This week I received a call from a breast cancer charity.  The organization was new to me.  And clearly I was an unknown to them as well.

Within the first fifteen seconds, the professional paid solicitor asked if I would make a pledge.  She said that they would follow up with a pledge card so I could send in my donation.  Since I wasn’t prepared to make a commitment without knowing more about the organization, I suggested that they send me the information so I could give it some consideration.

So what happened?  I was informed that they would not send information unless I made a pledge.

That’s right.  To learn more, I would need to give.  I had to conform to their rules or I couldn’t give.  Take that!

One thing is certain: This paid solicitation firm is highly efficient.  They were “churning and burning,” as the sales people say, or cold calling and pitching within seconds, then politely tossing away any lead that wasn’t an immediate close.

Of course, this is the worst kind of selling.  Why?

1)   It only works with low-level donations, which means you lose most or all of the best long-term donor prospects.

2)   It relies entirely on identification with the cause and not the organization, which means you fail to establish any bond that might result in continued giving to the organization if someone agrees to give.

3)   It is entirely organization-centered, giving little or no concern to the prospective donor and therefore potentially leaving a negative impression…if in fact it leaves any impression at all.

How could this be better and still efficient?  By asking a series of triage questions, noting the responses in the calling software and acting according to those preferences.  These steps would be as important to a museum or a blood bank as to a breast cancer charity and could include the following:

• On a scale of 1 to 5, how important is this cause to you?

• Are you familiar with this organization?

• Do you support other similar organizations? (And, if so, who?)

• How would you prefer to donate to us?

• How and when would you like to be contacted by us in the future?

What these questions lack in efficiency they make up for in showing a genuine interest in the prospective contributor, determining interest in the cause and organization, gathering important information for future contacts and establishing preferences for follow up cultivation and solicitation.

For many donors, “no” could easily mean “not now” or “not this way.”  For this organization and their professional phone solicitor, “not now” means “never.”

This is just one more for the growing mountain of stories I hear every day as people grow weary of what is delivered in the mailbox, what passes for charitable solicitation on the phone, what is “blasted” into our increasingly ignored email accounts and what flows through our twitter stream.  They all have one thing in common: They treat prospective donors all as expendable.  They say give because the organization has a need.  But of course that’s not why people give at all.

Why do we give?  We give because it makes OUR lives meaningful.

When a charity calls and says “my way or the highway” they are really saying they couldn’t care less about our feelings.  If they are going to take that tactic, best that they not bother asking at all.

One of the biggest challenges to today’s professional fundraising operation is fitting social media into the development mix.

It is not enough to just “friendraise” or even just to ask people to click a link and give.  We must also obtain their contact data, acknowledge their support, determine their level of interest and capacity and then make staff assignments so potential major donors will get proper stewardship.

Fundraising research is a critical component here.  But fundraising researchers, already in limited supply, under-resourced and focused on investigating qualified opportunities, have been reluctant to invest time in social media since it can often seem both so tangential to development and also because it provides information which often cannot be independently confirmed.

The editors of “The Networker,” the publication of the Association of Professional Researchers for Advancement – Minnesota, recently asked me how to counter the perception that “non-professional social media (e.g. Twitter) is providing ever-increasing levels of distraction and reductions in productivity”.

My response?

First, we should acknowledge that social media channels are in fact disruptive.  They interrupt the usual trajectory of development work and have their own increasing demands, not to mention a certain addictive quality.

So why spend time on social media?  Quite simply, these channels provide access to a much deeper reservoir of current and pertinent information on a much wider universe of individuals than any resource we have encountered in the past.

The databases of insider securities ownership, biography, real estate and business ownership researchers have traditionally used are dwarfed by the rapidly growing datasets of Facebook, Twitter, LinkedIn and other social networks.

How much of this information is relevant?  That depends on our definition of relevancy.

One thing is certain: the information is highly relevant to those who are producing it.  It showcases their identity as they see it and want it to be seen, including their passions, peeves and peccadilloes, and even catalogs their circle of friends and influence.

In short, social media is providing us an unexpurgated view of what is important to our market, the donors.

If we are nimble and efficient, an investment of time in social media by fundraising researchers need not result in a loss of productivity.  Rather, it can accelerate the retrieval of information and bring fundraisers closer to its source.

Dear Interlochen,

Thank you for a great thirtieth high school reunion!

The campus looked wonderful, something that made many of us at once envious and suspicious that life was getting too easy for the current generation.  The classes and performances were exceptional, a testament not just to the talent the school is attracting but the faculty you are retaining.  And socializing with old classmates was, as they say in the TV ad, priceless.

