Helen Brown Group

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Building blocks for a solid prospect management system

by: Tara McMullen-King, Director, Research & Consulting

 

Tara McMullen-King

Tara McMullen-King

It’s no secret that an effective prospect management system can significantly enhance an organization’s fundraising efforts – and here at the Helen Brown Group, we are sometimes called on to consult with clients who are thinking about creating a new prospect management system from scratch, or overhauling an existing one. Is your organization in the same boat? If so, it’s important to carefully think through the design, implementation, and upkeep to ensure that your system will be both successful and sustainable.

A robust prospect management system typically includes some of the following:

  • Donor interests and demographic information
  • Prospect assignment, coordination, and collaboration policies
  • Prospect strategy plans
  • Relationship management tracking via contact reporting, stage, and inclination coding
  • Prospect development and research activities
  • Proposal development and pipeline management
  • Volunteer and committee assignment and management
  • Accountability standards for program and fundraiser performance
  • And a rich source of benchmarking data and KPIs (key performance indicators) with forecasting capabilities

But how do we get there? Before jumping into creating a new system or refining an existing one, I suggest taking some time to consider the following questions, considerations, and challenges.

What are your expectations and desired outcomes with regards to implementing a prospect management system? What issues/problems/questions are you looking to address?

Defining your expectations and goals is crucial for setting a strong foundation for your new system, helping you clearly identify what you want to achieve. Whether your focus is on streamlining processes, enhancing data accuracy, improving reporting, or addressing specific challenges, keeping these objectives in mind will guide the design and implementation of your new system. Without a clear understanding of the issues you aim to resolve, you risk losing focus and developing a system that falls short of your needs.

Who are the key stakeholders in your organization that need to be involved in the development and implementation process? Do you have buy-in and investment from your organization’s leadership and other staff?

It’s essential to identify key stakeholders and secure leadership support. Stakeholders from different departments will have different perspectives and needs, which should be considered in the design of your system. Gaining buy-in from leadership ensures that you have the necessary support and resources, and that the project aligns with the organization’s strategic priorities. Without broad involvement and support, your prospect management system may face resistance or fail to meet the needs of its users – but getting staff to adopt any new system can be challenging due to unfamiliarity or perceived difficulties. You will want to provide comprehensive training and ongoing support to encourage adoption and ensure that staff are comfortable using the system.

What is your target timeline for the development and implementation of your new system, and what resources (staffing, time, technology, budget) are you willing to commit to support the project?

It will be essential for you to establish a realistic timeline and understand the resources you have at your disposal. What is the full scope of the project, and what will it take for you to achieve your goals? Without a well-defined timeline and committed resources, you may encounter serious delays, go dangerously over your budget, and face inadequate support, all of which could seriously jeopardize your success.

Who will create your prospect management policies and procedures? Who will implement those policies and procedures? Who is going to be responsible for entering and maintaining the data? Who will be responsible for keeping the system on track once it is created?

It will be important for you to think about the various roles and responsibilities – who will be responsible for the critical tasks that will keep your prospect management system functioning effectively in the future? Without clear ownership and accountability, you may suffer from inconsistent data entry, poor maintenance, and lack of adherence to policies, leading to a decline in data quality and usefulness over time.

How does your organization currently track donor and prospect data? What data is available and how reliable is it? Aside from your CRM, are there other systems or tools you currently use to track and manage donor relationships, interactions, and solicitation efforts?

Different departments or teams within your organization may store data in separate systems, leading to fragmented information and inefficiencies. To address this, you may want to consider integrating or centralizing data across teams for a more cohesive approach to prospect management. Many organizations also rely on multiple tools to manage donor relationships and track interactions, which can result in data silos and inefficiencies. By assessing your current data, tools, and existing data management practices, you can take steps to reduce redundancy and ensure that all relevant data is captured in one place, while also making informed decisions about what needs to be improved, what can be carried over into the new system, and how to ensure data hygiene and accuracy moving forward.

What are your organization’s current prospect management processes and policies, if any? Are they realistic? Understandable? Up-to-date?

Before creating a new prospect management system, it’s important to assess your current processes to determine which are still effective, user-friendly, and relevant to your needs. Outdated, unclear, or impractical processes can obstruct efficiency and compromise data integrity. By thoroughly understanding the existing state of your policies and workflows, you can leverage what works well and address any shortcomings in the new system, ensuring it aligns with your current goals and is straightforward for staff to use.”

How do you currently identify and prioritize potential donors or prospects for cultivation and solicitation?

Achieving fundraising success requires the ability to efficiently identify and prioritize prospects, so it’s incredibly important to take some time to evaluate your current strategies for donor identification and prioritization. By analyzing the strengths and gaps in your current system, you can create a new process that enhances these efforts, ensuring that high-potential prospects are identified, properly cultivated, and solicited at the right time.

Are you currently using your prospect and donor data to inform fundraising strategies? What metrics or key performance indicators (KPIs) do you use to measure fundraising success and donor engagement?

Data-driven decision-making can significantly improve your fundraising outcomes – so you should also consider whether you are fully leveraging the data you are collecting. If you’re not, your new system should be designed to better capture and analyze data to inform strategic decisions, such as identifying trends, segmenting donors, and optimizing solicitation strategies. Additionally, metrics and KPIs are crucial for assessing the success of your fundraising efforts, so it’s worth considering how you currently measure performance and whether those metrics align with your objectives. A new system could help track these KPIs more effectively, offering actionable insights to refine your strategies.

By carefully considering these questions and challenges, you can start building a prospect management system that not only addresses your immediate needs but also lays the foundation for long-term success. In upcoming posts, I’ll continue to explore additional questions to consider, offer strategic advice on data points and system design, and share some practical tips and tricks. So keep an eye out for more insights!

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“Summertime is always the best of what might be.”

