Helen Brown Group

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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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A DAFinitive answer

It’s Research Pride Month, and boy oh boy do we have a celebration going on at the Helen Brown Group! If you have no interest in donor advised funds, you might want to skip today’s article and wait for next week.

But if you are, let me tell you what the party’s all about here at HBG:

A couple of years ago I got really frustrated by the lack of information about DAFs.*

It was a constant struggle for me and my team to find out:

  • Who are the people with DAF accounts?
  • When we’re researching a potential donor, how can we find out if they have a DAF so we can let our client know?
  • Why isn’t it possible to find DAFs based on their philanthropic interests? Or their geography?

So a few members of the HBG team and I began building a database of donor advised funds to use as a lookup when we did research for our clients.

And it started to grow. And grow. Ten thousand funds. Twenty thousand funds. Forty thousand funds. Fif…holy cow!

About a year ago it dawned on me that this would be helpful to researchers everywhere. Not just us at HBG, but a research resource created by prospect researchers for prospect researchers. Or for anybody, really, who is interested in DAFs and their donors.

It’s finally here and we’re ready – and super excited – to show it off to you. It’s called DAFinitive™.

What can you do here? Well, check out the search page:

  • The keyword box searches the entire database. That includes every field you see here as well as additional fields you don’t, like notes we might have found about the fund.
  • Or, you can search by the last name and first name of a donor or fund administrator.
  • Want to search for a list of DAFs in Florida that have an interest in animals? You can do that.

Is every DAF in DAFinitive™? Absolutely not, but we do have about 5% of the roughly one million DAFs estimated to be in existence, and we’re adding at least 1,000 funds every week.

We’re elbow-grease searching for those tough-to-find funds, too (you know the ones I mean…the ones held by sponsors that rhyme with Schwidelity and Billicon Salley that don’t list their funds anywhere aargh). Fair warning – if you’re thinking DAFinitive™ is going to solve your Fidelity-Charitable-is-a-black-box problem, I’m sorry, we’re not there yet. We do have a few of those funds – and growing, though.

That said, we’re happily crowdsourcing from everyone in the research community (hint hint!) who sends us a fund name and a URL to confirm it so if you want to see a fund in DAFinitive™, send it along!

Do we know how much is in each fund? No, but much to our surprise we did find a couple of sponsors that actually did list how much (or a range of how much) was in each fund account – that was a yahoo moment! And you might be as interested as we were to learn that the average fund size held in those commercial sponsors (like Fidelity and Schwab) is lower – by a lot – than in community or single-issue sponsors. (Check out the facts and figures below).

If you want to know more about DAFinitive™, there are lots more FAQs on the front page of the site (www.DAFinitive.com) – take a look to learn more.

Thanks for sharing my excitement! A heartfelt and massive thank you to the absolutely amazing beta testers who gave us honest and helpful feedback to bring DAFinitive™ to the launch pad.

Happy Research Pride Month!

*Not familiar with DAFs? Here’s a bit more information for you!

DAFs are philanthropic bank accounts that just about anyone can set up with one of the 976 sponsoring organizations in the US. Sponsors are regional community foundations, the nonprofit arm of a for-profit financial institution (also known as “commercial sponsors” or “national sponsors”) or a single-issue sponsor (like a university, religious-based community fund, etc.).

The donor gets a tax deduction when they deposit money into the account, and then they advise the sponsor to make donations from that account when they’re ready.

Lots of times information about those funds (and particularly about the donors) sits in a big black box. Many of the commercial DAF sponsors don’t publish anything about the funds they hold, and it’s hard for nonprofits to find out if someone has a DAF unless they make a gift. (And sometimes even then the nonprofit doesn’t find out who directed the gift if the sponsor doesn’t include that information with the donation!)

Want to know more about DAFs? Giving USA just released a fascinating report that is a must-read. Here are some key points from the report:

  • Many DAF accounts have multiple donors or administrators that make gifts from the fund. Vanguard Charitable reported in 2016 that 61 percent of their funds had both male and female donor/administrators.
  • DAFs provide much less of an administrative headache than setting up a personal or family foundation, and in recent years an increasing number of foundations have rolled their assets into DAFs.

Don’t miss the 2021 DAF Report, either, from the National Philanthropic Trust (NPT). 2021 marked their eleventh annual report about DAFs, and this edition holds some fascinating information. For example:

  • “Grants from DAFs to qualified charities totaled an estimated $34.67 billion, representing a 27.0 percent increase compared to 2019 and a new high-water mark. This is the highest DAF grant increase in a decade.”
  • In 2006 there were 160,000 donor advised funds in the United States with assets of about $31 billion. NPT reports that as of 2021 that number now stands at over 1 million funds with assets of nearly $160 billion. The majority of them are held with commercial sponsors (approximately 864,099), with another estimated 84,334 held at community foundations and 56,666 at single-issue charities.
  • The average size of a DAF account across all sponsor types is $159,019 but that average varies quite a bit between them. The average amount in a commercial-sponsor DAF is $115,901; in a community foundation it’s $543,553, and in a single-issue sponsor is $244,238.

 

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Prospect Research Analytics in Three Acts

Steve Grimes

This month for our fundraising analytics feature, Data Insight Team Leader (and aspiring playwright!) Steve Grimes brings three real-life fundraising conundrums to life and illustrates how data insight can bring clarity and direction to common situations our nonprofits face. ~Helen

The stories you are about to read are fictional. The analytical techniques, however, are all true. 

 

Act 1: Survival Analysis

[Amari, prospect research manager, knocks on data analyst Hollis’ office door]

Hollis: Come in!

Amari: Hollis, you got a moment?

Hollis: Sure, what’s up?

Amari: I’m worried about our donor retention rate. I’ve had to reduce the gift officers’ portfolios by 20% this quarter because of non-response from their outreach efforts.