Of course, one of the moments we all dread at any reunion is when we are cornered in a room and asked for money.  No matter how much we love the place—and with Interlochen the alumni love is palpable—the fundraising experience can be awkward and uncomfortable for everyone.

Except for one thing: We were never asked to give.

Now, I know that Interlochen needs our money.  You told us that quite clearly in a detailed presentation by the president.  We also learned how little our classes had given.  And how small the level of overall alumni giving was to the school.  Much of this was a shock to many of the alumni who attended.  But we weren’t provided with the unique medicine that helps get over that shock.

So, here is a prescription from your friendly alumnus fundraising doctor to help alumni move from confused to enthused at the next reunion…and to raise more money for Interlochen, too!

1)   When reunion attendees arrive and register, allow the registrants to determine what is on their badges.  This year’s badges provided a name, class year and major while at school.  While I am proud of my “Creative Writing” alumni status, I wouldn’t introduce myself that way today.  At a minimum, give alumni the opportunity to define themselves, even if that includes both a past major and current occupation.

2)   Provide badge stickers honoring involvement.  These might include stickers reading “donor,” “class chair” and “planned giving society member.” These acknowledge attendee involvement and encourage others to follow suit.

3)   In the registration packet, include a preprinted envelope with the registrant’s name, cumulative giving, last gift amount and date.  Also include a separate flier talking up the important “all alumni” event (where the “pitch” will occur).  Encourage attendees to bring the packet with them throughout the reunion by including items they will likely want or need throughout the weekend.

4)   Early on in the weekend, seek out and personally acknowledge each and every donor at the reunion and talk with them for a few minutes to ensure their donor relationship is progressing well and all their needs and expectations are being met.  Listen.  And follow up, too.

5)   At various events during the weekend, acknowledge alumni volunteers specifically by name and activity.  Make them feel important and special and provide an example for others.

6)   Attend both staff and alumni generated official activities. When you attend alumni events you demonstrate an interest in their interests and learn things you would not otherwise know.  Yes, this is time consuming.  But it is only one weekend per year.

7)   In advance of the “pitch” event—or, better yet, in advance of the reunion—get permission from a reunion attendee to use a forthcoming gift as a challenge.

8)   During the “pitch” event, have a student say a few words about how a gift to the scholarship fund has changed his or her life—this is far more powerful than any building visit or powerpoint presentation.

9)   The event is also an ideal time to acknowledge donors by name in each of the classes, with special emphasis on those who belong to higher level giving societies.  Thank them publicly!

10)  As you prepare to “ask” at the “pitch” event, have class chairs and other acknowledged donors provide another pledge envelope to each and every attendee with a smile.

11)  Close the deal.  You must do more than state the case and say that support is needed.  You must tell people what they need to do and how to do it.  You must ask them to fill out the form and tell them you will collect it as they leave the room.  Instill some friendly competition by promising details on which class gives the most, has the highest average gift and achieves the greatest participation at an event concluding the reunion.

12)  Have class chairs and other alumni donors make the pitch with you so there is no question that there is already peer support.

13)  Party hop.  We’re all close in age now and there are no lines between administration and alumni other than those we draw.  Go to where the alumni go.  You just might have some fun.  And learn something too.  You’ll certainly break down the barrier of formality allowing a real exchange of ideas and facilitate greater giving.

14)  Hold a closing event.  The Alumni Recital or even the Student/Alumni Coffee House would provide exactly the kind of love fest where you could report good news on how much was raised during the weekend, thank everyone for coming and pass out forms to preregister for the next big event.

In addition to my prescription for alumni recovery and increased involvement, I also have two preventative medicine suggestions.

First, no matter how much any of the “helicopter parents,” seemingly spoiled students or ungrateful alumni may drive you crazy, please keep it to yourself.  Mocking them, even if trying to elicit sympathy for the current state of educators or to inject a little humor, will always fall flat.  Inevitably, when you insult one, even if unintentionally, you insult all.  Remember, a number of alumni are already sending their own children to the school at great personal expense and you don’t want alumni and parents leaving campus wondering if you were talking about them!

Second, reach out more regularly and listen more actively.  The staffing and resource limitations at secondary schools are legendary.  The very best institutions have to think carefully about how best to use their limited time.  But the only way to achieve greater fundraising success with alumni is to get to know those who have the ability and interest to give.  While that process can be aided by research, it is always in the end a matter of staff calling and talking with alumni.

