By Elisa Shoenberger, Benchmarking Analyst at Grenzebach Glier & Associates, and Katie Ingrao, Associate Director of Prospect Management at Rush University Medical Center and President of APRA, IL

Dear Analyst,

Some of our gift officers are super suspicious of our capacity ratings. They keep saying that they know Prospect A has a lot of stock and family inheritance but our ratings are too low! Or they say that they know that Prospect B owns a vacation home in Italy. I check into their suggestions but I often come up with very little information. They complain about how we don’t give them the net worth of their prospects. Sometimes they complain that they are too high as well. I can’t seem to win! What do I do to convince them to trust the ratings that I’m giving them?

Thanks,

Rating Distressed

Dear Rating Distressed,

Capacity ratings are the bread and butter of the prospect researcher’s trade. However, there’s a lot of confusion about what they actually mean and how they are generated. A standard definition is that it’s an estimate of a prospect’s potential giving based on their identified assets. Some shops have a cardinal role of taking 5% of identified assets; others may use a prospect’s past philanthropic giving as a guide. There’s a lot of different ways of calculating capacity ratings but I think the overall theme is that they are conservative estimates. Prospects may hold wealth in a lot of ways that aren’t publically available. Often times the wealthier the prospect, the more likely they hold their wealth in places that aren’t publically available. We don’t have access to bank accounts so there is not a sure way of knowing a prospect’s actual capacity. Sometimes, we find great philanthropic giving but few hard assets, which may explain why some think the ratings are too high. As a result, that’s why we talk about capacity ratings, rather than net worth. This allows us to provide some way for gift officers to plan strategies and prioritize their prospects when doing qualification work. All of that is understandable to those of us who work within prospect research but communicating our limitations to gift officers can be hard.

When confronted with questions of the validity and usefulness of capacity ratings by gift officers, your course of action should be one of education and collaboration. In addition to understanding the logic and feasibility of our work, gift officers need to understand that they also have a role in creating the prospect’s capacity rating. While we know as researchers that a capacity rating is just a jumping off point; sometimes it’s lost that creating a rating is a dynamic process that requires an exchange of information from both the gift officer and the prospect researcher. In that process, you want to build gift officer’s understanding of what you are able to provide for them as well as to set the precedence of bringing back helpful information and sharing it with you to improve the assessment of the prospect. Prospect researchers provide a number based on the information we have, the gift officers are the ones meeting with prospects and the opportunity to glean additional information. They will see the watch that they wear, the places they vacation, the houses they live in, etc. and should use these observations to form their own judgements as to the wealth of the individual.

In the exchange of information with gift officers, you may not find anything concrete but you might still gain useful information that you didn’t have before. For example, you may be able to search property listings in the area of Italy disclosed by the gift officer to see estimated prices of houses.

An extra step that I have found beneficial, if you have the time and support from your fundraising leadership is to run an informational training on capacity ratings and validation theory. These “lunch and learn” sessions provide a constructive format for gift officer’s questions and allows for a conversation on how they can be helpful in creating a capacity rating by sharing information. A good example to use when showing gift officers how the availability of data can affect ratings and our assessment is philanthropic giving. Pick one or two well-known donors to your organization, one with a lot of public giving and one we know has the capacity but does not publicize their gifts. Briefly run through your process of researching these prospects’ giving and compare the search results with them.  You should be able to show the difference in your process with someone who has a lot of information available and someone who does not. Building into your presentation instances where information provided by gift officers fueled deeper researcher and resulted in a more accurate rating also drives home your point.

Another approach used by some shops to settle disagreements between prospect researchers and gift officers is to create two distinct ratings for each prospect, one rating from prospect research and one from the gift officer. The thought behind this solution is that each rating allows for a different view or approach to the assessment of a prospect’s capacity. For example, a research rating could look at a prospect’s lifetime capacity and not just over the next five years. While the gift officer’s rating could specific to what they believe that prospect’s next gift could be. Each of these ratings could also take into consideration aspects of inclination such as affinity to your organization. In the end, you have to consider how your shop operates and what would best help move your gift officers forward in making solicitations.

There is no one size fits all but the key is to collaborate with the fundraiser.  Remind them that capacity ratings are a great starting place but they aren’t concrete and can change based on their estimation or subsequent meetings with the prospect. Continuing to educate them on how we work and being open to discussion and collaborating will aid you tremendously in building a trusting working relationship with your gift officers.