Hollis: Oof! Ok, any thoughts on how to fix that, I kinda like my job.

Amari: Sort of. I’m thinking of setting up an alert system to warn us when a donor is in danger of being non-responsive, but I need a straightforward indicator that I can communicate to the gift officers to keep an eye on. I don’t want to overwhelm them with too much information.

Hollis: So, like, a number we can use as a threshold so when a prospect falls under it we can flag them for being in danger of non-response?

Amari: Yup, pretty much!!

Hollis: Well, Amari, I think I have something for you. [Hollis points to their computer] Welcome to the Wonderful World of Survival Analysis!

Amari: Sounds intriguing!

Hollis: Well, it’s actually pretty morbid because survival analysis is usually used in medical research, to…well, understand how effective a particular medical treatment is..

Amari: That does sound morbid.

Hollis: In our case, it will be wonderful! So survival analysis visualizes a curve that shows how long a population of individuals ‘survive’ after treatment. From there we can use it to identify how long it takes for our donors to be in danger of moving into non-response. ‘Treatment’, our starting point, would be the first time they give to our organization, and we would be looking for the point when the majority of our donors stop donating regularly.

Amari: Ah, I think I get it. If we know what our retention rates are, identify at what point our donors stop giving regularly or in this case ‘survive’ within our organization, then those two metrics combined could be used as a threshold indicator to alert the gift officers for special action to retain the donors and hopefully improve our retention rate?

Hollis: Indubitably!

Amari: Indubitably?

Hollis: It was my word of the day.

Amari: Well, what do you need to get started?

Hollis: Data that describes how long each of our donors have been with us and their giving history.

Amari: Lovely! Ok, next problem, what are you having for lunch, I’m spoiled for options.

Hollis: I heard marketing had catering for a meeting, want to see if there is anything left?

Amari: You’re just solving all the problems today.

Hollis: I wear many hats, Amari!

 

Act 2: Decision Trees

[Hollis joins a Zoom meeting with Amari and Lin, Chief Gift Officer]

Lin: So then I says to Mabel, I says…oh hey, Hollis! Thanks for joining us!

Hollis: Not a problem!

Amari: Hollis, now that our retention rate is up, we want to make sure that the active prospect pool is populated with the best folks, but I feel like our Recency, Frequency, Monetary Values (RFM scores) aren’t measuring our best.

Hollis: What do you mean?

Lin: Our current RFM structure really only takes into account a person’s giving, but we have other engagement points that I don’t feel like we are tapping into.

Amari: So, like, email engagement, event attendance, and our web portal metrics?

Lin: The thing is, I’m not sure which of these engagement points we should incorporate into the RFM analysis. I’m worried we aren’t capturing individuals who are not giving a high or frequent amount, but who really like us, and I want to account for that.

Hollis: Ah, Lin, I think I have a solution! Welcome to the Wonderful World of Decision Trees!

Lin: I’m listening.

Amari: Is it as morbid as survival analysis?

Lin: Survival analysis?

Hollis: That was in the last scene, and no. But decision trees are just as useful to solve this problem.

Lin: Go on.

Hollis: Well, putting aside how we define ‘best’ and ‘engagement’ for the moment, and assuming that we want to capture as many people as possible who like us – not just the frequent donors – decision trees can help us in identifying which engagement points are the most appropriate to add into a RFM model for our purposes.

Lin:  But it’s key that we have engagement points in the RFM model that takes into account as many people in our database, not just a small population of individuals.

Hollis: And that’s why I think decision trees are perfect. If you’ve ever seen a family tree, the output of decision trees sort of looks like that. What we would do is put all our recorded engagement points into a decision tree model, and the subsequent output of that analysis provides a roadmap of sorts of what engagement points are the most important, and how many people each engagement point affects.

Lin: Oh, so it is sort of a visualized way to see which engagement points are the most impactful to our prospects and how many prospects fall into that engagement point?

Hollis: Pretty much! There is some work that we would have to do to conceptualize some of these steps, but it is totally doable, and in the end we can create a more robust RFM analysis that properly ranks more of our prospect pool.

Amari: Great! When can you get started?

Hollis:  As soon as I’m able to access all data points that describe how our prospects engage with our organization. From there, we would need some conversations on your definition of what the “best” prospect is for your team. It would take some iterations to get it right, but it is relatively straightforward.

Amari: Alright, I’ll get started on getting you that access.

Lin: Lifesaver, the both of you!

Hollis: Not a problem! Speaking of..[points at candy on Lin’s desk] can I have a couple of those Lifesavers next time I come into the office?

 

Act 3: Cluster Analysis

[During their weekly one-on-one, Amari and Hollis discuss the possible expansion of the organization]

Amari: You know, I’m feeling pretty good about bringing more people on board, but this is the first time in years that the organization has expanded like this, so I’m feeling a bit uneasy about the direction Development will go in the future.

Hollis: Lay it on me, what’s bothering you?

Amari: Well, I’m particularly worried about how to segment portfolios that speak to the strengths of the additional gift officers we are going to bring on the team. I would love a way to think about their portfolios that would speak to their abilities as stewards of the organization.

Hollis: Well Amari…

Amari: Here we go again…

Hollis: …I think I have a solution.

Amari: Welcome to the….?

Hollis: …Wonderful World of Cluster Analysis!

Amari: Hollis, how do you know so many worlds?

Hollis: I like wonderful things, Amari. All jokes aside, I do think cluster analysis is exactly what you need for this particular workstream.

Amari: I feel like you’re gonna explain this to me.

Hollis: Yup, you know the drill! So cluster analysis is used to identify natural groups within your data.

Amari: “Natural” groups?

Hollis:  Well, calling them “unbiased groups” is a little misleading, but for all intents and purposes that is what a cluster analysis algorithm creates. In the end, what we are doing in a cluster analysis is segmenting the data based on groups that are most similar.