Alumni should not be responsible for reaching out to their alma maters to express interest in volunteering and giving.  The schools must open that door in order to make the experience of giving as comfortable and fulfilling as revisiting the campuses we called home so many years ago.

Since the financial meltdown in 2008, philanthropists have become a frequent piñata for pundits and public alike. First it was the soft criticism that high-income earners are not generous enough.  Now their giving is described as bad for society as well.  What’s a wealthy person to do?

In an article based on their forthcoming book, “The Trouble with Billionaires,” authors Linda McQuaig and Neil Brooks take aim not just at rich people generally but benefactors to universities specifically.  It is more than the fear that major donors might influence curriculum—a charge any university would flatly deny—but that the very act of placing the donor’s name on a wall constitutes some kind of erosion of academic integrity and educational mission.

In making their case, the authors quote University of Toronto Professor Paul Hamel, who has as yet unsuccessfully advocated for naming a building on campus for an important and cherished Canadian non-donor, that “the priorities of the university have been skewed towards areas that interest the elites…rather than towards the priorities of faculty, staff and students who are engaged in critical analysis, research and teaching.”

This assumes both that financially successful alumni are completely out of tune with the needs and interests of their alma mater and that the donors control the entire process, forcing a university to take a gift to do something that is not in its own interest. This is a fundamental misunderstanding of the way philanthropy works since most large scale giving is the result of long-term cultivation and solicitation by the organization and not some kind of educational takeover by the donor.

McQuaig and Brooks do provide an interesting analysis of a $35 million donation from Peter Munk to the University of Toronto in an effort to argue that contributions of this size are not really “philanthropic” at all.  They point out that the tax deduction this gift afforded, together with the public monies it leveraged, gave Mr. Munk maximum credit (i.e. his name on a building) for an amount that actually “cost” him just a fraction of the total project amount.

“This should be treated for what it is,” they write, “not a gift to the community, but rather a business transaction purchasing that most treasured of items — a personal legacy.”

But here is the problem with that logic.  If Mr. Munk or some other wealthy individual, foundation or corporation had not made the donation, then the new school of global affairs which bears his name would either have been funded by the government at far greater expense to the public or not established at all.

Why?  These types of “lead” gifts help to capture the imagination and interest of other donors with more modest financial resources and encourage them to support the project at hand.  The gift, in effect, makes the program more real to the broader community and therefore more likely to garner their support.  Conversely, the absence of such a contribution can suggest a dearth of support among community leaders.

The reality is that names on buildings, the core of what seems to offend those who distrust philanthropy as a vehicle for public good, are at the very end of a process.  Cultivation of relationships with individuals who make large contributions usually begins far before they have amassed their fortunes.

More fundamentally, there are only so many rich people in the world who can fund the construction of buildings or endow new programs.  Most donors, who are also recognized for their contributions—perhaps in an annual report, at a public event or on a donor wall—give small but precious amounts.  They too support activities and programs governments cannot or will not fund completely if at all.  They also benefit from tax deductions for their charitable gifts.  Many of these same individuals would love to give more and perhaps have their own family’s name recognized more publicly if they had the resources to do so.

Would the authors suggest that someone giving hundreds of dollars not be recognized?  Or is it only recognition of donations by wealthy contributors that is so offensive?  Perhaps it is really the very existence of personal fortunes in a time of financial hardship for so many that is at the core of the backlash against philanthropy in all its forms.

But naming buildings is about more than tax deductions and family legacies.  For every student today who walks through a building named for some long forgotten alumnus, it is a suggestion of what is possible for them and an inspiration for someday giving back to make that same educational experience possible for those who follow in their footsteps.

In 1993, as a new employee at a wealth screening company, I was invited to visit an Ivy League university to discuss a possible project.  I walked into the office of the director of research, a highly intelligent and efficient professional with a great deal of credibility both internally and in the industry, and sat down to discuss what they had done to date and their current needs.  Almost immediately, I noticed a stack of binders almost five feet tall in one corner of the office.  These were the results of the last screening, the director explained, already gathering dust after just a few short months.

Later, I came to realize both in my own work and in talking with other vendors that screening results often languished.  One of the analogies was that purchasing a screening, which then averaged $25,000, and not using it was akin to purchasing a BMW and leaving it parked in the garage.

Today, the cost of a BMW has risen but the cost of most screenings has fallen dramatically.  Screenings have also increased in quality in a way that would be the envy of any automobile manufacturer.  But still screening results can languish, although they are now in the dust free environment of electronic deliverables rather than binders and no longer embarrassingly visible to office visitors.

