It Takes a Village: Best Practices for Principal Gift Pipeline Management

Principal gifts typically represent the most transformational gifts made at an institution. No matter the dollar level at which they are defined — different for each institution (but they are often at least seven-figure gifts) — these philanthropic investments help organizations make significant leaps forward in mission and program.

But this is not easy work! Closing these gifts can take years of careful strategy and cultivation from all levels of an organization. Aligning the institutional vision and the right cause to these donors’ passion and priorities is not always a seamless process — and it takes strong collaboration and input from multiple teams.

From the initial identification of these donors to the stewardship of their gifts, prospect development can play a key role in shaping their experience. For this article, we asked some of our prospect development colleagues who work closely with principal gifts at their institutions to share some of their best practices. Our contributors were:

  1. Lindsey Nadeau, Associate Director, Presidential & Principal Gifts, from George Washington University (GW) in Washington, D.C. Principal gifts are defined at the $1 million level at GW.

  2. Dan Bartholow, Senior Prospect Development Consultant, from the Ohio State University (OSU) in Columbus, Ohio. OSU defines principal gifts at the $5 million level, though is starting to focus efforts on gifts at the $25 million level or more.

  3. Joan Ogwumike, Prospect Research Analyst, from the University of North Carolina at Chapel Hill (UNC). The level for principal gifts at UNC is also $5 million.

  4. Chris Mildner, Campaign Associate from Legacy Health in Portland, Oregon and principal, Strategic Edge Resource Consulting.

Q: What are your institution’s most successful methods for principal gift identification?

Dan Bartholow (DB): Ohio State is a land grant public university in one of the fastest growing cities in the Midwest, but we are relatively young with respect to generational wealth and legacy philanthropy. So our prototype principal gift donors are independent business owners and family-run companies — in other words, self-made entrepreneurs.

Many of our identification efforts have focused on screening business owners and monitoring merger and acquisition activity. That’s in addition to monitoring all the other typical public assets, like stock holdings, compensation and philanthropy to other organizations. I’m also very old fashioned, so I’ll run a wealthy zip code query because it still occasionally works.  

Within the past two years, we screened our entire database through Blackbaud — so we uncovered an extensive amount of wealth data. We also use Wealth-X as a vendor, and their database screening both turned up some new names and helped reevaluate our assessments on some of our existing relationships. We also screen soft wealth indicators like Larkspur and Experian data.

Lindsey Nadeau (LN): Connections via other principal gift donors or prospects have been the most successful identification method for GW. Specifically, one of our principal donors proudly touts that he first introduced our institution to the university’s largest donor. We rely on our existing donors’ networks heavily. Additionally, the networks of our university leadership also have helped identify new prospects for the institution.

More recently, our team has been using vendor-generated alerts and push technology to identify ultra-high net worth (UHNW) individuals in our database and constituencies that aren’t already on our radar. From wealth alerts to relationship mapping, being able to outsource the heavy lifting has been helpful. We haven’t yet been using these long enough to track ROI, but it is helping us work faster and smarter.

Additionally, Research and Relationship Management conducts bi-weekly, team-wide “Prospecting Days” to help build the prospect pipeline. Here, the team looks for constituents with $50,000-plus capacity, and I and my director focus on prospects with principal capacity who are either not yet on our radar, or who aren’t being engaged or managed (gasp!). During quarterly portfolio reviews with gift officers, we highlight principal prospects who haven’t yet been qualified.

Joan Ogwumike (JO): At The University of North Carolina at Chapel Hill, principal gift prospects are identified through queries of our CRM and the use of vendors such as Wealth Tracker and Wealth-X. We also receive a daily list of donations made to Carolina above $1,000. In addition to these search channels, we review publications such as Crain’s and Forbes. Another great prospecting method has also been to check whether colleagues at a prospect’s firm are alumni, and then review them as potential principal gift prospects.

Chris Mildner (CM): In my long and checkered career, I have found that data mining in the CRM and vendor databases, as well as following bunny trails while researching other prospects, have been most fruitful. I also have used push technology to follow some prospects and their companies, as well as to identify prospects who publicly state an affiliation with the organization. When working for smaller organizations with a less rich donor history and little donor data, I found reading the local paper for wealth indicators and seeing if those people were in the database was helpful.

Q: Outside of a capacity rating, do you have any other data marker that easily identifies these individuals in your CRM?

JO: Our principal gifts office utilizes special codes in its CRM. This allows team members and fundraisers to query on principal gifts prospects, family members of principal gift prospects and emerging wealth prospects.

An emerging wealth prospect is someone who is believed to one day have the capacity to give at the principal gift threshold based on their age and career trajectory. These prospects are also coded and revisited after some years. If they do not reach the true principal gift level, the code is removed.

Special codes also allow the principal gifts researchers to maintain the growing number of prospects that still need in-depth research — we call these “pending prospects” — in the CRM.

LN: In addition to a capacity rating, we have a gift officer rating, which indicates both the prospect’s affinity and capacity. It’s slightly different from the capacity rating, because it takes into account the prospect’s inclination for our institution.

