Tag Archives: prospect screening

Can You Spot the HNWIs in Your Database?

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So much of what we do in prospect research revolves around finding wealth. Sometimes it sounds like the only thing we talk about is money! As I finish facilitating another Capacity Ratings Workshop at the Prospect Research Institute I am heartened to reflect that in every discussion we had about the money, we were irresistibly drawn to another rating – affinity or engagement.

I’m not trying to suggest that we don’t need to be really good at spotting high net worth individuals (HNWIs) in our database. We do! When we segment our database by wealth we are better able to focus on finding what really qualifies someone as a major gift prospect – how engaged or aligned they are with our organization.

Following are some tips for finding HNWIs who also demonstrate affinity for your organization:

  • Go Beyond the Screening: Yes, verify the information in your top-rated segment, but don’t assume no-one else in your file has wealth. Professional researchers know how to identify the hidden HNW gems such as private company owners, women volunteers, and wealthy families.
  • Prioritize Giving: Don’t get blinded by bling! High lifetime giving and monthly giving are great indicators for planned gifts. The savvy researcher might look for things like long-term home-ownership, too. It’s all about knowing your unique constituency.
  • Leverage All of Your Data: When the gift officer and researcher work as a team, you can test out what pieces of information best prioritize your top prospects. Is it attendance at multiple events? Donors who have multiple points of communication or participation? Donors invited by other top donors to participate and give? Create a feedback loop!
  • Research Wisely: Profile research isn’t about completing a form anymore. The software tools do most of that groundwork for you. When you know what wealth looks like and you know what a top donor to your organization looks like, you can research wisely. Spend more time on the most relevant information – connections to and interests in your organization.
  • Prospect Smartly: Truth is that even if you are at a college or university, at some point most organizations will need to reach out to people who are not part of our existing constituency. Getting good at finding connections and having a researcher-gift officer team to better clarify what a top donor looks like to your organization (wealth + affinity) will position your organization to seize external opportunities for major gifts.

Knowing what a HNWI looks like takes practice. Read the wealth and philanthropy reports published by places such as Indiana University and Capgemini. Once you learn to distinguish between someone living comfortably and someone who has significant wealth, the next step is to understand how HNW donors give differently from others. Cultivation and messaging for this group is distinct.

And the next time you are talking about wealth or estimated net worth and someone asks, “Isn’t it more important to know if they are philanthropic?” – you now know the answer! There has to be both wealth and philanthropy to raise major gifts.

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Pictures and Patterns: Decision-making with Fundraising Insights

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Imagine you emerge from a strategic planning session and your task is to raise more money from corporations. Your organization wants to expand its reach and you need to take the thousands of corporate donors in the database and transform them into a fundraising program. Why? Because everyone “feels” like there is a lot of opportunity there. Where do you start?

One of the most common mistakes in fundraising is to make decisions and invest money and resources in strategies that are based on intuition and anecdotal evidence alone. Let’s face it, sometimes it works, and maybe that’s why the behavior is so persistent. But much of the time data-weak decisions fail miserably, often slowly and painfully with lots of fingers pointed. There is a better way.

Leverage the talents of prospect research to paint pictures and identify patterns!

Well-trained prospect research professionals are methodical and analytical. That means that we enjoy solving problems, untangling messy information, and putting order to chaos. Share with us your dilemmas, your problems …your fundraising hopes and dreams. We can help you succeed!

In the new corporate fundraising program example, it means painting a picture of our corporate donors:

  • Where are they located?
  • How many of them are there and at what giving levels?
  • How long have they been donors?
  • Are they small, closely held companies, or large corporations?

And then identifying clusters and patterns:

  • Are there groups of donors in particular industries, geographic locations, or company size?
  • Do the donors that give the most and most frequently have anything in common?
  • Is there anything about the data that can help us understand the giving behaviors? Can we see any correlations between data points?

There is no standard checklist for exploring this kind of information. It requires a keen understanding of the fundraising being undertaken matched with an analytical mind trained in using data to solve problems.

When a prospect research professional works with you to explore your data and make an initial assessment, you can decide on strategies and tactics that will raise the most money now and in the future.