Why do so many of these screening results go unutilized?  It’s not a lack of value.  In fact, if every organization had the benefit of a screening and made full use of it I am convinced that far more money would be raised.  These are inexpensive instruments that bring tremendous focus and insight to development activity.  Used well, screenings can make fundraisers far more efficient, sensitive and effective.  They can often contribute facts that give fundraisers the confidence to ask for more money.

So if the problem isn’t the screening services, what is the impediment to implementation?  There are any number of reasons, both good and bad, ranging from mistiming the need for results to inadequate planning for review and distribution of data and from a change in staff between the time of contracting and delivery to inability to get development officers to visit with new leads.  In short, it is often a matter of poor planning and communications.

Through the years of watching good screening results sit idle, I began my own back of the envelope list of steps organizations could take prior to conducting a screening which might help to make the process more successful.  So, here is my checklist for the top six things an organization should consider when embarking on a screening:

1)      Define what constitutes a “prospect” for your organization

• For example, you may be looking primarily for stock market insiders, private business owners, women with deceased spouses over the age of 70, or some other combination of characteristics.
• If you’re not sure, you can look at your most successful donor relationships as a guide, determining what they have in common, keeping in mind that this is in part a reflection of where your organization has focused its past relationship building and solicitation.
• Make sure this process involves every part of the development team so that everyone is buying into the concept of a screening early on.

2)      Investigate what type of information is most motivational to your team

• Sometimes what people say they want is actually somewhat different from what they really need.  Since the ultimate measure of a successful screening is new prospects identified, cultivated, solicited and contributing, the information you receive and share with the team must be understandable and motivational.
• Show team members the type of information that is available from screening companies and see how they react, letting that weigh on your decision-making process rather than forcing people to join committees to author requests for proposals or site through multiple sales meetings.

3)      Determine what information you currently have on file

• Look at your file to find out what you need to update and what you need to fill in, using your determinations and investigations as the measure of what you might have at the end of the screening process.
• This is also important as you begin thinking about how to prepare a file for a vendor to screen and how to integrate any new information you acquire through the screening process.

4)      Decide how many prospects you need

• Screening customers often wonder how few names they can screen, often to save costs.  Instead, customers should determine how many prospects they can effectively manage for the project at hand and run a file of the warmest prospects to arrive at that number.  The cost is always small in comparison to the potential reward.  It also increases the likelihood of a successful screening by neither inundating the organization with information it cannot use nor only providing information on previously identified prospects.

5)      Talk to the screening companies

• Tell each company what you are looking for and ask if they can provide it.
• The screening companies can help you to determine the size and type of file you need to run in order to come up with the number and type of prospects you desire.
• If necessary, run test files to see deliverables, check on integration and examine online updating capability.

6)      Begin writing your implementation plan

• Implementation plans for screening are rarer than original copies of the Magna Carta.  Write one!  It need not be long and take forever to draft.  Rather, it can simply and briefly lay out the goals of the project, assign responsibilities (e.g. data review, data integration, prospect management, etc.), and so on.
• Ideally, this plan should be approved by the head of the development shop, shared with the team and ready for action upon receipt of the screening results.

Hopefully, these six items will make clear the goals, roles and responsibilities that will make for a successful project and not be a hindrance to undertaking the screening.  The idea is to add clarity, not time.  In fact, if done in a straightforward and direct manner, it could accelerate the process of reviewing your screening options and, most importantly, putting the screening results to effective use immediately upon delivery.

So what should organizations steer clear of as they explore screening services?  There are a number of practices which are big “no-no’s” but unfortunately very commonplace in the fundraising world.  Here’s my list of things to avoid:

A)     Ignoring the Vendors:  Shunning salespeople is entirely counterproductive.  Don’t send them an email asking for costs and no phone call.  After you’ve done some of your internal exploratory work, just bite the bullet and call them up.  You’ll learn things you didn’t know and won’t learn from colleagues in the field.  Besides, if a vendor is either unresponsive or attempts to oversell, that is a legitimate consideration in your procurement process.

B)      Sending out RFPs:  The fact is that screenings are usually too inexpensive to warrant such a time-consuming process.  Some of the best screening companies may not even bother to respond to an RFP because the cost of compiling the response is so high.

C)      Dog and Pony Shows:  Inviting all the vendors in for sales presentations just shows you haven’t done your homework.  While screening companies will do their honest best to listen to your needs and give you recommendations based on their suite of services, inviting all the companies to visit just means you’re kicking all the tires because you don’t yet know what kind of car you want to drive.  Again, as with RFPs, some companies may simply decline the invitation.

