[MUSIC] Hello, in this lesson we will look at how to determine a prospect's giving capacity. At the end of this lesson you will be able to do the following. Explain the process to estimate a prospect's giving capacity. Approximate the prospect's potential in comparison to other prospects in your portfolios. Investigate philanthropic data while researching new donor prospects. Identify reliable sources to use in prospect research. And finally, define prospect management along with its features, protocols, and policies. Let's get started. [MUSIC] Estimating a prospect's giving capacity is a mixture of art, science, and relationship. There is no magic formula that can be applied with confidence and accuracy in every case. You, as a development officer, are very aware of the relationship component. Adding research data injects some science into the equation. In the end, you must establish the ask amount based on what the prospect has told you, what others who know the prospect have told you, and what your research has told you. Evidence of large gifts that the prospect has made suggests that the prospect could give a large gift again. Ownership of semi-liquid assets suggest that stock gifts are a possible gift vehicle. If a person owns expensive property, it probably hints as assets beyond the property itself. In a wealthy family's portfolio, real estate is not usually the largest asset. Additionally, we can't discount the possibility that a property, other than the prospect's home, might be the gift itself. The goal of your research is not to pin down the prospect's net worth, but to approximately rank the prospect's potential in comparison to other prospects. So that you can spend your time with the prospects that are most capable and likely to give larger gifts. Various rules of thumb may be useful when rating a prospect's capacity. But remember that none of these will precisely fit your prospect's situation. They are only guides to get you started in the right direction. Then you refine your ask based on what you know of the prospect's circumstances and your development instincts. You may ask, why not just Google this? Well, it does seem like the obvious starting place, doesn't it? Many casual users of the Internet start their research with Google. However experienced researchers know that there's a large portion of the Internet that is invisible to Google. It is better to start your research with more targeted sources, like the ones we've previously discussed. Once you know more about your prospect, you can add more intelligent keywords to your Google search. Which you should do at the end of your research, not at the beginning. When investigating new donor prospects, it's important to look at their philanthropic data. The prospect research tools listed below will help you uncover valuable details about a donor's philanthropic history. Your library, people often overlook their local libraries, but they can give researchers free access to a wealth of information on philanthropy, just with a swipe of a library card. Especially if you're on a tight budget, they're a great option. Check out all the biographical business and newspaper databases your library has available. Many of them are specialized resources that are very expensive to purchase or use online. Your library will probably have access to online resources that again would be too expensive to purchase on your own. The Foundation Center. The Foundation Center offers a great deal of information about larger philanthropic communities. It has a free comprehensive database on grants and the people who make them. Some services on the site are free, while others require a paid subscription. Beyond its online presence, The Foundation Center has a group of libraries that fundraisers can visit to not only do research, but have help in that research from Center's librarians. The Foundation libraries are located in the following cities, Atlanta, Cleveland, New York and Washington DC. Finally, GuideStar. GuideStar has information on all IRS-registered non-profit organizations. With the aim of advancing transparency, GuideStar provides as many details as possible about the 501(c)(3)s in its database, from finances to an organization's mission. When you select an organization to research, GuideStar's website takes you to a page with multiple helpful tabs on the non-profit in question. Including a summary, their financials, form 990s and documents, people in governance, programs, impact, external perspectives, and contractors. Between FEC.gov, SEC.gov and county tax assessors public records, you will be able to discover tons of predictive donor data using government-related prospect research tools and resources. The FEC provides comprehensive data on contributions to political campaigns. Simply input a prospect's name and any other identifying details you have for that person such as a zip code, place of business, etc. If the prospect has contributed to a political committee or a campaign, you will be able to see how much they gave and whom or what they gave it to. The US Securities and Exchange Commission keeps a free searchable database called EDGAR, which has corporate filings. The search tool is fairly extensive and it lets users perform a four years full text search when it's in its advanced mode. Finally, if you are looking into a donor's real estate ownership, their county's tax assessor site can be a great help. Once you have an address, you can search the assessor site to ascertain property value. In terms of searching through property records, you will be slightly restricted by the capacity of each individual county's site. However, many will let you do research or search by location address, owner name, parcel number, or map. A major component of prospect research is discovering the business affiliations of your prospects, and the databases of professional and biographical information listed here will help you do just that. Marqui's Who's Who has an online database with a comprehensive population of biographies on top leaders in the fields of business, law, science, the arts, government, medicine and entertainment. It's a powerful tool that can give your fundraisers a well-rounded understanding of the individuals they're soliciting donations from. Dun & Bradstreet Business and Executive