Ah Summertime! It’s a great time to take time to recharge your batteries. But it’s also a great time to to recharge your prospect research activities as well – getting ready for the year ahead. Whether you’re gearing up for a campaign or just a busy fall ahead, Grace Chandonnet has some wonderful suggestions of projects to tackle now to help your future self. Happy summer! ~Helen

Grace Chandonnet

         Grace Chandonnet

As a kid, summer was the most anticipated season – sleeping in a bit, staying up a little later, lightened responsibilities, and more time for fun. It’s a bit different as a working adult, but even so, the pace of life – and work – does slow down a bit during the summer for many of us.

So why not take advantage of fewer deadlines, a lighter workload, and clients, colleagues and bosses taking some time off, by tackling those “someday” projects and tasks that you never have time for the rest of the year. In addition to switching up what your work is like for a little while, you just might set yourself up for success when the busy season inevitably starts in September.

In our profession, there are lots of ways we can use this time to help out our future selves while also having a sense of real time satisfaction. I surveyed my colleagues at HBG for some of their/their clients’ wish list items and I’ve included a couple of my own.

Database Hygiene – We all run across things (or the lack of things) in our databases that we wish were “cleaner” but often just move on to what is pressing in the moment thinking we will get back to cleaning things up at some amorphous future date. Why not dive into your database and tackle tasks like deduping records, being sure that all assigned prospects have capacity ratings, batch updating addresses, and adding phone numbers and email addresses to skimpy records? A clean database makes for a happy prospect intelligence professional, because we all know that if it isn’t in there, or if it is in there incorrectly, it doesn’t exist.

Research Refresh – One forward-looking client is interested in having full profiles completed for their top prospects now, in anticipation of being ready to go when the organization’s president’s calendar starts filling up with meetings in the fall. All that will be required will be a quick refresh when the meeting is imminent. If a pile of full profiles to complete seems too ambitious for one summer season, you could always review recent philanthropy and new board appointments for your trustees, top donors, and other partners, and brief the relevant fundraiser on anything especially interesting that you find. And while you’re in those database records, take the extra few minutes to update information as outlined above!

Proactive is the Name of the Game – Now might be a good time to undertake some proactive work.

  • Do you have a sense as to what priorities your organization will be turning toward this autumn?
  • Can you undertake some prospecting to identify a few new potential donors to those priorities?
  • Can you start a process for screening new donors (of an amount that makes sense for your organization), to quickly assess their capacity, their potential inclination to become closer to your org, and how to engage them?
  • Do you have some screening credits with any of your vendors that you could use to screen some subset of your database, and then use some of your time to validate the results?
  • How about checking out those folks who are checking out your organization on social media?

Prospect Management – Setting your fundraisers up for success is tantamount to setting yourself up for success. Maybe you could spend some time working with fundraisers, whose workload might also be lighter this season, on optimizing their portfolios. Having the right prospects and the right number of prospects in a portfolio is an effective way to eliminate frustration for fundraisers, and to ensure that time is being spent on the people who are going to move your organization forward.

Professional Development – With your supervisor’s blessing, this could be a suitable time to enroll in a course or workshop that you’ve been wanting to tackle. If the subject matter contributes to the advancement of your career, all the better. You might also consider joining a board or otherwise volunteering for your favorite cause to take advantage of the longer days and (hopefully) your increased energy because of a little less stress at work this season.

The Feel Good Stuff – Okay, it is summer, and some part of that should be about things that make you happy right now, and that you might neglect during the busiest times. Presumably, everyone is breathing a little easier at the moment – why not ask a colleague or two if they’d like to take a lunchtime walk on a pretty summer day and get to know them a little better? Or invite a few colleagues for a Thursday evening happy hour? Focus on people who have a different job description than you do, like a frontline fundraiser or the IT person who drops everything to write the query you need. I have found that working with people whom I know and like makes my days better and happier, and everyone has something interesting to say. Your colleagues will be glad you invited them.

And don’t forget to take that vacation or staycation and recharge your batteries! As author and journalist Charles Bowden wrote: “Summertime is always the best of what might be.”

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Building Research Systems That Work

This month we open the blog with a practical look at Research department guidelines by my colleague, Michelle Guzman, who has had plenty of practice setting up workable systems. For example, even if you have a research request system in place, if it’s been a while since you’ve taken time to re-evaluate it, the steps Michelle outlines may help you come up with ideas for an even more efficient or helpful way to receive and deliver information. ~Helen

Michelle Hart

           Michelle Guzman

After sharing about imposter syndrome in a blog post last year, I’m excited to chat with you this time about setting up some guidelines for your research team and the larger development team at your organization.

Guidelines are essentially just formatted lists, right? And who doesn’t love making lists? So, let’s get our checkboxes ready to roll.

There are many guidelines you can establish around prospect development, and doing so can help you feel that you and your office have things under more control. For me, having a foundation and reference points that are agreed upon by leadership helps create better communication and a more useful end product.

Setting guidelines and timelines for what your team offers can be done at any point. Perhaps people in your organization kind of just know the “rules” or perhaps it is more of a free for all. Or maybe you just need to tweak your existing guidelines.  I recommend that you follow a handful of steps to get through it.

First, write down – or type up – what deliverables/products/services you currently offer. This is a great time to also re-evaluate them. Are they still needed? Should you add another item that has not be officially offered but is needed?

Then, categorize them. For example, bios and ratings might go under the heading of “Deliverables”, and portfolio reviews might go under the heading of “Services”. Your office may focus purely on research or may add in areas of analytics and prospect management.

From there, you can consider the parameters you currently have set and then what you and/or leadership would like.

Next, think about product names. Are bios called profiles or overviews? Are these three names for different types of deliverables? If they are separate types of documents, make that clear and define them. Definitions can and should list what information is included in that deliverable.

For each deliverable or service, state how long it can take per prospect. This can be a range. I would recommend doing this per prospect so that it is not misinterpreted that a set of 6 bios would take 30 minutes to 1.5 hours. I mean, it could, but it is not likely. Instead, you would note:

Event Bio – 30 minutes to 2 hours per prospect

Giving yourself and your team a bit of padding on turnaround time will save some sanity in the end. This also allows you to schedule that 10 bios could take 5 hours to 3 business days – if you’re solely focused on just doing those, which is not always feasible. While considering how long the deliverable per prospect takes or could take, also consider how far out the deliverable should be requested and by whom.