For example, you might discover some companies are more “ripe” for a new approach than others. If they have been giving frequently and increasing their giving, visiting them and discovering their philanthropic needs might uncover a unique corporate approach for your organization that you hadn’t thought of!

Knowing that your best donors are dominated by small, closely held companies gives you the opportunity to find out why. What makes your organization so attractive to them? Are they really individual donors in disguise or do they have company objectives for their philanthropy?

Uncovering an unusual pattern, such as expressions of faith on the company website, might give you an insight that challenges the way you perceived your donors and that opens the door to much deeper relationships.

Fundraising success through insights is not so much about the tools – data mining, statistical analysis, profile research – it’s about giving the donor story inside your data a voice.

When you hire a prospect research professional to help you understand your data, you are hiring someone with a unique skill set – someone who can uncover and communicate the “story” inside your data.

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Can you Achieve Faster-Better-Cheaper Profiles?

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“I need a profile on this person today…can’t you just Google it?” It’s the kind of question that makes prospect research professionals cringe. But why shouldn’t a development officer want it faster, better, and cheaper? Why is your organization paying thousands of dollars a year for research tools if it still takes forever to get the information needed?

So what’s happening to cause this disconnect between development officer and prospect researcher? I suspect there a few causes, but first, let me tell you a story…

As a consultant I charge a flat fee for projects. I want my clients to be able to budget, and as a professional I should have a fair idea of how long it will take to do the research. Profile-type research falls into this category. And it’s this kind of pressure that keeps us razor sharp. It’s me and the team against the clock!

That’s how I “rediscovered” one of my favorite tools the other day – DonorSearch.net.

Faster-Better-Cheaper with DonorSearch.net

At Aspire Research Group we’ve taken on a few new clients that, in addition to standard profile research, needed some “situational” research done. Things like prioritizing, quick checks to be sure assigning for a visit is appropriate, or key items researched to prepare the president. So I asked myself, “How could we manage our time researching, keep up the high quality of information, and make it the right price?”

In my quest, I took a fresh look at our tools and settled on DonorSearch to start our projects. Of course, being able to upload a small batch of names for a prospect screening is a time-saver, but even when we entered only one name into the Integrated Search, suddenly everything was at our fingertips. DonorSearch had made so many updates to their product – the combined result meant we could be very competitive.

For example:

  • Time Management: The big name family business was clearly the source of wealth, but why was the prospect not listed on the website? Open Corporates in the Integrated Search demonstrated a long list of companies where he was a director – many with the same word in the name. From there a quick Google search revealed his specialty in the family business. Faster.
  • High Quality: There was a large, outlier gift to an organization with a strange name. I didn’t want to put it in the list without checking, but didn’t want to have to do a distracting search. A click on the source link gave me a searchable PDF – and lo and behold – it was an organization with a mission similar to the client! Better.
  • The Right Price: By letting the tool do all of the upfront “grunt” work finding relevant information we spent less time gathering and more time thinking, and that meant we could charge the right price. Cheaper.

Ask the Librarian: Can’t you just Google that?

But if you really want your research to achieve the business mantra of better-faster-cheaper, you need more than a great tool like DonorSearch. You need to start with a really good understanding of the need and continue with really good communication throughout.

So why do researchers get asked to Google it in seconds flat? Let’s go ask the librarians! Librarians are trained to interview the customer. When you go to the reference desk, the librarian has to figure out what you are trying to accomplish and then help you navigate your way to success.

While we don’t view the reference librarian as an expert on the subject matter that brings us to the library, we do view the librarian as someone who has received training in library science and is an expert on helping us find information. The librarian is a professional.

The “just Google it” request suggests that any amateur without training can perform quality prospect research, which can be insulting … but it also happens to be a great opening for a really good conversation to clarify the  problem to be solved.

Professionals are Always in Demand

The more that software tools are able to do, the more important prospect research professionals become. Librarians don’t worry that books will put them out of business!

And on the flip side, the more that software tools are able to do, the more we must use our communication and problem-solving skills to provide flexible, custom solutions.

