crescendo 2012 conference prospect research for planned gifts

© Blackbaud 2012 Katherine Swank | Target Analytics 1

Prospect Research for Planned Gifts

KATHERINE E. SWANK, J.D., SENIOR CONSULTANTTARGET ANALYTICS®, A BLACKBAUD® COMPANY

SEPTEMBER 2012


YOUR PRESENTER

• Target Analytics since 2007• Author and Frequent Presenter on Planned Giving, Major Gifts,

Prospect Research and Industry Topics • Law degree, Drake University School of Law

• Member, State Bar of Arizona• Past-president, Colorado Planned Giving Roundtable• Over 20 years as a development officer, including

• National healthcare, public broadcasting, law school• National Director of Planned Gifts $300M healthcare organization• Raised over $215 Million in career

• 11 years as affiliate faculty for Regis University’s Masters in Global Nonprofit Leadership program

Katherine Swank, J.D., Senior Fundraising Consultant


• Planned Gifts: A Basic Primer

• Strategic Outcomes of Prospect Research for Planned Gifts

• Planned Giver Profiles

• Collecting and Purchasing Data

• Data Sources that Help Identify Planned Giving Prospects

• Prospect Research to Identify Your Top Planned Giving Prospects

OUR AGENDA


Planned gifts are not mysterious

Donor cultivation is similar to major gift cycle

You may have more ultimate dollar potential in planned giving than

major giving

The prospect pool of likely planned gift donors at any organization can

be very large

Increased attention = higher $$ results

Some organizations have programs that

provide between 25% to 50% of their annual

revenues

Once established, many programs can boast a

cost of 3¢ to15¢ per $1 raised

MAKING THE CASE FOR PLANNED GIFTS


• 90 TO 95 OF EVERY 100 PLANNED GIFTS WILL BE BEQUESTS

• Another 5 or 6 of the remaining will be CGAs• 1 or 2 will be CRTs

FACTS ABOUT PLANNED GIFTS

Type of Planned Gift United States

Average Charitable Bequest Gift $35,000 - $70,000

Average Charitable Gift Annuity $60,000Minimum Charitable Remainder Trust value

often required by Trustees and Financial Institutions

$1,000,000


Provision in your Will or Trust to pass money to a charitable organization upon your death

• Typical clauses include an outright amount, a percentage of the assets, or the residual of the estate

• Wills have traditionally been considered the first estate planning tool

• Charitable bequests are easy to talk about and understand

PRIMER ON PLANNED GIFT VEHICLES – BEQUESTS


• 75% of wills are never changed- Only 1%-3% of charitable bequests are ever revoked

• More than 2/3 of planned gift donors also make current annual gifts- Research confirms planned gift donors are

significantly more philanthropic than non-planned gift donors

PRIMER ON PLANNED GIFT VEHICLES – BEQUESTS


When you complete or modify your beneficiary designation form, just name your chosen charity as a Full or Partial Beneficiary

• Typical gifts include an outright amount or a percentage of the asset

• Beneficiary Designation forms are becoming the first estate planning tool

• These gifts are easy to talk about and understand

PRIMER ON PLANNED GIFT VEHICLES – GIFTS OF BENEFICIARY DESIGNATIONS


PRIMER ON PLANNED GIFT VEHICLES – GIFTS OF BENEFICIARY DESIGNATIONS


PRIMER ON PLANNED GIFT VEHICLES - CGAS

A contract between one or two donors and Your Organization. In exchange for making a gift to your organization, you promise to pay the donor(s) a Fixed Amount Regularly for Life• Although part of the annuity payments are taxable,

the donor(s) also receives an upfront charitable income tax deduction for the amount of the original gift that is estimated to remain at the donor’s/donors’ death


PRIMER ON PLANNED GIFT VEHICLES - CGAS

• 5%-6% of all planned gifts are CGAs

- Next most common planned gift vehicle in U.S.