Let’s walk through this a little bit using everyone’s favorite who, what, where, when, and why prompts, even if it is a little bit out of order.

Maybe right now, requestors can send an email requesting bios by the next morning. Maybe that works for you…. but probably it does not. So, let’s think about when it would be ideal to get the request.

For events, it might be ideal to have the guest list at least two weeks out from the event with the knowledge that there will always be last-minute additions. Now you have the time frame of two weeks out for event bios. Do you want that to be two weeks out from your deadline to get them to the requestor or two weeks out from the event? Whichever you choose, note that in your guidelines. Do you want to have a deadline for last-minute additions, such as having the cutoff be the end-of-business on the Thursday before a Saturday event? Or do you want it to be by noon on the Friday before? Or earlier?

You’re doing great. If you have gotten this far, you have thought through and written up at least one product name, the time frame it takes (or that you want the team to see it can take), and how far out the requestor should send the request/ticket. Now, it’s time to line out who should be requesting the items, which quickly tells us where it needs to go.

If, for example, the president’s office needs event bios, then who should be sending your office names for bios? My recommendation is that only staff members from that office should be sending you names. For example, it can become chaotic if many gift officers are sending you names they think the president should have bios on (but maybe they really don’t?). If the president’s office wants bios on people, they can let you know.

So, why would your office need to know the reason for the request? Well, as researchers it gives us a lot of context around how the product should be structured and can give us a place from which to consult with the requestor on what they need.

Are you now saying, “but Michelle, what does this actually look like?” Well, the format of this document can vary, of course. Your organization might have formatting standards. I would suggest you make it easy to read and understand for your office and the larger group. I have primarily done this using a table. The below is a very basic table you with an example:

Once you have completed the document – whether on your own or with your prospect development team – go over it with leadership. They can offer valuable edits like naming conventions or even what they want the gift officers to be doing. In the end, you will have their support. Having buy-in is very important and helpful when referencing the guidelines. These can be included with the policies of your office and the development policies, as well.

When you have the final version set, it will be up to you and the team on how you share the information. I have found that a great mantra to keep in mind for gift officers is “repeat, repeat, repeat”. We all have a thousand – or a million – things going on in our lives at work and at home. While we do this stuff every day, they do not. So, give handy guideline cheat sheets out at portfolio review meetings or consultation meetings that you have with gift officers. The guidelines are also great to include with training materials for new prospect development staff members joining your team.

Even if you don’t use these specific ideas, I hope they’ve helped give you some inspiration for creating guidelines that work for your organization!

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The people vote and everybody wins

We say that we’re always looking for innovation in fundraising … but that it has to happen carefully because there’s not a lot of wiggle room at most nonprofits for a whole lot of risk-taking.

We lament our increasing dependence on a smaller number of larger gifts from major donors… and yet we have to strive for increasing the number of major donors because  that’s where the money is. It’s just more efficient, and we have to be careful with time and resources.

We’re experiencing a sharp drop in the number of smaller, sustaining donations as an industry…nonprofits struggle to engage with and retain foundational supporters.

All of these things hit me today as I was reading about a type of support called Quadratic Funding. Now, you need to understand that one of my most-beloved, rattiest t-shirts (that I will never send to Goodwill) says this:

 

In my job I have to math, but I don’t love it.

Still, this Quadratic Funding business makes a lot of sense to me because it takes the very limitations that we’re experiencing in fundraising right now and turns them into positive attributes.

Have you ever been in a store where, when you check out they give you a token? You’re supposed to take the token and drop it in one of a few labled containers, and whichever container has the most tokens by x date is the nonprofit that the store will fund at the end of the year. You vote with your token and one nonprofit “wins.”

Well, this is sort of like that, except every nonprofit or project wins.

Here’s how it works within one nonprofit

Let’s say your nonprofit has four projects that need funding. Nothing too risk-take-y like a building or critical-care unit. But projects that need to get done and that you can write or tell an engaging story or create a video about.

You start with a large donation that serves as the matching fund. (So, you’re still working with major donations, yes, but from perhaps a different type of major donor. It could be an individual donor or perhaps a collection of DAF donors interested in social impact funding.)

You tell the stories and build enthusiasm for the four projects. You invite gifts at all levels. People get behind their favorite project, and hopefully inspire others to get behind it, too.

The more gifts each project gets, the larger proportion of the matching gift fund it gets.

Wait, what?

So for example, let’s say the matching gift fund is $1,000 and we’ve got 4 projects to raise money for. Look at this table of gifts:

You can see that Projects 2 and 4 got the same total amount of support: $75.

Project 2 only got one gift of $75, so its match was $18.14.

Project 4 got five gifts for a total of $75, so its match was $78.78. It had more crowd support, so it got a much larger match amount.

Every project still wins, but the ones that have more interest and more enthusiasm for them win …bigger.

The mathy part

This concept of quadratic voting has been around for awhile, mostly in economics circles but also for political voting as well. (More here in Wikipedia for background).

But where it’s gained traction in philanthropy is from the support it’s gotten from Vitalik Buterin (the Ethereum cryptocurrency co-founder) in collaboration with Zoë Hitzig (Junior Fellow, Harvard Society of Fellows) and E. Glen Weyl (economist, Microsoft Research New England) who proposed the use of quadratic funding using crypto in their article “A Flexible Design for Funding Public Goods”.

(In fact, quadratic funding has been used in the Gitcoin Grants Initiative to distribute more than $60,000,000 to over 3,000 open-source software development projects in the past few years. Which is not nothing.)

How is the sausage made?

Apparently quadratic funding is calculated like this: you take the square root of the amount of each gift by each donor to a particular project. The sum of these square roots is then squared to obtain the voting power for that project.