If you manage a prospect researcher, if you are a prospect researcher, or if you want to be a prospect researcher, you can arrive at better-faster-cheaper profile research if you recognize the importance of great training (including communication skills) and tools. It’s what qualifies us as prospect research professionals!

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Cure Analysis Paralysis with this Visual

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In this wonderful era of exciting, off-the-shelf prospect research tools and one-click-away data analysis, how is it that we still struggle to prioritize our donors and prospects? But we do. The results come in, the scores are assigned and yet there are still way more highly-rated prospects than our staff could possibly contact. Which names do we call on first?

Human brains are not wired to interpret and act upon long lists of names with appended information, such as those found in our databases and Excel spreadsheets. And when you need 50 names, but there are 300 that all have the same top score, it can be paralyzing!

Whenever I hear about data visualizations I always see pictures of charts and graphs in my mind’s eye. But when I was grappling with how to deliver a prioritized prospect list to a client recently I decided against charts and graphs. I wanted something that would give them a colorful visual with graphics, but also actual donor prospect names with dollar signs.

The organization had decided to create a more formal corporate giving program. It had been happening accidentally and now they wanted to get serious. So she sent me a list of over a thousand of their best donors based on giving history. My job was to sort it out and send it back.

We decided to focus on two variables that we labeled engagement and gift potential. Engagement was based on RFM scoring, which stands for recency, frequency, and monetary and represents a giving history analysis. We also appended some estimated sales and other data to determine gift potential.

As you can see from the picture below, the key to the data visualization was limiting the presentation two only two, easily understood and highly relevant variables. (The information in the grid is fictional.)

Click to enlarge

Following is how you “read” the picture for this donor list:

  • Stars = high engagement, high gift potential
  • Loyal = high engagement, low gift potential
  • Opportunities = low engagement, high gift potential
  • Likes = low engagement, low gift potential

I knew that my client, a talented fundraising professional, really wanted to begin her efforts with a fighting chance of receiving major gifts in the first year. Who wouldn’t want that? It was up to me as a researcher to understand how to translate the organization’s fundraising program intentions into data points, create or get those data points, and then translate it back into fundraising actions.

My client didn’t need to understand exactly how I sorted and filtered to assign donor prospects into each of these categories. She needed to be able to recognize some names, be pleased and surprised to see some names she didn’t recognize, and be able to quickly make decisions about which ones she will call tomorrow.

No matter what kind of fundraising professional you are – front-line, prospect research, or something in between – you now have a simple way to visualize two variables that you can ask for or apply to the data yourself.

If you have a data visualization triumph I’d love to hear about it! Reply to this email or better yet, comment on the blog post.

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How do I make prospect profiles work for me?

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I work with quite a few fundraising professionals who are taking a leadership role for the first time or are heading into their first ever serious fundraising campaign. Suddenly you have to figure out how to make the leap into managing significant gifts and create a major gift program that delivers. That’s a lot of pressure!
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So, of course, you demand – and get – a budget for prospect research. Way to go! Now what?

What is prospect research exactly and how does one USE profiles?

As I mentioned in Re-Wiring the Trusty Profile, it helps when you and your team discuss and recognize how and where traditional prospect research, such as profiles, fundraising analytics, and relationship or prospect management intersect at your organization. Even in a small team, you’re no doubt running a full development program. Research will likely touch many parts of that program.
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For example, I had a researcher describe to me how her initial snapshot profile went directly into the donor database for prospects that were assigned for a first visit. It was up to the gift officer to print the snapshot report and make the visit. Is that traditional prospect research (e.g., snapshot profile) or prospect management (e.g., proactive prospect assignment)? Well, it’s both, isn’t it?

But to know what you can get out of a profile, you need to know what goes into it.

In 3 Strategies to Choose a Research Tool I show you a graphic and describe the five building blocks of the profile. This structure identifies what information is relevant for fundraising, but your profile format could be any kind of mix-and-match from these building blocks.
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In Can You Really Trust Prospect Research? I talk about some of the commonly held misunderstandings about the voo-doo we researchers do. There’s a lot of confusion about what information we can find and how accurate or complete it can be.
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As a fundraiser meeting with donors, you are performing primary research. You find out all of the information we researchers usually can’t. In your face-to-face meetings you discover people’s philanthropic passions, family and health situations, and their interests and personal connections to your organization. What information do you need to perform those visits and ultimately ask for a major gift? Once you understand the five profile building blocks, you will be much better placed to answer that question well.

