Tag Archives: donor research

2017 BNP Paribas Individual Philanthropy Report

Fundraising Insights, Wealth & Philanthropy Intel, , , , ,

By Elizabeth Eck

“Unlike many older philanthropists, this globally connected and tech-savvy cohort is not content with just writing a charitable cheque. They see their skills, networks and for-profit investments as part of how they make an impact with philanthropy.”  -The Economist Intelligence Unit

2017-BNP-PARIBAS-PHILANTHROPY-REPORT_FINAL_Page_01What is this Report?

Based on interviews conducted between November 2016 and January 2017 with affluent millennials and experts, the report assesses the shift in the approach to philanthropy by the next generation of affluent families, focusing on millennials engaged in family foundations. The report explores the millennial mindset, their investment tools and strategies, and the balance struck between family legacy and philanthropic innovation. The report defines millennials as those born between 1980 and 2000.

What are key findings from the article?

  • Millennials are taking the reins. Though the bulk of wealth and charitable giving remains in the hands of older generations at this point, millennials are increasingly being given the reins of family businesses and foundations and becoming the decision-makers.
  • Millennials believe in social entrepreneurship and are thus willing to support or invest in social enterprises and for-profit organizations, sometimes setting up their own. The sectors in which they invest include FinTech, EdTech, food/agriculture, and energy, and they are looking for sustainability – such as job creation and lifting individuals out of poverty. Meanwhile, traditional beneficiaries such as arts institutions are of less interest.
  • Social media has inspired a global perspective. Social media, online news publications, and ease of travel have led millennials to take a more global, dispersed approach to philanthropy. And there’s a sense of urgency to their giving – they want to tackle problems now.
  • Millennials are digitally social. Unlike previous generations, millennials like to use social media to announce the family foundation’s initiatives and achievements and to draw attention to their work. They are also open to collaborative approaches, often using social media to identify strategic partners.
  • Impact investing is interesting. While family foundations often invest endowments in conventional instruments such as stocks and bonds, millennials are increasingly interested in innovative financing tools and impact investing. Impact investments are those made to organizations and funds with the intention of generating social and environmental impact alongside financial return.
  • Millennials are unlikely to abandon traditional grant-making altogether. The report also notes that traditional grant-making and charitable giving is not expected to end as not all issues can be addressed through market-based solutions. Human trafficking and domestic abuse are cited as two examples. Moreover, social entrepreneurs require seed funding in early development.
  • Millennials view legacy more in terms of actions than institutions. As for the balance between family legacy and philanthropic innovation, in general, millennials are less concerned with the formalities of passing a legacy onto the next generation than their elders; however, they are instilling an appreciation for philanthropy in their own children. Rather than family legacy, they think in terms of a legacy of giving where there is less constraint and more incentive to turn ideals into action.

What can I do as a result?

  • Millennials care about being heard and being involved in good causes. Ask millennials for feedback. Even if the older generation is still the decision maker in a family foundation, engage the younger generation as they will be inheriting the reins before long. Ask for their feedback in terms of where they see the foundation going and what issues are important to them. Ask for feedback on how your institution might make improvements. Ask the millennials to volunteer for your organization.
  • Millennials want to tackle causes they care about – now. Learn to utilize all forms of social media – Facebook, Twitter, Instagram, LinkedIn, etc. Establish your presence and contribute meaningful content that tells your story with a sense of urgency.
  • In social media, find and follow foundations tackling the issues in your field. Comment on their posts so they begin to become familiar with your name and organization.
  • Learn to use digital assessment tools to track your impact and then share that information. Again, you want to tell your story and your successes.
  • If you’re in a traditional non-profit organization that doesn’t fall within the realm of social or environmental work, don’t despair. Think in terms of what might appeal to a millennial. Many arts and educational institutions, for example, offer programs for underserved youth. Trumpet the work you’re doing with those populations. You may find the funders following you on social media.

Additional Resources

 

Artificial Intelligence is here. Are you ready?

