristics of your best donors to the larger pool of potential donors Activities Involvement Participation Engagement Create and test models for their predictive precision

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Modeling Major Gifts What behavior do we wish to predict? What variables will we use? Levels and types of previous involvement (affinity) Demographic factors (capacity) Linkages (relationships)

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Results Used a model that created multiple analyses of multiple factors Internal data, wealth screening information, demographic data We were able to predict at very high rates whether a donor would make a future major gift Checking the model against real data in the database produced a correlation of over 80% for our top two prospect sets

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Major Givers Predicted

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Debunking Some Common Myths Research is Not: A magic bullet A substitute for relationship building An excuse to delay a visit or ask An other duty as assigned A clerical task Typing a name into Google Research cannot be done in ones spare time because spare time is an extinct concept

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Research & Development Just as in the for-profit world, Research requires an immediate investment to produce future results We need to be realistic about what we are trying to achieve and what it will take to achieve it Budget & Resources Training & Supervision Time & Patience A true major gift program requires and deserves an honest investment in Research

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The Research Profession

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APRA Code of Ethics Integrity be truthful and respectful Accountability protect donor privacy Practice be accurate and appropriate Conflict of interest protect your organization Write reports as if the donor is reading over your shoulder Be prepared to show any donor any information youve collected

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Advanced Services

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Networking Association of Advancement Services Professionals (AASP): http://aasp.camp8.org/http://aasp.camp8.org/ Best practices project: http://aasp.camp8.org/Default.aspx?pageId=330908 http://aasp.camp8.org/Default.aspx?pageId=330908 Association of Professional Researchers for Advancement (APRA): http://www.aprahome.org/http://www.aprahome.org/ Association of Fundraising Professionals (AFP): http://www.afpnet.org/ http://www.afpnet.org/ Prspct-L: http://listserv.apra-prspct-l.org/http://listserv.apra-prspct-l.org/ FundSvcs: http://www.fundsvcs.org/http://www.fundsvcs.org/

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Questions? AASP: Best Practices site: APRA: cmcarthy@tnc.org jthorsen@tnc.org