No question, it's been a tough economy for many nonprofits to raise money. But Marriottsville-based DonorSearch, launched the same year the economy plunged into the latest recession, has developed a database to help nonprofits identify which of their contributors are more likely to give more if asked and what type of gift they are likely to make, said CEO Bill Tedesco.
Tedesco said he started his career in public administration, moved into computers, then on to fundraising in Baltimore before getting into donor prospect research services.
How difficult has it been in the past few years for nonprofits to raise money and has your business grown as a result?
Since we started in 2007, DonorSearch has grown quickly. Early on in the recession, our sales doubled while we watched many businesses shrink. In retrospect, starting this business just as we were about to enter challenging times for nonprofits has worked out. We were positioned to provide a new approach and offer a cost-effective prospect research alternative right about the time nonprofit budgets were getting hammered. I wish I'd been smart enough to foresee what was going to happen, but the reality is our timing was just lucky and, after that, very hard work.
How does DonorSearch predict the likelihood that someone will give and the amount — and how accurate are these predictions?
Nonprofits and the companies that provide services to nonprofits have been trying to figure this out for years. … The truth is, the likelihood that someone will give to a nonprofit in the future is easiest to predict based on what they have given to the same nonprofit in the past. …
We determined political giving, charitable giving to other nonprofits and foundation relationships is more predictive than other approaches. In our industry, the traditional approach to predicting philanthropy has been based on wealth markers like real estate, stock and business relationships.
In contrast, we know if we can find a prospect that has made a gift of $1,000 to another nonprofit or they make a federal political gift of $250 or more, we can accurately predict that they will be part of the 15 percent of all constituents that are responsible for 75 percent of all giving.
What are some of the tell-tale signs that a person likely would dig deeper to give if asked?
We have built a proprietary database of 45 million-plus charitable gifts and 15 million-plus political gifts and a new type of search logic that enables us to search for proven philanthropy reliably and cost-effectively.
Imagine you are in charge of fundraising for an environmental organization, and you learn that one of your most loyal $50 donors sends 100 times more to another environmental organization. Statistically, that person is likely to be a better prospect for a larger gift than someone who does not give elsewhere. ...
Planned giving is a little different. One potential nonprofit revenue source is the proceeds of estate gifts when a donor passes. According to Giving USA, 40 percent of these planned gifts come from people the nonprofit doesn't really know. The stories about the little old lady who lived modestly all of her life, faithfully gave $100 most years and then left that organization $100,000 in her will are true.
Normally, a nonprofit is hard-pressed to justify extended cultivation efforts for someone who gives modestly, especially if they live in another state. …
Our approach is a new marketing model that focuses on the constituents who display an ideal combination of age, prior giving, philanthropy and wealth. In fact, there is evidence that people who score well on this model will be literally 10 times more likely to self-identify as future planned-giving donors.
The Chronicle of Philanthropy reported this year that the rich donate a smaller percentage of their discretionary income than middle-class Americans, and that wealthy people living among many other wealthy people tend to give less than the rich who live in diverse economic areas. Is this what you find?
I can't say that we find this. But then again, our research processes do not look at the affluence of a constituent's neighbor to predict the likelihood of a constituent's future giving. While this is not what we do, we acknowledge that historically it has been one of the core principals of mass marketing. …
Wealth is a moderately predictive variable of future potential giving. And yes, wealthier people have more financial capacity to give, but just like all other economic groups, not all wealthy people are charitable. No single economic group has the corner on charity. …
You live on a horse farm — with one horse — but are allergic to horses. How did that come about?
Ha! Funny question. We moved out of a Columbia cul-de-sac to five acres in Marriottsville about six years ago, right before we started DonorSearch. It was a lifestyle that my wife and I always wanted to try, but we had put it off through 30 years of marriage. Each of us had grown up and lived in the suburbs our whole lives. … The horse's name is Scoop, and we got him free in exchange for giving him a good home. ...
I am actually allergic to hay, dust, horse dander and a bunch of other things, so my visits to the barn are usually brief and always followed by sneezing. Life is full of tough choices.