Prospect Research: What You Don’t Know — and How It Can Hurt You

Using the IRS data, we can estimate a prospect’s capacity if we know his or her total assets in any one category listed in Table 1 because we know that Americans typically give about 3 percent to 5 percent of their net worth.

For example, if we know from our research that Mary Patron owns shares valued at $1.5 million of publicly traded XYZ Company, we can estimate her total assets to be about $5.15 million by dividing $1.5 million by 0.291.

This figure is just the assets, though, and doesn’t include any adjustments for debt. To give a more realistic picture, we’ll need to subtract the debt. If we subtract 8.9 percent for debt and mortgages, we can estimate her net worth to be approximately $4.7 million. From her net worth, we easily can calculate her giving capacity.

The real question
Can your organization survive without donor research? Perhaps.

But imagine meeting with a constituent and learning afterward that he is the wealthiest person in his community! Imagine the advantages of learning as much about the person as possible beforehand. Also, imagine the edge you’ll have by knowing your prospect’s true passion, which coincidently aligns with one of your institution’s strategic goals. Lastly, imagine an easier path to securing the resources needed to further your organization’s mission.

Margaret King is president of the InfoRich Group.