Fundraising Insights, , , ,

By Elizabeth Eck

“Leaders marvel at the opportunity to scour huge amounts of data for connections that would otherwise go unnoticed. But the specter of unseen algorithms deciding who gets services and the fear of bias-tainted data make the technological future seem more menacing than transformational.” -Nicole Wallace

Artificial Intelligence is here. Are you ready?What is this article?

Using examples from a number of nonprofits, this article explores the promise and the peril of artificial intelligence (A.I.). From the automation of repetitive tasks to real-time analysis, A.I. offers great promise.  However, many worry about “data science done badly. Analysts don’t always understand the data they work with, know what they can build with it, or grasp its limits.” And while scalability is a feature of A.I., empathy is not.

What are key findings from the article?

  • The number of nonprofits using A.I. is “miniscule.” However, many are learning that A.I. identifies patterns at scale, so interest is on the rise.
  • Just as the benefit of identifying patterns at scale can be quite large, so can the harm. Citing criminal justice data as an example, the article cautions that combining flawed or biased data with advanced analytics could not only replicate but magnify discrimination.
  • Others caution that by automating decision-making, the nonprofit will “lose that empathetic touch.” The article mentions Florida’s Feeding Children Everywhere as an example of a nonprofit that decided the benefits outweigh the costs. The nonprofit lets people apply for temporary food assistance through a mobile app, with half automatically qualifying for assistance. Of those who don’t qualify, an employee reviews the application. Rather than hiring more employees to keep up with the growing number of applications, the organization realized that A.I. could help, thereby reducing the number of applications needing human review. As a result, Feeding Children Everywhere will be able to provide 200,000 more meals in 2019.
  • The article concludes by stating that while machines will never be able to empathize, “humans can’t scale.” If used properly, A.I. offers great potential.

What can I do as a result?

Focus on A.I. as an assistant, not a human replacement and begin to imagine how A.I. could help you in your fundraising role.

  • What repetitive tasks could be automated? How about reviewing the weekly gift list, figuring out which individuals to write to, and then drafting the thank you. What if an algorithm could find those donors and then draft a personalized, editable email for you?
  • What decisions could A.I. help with? What about the timing or target amount of an ask? Wouldn’t it be great to have more data science to complement the art behind the ask? The computer will never be the one to make the ask, that’s where humanity will come into play. But the computer can do a better job of informing the decision making process.
  • What other areas could A.I. help? Trip planning, moves management? Who will make the next major gift? The possibilities seem boundless.
  • Check out Gravyty or Salesforce’s Einstein Prediction Builder for A.I. tools geared toward fundraising. Cognitive computing has already arrived at your door.  Maybe it’s time to take a peek and stay informed!

Additional Resources

What’s New in the 2018 Capgemini World Wealth Report

Fundraising Insights, Wealth & Philanthropy Intel, , , ,

By Elizabeth Eck

“North America accounts for 31.3% of global HNWI population and 28.2% of wealth. The HNWI population in North America grew by 9.9% in 2017 as compared to 7.8% the previous year, while HNWI financial wealth grew at 10.3% to reach US$19.8 trillion. -Anirban Bose

Capgemini WWR 2018What is this article?

The 2018 World Wealth Report gleans data from more than 2,600 surveys from around the world to report on trends for high net worth individuals (HNWI) and ultra-HNWIs.  The report provides insights into asset allocations and investment preferences, such as working with wealth managers and the growing interest in cryptocurrencies.

Capgemini defines HNWIs as those having investable assets of US$1 million or more, excluding primary residence, collectibles, consumables, and consumer durables.

What are key findings from the article?

