There’s GOLD in that thar database!
Dear Sr. Veronica,
Yes, I ate so much turkey that I just about sprouted feathers. It was fantastic. I think my favorite part of Thanksgiving is leftover turkey sandwiches. Stack them high with a little bit of cornbread stuffing and cranberry sauce… Delicious!
On to more important things. You asked how we would pick people to show our draft case for support. This is one of the most important questions that we’ll have to face with this whole campaign. All of the money you need is sitting in other people’s pockets. We need to figure out who has it.
I don’t know if you remember the old stop-motion Rudolf the Red-Nosed Reindeer movie. It’s about the time of year when I get to pull it out for my kids. One of the characters at the North Pole, Yukon Cornelius, wandered around throwing a pick axe up in the air and tasting the tip when it landed to see if it tasted like success. He was a prospector, as you might recall.
Faster than a flying pickax.
You have to find gold, but you need a better process than just throwing a pickax in the air and checking where it lands. You need to create a process for prospect research. What is prospect research? It is the set of activities that will enable you to find the donors who have the ability to make a large gift and are likely to be willing to give.
Prospect research is such a big deal for fundraisers that there is a professional association for people who do it for a living: the Association for Professional Researchers for Advancement. Check out their website at www.aprahome.org. They have great information there, but I’ll give you the Cliff Notes version.
Right now you have a database that lists all of the people who have given to support your order during the last how many years? 15-20? This database contains the names of thousands of donors. Some of these donors have not given in a long time, and some have given recently. Some have given large amounts, some have given small amounts. Some have passed away, but are (maybe) still getting your direct mail appeals.
This database contains the majority of the donors that will give to your capital campaign. I’m not saying that you won’t find new donors in the course of your capital campaign, but the donors in your database already know you and are already giving to you, so they are the most likely to give to support this big project if given the opportunity.
Get the Bird’s Eye View.
Prospect research will enable you to whittle down your list so you can focus your energy where it will make the biggest impact. The first way that you’ll do this is by doing a wealth screening.
Wealth screenings are done by companies that specialize in knowing about people’s lives and behavior. They pull together all the publicly available data on a person and come up with a wealth rating for pretty much everybody in the US. Companies like WealthEngine, DonorSearch, and IWave will match this publicly available information to the names of donors in your database, enabling you to see who among your donors may be able to give a larger gift.
It’s important to understand when talking about wealth screenings that this is publicly available information such as real estate values, SEC filings for Corporate bigwigs, Private Foundation Board Memberships, and the like. I am pointing this out for two reasons:
- We are not spying on our donors, because we are not getting any information that they are not legally required to disclose. We’re not stepping over an ethical or moral boundary line by performing a wealth screening.
- Wealth screenings are imperfect. Since they are based on publicly available data, wealth screening companies cannot provide information on wealth that is not public knowledge. Assets like trusts, privately held companies, and other income producing assets are completely hidden from view.
The wealth screening will produce a spreadsheet listing your donors and the potential giving capacity that the screening company has given each one. There’s a whole lot of math and statistical mumbo jumbo that goes into each figure that I frankly don’t completely understand, but the giving capacity is a good starting point.
Knowing giving capacity is super important. We only have a limited number of man hours to make this capital campaign a success. We have to focus our energies on people who are able to give big gifts and give them the personal attention they deserve. It’s unlikely for someone to make a six figure gift in response to an email… you’re going to have to ask in person. Personal attention takes time, so you better have a pretty good indication that the time is worth the effort.
Down into the Mines.
Once we have the wealth screening information, we’re going to go one step further in and do what’s called RFM analysis. RFM stands for:
- Recency – When was the last time they made a gift? Was it last week, or ten years ago? Research shows conclusively that people who have recently given are more likely to give than people who have not given in a long time.
- Frequency – How often do they give? What is their long-term track record? If they have been giving regularly for a long time, this is a good indication that they feel connected to your organization.
- Monetary – How much have they given? Both in terms of their last gift and their lifetime giving history. Someone who has already given a substantial amount to your order is more likely to give a large gift.
There are different ways of calculating RFM, some of which can get pretty labor intensive. What we’re going to do is a little bit simpler. We’re going to use these different measures as filters for screening our whole database. For the Recency measure, we’re going to filter out anyone who has not given in the last year. For the Frequency measure, we’re going to filter out anyone who has not give more than 3 times. For the Monetary measure, we’re going to filter out anyone who has lifetime giving of less that $5,000.
Filtering the donor list this way will give us a much smaller number of highly committed and deeply invested donors. We will then sort the list based on the wealth screening data that we received. The end result of this work will be hopefully be a list of highly motivated donors who have the ability to make a large gift to the campaign.
Get to Digging.
Now what do we do with this list of superstar donors? We talk to them. We invite them to come look at the case statement and offer any suggestions that they might have. This invitation is a great way to engage the donors for something besides money. It will also make them feel like they are important enough to be involved in the campaign before the public phase.
People who make large gifts are frequently asked for money. They are familiar with the process of capital campaigns because they have likely been involved in making more than one a success. Generally speaking, people who have the ability to make large gifts are smart, capable people. They have a lot to offer, if we think of them as more than just a checkbook with legs.
Inviting their wisdom in polishing the case for support is a win-win. We get their wisdom and can make the case statement as strong as possible. They get to contribute their wisdom and begin to feel invested in our success. This is a big part of what’s called a feasibility study.
I’ll go into more detail about what is involved in a feasibility study later, but all of this prospect research will be setting us up for success. When we finally start talking to people, we’ll be talking to the right people. And that can make all the difference.
P.S. You don’t need a fundraising consultant to do either the wealth screening or the RFM analysis, although a good one can give you more refined analysis than you might be able to do yourself. For our purposes, paying the wealth screening vendor and doing our simple RFM filtering should be sufficient to give us a good list of prospects.
Today’s post is the fifth letter in the second volume of the “Letters from the Almoner” series. These fictional letters will open a window into conversations between a professional fundraiser and a religious sister who running a capital campaign to raise money to build a new monastery.
Would you like to learn more about raising money for Church and Ministry? Check out Letters From The Almoner, now available on Amazon.com.