Research What can it do for your organization

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Research What can it do for your organization?

• London Region Fund Raising Executives
• May 27, 2004
• Peter McKinley
• petermckinley_at_sympatico.ca
• 519-872-4744

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In a money-scarce environment, a business must
maximize its chances. A good way to do this is to
improve your intelligence-gathering operation,
then start looking for opportunities the
well-heeled operations might have missed
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In a money-scarce environment, a business must
maximize its chances. A good way to do this is to
improve your intelligence-gathering operation,
then start looking for opportunities the
well-heeled operations might have missed

• Steven Goldman
• Reviewing Michael Lewis book Moneyball
• Baseball Prospectus
• http//www.baseball-analysis.com/article.php?artic
  leid2740

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Why do fundraisers focus so much on the wealthy?
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Why do fundraisers focus so much on the wealthy?

• Because that's where the money is'

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Research one definition

• The process of seeking to understand and activity
  or phenomenon in a systematic manner

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Traditional View of Research

Research
Annual Fund
Major Gifts
Stewardship
Records
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Role of Research

• To Collect and Analyze information in order to
• Identify and prioritize potential supporters
• Financial
• Volunteer Leadership
• Contribute to cultivation/solicitation strategy

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Role of Research

• Information, including information on wealth, is
  dynamic, not static
• Individual choices
• Broader economic factors
• Different model required to optimize scarce
  resources time and money

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Alternative View of Research

Annual Fund
Major Gifts
Stewardship
Records
Research
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RESEARCH AND PROSPECT MANAGEMENT

• INITIALLY, TWO BROAD GROUPS TO CONSIDER
• Identified (prospects)
• Unidentified (everybody else)
• Context is Major Gift prospects

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CONTRANS INCOME FD   T.CSS.UN Closed at
11.10/unit on May 25, 2004
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How Much Does He Have?

• Salary (463,499) Bonus (579,375)
  1,042,874
• Annual total for unit distributions
  588,677.07
• 5,308,354 units _at_11.10/unit 58,922,729.40

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How Much Does He Have?

• enough

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How Much Does He Have?

• Enough to book a call or try to network towards
  an encounter in order to determine whether
• Affinity with your organization exists
• Affinity with your organization can be built
• Its worth some of your time.

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Wealth Building Trends

• Income Trusts/Funds
• Vehicle for taking company public
• Income generating and equity building
• Decline in acceptability of dual-class shares
• Declining acceptance of windfall compensation

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Where to Focus?
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Where to Focus?

• What industries are important to Southwestern
  Ontario?

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London Economic Development Corporation

• Auto Sector
• Largest Manufacturing industry in Ontario
• Agri-Food
• 2nd largest manufacturing industry in Ontario
• Call Centres
• Life Sciences
• Information Technology

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Type of Non-Profit Organization

• Size Small, Medium, Large
• Resource implications how much can you spend
  in order to gain revenue?
• Reach Regional, National, International
• What are your restrictions? Can you reach outside
  your home base?

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Type of Non-Profit Organization

• Regionally restricted
• Have to access every local dollar possible
• Volunteer Networks critical for complete
  identification and screening
• No regional restrictions
• Same as above and
• How to spend wisely reaching outside of your
  region?

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Another way to look at it

• 188 people in the Directory of Directors in
  postal codes N4-N9 (Woodstock West)
• Canadian Whos Who people born in London (may
  still have connections).

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Targeting Resources

• Donations Capacity Affinity
• (objective) (subjective)
• Capacity expected level of support in ideal
  conditions () based on wealth
• Affinity how close is the prospect to the
  organization?

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IDENTIFIED PROSPECTS

• SEGMENT INTO GROUPS BASED ON HOW CAPACITY AND
  AFFINITY COMBINED
• FURTHER SEGMENT THOSE GROUPS, TO ESTABLISH
  PRIORITIES FOR RESEARCH

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Capacity and Affinity
HI
CAPACITY
HI
LO
AFFINITY
LO
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Capacity and Affinity
HI
CAPACITY

• Hi-Hi

• Hi-Lo

HI
LO
AFFINITY

• Lo-Lo

• Lo-Hi

LO
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Capacity and Affinity (Ivey)
HI
CAPACITY

• Hi-Hi

• Hi-Lo

HI
LO
AFFINITY

• Lo-Lo

• Lo-Hi

LO
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Capacity and Affinity
Top of Mind for Researcher
HI
CAPACITY

• Hi-Hi

• Hi-Lo

HI
LO
AFFINITY

• Lo-Lo

• Lo-Hi

LO
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Capacity and Affinity
Cultivation by Relationship Manager
Top of Mind for Researcher
HI
CAPACITY

• Hi-Hi

• Hi-Lo

Most Attractive to try to move
HI
LO
AFFINITY

• Lo-Lo

• Lo-Hi

LO
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Capacity and Affinity
Invite to your high-level event
Top of Mind for Researcher
HI
CAPACITY

• Hi-Hi

• Hi-Lo

Most Attractive to try to move
HI
LO
AFFINITY

• Lo-Lo

• Lo-Hi

LO
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Capacity and Affinity
Top of Mind for Researcher
HI
CAPACITY

• Hi-Hi

• Hi-Lo

Most Attractive to try to move
Next Priority for Researcher
HI
LO
AFFINITY

• Lo-Lo

• Lo-Hi

LO
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UNIDENTIFIED PROSPECTS

• SCREEN FOR
• Indications of significant wealth
• Indications of relative liquidity of wealth
• SOURCES
• Existing Donors
• Non-donors meeting indicators of potential
  affinity

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The Paradox

• The broader the appeal that an organization has,
  the more difficult it is to decide where to focus
  resources in order to attract donors

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The Need

• Increase the number of prospects, especially
  major gift prospects

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Addressing The Need

• What are the characteristics of a donor?
• What are the characteristics of a donor to a
  particular kind of organization?
• What are the characteristics of a donor to MY
  organization?

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Research

• Paul Reed PhD
• Senior Social Scientist with Statistics Canada
• Associate Director, Centre for Applied Social
  Research, Carleton University
• Nonprofit Sector Knowledge Base
• http//www.statcan.ca/cgi-bin/downpub/listpub.cgi?
  catno75F0048MIE
• Centre for Applied Social Research
• http//www.carleton.ca/socanth/casr/

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Historic Transfer of Wealth

• Boomers
• also the group that is most likely to be
  skeptical of non-profit institutions

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Societal Trends

• Careers and families starting later in life
• Increasing desire for early retirement
• Longer post-retirement lives
• User Pay?

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Why do fundraisers focus so much on the wealthy?

• Because that's where the money is'

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Because that's where the money is'

• Bank Robber Willie Sutton

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THANK YOU!

• Peter McKinley
• petermckinley_at_sympatico.ca