But the very best move you can make to use PROFILES WITH POWER is to communicate with your researcher!

With the five building blocks of the profile as your conversational guide, examine what you need to know at each stage of your interactions with donor prospects. What does your researcher recommend in terms of software subscription tools versus manual research?
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In some situations you might do well with a quick look-up in a tool on your own and a first visit before asking for a researched profile. And sometimes getting a researcher’s edge from out of the starting gate will deliver better results in a shorter period of time.
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Once you understand what you need and when, can you break it down into two or three types of standard profile requests? Of course you can always make exceptions – you’re the boss! But standardizing your practices will make it easier to manage expectations and easier to onboard new staff as you continue to grow.

Prospect Research is good and exciting work!

Discovering people’s paths to wealth and their expressions of philanthropy is sheer pleasure. As a prospect research professional I love being part of the team that connects people to the joys of giving. When I can work closely with a front-line fundraiser to cultivate and solicit a transformative gift it’s a breath-taking experience!
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The power of profiles can be yours – especially if you treat your researcher as one of the fundraising team. Who knows? Your prospect research professional might just turn out to be your secret weapon!
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Learn to perform basic prospect research and find information on your prospects – fast!

Get your free Knowledge Seekers membership and gain access to profile templates, commentary, and more. Click here to discover Prospect Research Institute’s learning community.

How To Find New Major Gift Prospects?

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Partner with a prospect research professional! As a fundraiser, why should you partner with a prospect research professional to find new prospects? Couldn’t you use a research software product or buy a prospect list?

Whether you look inside or outside of your database, you can easily generate a prospect list at the click of your mouse. Silicon Valley is certain that data technology solutions can fix whatever ails us – and in theory, why not? But in practice our data is every bit as fallible as we humans who create it.

Prospecting for donors follows this same pattern. Sure you can get a list of prospects from software, but you will be stumbling over errors in no time. Things like a donor who made a memorial gift when her dad died, but is unlikely to give at that level again. Or a common last name erroneously matched to wealth.

And then there are the prospects that are omitted. Where is the woman who volunteers in your program and lives in that multi-million dollar home? Or what about the young couple that make a small annual gift, but you know they have inherited wealth?

It doesn’t mean that the wealth screening or prospect list is useless. It means you need someone who understands the data and fundraising to partner with you to refine the list. You need a well-trained prospect research professional.

Following are five ways that partnering with a prospect research professional can get your major gifts program galloping:

  1. Verify the data: A wealth screening zips through thousands of records. When a researcher performs a double-check on your highest-rated prospects, you don’t waste time with duds.
  2. Track progress: Without a way to track your major gifts progress, your chances of achieving your goals drops dramatically. Prospect research professionals excel at tracking and reporting.
  3. Deliver custom information: Every organization is different and each fundraiser is different. Partnering with a prospect research professional creates a give and take resulting in information delivered how and when you need it most.
  4. Creative sourcing: The prospects you need might not surface with the usual screening products. Well-trained prospect research professionals creatively source the right prospects inside and outside the database.
  5. Translate and adapt: As the fundraiser, how well do you need or want to know the details of data technology? A well-trained prospect research professional translates the software, adapts, and delivers it to you in a form you can use.
Data technology is amazing and has transformed the way we fundraise. There’s no question about it. However, being able to achieve major gift fundraising success requires more than data.

When you are ready to dedicate time and attention to cultivating, soliciting, and stewarding major gifts, enlisting the services of a well-trained prospect research professional will produce the forward momentum you need to achieve major gift success.

Organization Loses Donor Trust – With Data Breach!