• Annuities can range from a little as $5,000 to over $1,000,000

- Over 4 in 5 annuitants learned about gift annuities through the organization’s own marketing and promotion


PRIMER ON PLANNED GIFT VEHICLES - CRTS

An irrevocable financial holding set up to move liquid or illiquid assets out of an individual’s possession into a Giving Vehicle with Charitable Intent. The trust pays a Specified Annual Amount to one or more people for a fixed number of years, or for the life of the individual(s) who benefit from the trust’s distributions

• At the end of the term, the remaining trust property is distributed to your organization and any other specified charities


PRIMER ON PLANNED GIFT VEHICLES - CRTS

• 1%-2% of all planned gifts are CRTs

• CRTs usually start at $1,000,000 or higher – when you use independent trustee

- Are useful for changing real estate, business assets and other relatively illiquid assets into cash

• Many CRT holders make charitable bequests as well


ROLE OF PROSPECT RESEARCH FOR PLANNED GIFTS

As few as 15 people making average-sized gifts can provide over $1 Million in mission

funding


Identify your

qualified pool of

planned gift

prospects

Categorize your prospect pool into gift

types

Segment top prospects who should be approached on a

personal level

Provide guidanc

e on appropri

ate solicitati

on amounts prospect

-by-prospect

Prospect Research Can:

STRATEGIC OUTCOMES OF PROSPECT RESEARCH


Bequests & Beneficiary Designation

Gifts

Charitable Remainder

Trusts

Charitable Gift Annuities

STRATEGIC OUTCOMES OF PROSPECT RESEARCH

Put the right FACE on your marketing


PLANNED GIVER PROFILES


•Target Analytics® researches and profiles planned gift donors every two years

•STATISTICALLY ANALYZES AND IDENTIFIES THE COMMON CHARACTERISTICS THAT CREATE A SPECIFIC PREDICTIVE GIVING PROFILE FOR EACH OF THE THREE MOST POPULAR PLANNED GIFT TYPES

PLANNED GIFT PROFILES


Is a past giver to your organization and enjoys a mid-to-high level of household income

Is mid-age and older and the children, if any, have left home

May have recently moved to a different home (younger prospects) or to a different area (older prospects, retirement)Has a home with a mid-to-high market value and lives in a neighborhood where many people are employed in Professional, Scientific and Technical Services fields

Has long-established credit but keeps balances low or pays off credit accounts each month

THE TYPICAL BEQUEST DONOR


•Home ownership

•Recent change of address

•Neighborhood characteristics

•Household or neighborhood income

Residence

•No children

•Children in college

•Children beyond college-age

Family

•Charitable gifts

•Volunteerism

•Membership

•Event Participation

Community Involvement

RESEARCH COMPONENTS FOR BEQUEST PROSPECTS


Is or was a consistent giver to your organization and lives in a neighborhood where the residents enjoy a high per capita income level

Is 75 years of age and older

May have recently moved to a different home or to a high-value senior living community

Uses credit out of convenience and pays off credit accounts each month

THE TYPICAL CHARITABLE GIFT ANNUITANT


•Home ownership

•Recent change of address

•Household or neighborhood income

Residence

•Evidence of retired status

•Single, widowed or divorced

Family

•Evidence of stock holdings, retirement plans or commercial annuities

•Former business ownership

Assets

•Charitable gifts usually $100 or less

•Giving to multiple organizations


RESEARCH COMPONENTS FOR CGA PROSPECTS


Is a highly consistent giver to your organization and still enjoys a high level of income

Retired or still working in high income or entrepreneurial occupation such as Management, Professional Technical and Sales positions

One spouse may be retired or does not work outside the home

Conservative credit habits

THE TYPICAL CRT DONOR


•High household or neighborhood income

•Multiple property ownership

Residence•Li

fe-stage

•55-70 years old

Family

•Evidence of stock holdings, large asset base and large retirement plans

•Current business ownership

Assets

•Evidence of major giving

•Board membership


RESEARCH COMPONENTS FOR CRT PROSPECTS


COLLECTING & PURCHASING DATA


SOURCES OF DATA

Demographic

Giving/Member history

• A non-donor or non-member has history!

Relationship• Types and total

number

Activities/ Transactional (interactions)

Attitudinal• An opinion answer

from a surveyInterests

Internal Data Examples


SOURCES OF DATA

United States Census

Equifax Niche Clusters

Compiled Household Data

Summarized Credit Data

Wealth and Philanthropic Data

Modeled Wealth and Income

External Data Examples


Demographic Overlays• Provide data specific codes, levels or yes/no factors usually

based on neighborhood data• Examples:

• Age, gender, children at home, etc.