CM: I developed weighted affinity ratings based on data markers to help prioritize prospects with good capacity ratings. The markers included whether or not they were donors, number of gifts, recency of gifts, consecutive years of giving, event attendance, number of patient visits, if they had a child who was a patient, whether they were alumni or had family members who were alumni, etc. I was working on adding more complex things, like how many emails they opened and articles they clicked on, when I left my last job. I also have used gift officer and volunteer ratings and created a rating for how publicly philanthropic the prospect is based on verified giving.

Q: What role does prospect development play in principal gift qualification at your institution?

LN: Once principal prospects are assigned, we have a division-wide standard of “100 percent Reasonable Attempts to Qualify” prospects in the qualify stage. This means that gift officer metrics require that the prospect manager have two contacts per quarter via two different contact types (e.g., phone and email, or email and written correspondence) for four consecutive quarters for unresponsive prospects in order to reasonably attempt to qualify prospects. Research and Relationship Management helps gift officers track this metric during quarterly portfolio reviews via the gift officer’s annual business plan report.

We do not yet have a sun-setting policy on principal prospects, but hope to implement one this fiscal year. This would help ensure that qualification efforts at the principal level are appropriately prioritized.

The prospect manager usually runs point on the qualification strategy. Typically, qualification strategies and activities include introductions through key connectors who share insight on the suspect’s potential affinity and capacity. This is followed by interactions with key university leadership to identify the suspect’s alignment with specific program areas. Throughout each prospect stage including qualification, Research and Relationship Management monitors and distributes relevant business and biographic prospect news, which may impact the qualification strategy.

Who serves as the prospect manager varies, as we have a hybrid approach to qualify principal gift prospects. Much of the prospect-specific work is done by major gift officers or chief development officers across the university, but all gift officers are eligible to develop principal gift prospects. A centralized principal gifts team, which includes a member of the Research and Relationship Management team, helps coordinate overarching strategy, pipeline development and leadership support — particularly for cross-disciplinary or multi-interest prospects.

DB: There is a shift in what research means for principal gifts — especially during the initial qualification process. After the initial discovery, you obviously want to know everything about them. You do the obsessive deep dive and find out what they named their pets and where they dock their yacht.

But then it becomes more about movement — what piece of information is needed to make the next step? You figure out what the university is doing that might generate interest or how they might want to be involved. Qualification work can be very erratic. When movement happens, everything becomes urgent. And it’s easy to forget that these very successful people you are attempting to engage are very busy either accumulating wealth or yachting with their pets.

To help manage this, we’ve implemented a process to organize strategy both centrally and with our colleges and units so that we are tracking all activity and next steps. Certain units hold monthly meetings to discuss all principal gift-rated prospects and what activity has occurred. We are currently focusing on a priority group of around 100 to qualify, so having multiple perspectives of fundraisers and an inclusive process has been very helpful.  

CM: At most of my employers, prospect development brought forward new prospects on a regular basis and researched prospects identified by field officers. New prospects are discussed in regular major gift strategy meetings, and prospect development is expected to contribute strategy ideas. At Legacy, development officers are expected to make several attempts to connect with the prospect in person or through a volunteer. If that does not pan out and prospect development thinks the prospect merits further discussion, we bring them back to the strategy meetings. At some point, we may code them as disqualified if it turns out there is not major gift capacity or as “no reassignment necessary” if there is wealth but no interest in or connection to our organization. Of course, this coding can be revisited if new information comes to light!

Q: How do you share principal gift leads with fundraisers? Do you have a “clearance” process in place before a potential principal gift prospect can be approached? Or can any fundraiser contact them at any time?

JO: Pending prospects are shared with fundraisers depending on their project needs. We share lists for special projects or for other fundraiser requests, and make sure the fundraisers understand that principal gift researchers have not yet verified that the prospects meet the principal gift or emerging wealth prospect criteria. 

LN: Once identified, Research and Relationship Management evaluates principal gift prospects for alignment across the university’s program areas and gift officer’s regions and focus areas. We then assign the prospect for qualification and notify the gift officer. This occurs during routine prospecting efforts or in response to specific requests from a gift officer.

We do not have a clearance process prior to outreach or assignment. This means that gift officers are free to contact principal gift prospects within our guiding principles, which include: 1) every prospect is a university prospect; 2) if it’s not in Advance, it didn’t happen; 3) the role of the prospect manager is primary; and 4) good citizenship is critical to our success. Therefore, if the prospect is unassigned, any fundraiser may contact them as long as they are within the above stated guidelines.

However, prior to Research and Relationship Management assigning a gift officer to a new principal prospect, the assignment is routed through the associate director of presidential and principal gifts research. They ensure donor centricity by consulting a “red flag” checklist to confirm the following:

  • The prospect is not affiliated with any other managed prospect record (e.g., spouse, family member or business partner)
  • The prospect still has principal capacity
  • The gift officer’s portfolio has room for the assignment
  • The prospect does not have a demonstrated, specific interest in a single area of the university and would be a better fit in another gift officer’s portfolio

CM: Prospects with capacity of $1 million or more are brought forward in regular strategy meetings during which assignment is made based on identified interests (or best guess if interests could not be identified). Other prospects are emailed as proactive leads. If the development officer decides to move forward, they send a clearance email to everyone. Sometimes the email brings new information to light and, on very rare occasions, an “Oops, I was working with that person” response. For the latter situation, they are expected to work coordination out and keep prospect development in the discussion loop. They can contact prospects, and our fundraisers are very good about coordinating that. I have worked at other places where that was not the case and it resulted in complaints about the right hand not knowing there even was a left hand — never mind what it was doing. We lost gifts over that issue.

