Major Gifts Fundraising: Qualifying your Prospects

Major Gifts Fundraising: Qualifying your Prospects

2013 Boston Major Gifts Fundraising SummitEvent Date: September 19, 2013

Presented by:

Michael Ibrahim, CFRE, All Newton Music School

Steve Kean, Boston University

Jonathan McLaughlin, The Steppingstone Foundation

Qualifying your Prospects

Today’s Objectives

1.Understand how to measure prospect capacity, commitment and connection

2.Using donor reports and personal interviews, understand how to organize and segment prospects based on capacity, commitment and connection

3.Identify categories of donors, including active supports, previously active supports, prospective supports and suspects


Today’s Topics

1.How to create a hierarchy to measure ‘qualification’

2.How can you effectively utilize such a hierarchy?

3.The human side of qualification


How to create a hierarchy to measure ‘qualification’

Michael Ibrahim, CFRE, All Newton Music School


The Three C’s

The Moves Management System is built upon using the ‘three C’s’ to evaluate prospective donors and set the

beginning ‘move’. The three C’s are:

Capacity

Commitment

Connection


Capacity

1.Capacity, or a donor’s financial ability to contribute to an organization, is relative to each organization

2.This the area of moves management that the development office has no control over

3.Good capacity measurement can be a tricky task; prospects must be wealthy, but wealth can be hidden. How do you tell if someone has wealth?

4.Question: “What is the potential, monetary or in-kind gift a this person can make to our organization?”

Informal Indicators of Capacity

Expensive home, vacation home

High-paying job, lucrative profession

Owns a business, sold a business

Professional, doctor, lawyer, etc.

Drives a luxury car, has a boat, airplane

Has an expensive hobby like flying or collecting cars

Frequent traveler

Is retired, even at a young age

Is over 60 years old. Mature people have had longer to earn and save money, while younger people usually have many commitments, such as children and college loans.

Younger people who do not work and have no apparent means of earning a living, and yet they live well.

People who have inherited wealth—the sons/daughters and grandsons/granddaughters of other wealthy people

Formal Indicators of Capacity

Home value(s) – great place to start and free (may contain some inaccuracies, but can give you general ballpark on capacity

Contributions to other causes

Political giving – free and publically accessible

Reports and donor listings in annual reports, development publications and donors websites

Stock transactions

Public boat/airplane records

Pension information

Prospect research software such as WealthEngine, DonorSearch, Razor’s Edge, etc.


Commitment

1.Prospects must have an interest, or commitment, to what the organization does, however, interest is not always obvious, and may be evident in different ways.

2.Someone with little interest can become more interested in the organization at a later time - the central component of the cultivation process

3.Question: “Can we identify what the essence of the prospects donor’s philanthropic commitments and passions are?”


Commitment

For example, how do you tell if someone has commitment to visual arts? The following are signs:

• A member of local galleries

• Interest and support of the arts

• Has a large art collection and/or parents took them to museums as a young children

• Politically active, locally, statewide, and nationally

• Went to college to study art


Connection•How do you get to someone who is both wealthy and interested in an organization? Someone may be wealthy and have an interest in the arts, but have no relationship to you. (Bill Gates shows up on all sorts of lists, but very few actually have connections to him) •The absence of a connection can be the most critical factor in determining whether or not to pursue a prospect. Forging a new connection to a prospect can be the most productive step you take towards getting a major gift.


Connection•How do you tell if you have a connection to someone? •You’re looking for people who have relationships with your volunteers, board, staff and constituents. •These can include neighbors, family, employees/employers, clients/service providers, and other friends. •To help identify these individuals, look at financial or other participation in the organization and each donor’s giving history. •Which individuals are constant donors year after year? How many constituencies does each prospect fall into?


Assigning Rankings•Using prospect and wealth research sheets, and aided by personal interviews, review of giving history and website searches, assign a ranking to each donor. •While it may be uncomfortable to assign a ranking to an individual, remember that this process is highly confidential and is only used to utilize the organization’s resources most effectively. •Depending on the size of the organization and prospect pool, there can be a wide range of ranking levels. However, for most organizations, start with three levels of commitment/connection and three levels of capacity.