Amari: So we would group prospects based on how similar they are across categories?

Hollis:  Well, “we” wouldn’t be doing it, the algorithm would. The power of cluster analyses is that it is unsupervised, we are essentially going where the data tells us to go.

Amari: Ahhh, I see where the “unbiased” part comes in.

Hollis: Yup, so we could find clusters of prospects that live less than 10 miles from our building, those who have given less than fifteen hundred dollars in the past year, or those who like the color blue. It really all depends on what we are tracking in our database and how we structure the datasets.

Amari: [eyes widen] And because we are letting the algorithm decide the types of groups, it might show ways of looking at prospects that we are not paying attention to?

Hollis: Spot on! This way we can identify ways of grouping prospects that are “natural” to our organization.

Amari: And knowing that beforehand might help who we recruit!

Hollis: Right, so we could do a cluster analysis on our giving data, find some groups of prospects that we feel are impactful to us, run a wealth screening on each of those groups to identify the return of investment to cultivate those prospects, and then use what we found in that analysis as a guide when doing interviews to select the right candidates for our demographic of prospects.

Amari: I think that solves some other problems we weren’t even thinking about.

Hollis: Probably, it’s nice when it works out that way.

Amari: Should I just give you unfettered access to all of our data.

Hollis: Of course. The more access we have to the org’s data, the more we can think about different ways of solving problems like this.

Amari: Can it help me with what to eat for lunch?

Hollis: I can probably figure something out, won’t know until I see what data we have. There is probably a positive correlation between eating a kale salad and how productive you are.

Amari: ….are you in the mood for salad, Hollis?

Hollis: Yeah, kinda.

Amari: Alright, my treat! Although, I’m sort of in the mood for a burger.

Hollis: There is probably a negative correlation with burgers and your productivity.

Amari: Yeah, you’re probably right, better stick to kale to be safe.

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The RiF Prospect Research Handbook is out today!

Lots of times we might have a brilliant idea to nudge forward (or perhaps even revolutionize) our profession, but then we think, ugh, is it worth it? That would take forever! And we go back to whatever it was we were doing before our daydream.

Fortunately for all of us that’s not what happened back in 2019 when Ben Rymer, then chair of Researchers in Fundraising (RiF), dreamed up the bold idea to create a soup-to-nuts Prospect Research how-to Handbook. In case you’re not familiar with RiF, it’s the professional association for prospect researchers in the UK. Just like Apra here in North America, RiF has a great conference every year (theirs is in November in London) as well as gatherings throughout the year.

The RiF Handbook (available today!), called Researchers in Fundraising: Best Practice Guide and Handbook for Prospect Research has been a labor/labour of love for many of us in the prospect research community. I was lucky enough to be one of the volunteer editors for a segment or two, and I was impressed at what a well-run machine it was, and what a great job that the project’s manager Ally Lee-Dudley, founder of Adcumulo, did of keeping the operation running so smoothly.

I was interested to learn more about the Handbook and the process of creating it, so I got in touch with Ben, Ally, and Chris Davis, RiF’s current chair, to find out more. Sincere thanks to Ben, Ally, and Chris for sharing these great insights!

Helen: Ben, how did the idea come about to do a Handbook for prospect researchers?

Ben Rymer: When I sent the initial proposal to the Chartered Institute of Fundraising (CIoF) in August 2019, I’d known for a while that a handbook/textbook/how-to guide was needed. My feeling was that prospect research was still something of a trade, rather than a profession or discipline. We have a huge amount of expertise, experience and goodwill in the community, but it had never completely crystallised into a finished product so we could build on and improve existing good practice.

HB: What was your initial plan for the scope of the project, and did that change at all as it evolved?

BR: All I knew was that the main areas of research practice should be included. Basically I wanted to create something that I would’ve found practically useful in my first job in the sector. We cast the net wide in starting, with plans for 23 chapters. The big trade-off since then has been in response to volunteer availability. All the content is crowd-sourced, and so we have to work in sequence with the expertise of volunteers who come forward … Also, Covid hit a short time after project kick-off, but we pivoted to remote working pretty well, thankfully.

HB: Ally, how did you get involved with the project?

Ally Lee-Dudley: My involvement with the project began in January 2020 when the Steering Group were looking for a Project Manager to move the Handbook from a great concept to a work in progress. At this time there were not yet any structures, processes, or resources in place so this really was the beginning of the Handbook as an active project.

HB: How many volunteers were part of it?

AL-D: To date around 90 volunteers have contributed to the Handbook, some as writers, some as editors, some as beta-readers, as some as micro-volunteers. Volunteers come from 3 different continents, and around a dozen different countries making the volunteer effort an international collaboration.

HB: How many chapters are there, and how was the decision made on which topics to include?

AL-D: At launch, 8 chapters are available for readers plus a Resource Director and Glossary of industry terms and phrases. There are another 7 chapters in progress which will be published as and when they are completed and a further 11 chapters that are yet to be started. Publishing content on a staggered basis like this means we are able to start getting useful content out and into the prospect research community far more quickly than if we wait for a ‘complete’ Handbook. The original list of potential chapters was developed through discussions between the volunteers who make up the RiF Committee. Over time several additional chapters have been added to that list as a result of suggestions made by volunteers involved with the project.

HB: Chris, as the scope of the project evolved, what changes did that cause you to make?

Chris Davis: As we added more chapters to the Handbook, we found ourselves looking beyond our immediate peer group for input and advice, to those with specific expertise or lived experience. For example, in our chapter on Strategic International Prospecting, we were aware that we needed to get as much input as possible not only from researchers with extensive knowledge of international prospect research, but also from those with experience of living or working in different countries and communities. This was definitely a challenge, but I hope we got the balance right! Similarly, when we start work on the chapter on Equality, Diversity & Inclusion in Prospect Research we’ll be seeking involvement from those who are experts in the ED&I space.

