Fund-Raising Veterans Offer Advice on Setting Up a Donor-Research Unit

During Peg Shelton’s first month as a researcher in the fund-raising department of the U.S. Olympic Committee, in Colorado Springs, Colo., she created a report that showed where the nonprofit organization could get millions more in donations.

Working with the fund-raising staff, she identified potential donors, found clues to their assets and net worth, looked up their past giving to the committee and to other organizations, and figured out who had national recognition.

“We tried to gauge their value in terms of bringing in other top names and determine who had the means to make major gifts,” she says. “We’re talking multimillion-dollar potential between them and their friends.”

Despite the report’s potential to boost fund-raising efforts, she says, it gathered dust: “I think it was shared with maybe three people.”

That experience taught Ms. Shelton, who is now manager of prospect research at the American Cancer Society Foundation, in Atlanta, the importance of assessing an organization’s readiness for absorbing more in-depth information about donors — and for employing a staff member to gather that information.

Planning and Diplomacy

A new research unit at a nonprofit organization can be a boon to the charity’s fund raisers, but it takes careful planning and diplomacy, says Pamela Poland, director of research at the Metropolitan Opera, in New York.

Researchers can expand the organization’s list of potential donors, determine how much people may be able to give, and uncover interests they have that might strengthen their ties with the nonprofit group. They collect information about prospective donor from internal files, records, and conversations with staff members as well as from databases, the Internet, books, newspapers, journals, and other sources. At some organizations, researchers play roles in developing fund-raising strategy and cultivating donors.

Some fund raisers may feel their independence is threatened, says Ms. Poland.

“A lot of major-gifts people enjoy the prospecting process, but they don’t have to exclude themselves from that,” she says. “They should learn to partner with a researcher, because it becomes a much more powerful way of digging for new prospective donors. If they have that resource of a researcher, it allows them more time for solicitations and puts them in a better position to meet their goals.”

Assessing Needs

Before embarking on an effort to create an in-house research office, consider how fund raisers are currently getting their information about donors, says Christina Pulawski, director of development and donor services at Loyola University, in Chicago. “How is it collected and recorded?” she asks. “How much falls on people who should be out soliciting gifts?” If the duties of donor research are pulling fund raisers away from actively soliciting supporters, she says, then delegating those tasks to a researcher is a good idea.

If the organization needs help assembling and organizing its donor research, the next question is whether to create a position at the charity or to hire a freelancer or a consulting company. The only way to figure out the best approach, Ms. Pulawski says, is to do a cost-benefit analysis. In the long run, she says, it usually pays to have someone inside the organization doing research — someone who understands the institution, spends a lot of time working with the charity’s database of current donors and prospects, and can help fund raisers decide how best to attract big gifts. A staff member would have access to a charity’s institutional history and sees connections that freelancers wouldn’t see, she says: “If I were freelancing and someone asked me to write a profile of one of the board members, someone in-house would have more material in their files than I could find in researching hours and hours.”

Choosing a Researcher

Most people come to careers in prospect research from other fields, says Charles Headley, vice president of Prospect Identification Network, in Daytona Beach, Fla., a company that provides major-donor research services to charities. They may have been librarians or journalists, or they may have backgrounds in marketing or public relations.

If an organization plans to hire more than one researcher, it can be advantageous to choose people with varied backgrounds, says Ms. Pulawski. When she was a researcher at Northwestern University, from 1994 to this past July, she says, the prospect-research team included a former forest ranger, a textbook author, someone with experience in theater, a recent college graduate, and someone who could design a database. “Everybody brought a different perspective,” she says.

Specific experience can offer an insider’s view of a donor’s world. “I was a lawyer for a while,” she says, “and when I’m researching someone in the legal profession, I pick up on certain things. What does this title mean? Why was there a mass exodus from one firm to another?” Such detailed knowledge of a profession, she says, can offer clues to what a potential donor’s salary might be, or that his or her company may be in trouble, or that he or she is getting a sizable bonus.

However, she notes, a researcher’s personal qualities are a far better indicator of success than his or her previous experience or career. Curiosity, creativity, and tenacity are key, she says, as well as an ease in using computers, because of the need to move data between databases. Personal skills are also increasingly important, she says, because researchers need to work with their organizations’ leaders, negotiate with information providers (like LexisNexis), build support among staff members for their efforts, and sometimes accompany fund raisers when they visit prospective donors. “Prospect researchers,” says Ms. Pulawski, “are no longer back-room geeks.”

