We in the prospect development field know well that our work adds value to our organizations, but sometimes, it's hard to make upper-level administrators--or even fundraisers--see how important prospect development is. In this article, Ian T. Wells of Ian T. Wells and Associates makes the case for even smaller nonprofits investing in prospect development. You can thank him after you show this article to the executives of your organization, and use it to show your value.

The Value of Prospect Development

By Ian T. Wells

The prospect development industry is not without its fair share of frustrations. There are researchers who have to deal with last-minute requests for detailed reports on priority prospects.  Others must contend with portfolio managers hesitant to enter contact reports or properly track their cultivation efforts.  Some data analysts are expected to build reliable predictive models while working with incomplete data.  A list of industry grievances may be long, but perhaps the most infuriating aspect of the business is the general lack of regard for prospect development itself.

An unfortunate number of non-profit organizations fail to invest an adequate amount of resources into prospect research and management.  No fundraising effort can succeed without donors, so it should be common sense that identifying, evaluating, and managing future donors lays the foundation for a successful development shop.  Yet many non-profits skimp on prospect development, while others mistakenly believe they can reach their full potential without investing in it at all.  

A Luxury Option or a Necessary Expense?

One of the more common excuses made by some organizations is “we don’t have money to spend on research.”  Small non-profit organizations often struggle to stretch every dollar as far as possible, and fear to allocate their limited funds into prospect development.  There may be a perception that research is a luxury option reserved solely for large organizations undertaking billion-dollar campaigns, and that smaller shops will just have to rely on hard work and good luck.  It is easy to sympathize with such a belief.  It is also an error.

For all their differences, for-profit corporations and non-profit organizations are still bound by the same economic forces: they both need to spend money to make money.  In the for-profit sector, it would be anathema to not invest in the basic fundamentals of one’s own business.  What would happen to the value of ExxonMobil’s stock if its CEO decided that the company “did not have the money” to drill for oil?

It may seem like hyperbole to suggest that prospect development is as important to a small non-profit as drilling for oil is to a global petrochemical conglomerate.  The two activities, however, achieve the same end: obtaining the resources that are necessary for each organization to thrive.  If an oil company decided not to invest in oil exploration, it would reduce its expenses, but at the cost of doing much greater damage to its revenue.  The same premise holds true for non-profits that decide not to invest in prospect development.  

Managing Costs vs. Managing ROI

Even some mid-size and large development offices fail to properly fund their prospect development efforts.  While such shops may have considerable capital to allocate to their various departments, their prospect development staff may still be underfunded relative to each organization’s needs.  Instead of maintaining the ideal ratio of one researcher for every five frontline fundraisers, such organizations may see one researcher struggling to juggle the prospect needs of ten or more gift officers.  Not surprisingly, the quality of a prospect development program suffers wherever researchers are understaffed relative to the organization’s needs.

The solution to this problem for such shops is self-evident: spend more money to either hire or contract out work to more prospect researchers.  But a common concern among such organizations is that the cost of fundraising should never exceed $0.20 per dollar raised.  Many established shops fear that violating the twenty-cents-on-the-dollar rule may hurt their ratings on websites such as Charity Navigator, which may in turn hurt donor retention and outreach.  This concern is understandable, but it is self-defeating in the area of prospect development.

If one examines the return on investment for each department in a development office, it is easier to understand how vital each department is to the success of the organization.  And if prospect development is properly credited with identifying and managing high-net-worth prospects that would otherwise not be in the pipeline, the ROI for such efforts should be considerable.  What is more important to an organization’s success: spending $50,000 to host an event that raises $1 million, or spending $5,000 to identify 50 new prospects whom each have at least $1 million in capacity?

Fundraising expenses do not have to devolve, however, into a zero-sum game that pits researchers against their colleagues.  Ideally, executive leadership may see the value of increasing spending in an area that can exponentially improve revenue.  If a non-profit raised $10 million each year on a $1.9 million budget, it might be wary of additional costs that could push the organization past the twenty-cents-on-the-dollar threshold.  But if that non-profit invested an extra $100,000 into building a comprehensive prospect development program that improved the bottom line by $1 million, it would not only increase revenue, but also reduce the organization’s costs-to-funds-raised ratio.