Many of these comments assume that you may conduct a screening which appends factual data, especially wealth and ownership data, to your file.  There are, however, other screening services which either create a custom model on your file or provide results which are predictive in nature.  These types of services can be very useful but they cannot replace the value of knowing something factual about specific individuals or their relative financial capacity.  In fact, having a strong supply of factual data on your constituents can make modeling more powerful.

Screening has always been a powerful instrument for development.  The increase in available factual data and the decrease in cost over the last few years make the barrier to using a screening service very low indeed.  Combined with the uncertainties of the impact of the financial crisis on our donors, there has probably been no better or more important time to run a screening.  All the more reason to hold ourselves and our organizations to some strong standards as we decide how best to get started.

Hope Consulting recently released the “Money for Good” report, a robust research study making a case for the ridiculous:  Demographics are irrelevant to fundraising.

Surveying individuals in 4,000 high income ($80,000+) households, with an intentional oversampling of individuals in households earning over $300,000, the authors endeavored to determine how nonprofits could more effectively obtain donations from individuals by understanding their true motivations.

“Money for Good” concludes its section on “increasing major donations from individuals” with five key findings and seven recommendations to nonprofits seeking to increase their fundraising capability.

The key findings begin with the conclusion that there is an additional $45 billion market opportunity for philanthropy.   This they say is “limited in part by high levels of loyalty in charitable giving,” making a perhaps obvious and related point that donors are “generally satisfied with nonprofits,” although they are also frustrated at being “solicited too often.”

The authors also highlight their finding, perhaps unsurprising but in sharp contrast to much of the discussion in donor advisory circles and among watchdog groups, that “few donors do research before they give…and those that do look to the nonprofit itself to provide simple information about efficiency and effectiveness.”

Unfortunately, the authors also draw two additional conclusions which are very difficult to support .

First, in an echo of the old “Seven Faces of Philanthropy” book, the authors conclude that “there are six discrete segments of donors with primary reasons for giving.”  These “behavioral” pools are broken down as follows:

• Repayer:  “I give to my alma mater”
• Casual Giver:  “I donated $1,000 so I could host a table at the event”
• High Impact:  “I give to the nonprofits that I feel are generating the greatest social good”
• Faith Based:  “We only give to organizations that fit with our religious beliefs”
• See the Difference:  “I think it’s important to support local charities”
• Personal Ties:  “I only give when I am familiar with the people who run an organization”

While pouring donors of various backgrounds into behavioral buckets is very compelling in a report of this type, it is difficult if not impossible to apply these simplifications to the fundraising process given that there is no credible research methodology for identifying prospects who fit into these categories or for screening donors on that basis.

In sharp contrast, I do believe that many people would identify themselves as having an affinity to an ethnic group, nationality, gender, age group, profession, political orientation or similar demographic characteristic.  But this, it turns out, is exactly what Hope Consulting soundly refutes as being important to understanding donors and their motivations.

“Demographics don’t matter,” the authors write, “HNW [High Net Worth] donors behave similarly to others.”

If the authors mean to suggest simply that wealthy people and people of modest means make philanthropic decisions in much the same manner, they have no way of knowing this is true without conducting a similar study of individuals in households earning under $80,000 annually.

If they mean that other demographic characteristics are not meaningful, they would have to be far more transparent about the demographic characteristics of their survey pool to be persuasive.

Even if the pool of respondents was sufficiently diverse to draw these conclusions, however, the contention that “demographics don’t matter” would only be credible if the surveys were designed specifically to elicit details on demographic self-definition and its influence on philanthropy, much in the same way that the survey has in fact done by including “faith” among the behavioral markers.  In a sense, people who recognize faith as an important characteristic in their giving are saying that they are defined in part by their relationship to their religion.  Might not “boomers” or “women” or “Latinos” or “musicians” or “democrats” or “environmental donors,” all cohorts defined in large part by their members, also say that their giving is influenced by their own unique self-described cultural identity?

For that matter, even if we were to accept these new behavioral group labels in fundraising, how can we know that they are not just derivative of the more important markers of our donors’ identities, the demographic cohorts to which these individuals truly belong and with which they associate themselves?

But don’t take my word for it.  Just ask your major donor which of these new labels best fits them.  It’s hard to imagine any choosing “casual giver” as their description of choice!

In pursuing the hypothesis that behavioral characteristics are the best measure of commonalities among donors, the authors wisely ignore these types of objections and instead focus on how to implement the labels they have designed.  They provide good practical ideas on tagging and tracking donors, starting with donors surveys and behaviorally segmented marketing.  It should be noted that these same techniques can be used to identify other perhaps more concrete demographic markers as well.

