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The Challenges of Proactive Research for Major Gifts

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By Gil Israeli, Director of Prospect Research and Senior Writer, American Technion Society

Today, having a major gifts fundraising program has become the top priority (and sometimes wish) of many fundraising organizations. After all, you can spend two difficult years raising small gifts of $5,000 to meet a $1,000,000 campaign goal, or, you can cultivate the same number of prospects all with $5,000 to $1,000,000 gift potential and target a much higher campaign goal.

The strategy to achieve the latter requires multiple developments in your [organization] culture and a confluence of at least three critical groups of people in your operation: board members (which include donors and volunteers), fundraisers and prospect researchers. A healthy web of relationships here bears directly not only on your annual fundraising revenue but also the robustness and longevity of your organization.

Besides the high priority of having these ongoing healthy relationships, what are the universal challenges involved in major gifts fundraising? Here are ten elements of the overall process that may illuminate why it’s difficult for fundraisers and researchers to identify viable prospects and also why it’s difficult for fundraisers to bring the process to its final successful solicitation. When you reach the end of the list, reflect back on these ten elements and you may better appreciate the differences between raising periodic major gifts and having a vital major gifts program.

– Assets: first, the prospect must have the right level of assets. Of course, this can vary as a prospect can make a major gift to fund a multi-year museum exhibit for $50,000 or a $5,000,000 gift to name two academic chairs.
– Affinity: is the prospect somehow connected or attracted to your organization? What is the “social distance” it will take to bring him or her into your community? Are his or her interests already defined (and not in line with yours) or can you introduce the prospect to a new project and generate a level of interest and commitment that results in a critical level of affinity?
– Propensity to give: is the prospect philanthropically inclined? Does he or she have a history of giving – to anyone? With someone who gives, you may be competing for a gold or silver medal. Someone who has never given first needs to even consider philanthropy as a “do-able” act for him or herself within their means. The first hurdle is the hardest.
– Capacity: major gift funders are concerned that their gift will be fully utilized. Not all organizations can take full advantage of a $20,000,000 gift and leverage it in every possible way. Smaller organizations (think of regional theaters) can accomplish a great deal (even radical change) with one of today’s increasingly common seven-figure gifts.
– Donor Recognition: this item regards your organization’s capacity to publicize and celebrate a major gift. Some donors expect serious recognition and are used to getting it: tribute dinners, honorary doctorates, and full-page ads in select publications. Measure your own relative capacity to generate donor recognition next to the needs of the prospect. If you fall short, then research (and the subsequent outreach) is likely moot.
– Donor Fatigue: if the prospect is highly visible, then he or she may simply be too tired of being approached to even consider new charities. New and experienced philanthropists often receive dozens of requests throughout the year, e.g., to attend special events – more than their calendars could ever accomodate. The right special events and fortunate timing can make a difference here.
– Access: how well “guarded” is the prospect? Are there professional gatekeepers? These individuals have marching orders and your email or phone correspondence may never reach the decision-makers. With larger foundations, your proposal may not warrant any unique attention and it may be sorted into a yes/no/or maybe pile for consideration along with others.
– Access Person: do you have a door-opener to help you start a meaningful dialogue with the prospect? Foundations often note: “the foundation does not consider unsolicited proposals.” But this is typically meant for the general public that has no viable connection to the foundation. If you know a board member (or someone who knows a board member), the door may open and that first valuable meeting may be within reach.
– Family: major wealth can often be managed (or mismanaged) by a group of family members who may (or may not) agree on their philanthropic interests. This can work against you if a family fails to focus on a philanthropic mission or set of agreed-upon interests. However, in some unique cases, senior family members (who generated the wealth) may spin-off separate foundations for their independently-minded children. Opportunities may then present themselves.
– Liquidity: markets vary, people get divorced, products flounder and fail, e.g., initially promising drugs don’t get final FDA approval. From the project perspective, capital projects require immediate cash outlays, while other projects can be funded with a payment plan or even an estate gift. Liquidity is a factor in the most insightful prospect research; good fundraisers are always alert to liquidity issues as they help their new donors develop payment plans.

Given these challenges, it is no wonder that procuring major gifts remains the most challenging area of fundraising. Every strategically-informed organization understands that while completion of a successful campaign driven by major gifts may create valuable momentum and visibility, it does not ensure success in the next campaign. Fundraising is not a business in which stellar past performance guarantees similar future performance.

On a more micro-analytic level, consider the role of the fundraiser who has a bottom line to meet and that it can take as much as two years or more to bring a new major gift prospect all the way to the finish line of successful solicitation. Seemingly, the most successful strategy for a fundraiser is to return to the prospects with significant capacity – the donors who have already given. Assuming good stewardship, they already have affinity and propensity to give. Yet, while this serves the needs of the organization’s immediate fundraising targets, the prospect pipeline can easily suffer in the long run. For this reason, many smart fundraising organizations conduct wealth screenings (by working with external vendors) to map the prospects in their database by capacity and propensity to give and to also pinpoint hitherto unidentified major gift prospects with significant assets and their likelihood to give to their organization.

Prospect researchers need to consider the above ten challenges as they conduct research so that they ultimately, proactively deliver the most realistic major gift prospects to their colleagues. (Of course, fundraisers are already much more directly aware of these challenges as they encounter them in their daily meetings with prospects.) Prospect research that doesn’t account for the above criteria can become nothing more than an exercise in meeting a report quota.

After considering all the above, fundraisers and researchers will spend more time examining genuine possibilities, while eliminating those that don’t make the cut. Valuable time will then be directed to valuable research as fantasy/dream/wish prospects such as Bill Gates, Charles and David Koch, Michael Bloomberg, David Geffen, Sandy Weil and the other folks on the Forbes 400 list are recognized as unlikely prospects for those of us who lack genuine access to them – the opportunity to gain an initial meaningful meeting with these prospects. With a good sense of orientation, your focus on the real good prospects (the viable ones) will become sharpened.

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