Researchers as Advocates

For better or for worse, the fundraising industry is one that is dominated by Type-A personalities.  This is not a bad thing in and of itself; successful fundraising all but requires gift officers to be ambitious, outgoing, and blessed with the gift of gab.  Executive leaders at non-profits are almost exclusively selected from the ranks of these gift officers, as their success in closing gifts may often be seen as proof of their fundraising mastery.

Generally speaking, a fair number of prospect researchers do not fit the Type-A archetype.  This, too, is not a bad thing in and of itself; successful prospect development all but requires researchers to be data-driven, focused, and more inclined to spend time looking at a computer screen than chatting by the water cooler.  In an industry where “face time” is treated as a prerequisite to success, however, the stereotype of the introverted researcher may cause prospect development professionals to be treated as support staff, rather than as strategic partners.

It is important for gift officers and executive leadership to understand how effective prospect development can help them reach their financial goals.  It is therefore incumbent on researchers to educate others on best practices when necessary, and to be highly-visible advocates for identifying, evaluating, and efficiently managing quality prospects.  By speaking up on behalf of our industry, we can empower ourselves to be rightfully seen as prospect strategists and logisticians who are key components of a successful fundraising cause. 

I tend to shy away from personal new year's resolutions, partly because I know exactly how likely it is that I'm going to stay away from sugar, vacuum the house once a week, or finally go through all my (three year old) wedding photos to make an album: not very likely at all. In spite of that, I feel like the new year is a great time for me to make some professional resolutions, since I feel like in the professional world, I have more accountability and more motivation to keep them. Here are some of the things I want to do in the new year.

1. I resolve to continue my professional development in the area of management. Having started a management role in September, I find that I am already learning a lot about how to effectively manage a team and help them to do the best work they can. Still, I know there's a lot more I can learn. I will make use of my organization's human resources department and web-based professional development, and will also spend time bouncing ideas off other managers in the office, in order to be the best leader for my team that I can be.

2. I resolve to do some cleaning...of my resources. While our office has a lot of resources that we use in our work, and they're all too much for one person to comb through and clean up, I can at least make a good dent in cleaning up the international research resources that I helped put together several years ago. I'll check links, update them as needed, organize bookmarks, add newer information, and so forth. (NEDRA's Resource Refresh think tank might help me with this!)

3. I resolve to do some physical cleaning. While the ideal of a paperless office is great, it's not something that I've been particularly good about putting into practice. Call me a Luddite if you must, but I still find good old-fashioned paper useful for a number of reasons. Unfortunately, I've accumulated so much of it that it's no longer organized or curated, and therefore isn't as useful as it could be. This year, I will spend what time I can on sorting my papers, filing the ones I want to keep, and recycling or shredding the ones I no longer need.

What changes would you like to make in your work in the new year? What practices would you like to implement? What projects would you like to tackle? Share in comments, and maybe others will be inspired to start 2017 off with some fresh resolutions!

In this article from 2006, Amy Minton discusses trends in prospect management, and how to implement an effective prospect management program in your organization. Even today, prospect development professionals in many organizations struggle with how to work with fundraisers on this important subject, and can benefit from Amy's insights and tips.

Trends and Issues in Prospect Management.pdf

The NEDRA Board had its monthly operations call on November 4. Among the subjects discussed were upcoming programs and some exciting news about the conference. Read on for more information!

We all know that finding a prospect's connections is one of the biggest ways we can add value, as researchers, for our front-line fundraisers. In this article, Bill Gotfredson of Boston Children's Hospital shows us a technique that many of us have probably never thought of: finding connections through golf.

How to Search for Golf Memberships

By Bill Gotfredson

 

One of the most common requests we receive as researchers is, “who does s/he know?”  We spend mountains of time building maps, charts and family trees to help officers glance into a donor’s social network and find a warm introduction to their call.  Well, the good news is that I’ve discovered another free online resource to help you build your maps, charts and trees. The four letters you need to remember are, G-H-I-N.

 

The Golf Handicap Information Network or GHIN is an online database golfers use to monitor their golf handicaps in order to level the playing field while participating in tournaments and competitions. 

 

According to the ghin.com website, “Developed in 1981 at the request of state and regional golf associations, the USGA’s GHIN service is the largest handicap computation provider in the world, serving more than 2.3 million golfers from 84 golf associations, federations and unions that collectively represent more than 14,000 golf clubs in 47 U.S. states, as well as the Bahamas, Bermuda, China, the Dominican Republic, Guam, Hong Kong, India, Mexico, Panama, Puerto Rico and Sri Lanka.”