“Money for Good” is right to bring greater discipline to our effort to understand donors.  Where they are wrong is to invent yet another set of terms of art that we might use but our donors would not.  How donors define themselves is far more important than how we define them.  And that is precisely why knowing the demographics of our constituency is so critical.

The World Wealth Report, Cap Gemini and Merrill Lynch’s annual review of the state of the world’s richest people, is now out.  The seventeenth edition of this document provides a mountain of evidence that the environment for philanthropy has changed and that globalization is perhaps its most important feature.

What were some of the key shifts over the last year?

• The world’s population of High Net Worth Individuals (HNWIs), or people with more than $1 million in investable assets, grew 17.1% in 2009 to 10 million people
• Ultra-HNWIs, or individuals with over $30 million in investable assets, saw wealth rebound 21.5% in 2009
• While North America remains the single largest home to HNWIs, with 3.1 million individuals and 31% of the global HNWI population, Asia-Pacific’s HNWI population reached 3 million in 2009, matching that of Europe for the first time
• Asia-Pacific wealth rose 30.9% to $9.7 trillion, surpassing the $9.5 trillion in wealth held by Europe’s HNWIs
• Philanthropy was up around the world in 2009—except in North America

The report also suggests that philanthropic giving is expected to grow across nearly all regions by 2010 (with the possible exception of North America) and that the trends toward transnational giving and inter vivos transfers are also expanding as legal barriers fall, donors focus more on philanthropy and the desire to see the impact of giving during one’s lifetime becomes more important to donors.

So what are we doing about all this?

Not nearly enough.

Clearly, we have been living though a very difficult economic climate generally and philanthropy has been hurt dramatically.  Our fundraising activity has been adversely impacted both practically and psychologically.  But the wealthy, both in America and around the world, have experienced a dramatic reversal.  And they are trying to find responsible recipients for their charitable investments.  Are we there for them?

Since the cost of raising major gifts globally can actually be quite modest—one leading California university calculated the cost of international fundraising at just three cents on the dollar—there is no reason for organizations with an existing international constituency, a global programmatic reach or even just Facebook and Twitter accounts to ignore this market any longer.

We are like people panning for gold downstream as someone uphill yells, “there’s gold in this mine, bring your pick axes and have at it!”  We continue to do what we know because it works, not thinking that a potentially larger opportunity is just a short trip and a little work away.  True, more gold is currently coming from the panning, but that’s in part because few of us are digging.

It’s time to go where the gold is.

Three of the world’s richest people have issued a challenge to their peers on the Forbes Billionaires list:  Give half your wealth to charity!

But to what end?

If Bill and Melinda Gates and Warren Buffett are any example, it will be for whatever they damn well please.

On one level, who could argue with that?  It’s their money after all.  And they are all successful people who can and do get things done.  Who better then these people to find and fund the opportunities that will transform the world for the better?

Yet here’s the wrinkle: With a few notable exceptions, like the Gates’ and Mr. Buffett, the Forbes Billionaires are not experts in making charitable investments.  At their best, they might carefully consider projects, closely scrutinize organizations and budgets, interview organizational leadership and compare notes with peers.

They will have several significant disadvantages, however.  First, they will not have at their disposal the quality and depth of information available to them if they were considering a financial investment.  Second, the same types of analysis used in assessing the wisdom of a financial investment are not necessarily the same as those which would guide a good charitable investment.

This may explain in part why major donors typically rely on some level of familiarity with and trust in an organization in making a decision to make a major gift. That type of trust and familiarity comes with relationships built over time.

Here, therefore, is the potential difficulty of sudden, massive infusion of philanthropy in the third sector:  Since time is limited and trust takes time to build, donors might consider taking matters into their own hands, simply because they haven’t yet had the opportunity to meet the organizations which are the best fit for them.

This is the route of many duplicative efforts.  New operating foundations.  New social entrepreneurial ventures.  All launched with the sincere wish to get something done and often innocently unaware that some organization is already doing the same work quite well but without sufficient financial support.

Now imagine that this is all happening on a massive scale.  Just consider what would be possible if all those on the Forbes billionaires list accepted the challenge and committed half their wealth to philanthropy.  Fortune magazine suggests that another $600 billion could find its way to charity.  That’s almost twice current annual giving levels in the United States and likely many times the goal of all capital campaigns currently running combined.