Sometimes charities hire people without prospect-research experience, because the skills can easily be learned, says Karen Greene, a partner at Bentz Whaley Flessner, a fund-raising consulting company in Minneapolis that works with nonprofit clients.

Membership organizations, such as the Association of Professional Researchers for Advancement and the New England Development Research Association, offer training through conferences and workshops, as well as mentor programs that match experienced researchers with newcomers to the field.

But it is also easy for novices to find mentors on their own, says David Shanton, a senior consultant at Marts & Lundy, a fund-raising consulting company that specializes in nonprofit clients, in Brooklyn, N.Y.

“Prospect researchers are amazingly open to mentoring and helping each other,” he says. “You could pick up a phone and make a call to any head of research and say, ‘I’m just getting started. Could I make an appointment to talk to you?’ You’d get a really strong response to that.”

The duties of a prospect researcher vary widely from one organization to another, says Ms. Pulawski. “Some researchers do a lot more than research. They do data processing, gift processing, stewardship, the annual fund, grant writing. Those are the most common things in the butcher, baker, candlestick-maker job description.”

Prospect researchers these days are more integrated into the fund-raising operation, she says: People who go out and solicit gifts are sometimes referred to as “line officers,” or “front line officers,” and those who do the research are sometimes called “fund specialists.”

Adding Up the Costs

Pay ranges widely for prospect researchers. “A beginning salary can start in the mid- to high 20s, and directors of shops at larger, more mature organizations can make nearly six figures,” says Mr. Shanton.

Salary surveys compiled by the profession’s membership associations can help an employer determine how much to offer a new hire. The most recent survey that the Association of Professional Researchers for Advancement conducted of its members, released in 2001, found that more than half of the 706 respondents reported making between $30,000 and $44,999 per year. Only 1.6 percent of respondents said they made more than $85,000 annually. (The survey also found that the overwhelming majority of respondents — 62.5 percent — work in higher education.)

In addition to those costs, a prospect-research operation — even a small one — will incur expenses for resources, says Fran Corcoran, director of advancement services at the College of Saint Catherine, in St. Paul. Along with subscriptions to local and major metropolitan newspapers, which most fund-raising departments already have, researchers may also need subscriptions to online services that give business and real-estate news, and may require access to publications aimed at readers of a particular ethnic identity or interest group. For example, Ms. Corcoran notes, “I’m here at the College of Saint Catherine, so I take the National Catholic Reporter.”

The Internet may seem like an endless source of information, says Ms. Greene, but it has its limits. “A lot is available on the Internet,” she says, “but free information is not necessarily qualitative information.” For example, she says, Web sites of privately owned companies may not have in-depth data about ownership that may be found — for a fee — from the business-information provider Dunn and Bradstreet.

Getting Started

Once the research office is established, one of the first steps is to become acquainted not just with the files and donor lists, but also with the people at the institution who might be able to offer insight about prospective donors, says Ms. Corcoran.

“Who in your organization knows stuff?” she asks. “You may think it’s just the archivist, but it could be the president, alumni, financial-aid people — it really all depends. Figure out right away who the resident fossil is, someone who has been around for years. But remember, too, that everything they ‘remember’ might not be true.”

Early in the process of creating a research shop, Ms. Pulawski suggests, organizations should set down rules regarding ethics — what information should be collected about potential donors and who should have access to it. Just because information is available, such as courthouse records and wills, that doesn’t make it fair game, she says. She suggests using only information that is relevant to a fund-raising effort; the Association of Professional Researchers for Advancement’s ethics guidelines can help.

Privacy considerations should even extend to the question of where the prospect researcher sits in an office, says Ms. Corcoran. “You need to be in a good place geographically,” she says, “not in a hallway, where people can read over your shoulder.”

From the very start, Ms. Shelton says, researchers should keep track of their charity’s donor-information resources and log their research accomplishments. For instance, she suggests, write down benchmarks, such as the number of donor files compiled from the beginning of a researcher’s work. “If you’re there long enough, you start seeing the fruits of your efforts,” she says, “and that indicates your value to the organization.”

Does your charity have a prospect-research shop? What advice would you give about setting one up? Share your experience in the Fund Raisers online forum.