HB: What surprised you most about the process, or what created the most changes or opportunities as things went along?

CD: I think I was surprised by how much content we ended up generating! I knew that the prospect research community would be hugely generous with their time and knowledge, but I was still taken aback at times by the volume of work we ended up producing. At this point I’d have to give a big shout out to our beta-reading and editing volunteers, who were a major help in clarifying and refining the chapters and getting them to where they are now.

HB: Ben, what do you think are the top 3 things that readers will find that might surprise them?

BR: 1. Reach: it is a big thing! Chapters I’ve worked on have ended up being 10,000-20,000 words long. We also have a very broad range of topics, so I think readers will be pleasantly surprised at that.

  1. What’s still to come: by the same token, there are some big chapters in the pipeline, so reader may be left waiting for those. If anyone has suggestions, please feel free to get in touch via the Handbook website, www.rifhandbook.info.
  2. Quality: we’ve put a lot of effort into making the content as good as it can be. For a wholly volunteer-generated initiative I think it is a solid product, but I’m biased of course!

HB: Chris, what do you think are the top things that you think readers will find most useful in the Handbook?

CD: I think that will be different depending on the needs and experiences of readers – throughout the Handbook we’ve tried to ensure that content is relevant for both those who are new to prospect research and for experienced researchers who are looking to innovate and upskill.

For early-career researchers or those who are setting up a prospect research function, we hope our New Researchers Guide chapter and the chapter on The Prospect Research Role will be invaluable. Within the Data & Skills Domain of the Handbook, there is some very detailed, nuanced, and in-depth content on estimating wealth and assigning capacity ratings – topics that we know are of eternal interest to prospect researchers and fundraisers alike!

Finally, we’ve made extensive use of case studies throughout the Handbook, drawn from the real-life experiences of researchers. We hope these will really bring the content the life and illustrate how the principles and techniques outlined in the Handbook can be applied practically.

HB: Chris, what did you enjoy most about the process?

CD: I’ve really enjoyed the experience of being involved in creating content for the Handbook, especially the early stages of this where you are exchanging knowledge with your peers. I’ve been working in prospect research for over a decade, but being involved with the Handbook has absolutely encouraged to rethink some of my settled views about the work that we do, and how we do it. I think the Handbook does reflect this process of peer exchange, and I hope that everyone who uses it will find something new and different in there that challenges their assumptions.

HB: Ally, What tools did you use for collaboration on this massive project and how well did they work? If you had another large collaborative project to undertake, would you use the same tools?

AL-D: The Handbook was always intended to be primarily a remote project, so in that sense we were lucky and the pandemic didn’t significantly affect our plans. In order to help ensure both accessibility of tools at no cost for volunteers and to help embed project sustainability by keeping the financial burden of the project low for RiF, we’ve largely drawn on tools that are available for free. As a Steering Group, our project management hub is a tool called Freedcamp, and this enables us to plot and track actions, deadlines, and milestones and assign task accountability at a strategic level.

For the Handbook’s wider volunteer community, the free version of MS Teams is our collaborative workspace. Teams provides us with a place to create, share, and store documents such as meeting agendas and action plans, and to work collectively on producing and editing content in real-time whilst being able to communicate quickly and easily with each other. Within Teams volunteers can access the web versions of MS Word and Excel so we’re all using the same tools to ensure compatibility plus there is in-build versioning history and storage back-up for those ‘just in case’ moments.  We’ve recently made the switch from using Zoom for our regular meetings to using MS Teams’ video calling service; it doesn’t quite have all the same features as Zoom but it does come at zero cost rather than requiring a subscription to hold meetings for small groups for up to an hour at a time.

The Handbook itself is created using a custom-made WordPress website. We chose the route of e-publishing over hard copy for several reasons and the WordPress platform, with its almost unlimited flexibility and versatility, is the best fit to meet the Handbooks needs both now and in the future. As an e-publication it is not only much easier to keep the Handbook content up to date, it is also far simpler to ensure its availability to readers around the world who can access the content from any device with a web browser.

Overall, aside from the usual occasional IT glitch, (we’ve done the equivalent of turn it off and on again once or twice), the tools we’ve chosen have been effective and created not only a conduit for remote productivity and development, but also a space to come together a a community and experience that sense of being part of a team working towards a common goal that is so important to the Handbook.

Many thanks again to Ben, Chris, and Ally for sharing the inside scoop on the RiF Prospect Research Handbook, and for all of the hard work and coordination that went into creating it! Check out the Handbook website at www.RiFHandbook.info. If you would like to be a volunteer writer or editor for future chapters, please visit this page to learn more.

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Prospect research on a tight budget – schools edition

Yesterday I spoke on the topic of “Prospect Research for Fundraisers” at the excellent virtual annual conference for the Institute of Development Professionals in Education (IDPE) in the UK (which is still going on, so if you’re a fundraiser for an independent, private, K-12 and/or secondary school, jump on that train).

One of the questions I was asked during the Q & A was, how can we identify prospects on very little budget? It’s a perennial (and good) question, so I thought that I would share my response here.

RFMD

The first thing I’d suggest is some very basic data mining. If there’s someone on your team who is good at downloading information from the database and manipulating it in Excel, you’re going to get a lot out of this project: it’s called RFM analysis. Don’t let the name scare you, it’s really just a bunch of sorting. It’s not a speedy project, but it is guaranteed to give you some really good insight.

What you’re looking for is people who have given to your nonprofit most recently; those who give most frequently; and those who give the highest amounts of money.

You should really have about 5 years’ worth of good giving information recorded in your database for this to work well. You will want to download your donors’ names or ID numbers and all of their giving for the past 5 years into a spreadsheet.

Now the fun starts. Add columns to create a points system. At the end you will sort by those with the most points and the most giving.