Back to the real world

Recently, the online community foundation Endaoment started an initiative in collaboration with Gitcoin that uses quadratic funding and, while the actual methodology may be somewhat ponderous, what they’re doing is suuuper interesting.

For example, you can go to its funding page and watch distributions from peoples’ crypto wallets, credit cards, DAFs and more happen in real time. Those gifts get matched from Endaoment’s Universal Impact Pool on a timed payout, which you can see as a countdown clock.

When I checked on Monday, the top nonprofits being supported were:

The amounts will change on a regular basis as more people donate and until the final distribution is made. As you can see, current events are elevating causes and nonprofits that are in the news, and as you look back on past funding cycles, the nonprofits that received funding were likewise in the spotlight.

What does this mean for your nonprofit?

A nonprofit doesn’t have to be on the front lines of current events to take advantage of quadratic funding. Even a small nonprofit can create a buzz from 1) an impact fund, 2) a few much-needed projects, and 3) great stories that inspire a new kind of giving.

And quadratic funding may reduce those things that we worry about:

  • It’s innovative but without a lot of unnecessary risk;
  • it involves major donor giving, but also involves crowd-funding and smaller donation-givers in a meaningful way;
  • and it creates an opportunity for buzz and excitement that may create new communities for our nonprofits.

I’d just get someone else to do the math.

Further reading

Great explanation here of quadratic funding and the new Endaoment Universal Fund for charitable giving: Crypto Altruism, “Crypto Philanthropy meets Quadratic Funding in new Endaoment-Gitcoin Partnership” https://www.cryptoaltruism.org/blog/crypto-philanthropy-meets-quadratic-funding-in-new-endaoment-gitcoin-partnership

The nuts and bolts: How QF works: https://www.wtfisqf.com/

Quadratic funding: The future of crowdfunding, explained, by Jagjit Singh. May 6, 2023. https://cointelegraph.com/explained/quadratic-funding-the-future-of-crowdfunding-explained

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The Good, the Bad, and the Ugly: Comprehensive Due Diligence Research

This week we welcome HBG Senior Consultant Heather Willis to The Intelligent Edge. Heather has been with HBG for over 11 years, and her breadth of knowledge on many topics – wealth held in ranching and farming and today’s topic, due diligence, are just two examples of why she’s frequently a go-to expert for all of us on the team. Today, Heather shares important issues to be aware of as you consider due diligence research for your nonprofit. ~Helen

Heather Willis

Heather Willis

The Good, the Bad, and the Ugly: Conducting Comprehensive Due Diligence

In the world of nonprofits, donors play a crucial role in funding and supporting various initiatives. Prospect research serves as the foundational step in any decision-making process with a potential donor, however, it’s equally important for nonprofit organizations to ensure that potential donors align with their values, ethics, and mission.

This is where due diligence comes into play. When a person closely associated with a charitable organization becomes the subject of a scandal, the organization’s reputation can be tarnished too. The stringent due diligence practices seen across the financial services industry to comply with regulatory standards are increasingly being adopted by nonprofit fundraising teams to protect their organization from financial and reputational threats.

By conducting thorough due diligence, nonprofits can establish productive and lasting relationships with donors while safeguarding their reputation and integrity.

Understanding Due Diligence on Donors

Due diligence involves the process of investigating and evaluating potential donors before establishing a partnership or accepting their contributions. This process goes beyond simply checking financial backgrounds; it delves into the donor’s history, motivations, and potential impact on the organization. Comprehensive due diligence helps nonprofits identify potential risks and ensure alignment with their goals.

Steps to Conduct Due Diligence on Donors

  • Define Your Criteria: Clearly define the criteria that matter most to your organization. Consider aspects such as ethical values, mission alignment, financial stability, and the potential for a mutually beneficial partnership.
  • Gather Information: Collect information about the donor from public sources, such as their website, social media profiles, news articles, and press releases. This information can provide insights into their philanthropic history, affiliations, and interests.
  • Verify the donor’s identity, criminal history, and any potential legal issues. Various online platforms offer tools to perform such checks.
  • Financial Analysis: Evaluate the donor’s financial stability and the source of their wealth. This step helps ensure that the donations are legitimate and that the donor’s financial situation aligns with the intended level of contribution. Some sources of wealth may be considered sensitive to your organization.
  • Previous Philanthropic Activities: Research the donor’s history of philanthropic activities. Understanding their past contributions and partnerships can shed light on their values and interests.
  • Stakeholder Interviews: If feasible, consider interviewing individuals who have interacted with the donor, either in the philanthropic sector or otherwise. Their insights can provide valuable perspectives on the donor’s character and reputation.
  • Mission Alignment: Examine how closely the donor’s priorities align with your nonprofit’s mission and goals. A partnership is most effective when both parties share common values and visions.
  • Legal and Regulatory Compliance: Ensure that the donor complies with all relevant legal and regulatory requirements. This includes assessing their potential involvement in any controversies or legal disputes.
  • Conflict of Interest: Evaluate whether accepting a donation from the donor could create conflicts of interest for your organization. This is particularly important if the donor has ties to industries or causes that could compromise your nonprofit’s integrity.
  • Consult Experts: For more complex cases, consider seeking professional advice. Legal experts, financial analysts, and ethical consultants can provide valuable insights to aid your decision-making process.
  • News: General news helps you stay alert to trends, but for mitigating reputational risk, you’ll want the ability to narrow in on negative news. Given the increased focus on environmental, social and governance (ESG) commitments, it’s also useful to have the option to narrow to ESG news. Not only can this help you identify donors who might NOT be a good fit, but it can also help you identify prospects who align with your own mission.
  • Sanctions, watchlists and PEPs lists: Geo-political volatility like we’re currently experiencing means that sanctions and PEPs (politically exposed persons) are changing rapidly. Doing business with a sanctioned individual or entity could do more than put your reputation at risk; it can lead to regulatory risk and fines.
  • Legal news: This type of news can help you see if an individual or entity has a litigious past that could put your organization in jeopardy.
  • Company and executive information, including beneficial ownership: When it comes to corporate sponsors, you need to look beyond the entity itself. For example, a company may have hidden beneficial owners who might not be a good association for your nonprofit. Likewise, corporate hierarchies can show tangential relationships that could prove problematic or another likely corporate sponsor, but the only way you’ll know is to do your due diligence.