  • Global HNWI wealth grew 10.6% to surpass the US$70 trillion mark and remains on course to reach US$100 trillion by 2025, with the Asia-Pacific region leading the way.
  • Asia-Pacific and North America fueled the 2017 growth in HNWI population and wealth, with Asia-Pacific accounting for 42.4% of the rise in HNWI wealth and North America accounting for 27.4%.
  • The US, Japan, Germany, and China are the four largest markets for HNWIs, with the US leading at 5.3 million in 2017, a 10% increase over 2016.  Guidestar estimates the number of active US nonprofits courting these individuals at more than 1.8 million, so there is great competition to secure funding from these individuals.
  • Though asset allocation remained fairly stable, real estate saw a significant increase in HNWI asset allocation in 2017, with an increase of 2.8 percent globally to 16.8%, becoming the third-largest asset class, behind equities and cash.
  • In North America, real estate represents 12.4% of HNWI assets, with residential real estate dominating the class at 52.3% – followed by 16.1% in commercial real estate (excluding hotels), 10.2% in land, 7.0% in farmland, and 5.6% in hotels.
  • HNWIs are becoming interested in investing in cryptocurrencies though the wealth management industry remains cautious because of regulatory uncertainty.
  • Wealth management firms are preparing for the entry of BigTech, which Capgemini defines as data-driven tech firms not traditionally present in financial services such as Amazon, Google/Alphabet, Alibaba, Apple, and Facebook.  Leading wealth management firms are investing in intelligent automation and artificial intelligence to prepare for the greater role that BigTech firms will play.

What can I do as a result?

  • Except in cases of public company insiders, the two biggest asset classes, equities and cash, are not readily transparent to a prospect researcher. Real estate, on the other hand, remains the most often used asset in determining gift capacity because of its transparency in the US. Capgemini estimates US real estate at 12.4% of a HNWI’s total assets, so this number can be very useful for estimating net worth.
  • The US leads the pack in the number of HNWIs – 5.3 million. For those prospecting in the US, there is a vast pool of wealth to tap into.  There is also great competition though, with 1.8 million active nonprofits vying for gifts from those individuals.
  • With the burgeoning interest of HNWIs in cryptocurrency and BigTech, there will be a need for prospect researchers and fundraisers to understand better how wealth management firms will be leveraging these vehicles.

Additional Resources

Midlevel Donors: Often Overlooked Gems

Fundraising Insights, , ,

By Elizabeth Eck

“Midlevel contributors are usually a relatively small portion of a nonprofit’s donors, but they give an outsize amount of money and tend to be more loyal than small-dollar donors.”

Mark Rovner, Principal at Sea Change Strategies

What is this article?

This article offers valuable insight into the importance of targeting midlevel donors so as not to leave money on the table.  At many institutions, midlevel donors have fallen through the cracks because they were thought to be worth too much for a direct mail campaign but not enough for a major gift focus.  They warrant more attention.  The author gives examples from veteran fundraisers of how to engage midlevel donors and the return on the efforts.

What are key findings from the article?

Focusing on midlevel donors will pay dividends if executed properly.

  • Rovner states that multiyear retention rates of “70 to 75 percent are not unusual.”  The author cites Best Friends Animal Society as an organization that is reaping the rewards of inspiring midlevel donors.  Constituents who give $1,000 to $25,000 annually to the organization account for 2% of donors; however, they also account for 30% of gifts to the annual fund.
  • Good customer service is the first step in attracting these donors.  If they don’t feel well cared, they might not wish to contribute further.
  • Future data collection planning is key when setting up a midlevel-giving program since it is difficult to go back and re-define processes when a program grows in size.  Doing so while the program is small and manageable will ease the burden.  Think about data points such as interests and behavior.  What might you need to collect in order to connect with these donors?
  • Effective segmentation of the database is important for targeting donors who might warrant more specialized attention.
  • Talking with midlevel donors via phone or email gives a more accurate picture of what donors want, one of which is to understand how their giving has impacted the organization.  It feels good to be in the know, especially when you’re being told that you’re making a difference.
  • It’s important to build a sense of community and to let donors experience the mission.  This relates to letting the donors feel good about the contributions they make.

What can I do as a result?