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keyboard-895556_1920Whether it’s a personal story or a media headline, we’ve all heard of incidents where data was mishandled or misunderstood and donors felt betrayed. And yet, many development and advancement offices continue to place little value on their information and data.
When I followed up with one of the beta testers for the Prospect Research Institute’s first-ever online class, Introduction to Prospect Profiles, she told me how thankful she was for the opportunity to take the class. Now she knew for certain that prospect research was NOT for her and she would seek a different career. Why? She couldn’t delve into other people’s lives that much. Privacy was sacred to her.
I didn’t think too much of it, but since then two more students have expressed discomfort about privacy issues. Because, of course, we cover this in the class; we walk right out there to examine the legal and ethical edges of privacy in fundraising research.
Why are prospective prospect research professionals nervous about privacy?
Could it be they don’t trust organizations to do the right thing with information? You know fundraising is predicated on trust – donors trust us to use their money for the greater good. Staff must also trust the organization to use its data and resources appropriately.
When prospect research is treated as a clerical function, anyone can do it, low-paid, and not heard – that translates to the same message about the information prospect research finds. Quite a few of my course participants are self-paid. And then they learn how deep we researchers can go. And then they see the dark edges of ethics. And they get uncomfortable.

If you are in the development or fundraising office, you are in a position to begin changing the culture of respect and trust toward your organization’s data.

You can leverage prospect research to (a) manage information legally and ethically, (b) lead with diversity and inclusion, and (c) use data persuasively to raise more money. How? Let me count the ways!
  1. Data Management: Prospect Research Professionals are uniquely positioned to research and be a part of the team creating information management policies that ensure your data is used and maintained effectively. This is the era of Big Data and your researcher is versed in mining the gold from it.
  2. Data Protection:The more important data becomes, the higher the risk that it will be breached and erode your donors’ faith in your organization’s ability to protect their information. Your prospect research professional is your trusted guide, helping you to navigate and translate vendor and IT products and jargon. S/he is also the voice helping you to create different levels of data access, such as who can print profiles, with how much information in them, and do what with them.
  3. Non-Traditional Donors: We’ve been using wealth screenings effectively, but it’s time to recognize that this identification method is limited. Encourage your researcher to work with you to identify non-traditional indicators of wealth. That means conversations, but it also means assigning and actively pursuing those minority prospects, too. If there is wealth there, why are you ignoring them?
  4. Relationship Mapping: This is a broad term for what requires a great deal of sweat equity, but software is inching forward to make it better and faster. Understanding the relationships among your major gift donors could be a healthy disruption to your usual processes. Understanding and learning to leverage the power of your other donor groups’ relationships could transform your organization’s fundraising reach! If you are not building the capacity for fundraising analytics to discover patterns such as these relationships, you will be left behind.
  5. Persuade with Data: Yes, you can work with your prospect research professional to illustrate the data that answers questions and use this to persuade donors to give. Infographics are particularly popular. But let’s use data to put a stop to fickle fundraising. How many times do you change strategies based on “I feel” or “s/he said” or “they say”? Use your prospect research professional’s analytical prowess to methodically gather data of all kinds to help leadership form a strategy it can stick to – and win. Jason Briggs outlines this brilliantly in his article on international research.
I’ve had clients learn the hard way. Initially shocked by my prices, they come back when they receive shoddy work from someone who has low rates, but lacks the skills and resources. The value of really good prospect research becomes clear when you receive synthesized information that gives you direction to raise more money.
Your organization needs a well-trained prospect research professional with an excellent ethical compass. Are you driving your best hiring prospects away by sending the message that information is cheap and anyone can turn that information into fundraising action?

Net Worth: Nasty, Nice, or Neutral?

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cash-1169650_1280There was a cry for help on the PRSPCT-L list-serv: “I’m a new researcher and my boss wants me to provide net worth on a prospect. He says it was the previous practice to do this and I can get what I need to calculate it from Dun & Bradstreet.” What would your response be?