Information contains the complete Dun's marketing identifier files. Those files include contact names, title, executive home address records, and D&B biographical records. Dun & Bradstreet's collection of 14 million records is one of the largest collections of details on privately held businesses and their executives. Finally, Zoominfo. Zoominfo's database contains detailed profiles of 7 million businesses and 95 million business people. When having a hard time finding contact info for a prospect, type their name into the Zoominfo search bar and you'll likely be provided with a prospect's email, phone number and company details. Likewise, if you're looking for certain details on a business, the same process applies. LexisNexis real estate property records is one of the most robust compilations of real estate and property records in the country. With information on more than 120 million properties throughout the United States. With information ranging from county tax assessments to detailed sale information on a property, it can be an immensely valuable resource in your search for your prospect's and donor's real estate data. In addition, websites like Zillow and Trulia allow you to search for property estimates and purchase prices by using your donor's address. The National Center for Charitable Statistics has a free search tool that lets you look up information on pretty much any non-profit organization in the United States. Their query tool is very easy to use, but flexible enough to do very specific searches, and the results include lots of summary information about non-profits. The Million Dollar List is a database that is ideal for searching for the cream of the major gift crop. The Million Dollar List database includes listing of publicly announced charitable donations of $1 million or more since the year 2000 in the United States. If you're looking for an organization-altering donor, they're definitely on this list. Finally, How America Gives, from the Chronicle of Philanthropy, this interactive tool allows users to investigate charitable giving by geographic location. With the engaging search tool you can examine giving at state, city, county, and even zip code level. We live in an age of social media. Don't underestimate the predictive value in exploring a prospect's online presence and social connections. Social media sites are some of the most accessible prospect research tools around. If your prospect has a LinkedIn profile, it is an ideal place to get a sense of his or her business affiliations and professional life. Perhaps you have a relationship with one of your prospect's colleagues who could introduce them to your organization. Or you might learn that your prospect is served on the board of another non-profit and you can let that knowledge inform your cultivation plan. To learn more about a person's interests, hobbies, and social relationships, Facebook is the perfect site to visit. As long as the donor has a public profile, you'll really be able to learn a lot. Ultimately, one of the most important things to remember about prospect research is that early prospect research is not complicated. Remember that the best prospects you have are your current donors. Look within your family. Look at special event attendance lists. Your committee, your board rosters, both current and former, your dedicated volunteers. Any donors you currently have that are making gifts of $1,000 or more. And don't forget individuals who are served by your programs and their friends and relatives. In the end, data is not enough. The job of prospect research is analysis, not just a data dump. The task of prospect research is to work collaboratively with development officers to try to answer their questions. Does this individual have the capacity to make a gift of significance? From what we know of his or her interests, prior giving, and other affiliations, is this person likely to be interested in our mission? And if so, why? From what we know of his or her assets and past giving patterns, how might this person be able to make a significant gift in cash or through some sort of planned gift? A results-oriented prospect research program should allow a development officer to narrow their focus and create a balanced list of prospects. The best case scenario we are looking for, individuals with a high level of capability, and a high likelihood of giving. Emphasis must focus on high level major gift prospects. Also consider your ability to assess prospects along the lines of, can you get to them? How long will it take, who's in the path and are there gifts there? It's also okay to have a few stretch prospects, but not too many. So how does one use information on the database and gathered through research to decide how much to ask? There are various rule of thumb that may be useful when rating a prospect's giving capacity. They are 1-5% of an individual's net worth. 20x an amount of consistent annual giving. 10x the amount of their largest annual gift. 10% of one year's income through a 5 year pledge period. 1-4% of stock worth less than $500,000. 5 to 9% of stock worth $500,000-$1 million. And 10% of stock worth $1 million or more. 5x the total of four annual gifts to the organizations in the community, including your own. Best practice would be to estimate with an average of two or more of these criteria based upon the best information you have available. Ultimately you will refine your ask based on what you know about the prospect's circumstances and your development instincts. While formal prospect research provides the factual basis on which to determine an individual's ability and perhaps to estimate what size gift he or she may make, one of the most effective tools is peer research. A rating of an individual's capacity to make a gift if he or she is interested. The rating session can be a group discussion, which is preferable with a lead volunteer conducting the session and staff members taking notes. Or a silent meeting, with individual members of the evaluation committee quietly making their ranking sheets and staff members collecting the sheets at the end of a session. In the supporting documentation to this module, I've included a number of resources that you will find helpful in structuring a peer screening session for your own organization.
