1. Finding the needle in a haystack and what kind of needle is it? Presented by David Lamb Prospect Research Consultant Blackbaud Analytics

2. Goals of this session A rationale for prospect research Prospect identification Research subjects Public company executives Private company executives Professionals Filling in the details Turing facts into information

3. I Spy NOT! Limitations of prospect research Public information sources Respect for the prospect Partner in building a relationship Time management Setting the ask at the right level Doing your homework Maximizing the prospect’s giving potential Anyone who systematically collects, records, and organizes donor data is a prospect researcher

4. What You Need To Know Ability Linkage Inclination

5. How Much Do You Need To Know? Depends on the progress toward solicitation Identification: just enough information to justify a contact Cultivation: “spot research” as needed 0-6 months from solicitation: as much research as you can get

6. Unequal Potential The 90-10 rule: 90 percent of your income will come from 10 percent of your prospects Most of the people on your database are not wealthy Some of the people on your database don’t care that much about your mission Start your efforts with the most capable and the most likely people

7. The Giving Tree Interest Ability

8. What You Can Usually Find Indications of wealth Stockholdings of public company insiders Salaries of top public company employers Real estate values Salary surveys Affiliations Doctors Lawyers

9. What You Can Sometimes Find Inheritances Affiliations Nonprofit Corporate Family Donations Biographical Business history Who’s Who Assets other than stock or real estate

10. What You Can Never Find Cash & bank balances Non-insider stock holdings Whatever the prospect wants to keep hidden

11. Prospect Identification Your best prospects are already on your own database Corollary: Just because someone is wealthy doesn’t mean she’ll give anything to you

12. Alternative Approaches Reading the paper Peer screening Arts programs & annual reports Data mining List matching

13. Reading the paper Top prospects appear in predictable places Business section Sports section Society/People Special case of business journals Executive changes Profiles of executives and businesses Top properties

14. Peer Screening Second best source of prospect data 200-300 names per session Top donors Consistent donors Simple check boxes Ideal conditions Knowledgeable people Comfortable and prestigious setting Reward participants Clear statement of confidentiality Anonymity

15. Peer Screening Questions I know the prospect … Ability I’m willing to help Other information

16. Arts Programs Collect programs from arts organizations Compare donor list in the program to the names on your database

17. Vendor Driven Data Mining Should be considered when your need for funding is not met by your current prospect pool Alternative approaches Statistical Modeling List Matching

18. Statistical Modeling Recognizing meaningful patterns in a large dataset through statistical analysis Long used in the social sciences & by business Assumption: donors have some characteristics in common Discover those characteristics Apply to entire database Predict giving Requirement: consistent data on giving and relationship to the institution For better models, you should append valid external data sources: Census Credit

19. Types of Donor Models Annual Giving Major Giving Gift size Planned Giving Bequest Annuity CRT Membership Patient Response

20. List Matching Automated process to match names on your database to names on other lists: Public company insiders Private company owners & officers Real estate Biographical sources Donor lists Any list in electronic form

21. Comparing the Approaches ResultsPer Record Cost Emphasis Modeling A score or other indicator about every record on the database Lower Prospect Identification Inclination & Linkage List matching Specific information about a few very capable prospects Higher Prospect qualification Capacity

22. What’s Right for Me? You should do list matching if: You have a well established major gift operation Your constituents are wealthy You are located in the midst of wealth You need to qualify people for gifts of at least $10,000 You should do modeling if: You want to segment your entire database Your major gift operation is less developed Your constituency is unlikely to be in lists You need to improve your annual fund strategy You need to improve your planned gift stratgy

23. A Comprehensive Approach Modeling results: 5,000 “good to excellent” prospects Matching results: 1,000 high capacity prospects Database size: 20,000 500

24. Research Subjects Insiders Private company owners Real estate Professionals

25. What’s An Insider? Director Policy making officer – top 4-6 Major shareholders 5% holders report on Form SC13 10% holders report on Forms 3, 4, 5, & 144 Indirectly held stock reported for Spouse Children Foundations Investment companies or partners

26. Researching Insiders Free tools SEC.gov Hoovers CBS MarketWatch Company web site Fee based 10K Wizard EdgarOnline

27. Researching Private Company Execs Hoovers State Corporations Site Company Web Site KnowX At the library Dun & Bradstreet Standard & Poors

28. What’s a Private Company Worth? Value is determined many factors: Cash flow Inventory Debt Market conditions Good will Compare target company to other companies that are for sale or recently sold Compare target company to similar public companies

29. Private Company Valuation Resources www.bvmarketdata.com (subscription required) www.bvmarketdata.com bizbuysell.com www.globalbx.com bizstats.com Yahoo Stock Screener The Ultimate Valuation Guide

30. Researching Real Estate The value of every property is public information Typically kept at the county level Sources: NETRonline The Tax Assessor Page Yahoo!RealEstate Zillow

31. Researching Professionals Ziggs Search for Professionals Zoom Info ZabaSearch Doctors AMA Physician Select AIM Docfinder Medical Salaries Lawyers Martindale & Hubbell FindLaw

32. What If You Don’t Know… Where the prospect works FEC Hoovers Google Zoom Where the prospect lives FEC Phone directory

33. Filling In The Details Donations Waltman’s Donor Series FEC State Political Donors One Step Birthdays Biographies Online Landings (Airplane Owners) Landings Salary Surveys Google or Altavista Google Altavista Foundation Affiliations Guidestar Grantsmart Foundation Center Foundation Directory FC Search Taft Foundation Reporter Public Records

34. Making Sense of the Data Gift capacity is a portion of net worth and income Net worth=assets-liabilities

35. Distribution of Assets Source: IRS www.irs.gov/pub/irs-soi/98perwel.pdfwww.irs.gov/pub/irs-soi/98perwel.pdf

36. The Art of Prospect Rating Philanthropic history Income based Slightly more than 2% of income goes to charity 5 year pledge=10% of income Asset based Make best guess of net worth >> philanthropic capacity is 2-5% of net worth Philanthropic capacity is 5% of total identified assets Average annual gift x 10 Consider places where the prospect may be influential

37. Prospect Research Resources www.lambresearch.com Prospect Research: A Primer for Growing Nonprofits APRA (www.aprahome.org) International Conference Great Plains Chapter Prspct-L (www.yahoogroups.com/prspct-l)www.yahoogroups.com/prspct-l

38. Tools You Might Buy Dialog: www.dialog.comwww.dialog.com FC Search: www.fdncenter.orgwww.fdncenter.org Waltman’s Donor Series: www.donorseries.com www.donorseries.com 10K Wizard: www.tenkwizard.comwww.tenkwizard.com KnowX: www.knowx.comwww.knowx.com