Absent many new big projects conducted by organizations the Forbes Billionaires already know and trust, or a new body of data and set of analytics to make significant new charitable investing more efficient and effective, these donors will have nowhere to turn but to their own devices to take on the challenges of the world.

Of course, we could fix that.  Charities could view the Gates/Buffett announcement as a challenge not only to billionaires but to nonprofit organizations worldwide as well.  A set of once in a century goals could be developed which brought charities together to address problems too large for any to deal with individually.  Perhaps plans to build model sustainable cities, develop clean energy, provide food and schooling for every child or eradicate major diseases.  Something big enough to capture the imagination of big thinkers and warrant significant charitable investments.

Most great philanthropy occurs not because of the charitable impulse alone but as a result of the marriage of ideas from solution providers (nonprofits) to visionary individuals with significant resources (major donors).  Bill and Melinda Gates and Warren Buffett have issued a global challenge far greater than simply asking wealthy people to give up some cash.  They are, in effect, asking the world to rethink what philanthropy can and should do.  Donors will need our help to fashion that vision and we owe it to them, ourselves and our beneficiaries in this generation and the next to dream bigger than we have ever dreamed before.

So, what would you do with $600 billion?

It was the best of times, it was the worst of times…

If you read or heard many of the leading voices in philanthropy recently, you might well come away with the impression that fundraising is in tough shape.  The comments have been so dour you may have missed one very important detail:

Giving in the US is at near historic levels!

Here are just a few examples of how industry leaders and media outlets are saying that the resource development glass is half empty.

• At the annual conference of the Association of Fundraising Professionals in Baltimore, AFP CEO Paulette V. Maehara told attendees that “we’ve never seen so many organizations raise such few funds.”
• PNN Online reported it as “the worst year for charitable fundraising in a decade…”
• The much anticipated Giving USA 2010 introduced its Executive Summary with the sullen statement that “This is the steepest decline in current dollar terms since Giving USA began its annual reports in 1956.”

The Chronicle of Philanthropy went even further, challenging Giving USA’s overall characterization of the fundraising marketplace as overly optimistic.  “Evidence that giving might not be as strong as Giving USA suggests can be found in numerous studies conducted over the past year,” wrote Holly Hall.

There is no question that 2009 was a difficult time and 2010 offers continued challenges to nonprofits.  Unemployment, while just half that of the Great Depression, is significant.  The US stock market, although significantly rebounded from the crash, is way off its highs.  The real estate market, although now apparently turning a corner, had collapsed and triggered near historic defaults and foreclosures.  Businesses retrenched.  Foundations saw shrinking endowments.   And yet…

Giving in 2009 exceeded $300 billion for the third consecutive year!

2009 is one of the three biggest years in the history of US philanthropy!

That’s right.  Buried in the bad news that both confirmed our worst suspicions and excused our greatest failures is a harbinger of hope.  But within that hope is a challenge that many of us have yet to confront directly.

That challenge is to first better understand what we are doing, to do the best of it more often when times are lean and to expand our market to new audiences.

This is not some abstract concept.   It is routed in one core belief and a series of specific measurements.  The belief is that fundraising drives philanthropy.  That our acquisition, cultivation and solicitation are the reasons that people give to us rather than to some other institution or perhaps not at all.  The measuremeants are all about the numbers and type of people we contact.

By way of example, businesses routinely make sales projections by estimating the ratio of suspects to prospects to sales.  In other words, it might take 600 people vaguely interested in a service to come up with 100 who would actually consider buying it and, finally, 25 who will decide to buy this year and to buy from you.

This is pretty similar, in fact, to planning for a capital campaign and using a gift pyramid.  Or perhaps to assembling a portfolio for a major gift officer.   Or conducting donor acquisition.  The ratios are all different but the process of estimating based on historical averages, and then learning to modify those ratios in good and bad times, however difficult and inexact, is the way to determine if you are doing the right things, in the right volumes, with the right people and at the right times.

Unfortunately, without knowing whether more or fewer solicitations were conducted last year, and without knowing whether we asked for more or less money in 2009 than in 2008, we really can’t judge whether Americans were being more or less charitable or, for that matter, how much the economic crisis had to do with the outcome.

Sure, times were tough.  But if the Giving USA numbers are in any way close to reality, it is helpful to note that the $300+ billion given in 2009 was raised by an ever growing pool of nonprofits.  According to Giving USA 2009, there was a 53% increase in the number of nonprofits in the decade between 1999 and 2009.  In short, more institutions likely received these donations, driving down average cumulative giving per institution.  Additionally, certain types of charitable activity are particularly appealing to donors in times of public hardship, making it more difficult for some types of organizations to raise money than for others.