Financial Models• Provide estimates based on banking and investment

information• Examples:

• Estimated liquid financial assets, estimated household income

ALL SHAPES & SIZES – ONE IS RIGHT FOR YOU


Wealth and Data Screening Services

• Access to multiple public-domain hard asset and biographic data sources at one time• Examples:

• Private company profiles• Biographies• Charitable donations to 501(C)(3) organizations• “Wealthy” lists

Analytic Predictive Giving Models• Predicts each separate individual’s likelihood to make a

certain type of planned gift• Bequest, CGA or CRT

ALL SHAPES & SIZES – ONE IS RIGHT FOR YOU


UNIVARIATE DATA

• Uses a single variable

• You are already using single variable analyses• Averages, sum of values divided by observations

• Medians, the middle value

• Modes, most common value

• Ranges, from lowest to highest

• Why use them?• Provides data for comparative purposes

• A simple methodology for understanding your database


# of years giving

# of relationships

Giving amount

Charitable giving

Age or Class Year

Home ownership

Property in trust

# of children or known

heirsGender

Business ownership Volunteerism Community

activism

DATA USEFUL FOR GIFT PLANNING


AGE ANALYSIS FOR MAJOR GIVING

• All major donors plotted by AGE- This example may/may not be true for your organization- Plot for your own organization


AGE ANALYSIS FOR GIFT-PLANNING

• All known planned gift donors plotted by AGE- This example is normal for most organizations


ADVANCED USES OF DATA FOR PLANNED GIVING


CLUSTER ANALYSIS

• Grouping individuals of similar characteristics into respective categories

• Way of taking a lot of data and grouping people into subsets in a meaningful way

• Prizm, PersonicX, Niches are all pre-made CLUSTER DATA overlays you can purchase


CLUSTERS ON DATABASE

• Household level clusters- http://www.equifax.com/consumer/marketing/en_us

• Group people by life stages - 26 Niches • How to use:- Append Equifax Niche Clusters to bequest donors in

fundraising database- Looked at % of file that fell into each Niche

• For one particular client we found that 76% of bequest intentions were in 7 Niches

http://www.equifax.com/consumer/marketing/en_us


EXAMPLE: NICHE I – IRA SPENDERS

• Average age: 67• Average income: $91,000• Children in home: No• Average home value: $146,00• Career: Retired• Education Level: College• Interests: Golf, travel, mail

responsive, stock trading, charitable


Niche E8%

Niche I9%

Niche M14%

Niche N12%

Niche S8%

Niche Y9%

Niche X16%

All Other Niches24%

% of Bequest Donors at Sample College

UNDERSTANDING BEQUEST DONORS


• Segment by known BEQUEST INTENTIONS

- For example, 76% of bequest donors are described by 7 of the 26 clusters

- 29% of the non-bequest donors were also described by the same 7 clusters

- Concentrate on these prospects who are included in 1 of the 7 clusters for bequest cultivation and solicitation

APPLICATION OF CLUSTER DATA


USE CLUSTER DATA FOR MESSAGING

Niche I: IRA Spenders• Age 67• Retired• Leisure travel

Niche M: Mid-Life Munchkins• Age 55 and children at home• Enjoy exercise and are pet owners• Business travel

Niche Y: Young-at-heart• Age 70• Lower income and may be veterans• Enjoy gambling, contests and sweepstakes


0%

5%

10%

15%

20%

25%

30%

9% 8%12%

27%23%

11% 10%

% of Gift Annuitants

USING REAL ESTATE VALUES

• Wealth and asset data, such as real estate, can be used to BETTER UNDERSTAND SPECIFIC GROUPS OF DONORS


PROSPECT RESEARCH FOR PLANNED GIVING


Collect data on your own

Purchase individual data

points

Use a specialized vendor with

access to the data points pertinent to planned gift

donors

CHOOSE YOUR DATA COLLECTION METHOD


• Recency, Frequency, Amount

Formula (simplest and least effective)

• Review known donors and apply findings to entire database

Internal Audit (moderate time needed)

• Statistical assessment using internal and external data about known donors to identify “like” records

Predictive Modeling (complex, hire an expert!)

CHOOSE YOUR POOL IDENTIFICATION METHOD


PREDICTIVE MODELING

• Predictive modeling answers a specific question, such as - Who are my best potential bequest donors?- The results provide a ranking or ordering tool for

prospect identification, assignment and marketing


Find your Top Prospect Group(s) at specific life stages and with visible wealth• Bequest / Beneficiary Designation

gifts of $35,000+• CGA contracts at levels of $25,000+• CRT prospects starting at $1

