Trusting your (prospect research) gut

Lately I have been validating a lot of wealth screening results, but this post is not about how to do that. For those kinds of tips, you can download the recent webinar delivered by Rachael Dietrich Walker during APRA’s 2016 Chapters Share the Knowledge event. Or (shameless plug) you can read this post I wrote last year for EverTrue.

Today, I simply want to tell you a couple of stories; cautionary tales about when to trust your instincts and look outside your vendor’s report during a validation – not to verify information but to supplement it.

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Here in the northern half of the U.S. we have tons of snowbirds – fleeing the cold for the more temperate climates in Florida, Arizona, and sometimes California. We also have prospects who love the colder weather, and have condos in ski country or huge forested lands in Wisconsin’s North Woods. And most of the time, your wealth screening vendor will find those second, third, and (yippee!) fourth homes. Indeed, that’s probably the number one reason we researchers love our screening vendors. They make finding those other homes a breeze, especially as search engine filter bubbles increasingly make it a challenge to do on our own.

The problem is, when a vendor’s algorithm doesn’t find those other properties, we don’t know if it’s because they don’t exist, or if there’s another reason. Most vendors match properties on some combination of mailing addresses and names. So what happens when your Wisconsin prospect uses their Florida address as the mailing address for their Florida property?

I always do a few “broad” (aka quick and dirty) internet searches as part of my wealth screening validations. I generally do this at the end of the process, usually just to see if there is any recent news or mega-gift I should share with my clients, and I don’t spend a ton of time. (To be fair, as a consultant, it’s often pretty easy for me to know when to pull the plug before I fall down the rabbit hole, by sensing when the meter has run out for that particular validation report.)

It was during one of those searches last month that I came across a Naples, FL, news story naming Mr. and Mrs. Prospect as the hosts of an upcoming garden party at their Naples home. Which was not in my screening results. I went back to the screening vendor’s website, and redid my search using Florida as the state instead of Wisconsin. There it was, their third multi-million-dollar home.

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If you read Helen Brown’s blog, you know about the growth in family offices, and important clues to recognize them. Helen has also compiled a helpful list of resources. Rather than repeat that here, I simply caution you to pay attention whenever your wealth screening reports an LLC.

Last week I was validating the screening results for a local executive. He has a fairly common name and a leadership role in a public company, so I expected a long slog through mismatched charitable donations and property records, and years of SEC filings. Imagine my surprise when all the screening found was a couple of LLCs, with meager Dun & Bradstreet reports, a few old property records, and remarkably low net worth and gift capacity ratings.

I usually begin my validation process by looking at property records, so I looked up those old properties in the tax assessor website. There I found that the two local properties were now owned by one of those tiny LLCs reported in the wealth screening. Further searching on Zillow confirmed the combined $4M assessed market value for those two properties. But that was just the tip of the iceberg.

I checked the business incorporation information my state makes available, and the LLCs were indeed registered in the name of Mr. Prospect. So that was easy. Then, following my validation routine, I looked at the most recent proxy of the public company where Mr. Prospect worked. My usual search tactic with proxies during wealth screening validation is, you guessed it, quick and dirty. I simply search on the prospect’s last name and click through all the hits. The 11th or 12th mention of Mr. Prospect’s name was in a footnote to the Beneficial Owners table. No wonder the screening didn’t have any stock holdings to report! Although a member of the executive team, he wasn’t a stock-holding insider. But one of his LLCs was. The LLC owned more than 11% of the public company’s outstanding stock.

Since this was simply a validation, nowhere near a full profile, at this point I felt I could wrap things up.  I warned my clients that the screening rating were low, how much else I had already found, and that there was likely to be much, much more to the story.

Taking a couple more steps to research these two prospect households a little bit more didn’t add much time to my usual validation process. But in both of these cases what I found added detail and nuance to the screening results, which will help my clients make more informed decisions as they develop cultivation and solicitation strategies, and deepen their relationship with these prospects. And isn’t that the point?

Wealth screenings continue to introduce jaw-dropping efficiencies to prospect development tactics. But no algorithm can yet replace the intellectual leaps a skilled researcher is able to make, when their training and experience evolve into instinct.

 

4 Tools You Can Use to Conduct Prospect Research Without a Full-Time Researcher

I am pleased to welcome Bill Tedesco, founder and CEO of DonorSearch, as the first guest blogger on The Fundraising Back-Office.