To begin, a simple definition of net worth follows:

Assets – Liabilities = Net Worth

The Three Common Responses to Net Worth

If you mention “net worth” in the prospect research field, you will likely hear one of the following three responses:

  1. Don’t do it! Or you will be voted off the prospect research island!
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    The argument against estimating net worth is usually this: If we cannot find or know the values of all assets and liabilities (which of course we cannot), then we have no business estimating net worth. This is often a strong, unequivocally held opinion.
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  2. Hide that you are doing it by using another term or keep it behind the capacity rating calculation.
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    This is the most common practice in our field. Instead of using the words “estimated net worth”, researchers rephrase with a term such as “estimated wealth”. Even more common is to use the results of wealth surveys, such as the chart on page 19 of the Capgemini 2016 World Wealth Report, to estimate net worth based on a known asset such as real estate and then take a percentage of estimated net worth as the gift capacity.
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  3. Boldly present estimated net worth.
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    There are researchers who feel comfortable presenting estimated net worth. Some provide disclaimers or educational explanations to communicate better generally or to clarify outlier situations.

Easy Formula, Tricky Calculation

Assets – Liabilities = Net Worth

The formula looks so simple, but this is deceptive. As prospect research professionals we know that we can’t discover and value all of a prospect’s assets or liabilities. It is the reason we use the word “estimated.”

Among the challenges in estimating net worth, there are two that jump out quickly:

  1. Many assets (and liabilities) are troublesome to value – none more than private company ownership.
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    I have discussed the difficulty of private company valuation before. A common route to wealth is to start a private business, and many of these successful entrepreneurs want to “give back”, among other motivations for giving.
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    And it brings us back to our fellow researcher’s list-serv plea. Dun & Bradstreet (DNB) sells data, including estimated values of a private companies. Assuming we know how much of that company our prospect owns, we could use the DNB dollar amount to estimate the prospect’s ownership value. Or could we? DNB uses its own formulas to estimate and can be very far off the mark.
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  2. Are we talking about titled ownership such as a name on the deed, or influence over money, such as sitting on a grant-giving family foundation board?
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    Our prospect could be a child of a wealthy family with very few public assets identified. And yet, we may find she has influence over millions of dollars in a family foundation. Estimated net worth and gift capacity clearly diverge at this point. You might estimate a low net worth, but still consider her to have a million dollar gift capacity because of her influence over grant giving.

Logic and Emotion – Let them Collaborate!

There is nothing simple about money. Money is one of the most emotionally volatile topics you can discuss, and those emotions flow into the workplace. Addressing your own emotions and biases about money is the first step.

You might want to seriously consider whether your difficulty imagining the wealth of multi-billionaires is affecting your ability to logically estimate net worth or gift capacity – and whether you have negative emotions attached to great wealth accumulation. Emotions are not your enemy. Ignoring them is.

Now you are ready to balance how you and your gift officers “feel” about your prospect’s potential wealth with the logical, quantifiable assets and liabilities found in the public domain.

Following are the most frequently used tools or ratings:

  • Estimated Net Worth
  • Gift Capacity Range
  • Affinity (how close they feel to your organization)
  • Philanthropic Inclination (do they give at all?)
  • Linkage (how are they connected to your organization)

When used responsibly, estimated net worth is one more tool prospect research professionals can provide to assist frontline fundraisers in creating major gift solicitation strategies. Don’t be afraid to use it!

More Resources You Might Like

Capacity_Ratings_icon_v2

 

Join the Resource Collections online community to access this handout. Use it to facilitate discussion with your gift officers and leadership.

 

Fire your Prospect Researcher! Artificial Intelligence (AI) has arrived.

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For years now we’ve been told that Artificial Intelligence was going to take over prospect research tasks. Truth is, it has. Well, some of them anyway.

Consider wealth screenings. What used to take month after month of tedious, routine, baseline capacity rating work now takes less than an hour. Upload your file, it processes, and presto! You have gift capacity ratings on your prospects based on external wealth matches.

Or how about the user-friendly lookup tools, such as iWave’s PRO, that remove the first step of searching that prospect research professionals used to perform?

Does all of this mean prospect research is on the fast track for complete takeover by the machines? Should you fire your researcher? No way!

Artificial Intelligence has had a lot of hype over the years and very little real action – until now. A few events have led to some breakthroughs:

  • The internet has made vast amounts of data available, which can be used to train computers.
  • Graphical Processing Units (GPUs), the specialized chips used in PCs and video-game consoles to generate graphics, have been applied to the algorithms used in deep learning, a type of Artificial Intelligence.
  • Capacity to run GPUs can be rented from cloud providers such as Amazon and Microsoft, allowing start-ups to innovate.