Assigning Rankings•Commitment/Connection is given a numerical rank (1, 2 or 3 with 1 being the lowest commitment and 3 being the highest).•Capacity is given an alphabetical rank (A, B and C, with A being the lowest capacity and C being the highest). •These low, middle and high rankings are subject to the specifics of each organization, campaign and fundraising maturity. Once these values are assigned to each prospect, they can be put into a simple 3X3 grid with commitment/connection on one axis and capacity on the other



Organize and Segment Donor Lists•Segment prospects based on rank•This will help you determine who you should approach first, and the best strategies to do so. For example:


The Four Different Categories of Donors

1.Active supporters are an organization’s current donors, volunteers, employees and constituents.

2.Previously active supporters are lapsed donors, past or retired volunteers (including board members), past or retired employees and past constituents including alumni, subscribers, members, etc. that you haven’t heard from recently.


The Four Different Categories of Donors

3.Prospective supporters: individuals with a possible link to the mission of the organization including family members of people who the organization has helped, of volunteers and employees, friends and close associates of people who know and love the cause, and people connected with current donors.

4.Finally, suspects are individuals you believe would be interested in your cause if they knew about it. This includes individuals that can be found through research, recommendations and magazines (Business Journals, Business Week, Wall St. Journal, Trade Magazines).


How can you effectively utilize this hierarchy:

From Framework to Fieldwork

Jonathan McLaughlin, The Steppingstone Foundation


Organize list and START CALLING (and emailing) for a meeting

1. Start with those you have identified as your best prospects first - friends respond

2. Temporarily put aside your hierarchy in favor of volume - you will get some surprises and gain context

3. Begin process of learning connections to other donors and org - but don't delay calling to do it

4. Taking a clearly defined meeting is your best indicator of inclination


JUDGEMENT CALLS are required to triage your time and effort (and your org's resources)

1.You need to not only identify the stage someone is in, but HOW they can be moved to the next one

2.Continuously revisit based on new opportunities, relationship discoveries, colleagues input

3.Watch for biases in interpreting information and in categories of donors

4.Need trust of your organization to best utilize hierarchy


Ultimate Goal is the creation of a DONOR PIPELINE

1.A pipeline is a group of contacted prospects that will be solicited in the next 12-18 months

2.Organized by size and time of gift, with steps laid out towards a solicitation

3.A constantly shifting, living document

4.A more refined version of a FOCUS LIST that comprises folks you are actively working

5.Expect about 1/3 of asked for revenue to come through, not quite the way you planned


The Human Side of Qualification

Steve Kean, Boston University


Identifying Prospects: Multiplying yourself

1)Your time and the data – analysis and (in)action

2)Staff/Volunteers – gain institutional knowledge/trust

3)Rating & Screening Sessions(Rolodex in the old days)

4)Board members – replicate & replace themselves


What does a qualification meeting look like?

1)What is the goal of your “discovery” visit?

2)What do you say in this visit? (answer: NOT MUCH)• What do you know about our organization?• What are our strengths/weaknesses?• How did you become familiar with us?• Who at our organization is important/connected to you?• Have you visited us recently?• What would you like to accomplish with your personal

philanthropy that would be meaningful to you?• How important is our organization to your personal philanthropy?• What other organizations do you volunteer/support?

Qualifying your prospects

Qualification meeting (continued)

3) Roadblocks that you’re likely to hear:•I’ve never really thought about what I’d like to do with my money•I’ve given all that I can•The time isn’t right•I’m most interested in supporting other groups•I don’t want to tell you about my passions or I’m too distracted to tell you right now

4) Backing up a step, how do you get this meeting?•Method – no perfect answer•Be brief & direct and tell them why they are on the list•Do not conceal your purpose, you’re not an “alumni officer”

Documents

Major Gifts Fundraising: Qualifying your Prospects