Each time they gave, put a point in that column. If they gave multiple times in a year, that’s multiple points in the frequency column (so if they made two donations, they’d get a 2, for example).

You can be as creative as you like when you set up your scoring system – how in-depth you go is entirely up to you. Once you get the points in, then sort away by top scores: who gave the most recently? Who gave the most frequently? Who are the top donors? Now who is at the nexus of all three columns?

Chances are you will see a lot of familiar names at the top, but as you go down the list a bit further, what surprises do you see?

Maybe you want to go back further – 10 or 15 years if you have that amount of data. If so, you can get a look at RFMD, where D=Duration. Who has given to you most loyally over the years?

The cost of a project like this is your time, which certainly isn’t cheap, but at least you don’t have to add anything to a budget to do it.

This is just one way to do an RFM analysis; there are certainly more sophisticated ways to do it, and more factors you can add into the mix. Be creative and don’t be afraid to experiment.

SEARCH AND ALERT

Head to your favorite search engine, and do a search similar to this:

(alumnus OR alumni OR alumna OR graduate OR “old girl” OR “old boy” OR …you get the drift) “name of your school here” (donor OR philanthropist OR donation OR million OR billion)

If your graduates go by the term “Old Wycombiensians” (for example) then by all means use that in your search string. Be creative in the words you add in the parentheses at the end of the string; for example, instead of the word donor, you can use a phrase like “sold her company” or “hedge fund” or “yacht” or “ponzi scheme.”

Once you have a string that gives you good results, you can save it as an alert and have the results delivered to you when something new comes through. Voila! You just learned about that alumna who sold her company to a hedge fund and bought a yacht!

REPORT

I love this report I’m about to mention – we used it at every nonprofit I ever worked at, and it always bubbled up great prospects. Maybe you already use it – if so, you know what I’m talking about.

The report is as simple as this: you already know what level of donation makes you sit up and take notice at your school. Maybe it’s £/$250 or $/£500 or £/$1,000, but whatever it is, that’s the amount you use for this report.

Every week on a Monday morning, ask your database (or your very kind database administrator) to automatically run a report of everyone who gave a gift of whatever-that-level-is last week.

Maybe there won’t be any surprises in there, but every once in a while, there will be. The report flags up great opportunities for stewardship, to be sure, and also great pointers for a little more in-depth research.

FREE RESOURCES

Don’t miss the free HBG Research Resources here on our website. There are pages and pages of links, and I know that you’ll find some great tools and ideas there to help you identify new prospects.

 

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December edition – Who’s Doing Well Now?

It’s been eight months since I did a blog post on the topic of “Who’s Doing Well Now” and I thought the end of the year – giving season – might be a good time to revisit that question.

If you read that original blog post and the follow-up white paper, many of the industries from that period remain at the top, but over the summer innovation (and pivotation) pushed a few other companies and industries into the spotlight. I wanted to share my resources to help you dig a little deeper to find prospects that might be flying under the radar a bit.

For example, it’s not a secret that puzzles and games are doing well, so of course we should look into who makes them. Manufacturers like privately-held (and very diversified) Allied Materials and Equipment Co. of Kansas City, MO, whose subsidiary Allied Products is the maker of Springbok puzzles, are doing well this year. According to their website, Allied also makes American flags that fly “over some of our nation’s most important institutions as a result of contracts with the United States Senate, Department of Defense, and GSA recipients.” Those flags are also used for military (and veteran) keepsakes and burials, which unfortunately have seen an uptick this year. Allied’s DOD contracts also extend to military equipment, such as chem/bio life support systems.

Want to find more suppliers with US government contracts? There’s a database for that: https://www.usaspending.gov/. You don’t have to know the name of the company, either. If you’re prospecting, the surprisingly well-built search tool allows for a large array of filters, including recipient (awardee) type, NAICS code, state, zip code, and congressional district.

Specifically interested in companies that have received contracts for COVID-related purposes? You can find that on the USASpending site, but ProPublica has also created a very search-friendly tool at https://projects.propublica.org/coronavirus-contracts/ for finding companies that have recently increased sales due to government contracts.

In the Washington, DC area, it would be natural to think that the fastest growing company would be a government contractor. Holistic Industries, which has grown 447% over the past three years and is considered an essential business will probably not be a DOD contractor anytime soon, though. The cannabis retailer reported growth over 30% for the first quarter this year and beat estimates for Q3 by $3 million. CEO and University of Maryland alumnus Josh Genderson has hopes to double sales next year. Cannabis retailers can’t use traditional banks to park their money, and they frequently donate to local nonprofits to prove their place in building up community. If your nonprofit doesn’t include cannabis retailers in your due diligence ‘no-no’ list, you may want to check out your local retailer’s leadership.

With the disruptions in the supply chains over the past several months, grocery retailers have needed to utilize more cold storage facilities to keep things fresh and relatively close-by. Two companies control nearly 60 percent of all of the cold storage in the US – Lineage Logistics and Americold Realty and both are growing quickly, according to The Wall Street Journal. The CEOs of both companies are graduates of Midwest universities that mention nonprofit interests on their LinkedIn pages.

I found the three specific company examples mentioned above by searching for “companies doing well” and limiting my search dates, but there are other resources (stronger than a search engine) that you can use to prospect for successful industries and companies (and the people who are doing well because of them) right now.

One of my all-time favorites is an expensive resource that used to be found only in hard copy in business libraries: ValueLine. Imagine my delight when I learned earlier this year that not only is ValueLine online and searchable, but my library card to my little local library gives me free access to it. (Maybe yours does, too?) ValueLine gathers information about 6,000 publicly-held companies and 18,000 mutual funds (as well as other invest-ables) and provides insights on which companies and industries are “timely” (how they’re doing as compared to others in their industry) and “safe” (the likelihood that the company will continue to do well over the coming months – or not) at the current moment.