 

Before searching, let’s walk through a few quick pointers about how golf and country club memberships are designed and how that applies to the GHIN database:

1. In general, private clubs do not ever disclose their full membership roster. You can search a club’s 990 for the directors but that is a small percentage of the members

2. Most golf club’s “full voting membership” level includes a golf membership for the member. Spouses and children can be extra for golf and they do not always receive a golf membership.

3. Full voting members are individuals who are wealthy enough to pay the $25K-$250K+ initiation fees, the $5K-$50K+ annual dues, and likely live and socialize in the same local communities.

4. Most private golf clubs limit their membership to 300-500 full voting members.  

5. Most golf clubs assign a GHIN number to their full voting members.

 

The search for golf members with GHIN numbers is simple. It is only on the individual level; you cannot search by club. The results will only be identified with first name/last name and the associated club so you will have to winnow down results using geography, spouses, and children to triangulate results. The simple steps are:

1. Go to GHIN.com

2. Click on “Handicap Lookup”

3. Click on “Name and State”

4. Enter your donor’s name and state

5. Click on individuals in the results list

 

One marvelous bonus feature for this search is that the results on the individual level provide you with all of the clubs a GHIN number is associated with at a golf member level, regardless of which state you originate the search.

 

Now go have some fun identifying relationships and picture yourself playing golf with Mayor Bloomberg at one of the eleven clubs in two states and Bermuda where he is a golfing member.

The Conference Committee is delighted to announce that the keynote speaker for our 2017 Annual Conference has been chosen! Luma Mufleh is a social entrepreneur who has dedicated her career to helping refugees, and who comes to us through Greater Talent Network. Mufleh is the creator of the Fugees Academy, the first school for refugee boys and girls in the United States; and the coach of the Fugees soccer team, which brings refugee children together to share in the enjoyment of the sport. She has also created Fresh Start and Queen Food Company, two businesses that employ adult refugees and immigrants and pay them a living wage.

 

We hope you’ll join us at the conference to hear what is sure to be an inspiring keynote.

Thanks to everyone who joined us for Christopher Dial's presentation on unconscious bias, and the subsequent NEDRA Night Out. Thanks also to everyone who attended the Think Tank on prospect management. Hopefully, everyone came away from each of these events with new ideas and new connections!

The Programming Committee has two more events scheduled before the end of the calendar year. On Friday, December 9, professional speaking coach Susan Daniels will be presenting Speak Up!, a workshop on public speaking, at Smith College. If you've ever been interested in presenting at a conference, or just want to feel more confident and prepared when speaking in meetings, this is a great opportunity to learn how to do so!

On December 12, there will be a Research Basics Bootcamp at Northeastern University. Susan Grivno and Matt Lacroix will be covering all the basics that a new researcher needs to know. If you're new to the field or need to brush up on fundamentals, sign up today!

You can find more details and register for these programs on the Upcoming Programs page.

In the new year, the Programming Committee is working on creating more great educational opportunities. Stay tuned for more information, and remember, if there's a subject you want to know more about, or if you want to share with your fellow researchers on a topic of interest to you, you can submit a Program Proposal any time.

In this season of feeling grateful, has there been someone in our industry who has significantly made a positive impact on you and your career? If so, please consider nominating this person for NEDRA’s annual Ann Castle Award. 

The award includes a $250.00 cash prize, a one-year NEDRA membership, and free admission to the 2017 NEDRA Conference. Note: Current NEDRA board members are not eligible to be nominated. Please click here for the nomination form.

The Ann Castle Award acknowledges outstanding effort or achievement in the field of development research and related fields, which may include special projects, articles in development-related publications, or other efforts that have served to promote or assist others in the field of development research. It may also recognize exceptional effort or achievement that has served the development mission of the nominee's (or applicant's) organization. You can read about previous Ann Castle Award recipients here.

Although it's almost 20 years old, Jane Kokernak's article on how to succeed in a multi-role position is still relevant for every many-hat-wearing small shop employee out there today.

The Fine Art of Juggling.pdf

The NEDRA Board had its monthly operations call on October 19. Among the topics of conversation were the upcoming schedule of fall programming and the annual conference. Read on for more information!