  • Identify: Look for affinity first, even if you only have past giving behavior. Try pulling a list of individual donors who have given recently, frequently, over a long period of time, and who fall within your mid-range of annual giving amount. If you don’t know what your mid-range of giving is you can run a quick mean, median, and mode calculation on total cumulative giving per donor in your last fiscal year to begin figuring it out.
  • Cultivation: Is there a simple way you help your donors “experience the mission?” Host (and video-tape) a one-hour talk by the CEO or a subject matter expert during which the problem the organization is trying to solve and the organization’s successes are discussed. Deepen engagement with your volunteers and donors by asking them to host this “punch-and-cookies” event.
  • Stewardship: Are you sending handwritten gift thank you notes? Deepen engagement with your board members and volunteers by asking them to write thank you notes to your mid-level donors. You might even consider giving them a script and asking them to make thank you calls, especially for higher gift amounts.
  • Staffing: Mid-level donors are perfect training grounds for future major gift officers. Are you hiring your first major gift officer? Start with calls and visits to mid-level donors. Or you can hire a dedicated mid-level donor officer and create a career path.
  • For specifics on how to plan for a midlevel donor program, see Advancing Philanthropy’s “A Strong Middle Promotes a Healthy Fundraising Program” (link below). The article offers insights on how to define what constitutes midlevel for your particular institution, how to do data analysis and use data appends, and how to take action.

Additional Resources

 

The Wealth Report | Frank Knight | 2018

Fundraising Insights, Wealth & Philanthropy Intel, , ,

“It is therefore a fairly safe bet that the next decade will not see a repeat of the double or even triple digit property price growth we have seen in leading markets over the past ten years.”

 

What is the Report?

The Wealth Report is a global perspective on prime property and investment published by Knight Frank, a global real estate consultancy firm. The report defines prime property as the most desirable and most expensive property in a given location, generally the top 5% of each market by value. The report emphasizes ultra-wealthy individuals, defined as US$50 million or more in net assets

What Are Key Findings From The Report?

2017 was a banner year for the real estate markets and for the ultra-wealthy. Where are those wealthy individuals and what do they look like?

  • Leading with the most ultra-wealthy individuals, North America takes the top spot with 44,000; Asia overtakes the second spot with 35,880; and Europe narrowly finds itself third with 35,180.
  • Recent changes in U.S. tax law favor a continued upswing in wealth accumulation. Interestingly, while New York tops the list of ultra-wealthy residents now and predicted into the future, London out-performs for where the ultra-wealthy invest in real estate and have preferred lifestyle elements such as quality universities and luxury hotels, shopping, and restaurants.
  • While the majority of the ultra-wealthy have their primary residences in the country from where their wealth is derived, a significant number are globally mobile.
  • Top three reasons for luxury investments: (1) joy of ownership, (2) capital appreciation, and (3) safe haven for capital.
  • Two key trends in 2017 for luxury residential markets were a big slowdown in China’s top-tier cities: Guangzhou, Beijing and Shanghai; and growth in Europe, including Amsterdam, Frankfurt, Paris and Madrid.
  • The top three priciest cities for luxury residential real estate, relative to square meters, were Monaco, Hong Kong, and New York.

What Can I Do As A Result?

  • If the ultra-wealthy are not in your database or on your radar, you still have some takeaways from this report: Owning a second home is a reliable indicator of someone who has wealth. For those that do own multiple properties, consider the top three reasons. Use conversation to help you identify whether the second home purchase is purely out of joy and stretches the purse strings, or if your prospects considers it a good investment, which suggests smart financial planning.
  • New York and London remain the global hotspots for the ultra-wealthy and in the U.S., real estate ownership and sales are public pieces of information. If you have US$1 million gift prospects, consider these addresses as key indicators of wealth worth verifying.
  • While Asia is vying with Europe for the most ultra-wealthy individuals, if your prospects are in China you will want to keep current with government decisions that impact wealth accumulation.

Additional Resources

Tax Webinar | Follow-up Questions

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The Tax Cuts and Jobs Act that was signed into law on December 22, 2017 was over a thousand pages long. Like previous tax law, the changes are complex and interrelated. In Aspire’s webinar, Discover Gift Opportunities in the New Tax Law with Prospect Research, we primarily covered the income tax changes that might affect your donors and their ability to give or their perception of their ability to make a charitable gift.