Balancing Ethics and Accountability

While the intention behind donor due diligence is to maintain transparency, accountability, and ethical standards, it is not without its controversies.

  • Preserving Donor Privacy vs. Ensuring Transparency: Controversy often arises from the tension between preserving the privacy of donors and ensuring transparency within nonprofit organizations. While donors may wish to keep their personal information confidential, nonprofit organizations argue that transparency is essential to demonstrate their commitment to ethical fundraising practices and maintain the public’s trust. Striking a balance between these two perspectives can be challenging, as both donor privacy and organizational transparency are valid concerns.
  • Potential Chilling Effect on Philanthropy: Critics argue that if donors feel their intentions are being scrutinized too closely, they might be discouraged from contributing to causes they care about. This fear stems from the idea that donors may perceive the due diligence process as invasive and overly skeptical. This perspective emphasizes the importance of fostering a philanthropic environment that encourages generous giving without unduly deterring potential donors.
  • Selective Acceptance of Donations: Some argue that extensive due diligence may lead organizations to reject donations from sources that may have had controversial affiliations or actions in the past. While this may be seen as a way to maintain ethical purity, critics point out that it could result in missed opportunities to redirect funds towards positive change. The debate lies in determining the appropriate level of scrutiny that aligns with an organization’s values while still capitalizing on potential contributions for the greater good.
  • Misuse of Donor Information: Organizations that collect and store donor data must ensure robust data protection measures to prevent leaks, breaches, or unauthorized access. Mishandling sensitive donor information not only jeopardizes donor trust but also raises ethical and legal questions about the responsible use of such information.
  • Uneven Implementation and Resource Allocation: The controversy surrounding donor due diligence is compounded by the uneven implementation and resource allocation across different nonprofit organizations. Larger, well-funded organizations might have the capacity to conduct thorough due diligence, while smaller ones might lack the resources to do so. This leads to potential disparities in accountability and transparency, which can undermine the sector’s credibility as a whole.

Conducting due diligence on donors is a critical practice that nonprofit organizations should prioritize to protect their values, reputation, and mission. While the process may require time and effort, it’s an investment that can lead to meaningful, sustainable partnerships with donors who are genuinely aligned with your cause.

By following these steps and staying diligent, nonprofits can ensure that their relationships with donors are based on trust, transparency, and shared objectives. The debate over due diligence on donors underscores the complex ethical landscape within philanthropy. While the practice is aimed at maintaining transparency, accountability, and ethical standards, it is not without its controversies.

Striking a balance between respecting donor privacy and ensuring organizational transparency, while also avoiding a chilling effect on philanthropy, requires careful consideration and open dialogue. As the philanthropic sector continues to evolve, finding common ground on this issue will be crucial in fostering a climate of ethical giving and meaningful impact. For an extensive list of due diligence resources please visit the Helen Brown Group’s Due Diligence Resources Page and let us know if you have others that we may have missed!

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Spotlighting First-Time Donors at Year-End

HBG Consultant Jessica Woodbridge

The holiday season is a very special time for gifts of all types, and of course we want to make sure to say thank you for them. We also want to be sure to bring those new donors closer into the nonprofit’s circle to engage them in more meaningful ways. This week my colleague Jessica Woodbridge shares great tips on using free and low-cost tools already at your disposal to get an early new year jump on thanking and engaging. ~Helen

Your team has worked so hard all year long to meet and maybe even exceed your organization’s fundraising goals. That final push at the end of the year usually turns into an “all-hands-on-deck” situation: call-outs to donors and prospective donors, lunches paired with solicitations, and appeals with multi-tiered approaches including mailings followed by e-blasts, and more call-outs! The checks are rolling in, credit cards are being processed, and new records are being created in your database with brand new donor data.

Wow! That’s all so exciting! The question now is:

How can you turn all this data into usable information for your team?

By highlighting prospects who show some sort of wealth capacity, gift officers can begin to establish relationships with these new donors and cultivate them so they will become repeat donors and even consider upgrading in the future.

If you can, use a screening vendor to run these new names through a batch screening; that’s a really efficient and quick starting point to help filter the top prospects.

If you don’t have a screening tool or are simply interested in getting the information to your team as quickly as possible, a great starting point is to export all the new donors into an Excel document along with the following data points (if available):

  • Constituent ID
  • Name(s), including spouse and other family members, business
  • Address, including the zip code
  • Gift amount
  • Email address
  • Soft credit recipient, including business, family foundation, donor advised fund (DAF), etc.

Then you can begin to make some sense of the data:

  • Add some columns at the end of your data to flag your priority prospects in whatever way will help you and your team. It could be by tiers (i.e. wealthiest prospects=Tier 1, second wealthiest prospects=Tier 2, etc.) or just mark them all as “yeses”, for example.
  • Using Forbes Wealthiest Zip Codes (link here), you can flag your new donors who have these zip codes either by a manual process (sort by zip, use CTRL Find, etc.) or use VLOOKUP in Excel to flag anyone with a zip code from the Forbes list.
  • Sort by gift amount (largest gift to smallest gift).
  • Review email syntaxes looking specifically for anything that doesn’t have @gmail.com, @yahoo.com, etc. and instead uses a business email address (i.e. jane.smith@gs.com, jane.smith@bain.com, jane.smith@blackstone.com).
  • Review anyone that has a soft credit recipient listed (i.e. if it came through a DAF or Family Foundation)

You’ll want to consider sharing the top tier of prospects you find immediately with the gift officers/leadership so they can make some personal touches (i.e. a personal phone call thanking the donor, a special thank you letter separate from the tax receipt/acknowledgement). Depending on your team’s policies, you may also start to assign some of these prospects into fundraiser’s portfolios.