My search in ValueLine this week showed that 26 companies are at the Venn diagram nexus for both growth and safety. The list includes several you’d expect like Clorox, Costco, General Mills, Home Depot, JM Smucker, Procter & Gamble and Walmart, with a few interesting ones like Jack Henry & Associates (payment processors for the financial services industry); Landstar (shipping and logistics); and Synopsys, an electronic design automation company focusing on silicon design, verification, and intellectual property and software security and quality.

Another resource to check for companies doing well right now is the Fortune Global Fastest 100, a listing of the fastest-growing companies in the world. I like to break their list down into industries to get an overview of sectors that are growing quickly in order to spot trends and outliers. This year the top three categories for growth are commercial banks; homebuilders, engineering, construction, and building materials; and internet services and retailing.

One last resource I wanted to mention is LinkedIn. Since it was first published on March 31, senior editor Andrew Seaman’s article, “Here’s Who’s Hiring Right Now” has been regularly updated. Its long list of companies that are doing well enough to be hiring this year is worth a look for prospecting ideas.

What places are you looking when you’re prospecting these days?

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Shining light on new prospective donors

In the last month I have spoken with the chief fundraisers of four nonprofit organizations, all of whom told me that they need to add to their donor pools, and fast.

According to research from mid-June by the Charities Aid Foundation America, only one-third of nonprofit leaders expect that their nonprofit will still be operational a year from now if things remain the same. Another third are fairly certain they will be closed, and the final third just aren’t sure.

If you’re in either of the latter two categories, like the four nonprofit leaders I spoke with, you’re greatly concerned about identifying donors that will help you weather this storm and get your organization beyond it.

There are overarching fundraising strategy issues to identify and resolve that may differ from organization to organization, of course, but from a prospect development standpoint, here is some of  the advice I gave them:

You can’t ask people for money if you can’t contact them

If you don’t have up-to-date information on your donors, now is a good time to spend very little money to get it. If you already send out bulk mailings, ask your mailing vendor to give you a quote for a National Change of Address (NCOA) update. Depending on your situation and budget, update the last 5 or 10 years of your SYBUNTs (those who have given in some year but not this one) to discover where they are.

If you don’t have money for a wealth screening, consider analytics

Fundraising analytics, data insight, fundraising data science…whatever you want to call it, analytics can help you identify great future donors that are already warm prospects. It doesn’t have to be expensive because you don’t have to append outside data – you can use what you’ve already got.

Who looks most inclined to give soon? Who has been quietly putting up their hand that they want to be noticed? Which are the donors that have been increasing their gift every time they give? What regions or programs or sectors should you concentrate on? Analytics can provide a lot of great prospects on a tight budget.

If you have money for wealth screening and it’s been a while, you should really do one

If you did a screening before February, all of the stock and business and real estate information is going to be skewed. I don’t need to tell you that people are in a very different financial position now than they were 9 months ago but for some people at the top of the wealth scale, their wealth has actually increased. If your nonprofit is one of their top-priority philanthropic causes, you don’t want to miss knowing this.

And further to that point: those under the 1% (but still affluent) have been strongly supporting causes over the past 8 months that they care about most. If someone has given to your nonprofit since February (and it’s not a memorial gift), you can bet that your cause is in the top three-to-five on their priority list. A wealth screening can help you pull out the person who gave $250 but could give $25k.

Most wealth screening companies provide information on a person’s past philanthropic giving, and that can be incredibly helpful when you’re trying to prioritize your time and effort to see what a donor’s interests are and what their largest gifts elsewhere have been. However, wealth screenings can be a waste of money (here’s how), so you want to avoid those pitfalls at all costs.

Go outside your base as Plan B, not Plan A

I always recommend exhausting every effort to find great prospects in your own database before combing the hills externally. Unless you personally know every single person that you raise money from and you contact them every month, you have to remember that (especially now) situations change. Companies thrive and companies go under. Through it all though, if someone has given to your nonprofit before, they’re already part of your family of donors. You don’t have to convince them of the importance of your mission – they’ve already bought in.

That said, if you don’t have a fundraising database, if you’re working for a startup nonprofit, or creating a brand-new program that has a different focus from your main mission, that’s obviously a different situation. That’s when elbow-grease prospect identification makes sense.

Elbow-grease research is kind of a slog, but it can be worth it in the right circumstances. Our method starts with an organization’s board, well-connected and committed volunteers, and other community champions. We build out their networks and family ties to find others they’re connected to who look likely to have a philanthropic interest in the cause. That way (we hope) we’re identifying “warm” prospects – people to whom they already have a connection via a friendly introduction.

We also look for institutional partners – companies, family and community foundations, larger endowment-based foundations, and even municipal sources to determine who gains directly or indirectly from our client organization’s presence in the community, region, or world.

We explore who benefits financially, spiritually, reputationally, socially, or materially from that nonprofit’s existence? Does the nonprofit raise the status of a community? Educate workforce toward a particular skillset or industry? Contribute to lower crime in an area? Bring in increased foot traffic to a nearby store? Who benefits from those things?

I know, that’s a slightly different angle from the norm, but I think it helps to turn the page to read the print upside down sometimes, don’t you?

Of course, we also look for institutional prospects in the “normal” way – to see which have included specific interest areas in their giving statements, or have given to a similar mission in the past.

These are just a few of the ways we (and you) can identify new donors.

The most important thing, though, is to have a plan in place for what you’re going to do next. Are fundraisers at your organization excited to make contact with new prospects? Or will those great future donors remain uncontacted? If so, your prospect research time and effort is better spent elsewhere.

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Who is doing well now in the UK?

Back in April, I wrote a blog post about companies, individuals, and sectors in the United States that were doing well despite (or in some cases, because of) the coronavirus pandemic. Today I want to offer some research that I’ve done on the same topic, but focused across the Atlantic. For everyone who has prospects in the United Kingdom, this one’s for you.