In short, if an institution did the same things in 2009 that it did in 2008, they would likely have seen a different result since there was more competition and the public’s attention was redirected to the needs so vividly displayed in the media.

As everyone in the nonprofit world knows, difficult doesn’t mean impossible.  In the world of fundraising it simply challenges us to commit to a higher ratio of suspects to prospects to donors, to continuing to ask for support even when times are tough and that we need to open the doors at the base of the pyramid to a much wider spectrum of support.

What if Google charged you $3.00 to conduct a search?

When your organization looks up constituent contact information on the web, it is likely spending that much or more.  Not in fees to Google, of course.  Nor in technical or software fees.  That is all “free.”

So where is all that money being spent?  Your time.

In addition, what you are not doing when you are conducting these ostensibly free searches may be costing your organization far more in something you may vaguely remember from your school days: Opportunity Cost.

Put staff time and opportunity cost together and it’s quite a bit of money.

That doesn’t mean we shouldn’t conduct research, of course.  Knowing more about constituents helps us to focus our time on the right opportunities in the right ways and to treat our friends and contributors with intelligence and sensitivity.  The question is rather how we use the vast treasure trove of data now available to us efficiently and effectively.

In order to make that leap, it’s important to first face the reality that our time isn’t free.  A staff member paid $35,000 plus benefits costs $0.39 per working minute.  A supervisor paid $65,000 plus benefits is clocking in at $0.73 per minute.  Assuming you had a staff member engage in a five minute internet search and that you also applied a reasonable supervisory time allocation (20%) to that activity, the cost of time would be $2.68.  (Yes, that’s 5 x $0.39, or $1.95, for the staff member and 20% of 5 x $0.73, or $0.73, for the supervisor.)  Do it another way—say an Executive Director or Vice President for Development searching for something on the web—and the staff time costs could be significantly higher.

In the grand scheme of things, $3.00 may be a small price to pay for vital information gathered quickly and efficiently by a knowledgeable and responsible member of the staff already under salary and working for you.

To make clear the cost implications, however, let’s look at the matter more holistically.  Rather than doing one lookup, we might perhaps do this simple task 25 times a month.  Just like those occasional calls on your cell phone that surprise you when they all show up together on the bill at the end of the month, little things do add up.  Those 25 lookups are over 2 hours of time and a minimum of $67 per month or $804 annually.  Just imagine how you might spend that money differently if you could!

But of course you can’t.  This is staff time not cash.  So perhaps an even more important consideration might be whether you could apply that time to a task that would generate more revenue.  In other words, what is the opportunity cost, or the cost of passing up another opportunity, of having people typing searches into web browsers.  This is, of course, even more critical when we have line fundraisers conducting their own research since the alternative could be actually visiting with donors and asking for gifts.

Again, none of this is said to dissuade us from conducting research.  Quite the contrary!

In fact, if we truly recognize the value of our time, both in terms of cost to our institutions and in the opportunities that we can pursue when focused on our most important work, then we can sharpen the edge on research and make a greater commitment to it as well.

How do we begin?  Make a general plan for research which is centered in the belief that knowing donors better can bring efficiency to our offices and more money to our institutions.  This plan might define what constitutes a prospect, for example, so that everyone is operating with the same concept in mind, both bringing the right prospects to the table and taking action on those provided to them.  The plan might also determine what type of research is most desirable and establish the preferred sources to be used in order to discourage staff from looking endlessly for information or checking source against source in an effort to understand a person or institution perfectly before engaging them.  In addition, the plan might address how and when it’s best to use products and services to take care of functions like ongoing address updating (batch processing through a vendor) or large scale prospecting for a campaign (with a database screeening).  Finally, the plan can establish research goals, determine research priorities, make a commitment to resources and staffing and set down policies and procedures for obtaining and handling information in a secure, ethical and confidential manner.

Such a plan could be written in a day and be no more than three pages long.  It could written by the Director of Development or, if you are lucky enough to have one, the Director of Research.  But it should be written down, approved by the top of the shop and made an integral piece of the development plan.

It is precisely because most organizations neither have the benefit of professional prospect research staff nor any policies and plans governing development information that we get confused about what research is, what it can be, what it costs and how much more money it can help us to raise.

To many around us, it might appear that “Googling” is research.  And a pretty cheap way to do it, too.  But it’s not.  And in fact the “free” aspect of it is precisely what makes it so very expensive. So the challenge to us all is to stop dabbling and to take the research opportunity seriously, making a plan and providing the resources and staffing to do so.