Self-driving cars may still be on the horizon, but the bots are on the road already! They can schedule appointments on your calendar, draft replies to emails, and even read radiology imaging studies more accurately than a radiologist. The Economist describes the opportunity and threat quite succinctly as follows:

 “What determines vulnerability to automation is not so much whether the work concerned is manual or white-collar, but whether or not it is routine.” (6/25/2016)

 

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It’s easy to leap to the conclusion that prospect research professionals will lose their jobs to the machine – much of what we researchers do is routine – but that would be forgetting how machines have changed the world in the past.

Across the centuries, people have feared the march of the machines. In the late 1700’s to early 1800’s the Industrial Revolution rocked our world. As recently as the 1980’s, the rise of personal computers revolutionized the way we work. And with every introduction, much hand-wringing and predictions of unemployment were had.

How will prospect research professionals likely weather the advancing army of machine algorithms and programs?

Much the same as we adapted to wealth screenings and tools like iWave’s PRO. We learn new skills that wrap around the new technology. We leverage the new technology to work for us and for our fundraising team. We change the tasks we perform.

Prospect research professionals have a unique blend of skills. We can scan mountains of information and pull it together in a way that is meaningful for your specific need, whether that is creating a $5M gift strategy or a $5B campaign. We recognize the opportunities for our organizations in the data patterns the machine discovers.

If you want your organization to keep in step with the advances of machine learning, do NOT fire your researcher! Instead, reassure your prospect research professional of her value and insist that she take advantage of training that will give her the skills to use new technology. If you do this, she will be better able to guide you into new worlds, such as fundraising analytics … and beyond!

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Prospect Profiles and Private Co. Valuation

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customer-563967_1920How many times have you lamented: “Yet another prospect involved in the family business. The family’s privately-held business, that is. What valuation number am I going to pick out the air this time?!” We’ve all been there. Valuing private companies is a tricky business indeed (pun intended).

We know why so many of our prospects have ownership interest in private companies. According to a 2013 Forbes article:

  • Out of the 27 million firms in the U.S., nearly all are privately held.
  • Among the 5.7 million firms with employees, less than 1% have shares listed on a U.S. exchange.

So it’s no surprise that there are many firms specializing in valuing private companies. The need for a valuation could be a desire to buy or sell, investments looking to exit, or in anticipation of an initial public offering (IPO), among other reasons. Hoovers and Dun & Bradstreet may be among the best known search tools in our field, but there are many others. For example, Prospect Research Review did a product review report on PrivCo.

Law of Diminishing Returns

Before you dive deeply into any specialized research, consider the law of diminishing returns. At what point are the time and resources you spend going to outweigh the benefit? If your prospect qualification to gift ratio is 7:1, you could be spending twelve hours on a dud. Then again, if you are researching a prospect likely to give her largest gift ever to your organization, you want to be gung-ho!

You also want to consider the full wealth picture before you dive deeply into one piece of that wealth. If the prospect is listed on Forbes Richest People in America are you certain you need to spend hours valuing one or more companies owned by him or her?

Return on Education

You also want to consider your return on education. Why value one private company, when you could give yourself the foundation to value all kinds of companies in the future?

When you have a prospect that demands a deep dive into company valuation, do your research on how to make a valuation and keep notes so that you can apply what you learn to the next private-company-owner prospect.

Top 3 Private Company Valuation Resources

Following are some of my favorite resources for deciding how to create a valuation and a jump-start of links to get you finding the data:

  1. ARTICLE: Jarmuz, Bill. “Private Company Valuation for the Prospect Researcher” APRA Connections magazine, Jun 23, 2006, Membership Paywall
  2. WEBINAR: Lamb, David. “Refresh: How to Estimate Private Company Value – And Rate A Prospect With The Information” APRA on-demand, Members $49 | Non-members $79
  3. LINK LIST: Aspire Research Group LLC, Favorite Link List-Business, Free

 

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