Part 2 of The Power of Research series by Mary Richter
In this three-part series, I am going to highlight the ways in which prospect research informs and guides the work of development fundraising officers. I’ve relied on my research skills to support my work as an annual fund director, campaign director, and advancement director, and currently as an independent consultant. Within these roles, I implemented research most often in a few tasks which I will focus on – managing a board nominating committee, creating and managing a campaign prospect pipeline, and segmenting annual fund solicitations (coming soon).
One of the first steps in campaign planning – perhaps the most important one – is to decide who your prospective donors are.
Many organizations approach their most reliable, most generous annual donors first, starting with the board, followed by most capable and engaged donors, but it is also important to use a campaign as an opportunity to engage the most capable prospects or donors who have not been interested in supporting your operating budget or supporting annual events. An exciting, transformative project such as a building or major endowment campaign might be just the ticket with some of the major philanthropists in your midst.
How do you find them? You do a wealth screening of your entire database (living and mailable folks only) with iWave, and you’ll easily be able to spot the people with the highest capacity and the most philanthropy. Examine those people more closely, by continuing your research and also your internal review. Ask yourself questions like:
Then decide whether you’ll be able to convert the prospect from their current giving status to a campaign donor during the time that your campaign will run.
Often, board and staff leaders want to know what the development office thinks can be raised in the upcoming campaign and ask for estimates. You do this by creating a prospect list, estimating target gifts and capacity, and adding up the total target number of your community.
Be careful – don’t add it up to $25 million and tell the CEO that you can raise $25 million! Many development officers strive to have a 4:1 ratio in a campaign (e.g. 4 prospects for each gift level), which means that you’d want your total target gifts to be 4 times the campaign size.
It is vital to mention, though, that many organizations choose not to include gift targets and capacity for the major philanthropists with whom there is a very slim chance that you’ll obtain the gift. For instance, let’s say you work at a hospital planning a campaign. A $5 million donor to another hospital once had emergency surgery at your hospital, three years ago, and sent $1,000 in gratitude.
It’s unlikely that the donor would become a campaign donor to your hospital, but there is a chance, and it might be worth it to approach the donor. I would recommend that, when sharing your estimate of what you can raise in a campaign, you omit the people who are really far afield or the people who would take more than two years to cultivate.
Using your research and giving history, you can determine estimated gift targets for your campaign prospects. As you move closer to a solicitation, the gift target may change, but with solid research, the capacity should not change.
Much like creating a board pipeline, you will create a pipeline that allows you to sort by capacity (e.g. Dana Smith is capable of $1 million), target gift (e.g. we think we could ask Dana Smith for $250,000), timing of solicitation, solicitor, and last name.
The prospect pipeline will become the focus of many campaign meetings, whether internal or with board members present, and will help to spur on activity. Each gift officer or volunteer solicitor is accountable for the moves that have taken place since the last meeting that will advance each prospect closer to a solicitation.
Hopefully, you’ll be able to approach the most capable prospects earliest, ideally in the quiet phase. I was fortunate to work with the Osborne Group on a campaign, and they always advised us that all that was quiet in the quiet phase was the goal.
Refer to the goal at that stage as the “working goal” or “quiet phase goal” because you are testing the goal based on your progress with your first solicitations. Your final goal is decided right before you launch the public phase of your campaign because your estimate of what’s feasible becomes much more real when you have approached the donors who can make the biggest difference to your final goal.