What you’ve done so far is to flag the prospects who show a high wealth capacity. However, your gift officers (and possibly further research) will need to assess the person’s true affinity and inclination towards your organization, but that’s for another blog post!

At this point, you’ve helped set your team up for success right off the bat in the new year and hopefully can make some great progress with donor retention and upgrades in the future!

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Key Performance Indicators

Key Performance Indicators (KPIs) can be a tricky thing to measure in prospect research.

For example, how do you measure the impact of due diligence research that helped your organization narrowly miss partnering with disaster? 10 hours of research that, essentially, you have nothing to show for.

How do you track a day of research that finds that, yes, the donor prospect is capable of a major donation – they just have negative interest in or no connection to your cause.

It’s a lot easier to measure what’s easiest to track. Like:

  • The number of new prospects identified.
  • The number of reports written.
  • The number of screening prospects qualified.

Basic math. 1+1+1+…

Back in the day, those things were enough.

(Those things were never enough. We just weren’t grown up yet as a profession to know that they weren’t enough. We didn’t know how to set the proper expectations for ourselves. And those things were just easiest for us to track in our less-sophisticated databases, so that’s what we did.)

Also, I’m not saying that those things shouldn’t be tracked, I’m just saying that they’re the baseline. Things of interest. Not things to base the measurement of our department’s impact on.

And here is where I send out a big thank you to the very interesting (and much too short!) panel discussion on KPIs at the RiF conference this week for sharing their knowledge, ideas, and getting me thinking about this. The panel featured moderator Chris Davis (Birkbeck College) and panelists Hannah Clarke (UCL), Nidhi Fisher (Science Museum), and Ed Raichura-Brown (Marble Prospects) who each brought thought-provoking insight to this important topic.

The panel was called “Measuring and Showcasing the Impact of Prospect Research” and, naturally, KPIs factored in heavily in the discussion.

Things to consider in establishing KPIs

So, okay, if it’s hard to measure some things that may be important (but we’re not sure how important), and too easy to track other things that are just …things to count, what do we measure?

One important observation that came up in the panel discussion that we all agree on is that, in order for prospect development to have true impact, we have to set our goals according to the big picture.

What are the targets that the entire fundraising department has to meet?

What are the goals that each fundraiser has to meet? What about the unit? Department? Entire institution?

Once we’ve identified those larger goals, we can start thinking about the KPIs that we then need to set for ourselves…and then some.

Measuring the best of our energies and skills

Wildly plagiarizing from John F. Kennedy here:

We choose [the KPIs to measure our impact] not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills.”

For example, let’s say it’s determined that we need to identify 100 new donors at the principal gift level for a new initiative or campaign. Fine. That’s easy enough to measure – you do the project and afterwards you download a list showing the 100 folks who weren’t previously identified or assigned who now qualify as principal gift donors. But what about:

  • Who found them?
  • When were they found?
  • Was there a specific resource that was used to find them? (Were they found through one person’s initiative or a wealth screening, for example).
  • And, most importantly, did that constituent actually go on to make a principal gift? Which fundraiser was responsible for the ask?
  • If they didn’t give, what was the stated reason? If they did give, how long did it take?
  • If fundraisers and prospect researchers are paired, at the end of the year or campaign, which teams proved most effective at converting new prospects to donors? Why?

These are the kinds of questions that lead to setting KPIs that help us measure impact. Because we can now draw a line between the person who identified that prospect right through to the fundraiser who made the ask to the principal gift that came in.

  • We learn that Jane Researcher identified 30% of the successful new prospects – what was her secret sauce? You can bet we should do that again.
  • We see that when Jane’s identified prospects were given to Fran Fundraiser, 90% of the time a gift came in, so they clearly make a great team. (why? What’s the secret to their success? Can we now replicate that with other teams?)
  • What about the prospects that didn’t go on to make a gift? Can we look into why not so we can specifically not do that again?

Maybe you have other questions you need to have answered

Maybe your fundraising goals are tied not to finding and engaging new donors, but to retaining and upgrading current donors.

What KPIs would be important to consider to make that goal successful? What KPIs from Major Gifts, Prospect Research, Stewardship, Donor Relations, Communications, and more would all tie into it?

And that’s really it, right? All of the group moving together toward the goal, considering the questions: what do we need to monitor in order to inform us that we’re on the right (or wrong) track? Or that we were successful (or not, or could have done better, or…) when we’re done?

Because those are the KPIs that you need to set. Not just the easy things. And if the KPIs you’re currently tracking aren’t getting you to the goal, why are you still wasting the time it takes to input them?

And what about those really hard things? Or things that lead nowhere? Or that tell you inconvenient truths?

What about the projects that expended energy with (seemingly) no result? The due diligence report that took 3 days with the decision not to move forward? Should you bother to track that?

Yes. Absolutely.

In soccer, tracking saves is just as important as tracking goals, right? It’s no different in fundraising.

The hard things can tell you where you’re most effective.

 

 

 

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Same Language, Different Accents? Communication is key!

Jayme Klein

                    Jayme Klein

Communication is key for every single relationship to work, whether it’s in your personal life or at work. But you can’t just say “Hey, communicate more!” You have to have an idea of what to communicate about, and how to get the conversation started. For organizations to run more smoothly and for nonprofits to raise more money, creating a culture where everyone knows what to ask for makes it possible for everyone to get answers more quickly. This week, Jayme Klein shares great tips for frontline fundraisers and prospect development pros to create clearer pathways of communication. ~Helen

I’ve worked in prospect research for a third of my working life (thankfully, my first job assembling gift baskets didn’t pan out). While many of my previous employers had their own unique challenges, one of the most consistent issues that I observed was communication between prospect development and frontline fundraising staff.

It wasn’t for lack of trying, but rather, frontline fundraisers didn’t know what information was important to share with us, and we didn’t know how to ask them for information that would be the most helpful in our research. Also, policies were not in place to import institutional knowledge.