Million+

EMPLOY PROSPECT RESEARCH ON PRIORITY GROUP


• Tap into your organization’s existing PROSPECT RESEARCH • Subscribe to a push-of-a-button MULTI-RESOURCE SERVICE

to do basic research in less than 1 minute

USE A DATABASE DESIGNED FOR RESEARCH

Example prospect research database

summary page


GROUPING AND OUTPUT CAPABILITY

Prospect Results with Common Characteristics # Prospects Identified

Company Officers 181

Business Ownership >= $1M 48

Public Company Insiders with Insider Securities >= $1M 88

Real Estate >= $3M 297

Multiple Property Owners 198

Properties in Trust 152

On the “Wealthy List” 270

$5M+ in Total Assets 107

• Prospect research CRM fields allow you to group records for DATA MINING


SUBSCRIBE TO USEFUL DATABASES

• Example: Charitable Gifts listing, including planned gifts


POPULAR PROSPECT RESEARCH SITES & SERVICESIncome, Hard Assets & Indicators of Wealth Fee-Based

Dun & Bradstreet Business ownership; Business connections Yes

County Assessors Offices Real estate and multiple property ownership; property held in trust No

Income360 Household income indicator Yes

Larkspur List of Wealthy Presence of luxury items like planes, yachts, and other indicators of wealth Yes

SEC Filings Public Company Insider Lists and Stock Holdings No

Age and Life Stage Indicators

Echelon Power Segments Liquid asset indicator; Life stage Yes

Who’s Who Biographies Self-reported biographical information; interests; career Maybe

Philanthropic Interests

GuideStar Affiliations to non-profits, private and family foundations No/Yes

NOZAsearch Charitable giving data such as Gift Type, Size, Date, and Recipient; over 75M philanthropic gifts cataloged

Yes

Annual Reports/Google Community Annual Reports/Public Announcements No


QUALIFY BEQUEST/BENEFICIARY GIFT PROSPECTS

Consistent charitable

donations to multiple

organizations at $100 (-)

Connection to private or family

foundation or donor advised

fund

Age or Life-stage

Volunteerism, high

engagement factors


QUALIFY CHARITABLE GIFT ANNUITY PROSPECTS

Business owners and high-level

professionals

Pension plan professions like

teachers, telecom

employees

Multiple property owners

Evidence of CGAs or

planned/ estate gifts at other organizations


QUALIFY CHARITABLE REMAINDER TRUST PROSPECTS

Heads of large companies,

public company insiders

Wealth factors such as Lists of

Wealthy, Country Club

list, etc.

Property holdings of $10 Million or more

Large gifts including those

at other organizations


THE ULTIMATE REWARD OF PROSPECT RESEARCH

Identify your best prospects for planned gifts

Prioritize your most capable and likely donors

Free your time to build relationships - You can raise $1 Million from only 15 people

If you meet with 1 person a week you could confirm commitments of more than $7 Million in two years!


• Contact me:

Katherine Swank, J.D., Senior ConsultantBased in Littleton, CO_______________________________________________________ Target Analytics, a Blackbaud Company 2000 Daniel Island DriveCharleston, SC 29492 Blackbaud cell: 843-991-9921 [email protected] @KatherineSwank www.Blackbaud.com/TargetAnalytics

White Papers: http://www.blackbaud.com/company/resources/whitepapers/whitepapers.aspx

QUESTIONS & COMMENTS

mailto:[email protected]

http://www.blackbaud.com/targetanalytics

http://www.blackbaud.com/company/resources/whitepapers/whitepapers.aspx


• Katherine Swank, J.D. and Michael Quevli, Prospect Research for Planned Gifts: Using Predictive Donor Profiles, Wealth, and Asset Screenings to Identify High-End Planned Gift Prospects, 2010, download at www.Blackbaud.com > Resources > White Papers

• Lawrence C. Henze, J.D. and Katherine Swank, J.D., Data for Sale: Collecting and Using Data for Gift Planning, 2011, download at www.PPPnet.org > Members Library> National Conference Archive > 2011 National Conference on Philanthropic Planning or contact me directly

• 2009 Stelter Donor Insight Report: Age Differences in Planned Giving download at www.Stelter.com> Research/White Papers

• The 2010 Study of High Net Worth Philanthropy: Issues Driving Charitable Activities among Affluent Households download at http://www.philanthropy.iupui.edu/research-by-category

A FEW RESOURCES WORTH READING

http://www.blackbaud.com/

http://my.pppnet.org/library.htm?mode=view&did=60418&lid=5&wf=60408

http://www.stelter.com/

http://www.philanthropy.iupui.edu/research-by-category

crescendo 2012 conference prospect research for planned gifts

Economy & Finance

planned gift donors

planned giftskatherine

planned gift vehicles

planned gift vehicles

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major gifts

major gift donors