Just as everywhere, the economy in the United Kingdom right now is on a slanting slide into sure recession. However, that doesn’t mean that every company or sector is in the red along with it. As I go through the individual companies and sectors that are doing well right now, think not only of those who are executives or major shareholders that are in these companies, but the companies themselves and others in that sector that may be prospects. Also consider if they have a corporate foundation with funding priorities that your nonprofit might fit.

Basic goods

Just like here in the States, the major supermarket chains are experiencing solid sales right now: Tesco’s sales are up 12.7% and Sainsbury’s and Waitrose are both up 12.5%. Discount grocery chain Co-op is up 30.8% and sales for mainly-frozen-foods grocer Iceland are up 29%.

In order to get those groceries, many people are relying on the UK’s main delivery service, Ocado, which is reporting sales that are up nearly 33%.

Companies and manufacturers

According to Make UK, the professional organization for the UK’s manufacturing sector, 90% of UK manufacturers have continued to operate fully or partially since March, although around 20% have furloughed or laid off staff.

Which manufacturers specifically are doing well?

Any company manufacturing Perspex (plexi-glass), for example. Every person operating a cash register or sitting at a customer service window has (or will have) a sheet of plastic between themselves and the customer, so those manufacturers are operating on all cylinders.

The same goes for anything medical related, including PPE manufacturers/suppliers (face masks, gowns, visors, aprons, thermometers), medical equipment parts and materials (beyond just respirators to the base materials like plastics and sheet metals), and companies that make household and institutional cleaning supplies, including Reckitt Benckiser, the maker of Dettol, and hand sanitizer manufacturers.

And of course early on in the lockdown just as in the United States, UK television streaming services, games, and other forms of entertainment did (and continue to do) really well, too.

Who does well all the time?

Grocery stores usually operate on fairly thin margins, but people always need groceries so they tend to be fine no matter the economic circumstance. Banks, energy companies (those delivering heating oil and gas, for example), internet and phone companies, and the infrastructures that support them do well, too.

Right now, in addition to ecommerce (like UK-based companies selling must-have items like Argos, B&Q, Curry’s, Screwfix, office suppliers, etc.), shipping (and supporting industries) are also doing well because all of those ordered items have to be delivered.

Which companies and industries are having a moment?

And speaking of delivery, a new-ish form of vehicle is increasingly important, with drones supplying medicines and PPEs in half the time over the Solent to the Isle of Wight and from mainland Scotland to the islands. Look for companies like drone operator Skyports and defense and technology companies like Thales that manufacture these useful technologies.

It’s not just corporations and UHNWIs doing well: Local bike shops can’t keep stock on the shelves – especially bikes under £500, and they can’t keep up with repairs, either. Electric bike sales are up 96%! Britain has re-discovered biking in a big way, and it’s healthy for the bikers and for the bike sellers, from local shops to chains like Halfords.

The UK is a gardener’s paradise, of course, and garden centers which have now reopened are experiencing the same sort of panic-buying (and associated boom in sales) as we Americans had with toilet paper in late March. There’s an 8-week wait for certain plants as sales at some centers have exploded 75%.

Who will be doing well moving forward?

Because of COVID-19, demand is also beginning to rise for contact-free items like touchless faucets, flushers, and dispensers, so watch those manufacturing spaces as well.

Property investors with deep reserves like Great Portland Estates, one of the largest property owners in London’s West End, bought up bargains during and after the Great Recession. They purchased nearly 60% of their current portfolio between 2009 and 2014, and according to an article in the Financial Times (paywall) they plan to do it again.

As in the United States, look for managers and investors in contrarian hedge funds. Some that shorted the market back in January and February have made hundreds of millions of dollars.

Any company with a contract to supply to the government should do well in the next year (or more) as well. Once awarded a contract, a company can expect steady payments from a reliable source. Look for connected companies like Liberty Global, (no relation to Liberty of London) which signed a deal with the UK government to provide on-street charging points for electric vehicles.

Finally, although it would be easy to think that private equity and venture funding would be completely dried up, it’s not always the case. I spent a little time spent in Crunchbase and found that startups and young companies in the UK received $3.9 billion in the period between March 1 and June 1 of this year. A quarter of those companies are outside of London, too, so it’s not all invested in the south. Both the funders and the companies funded are worth a look to see if there are prospects for your nonprofit.

What other companies and sectors do you know of that are doing well in the UK right now? Please share in the comments for all of us to benefit from!

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New White Paper! Who Is Doing Well Now?

A month ago I wrote an article for this blog called Who’s Doing Well Now? which highlighted several companies and individuals that were doing well financially due to their prescience about the market or because of the goods and services that their company is manufacturing, shipping, or selling during this pandemic.

Since then, a number of other companies and individuals have been added to that list, and I’ve gotten overwhelmed (in a good way!) with articles about philanthropists stepping up right now. It was too much important, good information not to be shared to help our sector.

So we wrote a white paper to pull this information together for you. We hope that it helps you and your nonprofit identify prospects and industries that will help you get through this time.

It may be that the specific individuals and companies you see in this white paper aren’t in your database – but people like them, or industries they represent, might be. You may be in the UK or EU or South America and the company names are all different but use this as a creativity lab for prospecting.

The white paper is here in our Learning Media Library and it’s free. Let us know if you find it useful, and add any articles or resources in the comments that you’ve found to be helpful.

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Who’s doing well now?

In the past four weeks, I haven’t gotten a single solicitation from any of the charities I support on a regular basis. Not by email, not by snail mail, not by text.

One of the newer charities I support has sent two emails with links to video showing them in action, delivering meals to COVID-impacted families, low-income folks, nurses, doctors, hospital maintenance, and more.

But that’s it. Everybody else has been dead silent. And my charity didn’t ask me to help in either email.

