Don’t Lay Off Your Prospect Researchers!

With Worksheets and Suggestions for Cost Cutting that Will Better Support Fundraising

During the 2008 economic crash, my employer had to lay of 10% of the Advancement Office. We just had to. I had to choose to lay people off. It was miserable.

​What it taught me, though, is that management is just as confused and frustrated as staff are when it comes to figuring out what budgets and whose jobs to cut. Of course, we are going to advocate for leaving Prospect Research intact because that is where we come from. However, you can back up these assertions for your own shop by using data. Let’s begin.

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The temptation will be to take all the cuts from any staff who are not frontline staff. The logic goes like this: We need major gift officers to keep raising major gifts, so we’ll keep them and lay off other people; oh, and we need gift processors, so we’ll keep them. With this logic, everyone else’s job is at risk. It’s tempting, isn’t it? And it’s an easy decision to make. 
Let’s look at the effect of cutting Research, Stewardship, and Annual Giving:

1. When Stewardship is cut, donors are no longer receiving their accustomed appreciation. The effect is reduced future giving, even if it takes two years for your shop to start feeling it. A donor scorned rarely ever returns. 
2. When Annual Giving is cut, unrestricted revenue is cut. I once showed my small college treasurer that every $1 cut made to my budget resulted in a $7 cut in unrestricted giving coming back to the college. When we did it anyway, we saw unrestricted revenue drop.
3. When Research is cut, gift officers become expensive researchers who do a poor job researching. They will (and I know because I’ve seen it) retreat back to their known prospects, talk a lot about how they need new prospects, all while not being able to (or willing to) identify new prospects. The Major Gifts program slows just when it is needed most.

Now let’s look at that promised worksheet. Follow along to show the gift total impact of laying off researchers in your shop. The instructions follow with the worksheet below. After the worksheet, we’ll discuss other cost cutting measures that can help instead.

1. Find out how many new prospects have been delivered to Major Gifts and/or found by Research over the past five years. 
2. Sum up all of the giving from all identified prospects, including annual gifts. 
3. Find out what percentage of those prospects ultimately made major gifts.
4. Find your number of solicitable prospects in your database.
5. Assemble your answers here:

Research Impact Worksheet

Now you have some information about the impact of Prospect Research on the efficiency of your gift officer team. Using our example, we would assert that no Research team means that the gift officers would be bringing in major gifts from less than 1% of their portfolios if left on their own to prospect, whereas the Research team’s work increased that efficiency by 18,500%. Or, put the opposite way, if gift officers had to randomly pick prospects from the entire constituency, then they would use up (185) times the resources used when the Research team is involved.

“Yeah, but,” you may say, “the gift officers would be choosier than that.” We agree – the MG team may not choose prospects from as random a pool as the entire constituency. But here is where we at Staupell assert that they would most likely do worse. When consulting with fundraising offices, we hear that gift officers use tried and failed paradigms to identify new prospects, such as giving history and constituents who own land in fracking zones. 

They do not have the skills to slice out the top-level capacity from a constituency and then to assess liquidity and readiness. It’s like an oil company telling its drillers to just keep drilling until they hit oil because the company couldn’t afford the geologists anymore. Gift officers should not have to do their own prospecting.

Let’s look at it another way. Doctors have nurses to provide care at a cheaper pay rate, though the services are charged to the insurance company at full price. Then LPNs came on the scene to do more rudimentary nursing tasks because they cost less per hour, but the bill rate to the insurance company remains the same. Then hospitals started hiring people to do one job, like taking blood, so they could pay these people at the technician rate. If we told our doctors to do it all themselves, they’d see fewer than half of the patients in a day that they see now.

So, let’s do our next worksheet.

1. Write down your team’s salary plus 28% for benefits (multiply each salary by 1.28 to get the answer).
2. Write down a gift officer’s salary at your shop plus 28% for benefits. (Yes, you do know what they make – you can tell by their pay grade. Or go to Glassdoor.com to look it up or any salary survey for nonprofits.)
3. Divide your salary and benefits into your average gift officer salary and benefits. Now you know the rate of discount to have you do the research over having the gift officer do your work. 
4. If you personally serve more than 4 gift officers, consider showing your entire cost per Gift Officer dollar. See the worksheet below.