At the end of the webinar there were a few questions that went unanswered. We dug a little deeper to find answers for you, which we have presented below.

Does the new tax law have any impact on charitable remainder trusts and charitable gift annuities?

No. There was no change to those or other deferred giving vehicles. On a related note, there was no change to the capital gains tax rate and no change to the rules for gifts of appreciated property, such as stock.

The Aronson Nonprofit Report produced the following article that summarizes this information and more.

 

Other than the athletic seating deduction are there other elements that impact what benefits nonprofits can offer to donors and what is considered goods and services versus what is fully tax deductible?

I’m going to answer this question with a firm “maybe.” While Aspire’s webinar covered the implications of the new tax law relevant for fundraising from donors, we did not review how the law impacts the rules governing nonprofits.

But I would not leave you without a great resource! The following article from Yeo & Yeo, CPAs and Business Consultants provides a great summary that should do a much better job of giving you the information you seek.

 

Did you miss the webinar? Click here to learn more or to purchase a recording.

Discover Gift Opportunities in the New Tax Law with Prospect Research

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Identify new donor opportunities and forecast potential losses

Webinar | $75

Information on the new tax law has flooded the internet, including a lot of doom and gloom forecasting of plunges in giving. Are you still left wondering what that means for your nonprofit and how your unique constituency might behave?

This webinar introduces some fresh thinking on the new tax law from a prospect research point a view. We summarize the key points of the tax law as they apply to philanthropy, both positive and negative. Then we walk you through step-by-step on how you can make reasonable assumptions and forecast the possible negative and positive impacts on your organization’s donors.

With all of the information out there, by now you likely understand the key provisions in the new tax law. You just need a creative and methodical approach to apply that information to your unique constituency so that you can make data-based decisions right now about exactly what donor messaging tactics to implement before the end of the year.

Fear not! This is not a webinar about complex statistical modeling techniques or complicated mathematical formulas. This webinar is about making reasonable assumptions and applying them in simple calculations to identify the likely risk and opportunity segments in your donor base. Any fundraising professional can master this approach.

You Will Learn

As a result of this webinar you will…

  • Understand the key tax provisions that affect your constituency’s wealth and philanthropy.
  • Determine reasonable assumptions to use in risk and opportunity formulas and apply these to your donor base to identify your organization’s risk and opportunity segments.
  • Quickly assess some of the risks and opportunities your major gift prospects may be facing on a case-by-case basis.
  • Recognize and understand some tactics donors can use to maintain or increase their giving.

Your presenter is a prospect research professional with experience turning data into action. Please note that she will NOT be covering fundraising messaging, techniques for discussing the tax implications with donors, or the exact mechanics of the tax law. This webinar is for professionals looking to evaluate the risks and opportunities in their constituencies and for a clear summary of information relevant to fundraising practices.

You Will Also Receive

  • A prospect research tax implications “cheat sheet” to quickly evaluate the impact of the new tax law as you review your major gift prospects’ information.
  • An info-graphic-style reference depicting the risk and opportunity segments and the associated formulas.
  • A list of the best tax-related resources for nonprofit and higher education professionals.

About the Presenter

A resourceful fundraiser with an innovative focus on prospect research, Jen Filla is a researcher, consultant, author, speaker and trainer. Her mission is to perform research with distinction and to provide other fundraising professionals with the power to perform their work with excellence, lead with research, and make a difference!

Deeply committed to advancing philanthropy and the fundraising profession, Filla is co-author of Prospect Research for Fundraisers: The Essential Handbook, part of the Wiley/AFP Fund Development Series. She has also served as a volunteer and trustee for numerous organizations over the years including The Center Foundation and Habitat for Humanity of Delaware County. Currently she serves on the board of the Nonprofit Consultants Connection in Tampa, Florida.

Filla is a member of the Association of Professional Researchers for Advancement (Apra), the Council for Advancement and Support of Education (CASE), and the Association of Fundraising Professionals (AFP). She received a B.S. from Neumann University.

$75 US Dollars

 

Questions? Email the presenter at jen@aspireresearchgroup.com or call 727 202 3405