Q: How are cultivation strategies for principal gift prospects developed at your institution?

DB: Principal gift donors are evolving, and our fundraisers are becoming more like philanthropic advisors. High-net-worth individuals tend to be accustomed to concierge services, and our cultivation strategies are personalized with that in mind.

These are people who may be savvy with building a fortune but inexperienced in how to make an impact through philanthropy. We try to develop cultivation strategies that help guide them through that process. As an organization, we are attempting to collaborate more for prospects with multiple interests to maximize philanthropy for our next campaign. It’s building a framework to align priorities at the right time and knowing which internal partners to involve at the right stage of the process.

LN: There are two primary ways cultivation strategies are developed: individual prospect strategy sessions; or larger, recurring principal gift Network meetings. Additionally, I work with the central principal gift team to identify any prospects where movement may be languishing.

Prospect strategy meetings occur on an as-needed basis. The purpose of these meetings is to discuss a single prospect who likely has a narrow focus in one or two areas of the university. The prospect manager, their fundraising manager or any member of the central principal gifts team can convene a meeting. I attend these meetings, which at times also include various academic or fundraising leadership — and liaisons from the Research and Relationship Management team. We circulate any past research available on the prospect in advance of the meeting so all participants can review the background. The merits of multiple strategies and next steps are discussed, and the strongest is entered as a strategy in our database with clearly identified key players and next steps.

Alternatively, GW has conducted a bi-monthly “Principal Gift Network” meeting, in which the assistant vice president of principal gifts gathers all chief development officers from schools and units, central fundraising leadership, me and key stakeholders from Advancement Services. The goal of this meeting is to discuss principal prospects who have wide-ranging philanthropic interests and the potential to make a transformative gift to GW. The group reviews the prospect’s relationship with our institution, discusses potential areas of alignment between the prospect’s interests and our programs, and works to identify connections to the prospects. Research and Relationship Management tracks and prioritizes potential prospects who merit discussion at these meetings. Fundraising leadership, including our vice president, asks questions of the prospect manager; building a comprehensive strategy is a collaborative process. Research and Relationship Management has an active role during the discussions, providing context about the prospect, but we also pose questions to the group to ensure the network is thinking strategically and broadly.

Research and Relationship Management also works closely with the assistant vice president of principal gifts to identify languishing principal prospects. We have recurring meetings that serve as mini-prospect strategy sessions where the principal gift pipeline is reviewed for any proposals that are behind their projected timeline, and follow-up outreach is conducted to the proposal manager and their fundraising manager. Additionally, strategies for principal prospects are audited to ensure the broader prospect strategy is gaining traction. If it is not, follow-up outreach is conducted to the prospect manager and their fundraising manager.

CM: At Legacy and past employers, strategies are discussed in major gift meetings, recommended by prospect development, determined by development officers and revisited in major gift meetings if the plan didn’t work out. Volunteers also help with strategy development and identifying door openers.

LN: At GW, rigorous and routine principal pipeline reviews are most effective in managing the principal gift pipeline. In these meetings, Research and Relationship Management drives the conversation. We talk through timeline, probability, and what will help ensure solicitations stay on track. The frequency of these reviews varies. They occur either with a gift officer during their quarterly portfolio and pipeline review, at a monthly team or unit meeting, or as needed with the chief development officer of a school or unit and their fundraising manager. We increase frequency as we approach year-end or campaign close. The most important focus during review is discussion of obstacles to making an ask or closing a gift.

At the beginning of the fiscal year, the director of our team is essential in driving the goal-setting process, which relies heavily on ground-truthing each school and unit’s principal pipeline. Additionally, our vice president meets with the president and academic leadership to discuss each school and unit’s progress toward their goal, which is often focused at the principal gift level. Research and Relationship Management helps prepare staff and provides data that drives these conversations.

Our institution previously had an open relationship management system, meaning that gift officers entered, updated and closed their own proposals in Advance. The challenge was that this lead to unreliable data and projections, as gift officers were not experts in proposal data management and often weren’t inclined to close proposals out of the system. In January 2018, the division restricted edit access to the proposal table in Advance (as well as prospect data) to allow only Research and Relationship Management to enter and edit this data. This has enabled our institution to more successfully and accurately track the principal gift pipeline, while producing meaningful projections data.


 

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Looking for more on relationship management? Check out this Twitter Chat recap with Apra members for a discussion around demystifying principal gifts. 

Or, download this webinar, "Securing Principal Gifts to Further Your Organization's Mission," led by Melissa Bank Stepno from Target Analytics, a Blackbaud Company.  

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