Look at the Research, all that glitters is not gold

Dear Diary,

I love to be as hopeful as the next person, but the hope that many Development Officers have in regards to their prospects needs to be addressed.

I've read the email threads from a Development Officer full of conviction that a donor had the capacity to give "in the millions". I've read the email threads in which someone knew their prospect was "wealthy" because he used to own a public company. And I've also been in a thread in which a Development Officer knew his prospect had to be at a high giving threshold because he was a Director at a certain private equity firm.

Everything that glitters is not gold. I'm sorry to burst so many hope-filled hearts, but the truth is - positions at companies, and certain career paths are not always what they seem. Nor will they always result to the giving capacities that you hope for prior to reading your prospect's research profile.

Although magical, Prospect Researchers are not magicians. They cannot display wealth that is not there. They cannot assume a capacity of giving unless it is properly backed up by total compensation either publicly disclosed or estimated; evidence of real property(ties) must be associated with the person(s) or their Trust; or there must be evidence of their company ownership, gains from company acquisition, or publicly disclosed stock and valuations.

To have the capacity to give to an organization at a certain level, a prospect must have assets (hard assets e.g.: real properties, stock, family foundation, compensation- something quantifiable). This means that based on the individual’s assets one can give comfortably within a range or above a threshold. This is also calculated at every organization differently - some calculate capacity by dividing total assets by gift percentage (typically 2% to 5%).

Then you have additional assets (soft assets e.g.: art, car, and/or jewelry collections, hobbies, club memberships, hundred-thousand donations and more) that only add to or upgrade their capacity. For example, by knowing that a prospect has made a $50,000 gift to an education- based organization, you have the confidence to say that this is an interest area, and a level of giving that your prospect is comfortable with.

A title or position does not hold the type of weight that you may assume, for example, think of a prospect that is a Chief Financial Officer at a public company, he or she has 20 years of experience in their field, earning $200,000 annually, 61 years old, living in a house with a total assessed value of $280,000, two children in private colleges, and common stock worth $50,000. This prospect does not have the capacity to give your program $1 million. First, the age, tenure, and position show that the prospect has hit their career peak and is possibly thinking of retiring. If this prospect retires and sit on boards to stay active, they could be compensated through that service, but would still not earn an outstanding amount annually. Second, this prospect is using majority of their money to finance their kids' tuitions, and could be making gifts to their schools. Based on my experiences, I can say that this person could be a small to major gift donor; And to think long term, they could be a great planned giving prospect. But a million dollar ask is hopeful thinking.

You have to look at the research.

Somewhere in the world, right now, a Researcher has burst another hopeful bubble.

Until next time, October 15th!