I will never forget the boatload of money we spent on the research. I was in charge of new ventures and acquisitions for a commercial publishing company. We had determined that a magazine serving a certain audience was needed and could be a profitable venture.

Our research department – a full-fledged group of professional researchers – had strongly argued that we need to do focus groups around the country to “prove the concept.” What did I know? They were the professionals. And I was rather young in my career at that point. So, I accepted their proposal to do the research in Chicago, Seattle, San Francisco, Los Angeles, Dallas, Atlanta, and New York City.

We spent a lot of time in each of these cities doing focus groups with folks who fit the profile of the potential buyers. We gathered a ton of information.

And we spent a lot of time and money.

What did we get? Subjective opinion from good people who said they loved the concept and would buy the magazine if we published it. So, we produced the first edition using all the marketing and subscription acquisition techniques available at the time. No expense was spared.

What happened? We failed. And we lost a lot of money.

Now, to be clear, my message to you in this blog is not about spending money or failure. No. Failure is a good thing, as it provides a path to success. And the money we lost was budgeted because I had prepared management for the fact that launching a new venture involved sorting through a lot of concepts, trying some of them, and failing.

The takeaway here for me was that research – even good, solidly-managed and professional research – can lead you down a wrong path in decision making.

We see this all the time in major gifts and planned giving. Many organizations have a research person or team, and it is an incredible resource. Unfortunately for many organizations, the research group may not understand how major and planned gifts work. This can create tension and cause challenges between the research team and fundraisers as they each try to figure out how to work together. And, often, the results lead to failure.

Some of the common challenges we see happens when the research folks:

  1. Place too much emphasis on wealth ratings. Since Mr. Jones is a 10 (the highest rating) then he should be chased for the money. Never mind that he hasn’t given. Or that much his assets are in a trust. His numbers just look good, so “You should add him to your list.”
  2. Fail to focus on recency / frequency / amount as key indicators. This is so interesting to Jeff and me. Key metrics in major gifts are the recency and amount of a gift, and the frequency of giving. Why? Because a donor who has given most recently is likely to give again. And if they are giving at a certain level that meets your major gift criteria, that is also a predictor of potential. These are real data points you should pay attention to. Just relying on wealth ratings is not enough.
  3. Claim that financial info is all that is needed. This is not true. Additional details are helpful and needed – like occupation and professional history, education, age info, information on the company the donor is related to, social media use, demographics, lifestyle, psychographics, and potential product ownership. This additional information can go a long way to helping a MGO or PGO be successful.
  4. Recommend a name of a person who “has to go on a major gifts caseload.” This is crazy stuff. But we see it all the time. The research team sends major gifts the names of wealthy individuals that they believe should become targets for fundraising, even if those individuals have never given to the organization.
  5. Using strategies or approaches to major or planned giving that are based on opinion rather than fact. This is like my research story at the start of this blog. The opinions (focus groups) were presented as facts. And if “research says X,” then we should do it. Not true. Past giving, designated giving (clues to passions and interests), gift amounts, and frequency of giving are all strong predictors of future giving. Let that information guide your strategies and approaches.

Here’s what you can do to re-establish the correct balance and start partnering well with research:

  1. Collaborate with research on the metrics you want to use. Wealth ratings can be an indicator and can provide valuable information, but you should also be looking at your active donor file for donors who give $1000+ cume a year, who give frequently, and who have given clues about what their passions and interests are.
  2. Work with research to identify other key information fundraisers want to know about existing caseload donors. There might also be other data points like I have outlined in point #3 above. The value here is to agree on what data points are part of your decision making for who to add to a caseload or what information to acquire and use for existing caseload donors.
  3. Establish clear rules and structure related to the qualification process that should be followed when research passes a name along to the fundraising department. You can’t just add a person to a caseload because research says you should. The donor does need to be qualified and the research team needs to be on board with that.
  4. Set protocols for how to approach any new donors who are being flagged as they move up the donor pyramid. You cannot leave this to “just happen” or to just let research set up the approaches. Folks from direct marketing, planned giving, and major gifts should sit at the table with research to determine how these new donors, especially the ones who have given at levels required major gift attention, should be managed.

Research is good. But like any function in the organization, it needs to be managed and focused on the right things. Be sure you are doing that so that the facts you are using are the right facts.

Richard

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