Cost Effectiveness Worksheet

​Now you can show both the impact of your work and the minimal cost that is really involved. (You can also get mad about the disparity in your paychecks, but that’s for another time.)

“Yeah, but,” you may say, “we still have to cut costs.” Yes, you do. This forced economic recession that we’re in pretty much puts industry and commerce at just above a standstill. Like it or not, something has to go. Here is our list of suggestions for cost cutting, even suggestions for changes that allow for staff reductions (because some nonprofits will insist on those systemwide).

Automate absolutely everything you can

• Stewardship letters do not have to be handwritten every time. Back in 1989 I worked with a stewardship officer who had set up WordPerfect to put specific words and phrases into a thank you letter based on the gift range. Automation like that can reduce staff time for writing, passing around, tracking, and mailing stewardship letters, even at the top level of the annual giving program.
• Event bios should be a report out of your CRM. This is the perfect use of your reporting team – identifying those key points that your top management need for talking to a prospect at an event and then getting them printed out in the most useful way. If you are a researcher who writes and re-writes event bios, draft a template of them to have them printed for every event (because attendance is tracked, right?).
• Prospect profiles should no longer live in a separate location from the CRM. They should be printable, with the appropriate bits updated as necessary. If we could ever get to a state where the Research team is constantly adding new information and assessing capacity, then the team would be at its pinnacle of the reactive research mountain.
• If you must lose a researcher, insist on replacing the position with a good screening product so your team can still identify new prospects.

Write a plan to reduce the number of Major Gifts prospects to those who are most likely to give (this set of suggestions can only be implemented by management, but they may appreciate the ideas)

• Implement a “qualify or lose” policy that removes prospects from a gift officer’s portfolio after a year if the prospect has never been qualified.
• Clean up portfolios by removing prospects who have been tracked for longer than 95% of your pool and return these prospects to Annual Giving or Membership.
• Move stewardship prospects to Stewardship. They’ll be grateful for the work now that you’ve automated most of their tasks.
• Since everyone has to add work to their day, assign prospects to management, all the way up the chain. 
• Lay off gift officers who reject prospects outright from their portfolios, especially those who reject more than 20% of new prospects delivered without conducting qualification. The Research team’s job is to decide whether a prospect should go to field research; the Major Gifts team should not be allowed to second guess.

Re-think Your Administrative Staff

• The last time I heard a person took shorthand for a planned giving officer, it was 2003. I believe that she was the only person on Earth still doing that. We don’t need administrative assistants to make our calendar entries, plan our travel, take our phone calls, hang our coats, or take our notes. Those days are over. Also, Starbucks makes most people’s coffee now.
• The giving associate position was developed as an apprentice corps to major gifts. The last time I visited a shop where they were employed, they were being used to write long, complex prospect briefings. Gift officers should be coding their strategy into the CRM, along with their contact reports. Handwritten briefings are not necessary – a profile and a verbal briefing with that high-powered volunteer is all you need. If the high-powered volunteer objects, remind him or her that you had to cut staff. 
• Any staff member with a title of “Coordinator” should be looked at carefully. What is this person coordinating? Mailings? Outsource it. Gift processors? Find grown up gift processors who don’t need a traffic cop. As cold as this comment is, people sometimes get promoted to management or coordinator or team lead and then do not produce anything. Flatten the organization.
• Lastly, if the managers for Major Gifts have to carry portfolios, then managers for Gift Processing must also process gifts (the most complex ones or from the highest level donors) and the Research director must conduct research (on the highest level prospects). If anyone in your shop has a one-line job description of, “I supervise,” that person needs to have a much bigger job description or have his or her job re-organized.

​I wrote this blog post to give you hope that you have something else to do besides sit by and wait to be laid off.  Change you initiate is easier for you to swallow, and you can initiate change by offering plans that get the work done but cut costs. We want you to remain employed because we love being with you.

​If you have comments (including how your organization is handling the crisis), share them with me at marianne@staupell.com.