Whether you are in a small or large shop, there are ways to improve communication, reduce those clarifying emails and phone calls, and create an overall better working relationship with your fundraising partners.

What is your system for fundraisers to request information?

Do you have a research request form, a spreadsheet, or do you communicate requests via email? Before those requests arrive, do fundraisers know what to tell researchers, and do researchers ask for what they need? For example, does your request process ask the fundraiser to provide the prospect’s ID in the CRM? If not, providing any name variations (nicknames, prefixes or suffixes) can also go a long way towards identifying the right person, and for those John Smith’s out there, it can save so much time!

Are expectations set so they can be met?

Often, what can help prospect researchers the most is to ask the requester what they already know about that prospect. Maybe there is information that hasn’t yet made it into a contact report?

Here are some other useful questions to ask requestors to provide the best information possible:

  • Is there an upcoming meeting scheduled? If so, what is it about and who will be in attendance?
  • What information is the fundraiser looking for? Do they simply need contact information or do they need a full profile?
  • Has the prospect mentioned any new jobs, home purchases, interests or gift intentions to your organization or elsewhere? Are they unable to meet because they’re at their summer house or on vacation? Where is the house? What type of vacation is it (camping versus their European villa)?
  • Names and information about spouses, parents or children is always appreciated.
  • Contact information (especially professional information) can put a prospect researcher on the right path faster. (Fundraisers, collect those business cards and share them with your research partner!)

Another way to help improve researcher/fundraiser communication is to give each other insight into what you do.

A stand-out memory from my first research job is a meeting that we had with an academic department and their fundraiser liaison. The professors had a genuine interest in what we researchers did and asked us to describe our line of work. The fundraiser interjected: “they Google all day.”

While we managed to avoid violence that day, it did reinforce the need for us to better communicate what prospect research is (and perhaps isn’t) and how researchers find information.

If you’re reading this blog, you know the depth of our work. However, how can this be better shared with other fundraisers so that they better understand our process?

  • Does your organization have lunch and learns? In person or virtual, they can be a great opportunity for everyone to meet and share their knowledge.
  • If you’re in a small shop, create opportunities to help fundraisers find basic information more quickly on their own and show them what you typically look for in resources they don’t have access to.
  • Have a conversation with them to show them how much value is in the information that they have in their heads. They often know a lot about their prospects that they may not think is important, but would be incredibly useful to a researcher.
  • A one-on-one call to discuss a research request can go a long way. It is a great chance to get to know each other better, show what you each know, and help determine what’s left to be found.
  • If your schedules allow, meeting for real or virtual lunch or coffee often allows you to discuss work challenges and successes in a more informal atmosphere. Some of my best strategizing sessions with fundraisers were over a cup of coffee outside of the conference room.

We all know that entering contact reports is not always the most popular task, but the information within them can be a gold mine for researchers trying to pull at threads of information to find the whole cloth.

If information doesn’t make it into your CRM, it may be lost to history. (Or to a dusty basement, like the one I once dug through to find paper files for a trustee who served 30 years ago but had an empty digital record.)

While there is often no money in an organization’s budget that can be allocated to digitize paper files, a long term project of importing paper records is a worthy goal.

It helps to take the “we’re all on the same team” approach when it comes to data. A fully-formed prospect record, inclusive of all information found, will help both fundraisers and prospect researchers alike. This all comes back to communication and valuation. When prospect researchers share the value of their work and fundraisers share their valuable information, it makes for a more successful organization overall.

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Resilient nonprofits can face anything

Heather Willis

HBG Senior Consultant Heather Willis

It hasn’t been too difficult to find articles in the press about the success or failure of companies to survive (or, indeed, thrive) during the past 18 months, but what about nonprofits? How have they fared? And for the ones that have been successful, what has been their secret? This week my colleague Heather Willis does a fantastic job of walking us through a series of reports from the Charities Aid Foundation which has surveyed nonprofits across the globe multiple times during the Covid19 pandemic to discover and share the game plan for resiliency in our sector. ~Helen

When the World Health Organization declared COVID-19 a global pandemic in March 2020, Charities Aid Foundation (CAF) America set out on a mission to document the impact of the crisis on nonprofits worldwide. CAF has produced nine surveys and reports since, which represented the voices of 3,500 organizations operating in hundreds of countries and representing 15 causes.

These reports take account of charities around the world that have been performing their duties under extreme pressure. While many organizations have had to close in the last year due to new problems posed by the COVID-19 virus, others that have remained open have showed amazing tenacity and persistence in the face of new challenges.

What CAF found through this research is encouraging and uplifting. There was an expansive picture of persistence, humility, compassion, and empathy. The pandemic has had the counterbalancing impact of bringing the worldwide community closer together for a purpose that transcends borders and cultures, at a time when many people are feeling socially isolated.

In the Beginning

The vast majority (94.84%) of the respondents’ countries imposed coronavirus related restrictions that had an immediate impact on the organizations.

CAF reported in the first survey that 67.93% of the respondents saw a decrease in funding and reported difficulties in reaching donors, while 33.97% indicated an increase in operational costs. More than half were unable to fully meet the expectations of those they serve due to staffing limitations (48.58%) and system-challenges (37.57%). Restrictions on travel, a key programmatic element for many organizations, affected 63% of the respondents’ operations.

Despite the serious challenges, 90.10% of respondents continued to serve their communities. Although they had to suspend certain activities, almost two thirds of the organizations surveyed (61.87%) continued their operations remotely and 28.23% maintained full operations (11.03% working in office and 17.20% working remotely).

Mid-Pandemic

Volume 5 reports that the majority of responding organizations, 97.16%, were able to maintain their operations, and another 2.84% were not operating at that time. While the data suggests a marginal improvement compared to the Volume 3 survey in June when 92.47% respondents were operating, the organizations that had to close down during the past months were poorly represented among current respondents.

Of those that closed operations or some programming, the majority indicated the incompatibility of their services and programs with online delivery as their principal reason.