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In an ideal world, if an organization needed a new staff member, the Executive Director could wiggle her nose, click her heels, make the request, and the perfect employee would appear.

In the real world, funding is tight and nonprofit employees have to be expert multi-taskers, folding numerous job requirements into one-size-doesn’t-really-fit-all positions.

It is quite common that smaller to mid-size nonprofits don’t have the means to hire full-time prospect researchers, but that fact does not make the need for prospect research any less critical.

To help those organizations that want to implement prospect research, but don’t have the ability to hire a researcher at the present time, these four tools can provide the necessary support to get going with your research.

These tools will help guide you through a productive trip down the prospect research rabbit-hole.

#1: Prospect Screening Companies

Subscribing to the services of a prospect screening company, like DonorSearch, is a great way to conduct prospect research without having to hire a full-time research staff member.

Prospect screening companies do the heavy lifting for organizations. They take your donor list, whether it is large or small, and compare those donors and prospects against a group of databases.

Screening companies will use a combination of publicly and privately available databases and then take the information learned and compile the data into prospect profiles.

With a research company’s help, your busy staff can focus its efforts on using the prospect profiles for fundraising, rather than the building of them.

To put this in other terms, imagine the prospect profiles are all homes in a new neighborhood. The screening company is the construction company and your organization is the real estate group.

Not everyone is equipped to build a home. It is important to know your limits and acquire assistance when it is needed. We don’t need any fundraising houses falling down!

#2: The Foundation Center

The Foundation Center is information central for the philanthropic community. The Center houses an extensive and exhaustive database on grants and grantmakers.

The website offers a mix of free and subscription-needed services.

A great feature of the center is its collection of actual libraries that nonprofit professionals can visit and get research help from the librarians on staff.

If you live in one of the following cities:

  • Atlanta
  • Cleveland
  • New York
  • San Francisco
  • Washington, D.C.

Visit a Foundation Center Library and enter prospect research heaven. Even if you cannot get to one of the main libraries, their website is comprehensive and extremely helpful.

While we’re on the topic of libraries, don’t overlook your local public library. Sometimes it helps to incorporate “old-fashioned” methods of investigation into your prospect research.

#3: Social Media

We all have a bit of a sleuth instinct. Social media feeds into that tenfold. Rather than using social media to see what your high school nemesis is up to, put your skills to good and charitable use — conduct prospect research.

LinkedIn and Facebook are great places to start.

If your prospect has a LinkedIn, you’ll learn valuable details about his business affiliations and employer information. You could quickly see returns on some of that information.

Imagine learning that a donor works for a company with a generous matching gift program. Once you know that, you can promote the gifts to the donor and encourage her to submit a request, leaving your nonprofit with twice the expected funding.

A public Facebook profile will result in slightly different, but just as pertinent, information. A person’s Facebook page reveals his or her social connections and interests. The former are good to know for networking reasons, and the latter are good to know for personally connecting to said donor.

People spend much of their time living within their online profiles, and their online presences provide a good outlet for getting to know them better.

#4: Zillow

Real estate ownership acts as a unique marker. It can indicate both a capacity to donate and a philanthropic inclination.

In many ways real estate ownership is considered a traditional wealth marker. If you own real estate with a high dollar value, you have money. One plus one equals two. The relationship makes sense. Interestingly though, certain dollar amount thresholds are statistically connected to charitable giving.

For example, donors that own $2+ million in real estate are 17 times more likely to give than an average prospect.

It is in a nonprofit’s best interest to screen for real estate ownership, but if time and resources are limited, there’s a quick and easy option for searching, Zillow.

Once you have your prospect’s address, which should already be in your donor database, you can search for it using Zillow. The website will give you an estimated property value. It is as simple as that.

If your organization is still looking for more help, but you’re not ready for a full-time staff member, consider contracting prospect research services out to consultants. They can be a strong option, either in the short term or as a program launching point.

There are plenty of other tools and resources out there to supplement the prospect research efforts of nonprofits. They help make the real world slightly more ideal.

 

Bill Tedesco is a well-known entrepreneur in the field of philanthropy with over 15 years of experience at the helm of companies serving the fundraising profession. He has personally conducted original research to identify markers of philanthropy and has developed modelling and analytical products that use those markers to accurately predict future giving.

Since 2007, he’s been the founder, CEO and Managing Partner of DonorSearch. DonorSearch is one of a small group of companies providing wealth screening, philanthropic reviews, and online prospect research tools exclusively to the nonprofit market.