Now, I understand, I’m not a major donor. But I am one of those long-term nonprofit-sustaining regular donors that helps pay for rent and toilet paper and electricity through my unrestricted gifts. It’s been my honor to support “my” charities, and I have been under the impression that my support was needed. I’d think so now more than ever. Their silence confuses me.

I’m not alone. There are millions of Americans looking for a way to be helpful. Even in tough times, especially in tough times, people want to give. People do give.

Perhaps the fear is that we might bother people while they’re down.

Or maybe some fundraisers are just deer in headlights right now, trying to figure out the “best practice,” “right” thing to do and are just…immobile.

I know, we’re dealing with a pandemic. This is a whoooole new playbook. But (if there’s a plus side to be found) we’re also dealing with an economic reality that we’ve seen before. Many of us lived and worked through the Great Recession, and although it’s not what we hoped for, we can do this again.

There’s a fundraising intelligence solution to this problem

Just like in the good times, our job as prospect researchers and fundraisers is to find the people and the industries that are doing well right now. We need to build an engagement strategy with them. And move forward. Because they are looking to help and they will give.

Maybe they’re current major donors (which is always the best, of course), but they don’t have to be. They can be those next-tier people further down in your portfolios, or people, companies, and foundations that you haven’t even approached or considered yet.

To help our clients right now, my colleague Angie and I started doing research into companies, industries, and people that are thriving in this upside-down economy, and we wanted to share what we found with you, too. Spoiler alert: there are a lot of people and companies doing well right now. More than you’d think.

Let’s start with the companies and industries that won’t surprise you a bit, because these are the ones that you are probably personally are relying on right now:

  • Costco
  • BJ’s
  • Walmart (hiring 100,000 new workers) and other discount retailers
  • General Mills, ConAgra, Campbell Soup and other companies making shelf-stable food
  • Companies manufacturing cleaning products (including small/nimble companies that have pivoted to meet new opportunities like Fabrizia)
  • Amazon (hiring 100,000 new workers)
  • Comcast, Charter, Cox, RCN, and other internet providers
  • Personal fitness equipment companies (treadmills, stationary bikes, weights, etc.)
  • Companies manufacturing puzzles and games
  • Online / computer gaming (Nintendo, Electronic Arts, Activision Blizzard, etc.)
  • Online education companies
  • Zoom, GoToMeeting, and other videoconferencing services
  • Project management and collaboration software
  • Netflix (and Hulu, and Disney Plus, and every other in-home entertainment-related company)

Okay, a lot of those make sense, right? It’s easy enough to go to your database and filter on company or industry code to get a list of constituents affiliated with these companies and industries. (As long as you’ve been gathering that information and keeping it up-to-date in your database. If not, here’s your opportunity to get started).

What other companies and industries are making money now?

  • Healthcare-related (medical supplies, medical equipment, diagnostics, tele-medicine)
  • Drug / vaccine companies that are in the race right now (Moderna, Sanofi, Johnson & Johnson among many others)
  • CVS, Walgreens, Rite Aid and other drugstore retailers
  • Staples/Office suppliers
  • FedEx, UPS, supply chain services and logistics
  • Private jet companies (NetJets, Wheels Up, Delta Private Jets, etc.)
  • Industrial warehousing
  • Data centers
  • Alcohol beverage companies and retailers
  • Cannabis/CBD/hemp-related growers and sellers

Don’t forget the individuals that bet on an economic downturn. Hedge fund managers expecting a downturn shorted the market and made billions. Here are just a few:

Boaz Weinstein’s Saba Capital Management Tail Fund was up 175% in March, with an estimated gain for Saba’s funds at $500 million. According to Reuters, other winners betting on a downturn and winning big included Capstone Investment Advisors, Universa Investments LP, 36 South Capital Advisors, and Cambria Investment Management LP.

You may also have read one of the many articles about Bill Ackman (of Pershing Square Holdings) who earlier this year bet $27 million in shorted high-yield bonds that made him a profit of $2.6 billion. Ackman published this letter to investors which was leaked to the media explaining in detail how (and why) he did it.

There are whole mutual funds designed to take advantage of economic downturns. Just do a search on “tail risk fund” and you’ll be amazed at the number of funds that are in the black right now.

These people and companies are not alone. While many of our prospects don’t do well in a recession, it’s good to remember that some people (and companies) do. Some even thrive, and – like Jack Dorsey – want to help.

But you don’t have to look to the billionaires. There are lots of regular fund donors who would love to support their favorite charities right now if you make a good case for why your nonprofit is relevant – and then ask.

Your org doesn’t have to be COVID-specific, either. Botanic gardens and nonprofit parks that are open provide much-needed relief now. Symphonies and theaters are reaching out with online concerts and plays to meet our need for entertainment. Libraries, bless them, are still loaning e-books and doing story hours for kids via video.

There are prospects out there with capacity, inclination, and connection to all of our nonprofits. We have to give them the opportunity to be helpful.

FOR FURTHER READING

Coronavirus Business Tracker: How The Private Sector Is Fighting The COVID-19 Pandemic, Forbes

Some Big Investors Smell Profit in Virus-Plagued Companies, New York Times

Hedge Funds Legends Quietly Contacting Investors, Citing Historic Buying Opportunity, Institutional Investor

This Hedge Fund Saw Risks of Coronavirus Early. Now It’s Up 36%. Wall Street Journal

The Booming, Cloistered, & Rarefied World of Private Jet Pandemic Travel, Institutional Investor

Grocery delivery apps see record downloads amid coronavirus outbreak, TechCrunch – Includes download numbers. Data supplied in the TechCrunch article available here.

Gaming Stocks Are Holding Up Relatively Well as Consumers Stay Home, The Street

Coronavirus Pandemic Widens Divide Between Online, Traditional Businesses, Wall Street Journal

A note of special thanks to my colleague Angie Stapleton, who provided absolutely stellar background research for this article.

 

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