                                                                       Reasons for closing operations or programming

In one three-month time frame, 9.98 percent of surveyed organizations did not receive any money, and many were struggling to meet rising demand for their services. Individual donations continued to be the primary source of income for more than 70% of the organizations surveyed. Since the previous study, the number of groups receiving corporate funding climbed by 10.41%. Subsidies from the government also helped to mitigate the crisis’s harmful consequences. Since the previous survey, the number of groups getting government funding also climbed by 12.50 percent.

Charities had to adapt quickly to constantly shifting demands and donor interests promulgated by the pandemic. Normal fundraising channels such as special events and annual campaigns were closed off due to social distancing regulations. Charities that were nimble enough to shift all or most of their fundraising to online portals at their websites fared better.

In a decidedly challenging task, the Volume 5 survey asked respondents to rate the most critical skills for success during those months.

In answer to the question “What skillsets were most useful to your organization during the months impacted by the coronavirus pandemic?” respondents ranked skill sets as follows:

  1. COMMUNICATIONS (telling your story, connecting with your stakeholders)
  2. FUNDRAISING & DONOR RELATIONSHIP MANAGEMENT
  3. FINANCE (effective fiscal management, strategy, contingency planning)
  4. TECHNOLOGY (creating virtual networks, developing apps)
  5. EXECUTIVE MANAGEMENT & BOARD OF DIRECTORS
  6. NETWORKING

To deal with the new problems, an overwhelming number of responding organization were able to design and implement creative ideas and activities. Ninety-seven percent of responders agreed that innovation is necessary.

Large organizations (with 21+ employees) were roughly twice as likely to report that they were surviving or thriving than small organizations (1-5 employees). Smaller organizations were more likely to face limited staffing resources due to illness and lock-downs. Organizations with five and fewer employees are 56.5% were more likely to say that they were “struggling” as a result of the COVID-19 pandemic, as opposed to all other larger organizations surveyed.

Currently – Unfortunately not Post-Pandemic

Charities responding to the survey had many things in common, but three strong themes emerged: smaller organizations have had a more difficult time; the way charities fundraise has had to fundamentally change; and many organizations have adapted to view disaster and crisis planning as a core part of good charity governance.

Given their tenacity during the epidemic, over 64% of respondents are confident in their capacity to continue operating indefinitely under present conditions.

Organizations were asked the question “How confident are you in your organization’s ability to successfully face the next crisis?” Their answers were:

Surviving to Thriving

Over the course of CAF America’s research, they summed up their observations in Volume 8 and have detected six thematic areas to a charity’s ability to survive such a significant interference with their operations, finances, and staff.

Technology

There is a direct correlation between organizational resilience and the ability to adapt to online tasks that will remain the case post-pandemic. Key areas of improvement in resilient organizations included fundraising through digital technology, identifying digital tools to better connect with stakeholders, formulating digital strategies, and enhancing online programs and service offerings.

Communication

Improved communication is necessary for fundraising and storytelling to entice more support, engaging impact reporting, communications with non-digital and other stakeholders, and video presentation to improve outreach. The trend towards more cost-effective communication on social media channels and through online newsletters and reports is likely to continue post-pandemic.

Fundraising

The pandemic has highlighted the fundraising issues that smaller charities confront when their entire workforce is focused to meeting the growing requirements of their recipients. Sixty-five percent of the nonprofits unable to devote resources to creating and implementing new fundraising activities had fewer than twenty staff.

Finance

Areas critical to charities’ long-term success include building and sustaining financial reserves, strategic planning, contingency planning, and developing a risk management framework.

Leadership

While the majority of charities have faith in their leaders, they still need to enhance their skills and strategy. Nearly 60% of the charities polled said they wanted to improve their change management skills both during and after the crisis. Strategic planning, developing crisis-resilient teams, organizational mental health and well-being, and effective internal communication and staff engagement are among the other abilities that need to be improved.

Diversity, Equity and Inclusion

To strengthen their long-term strategy and build resilience, charities recognize the importance of incorporating DEI into bigger talks about global philanthropy. The pursuit of DEI to develop more effective organizational and programmatic outcomes is essential for social progress.

Donors are showing an increased commitment to flexibility while nonprofits now understand that impactful philanthropy requires collaboration, flexibility, commitment, and streamlined progress measurement strategies.

As never before, non-profits are being asked to put resilience into practice. Nonprofits will move forward from being aware of the new normal to clarity of renewed purpose, and then to taking deliberate action, as a result of the dialogues taking place today between staff and boards. They will be focused on instilling energy, encouraging renewed spirit and re-dedication to mission, and exhibiting, in word and deed, an increasingly positive attitude toward mission.

Further reading

Nonprofits show resilience and initiative during second year of pandemic, University of Washington News, December 14, 2021

Is your organization thinking about continuing working remotely? Some things to ponder are listed in this Nonprofit Times article, “Remote Possibilities – What Comes After Zoom?”

 

 

 

 

 

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The overlooked generation

There’s a puzzle that I’m trying to figure out. Maybe you’ve got some insight and can help me.

When I got started in my career in prospect research, it didn’t take me long to figure out that we were concentrating on people (okay, mostly men) who were in their 40s to 70s. These were the donors who were in their prime earning years or recently retired, finally able to spend their spare time on volunteering and their spare cash on donating.

We didn’t ignore their kids, of course, but since there’s only so much time in the day, it was the Boomers that got the majority of our prospect identification and research attention. It’s just Sutton’s Law.

So, okay, those Boomers are aging out of prime giving now. Most are now fully in retirement mode, so it makes sense that we look to the next generation who are in their prime earning years or recently retired.

In the press (fundraising and general audience), you can’t open a newspaper or magazine without seeing articles like Millennials And Charitable Giving: A New Approach To Philanthropy, How Millennials Are Changing Philanthropy, and How to Appeal to Millennial Supporters.

Which is great.

But that’s not the next generation after the Boomers. Gen Xers are. [Read more…]

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