The Fund Raiser

Rank and File

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By Mark J. Drozdowski

Fund raising is an imperfect science. Even in the most sophisticated shops, it can be a messy affair. And fledgling operations can resemble Pop Warner football games complete with stumbling tykes sporting oversized helmets.

The point is, we all take some bumps and bruises along the way and many of those contusions occur when we venture into ethical gray areas. Of course, all ethical areas are gray, which makes such matters so darn fun.

But when the gray areas involve trustees, the fun is tempered a bit. I still have a few battle scars from one recent encounter, and only now have I regained enough strength to discuss it.

Among my various duties, I work with our board's development committee. For those unfamiliar with what such an august tribunal actually does, let me explain. Essentially, the trustees on the committee are our top fund-raising volunteers, at least among the board members. They help to shape development policies, to uncover prospects, to open doors, and to encourage others to give and volunteer in similar capacities. They are also donors themselves.

In their work on the committee, they read confidential and sensitive information about people's assets and giving habits, including their own and those of fellow trustees. But should they? And if so, how should such access be managed?

College fund raisers typically have three levels of donor information. On the most basic level are prospect ratings, indications of how much we think people can and might give. Those ratings result from meticulous research examining compensation, real-estate holdings and other assets, and, to the best of our knowledge, liabilities. We also look at past giving and contributions to other organizations, if applicable. Researchers and fund raisers are accustomed to interpreting such data and making projections based on an admittedly incomplete picture.

Once we have that projection, we begin to "rank" prospects according to their giving potential. We create a virtual pyramid, listing a few people in the eight-figure range, several more in the seven-figure category, even more at six figures, and so forth.

Some institutions will also indicate in their projections the assumed likelihood of a gift. For example, we might suggest that someone is capable of giving us $500,000, but currently has little to no inclination to do so. Or we might say someone is very likely to give us $50,000. In any case, by grouping folks together by level, we begin to see what our overall fund-raising targets might be.

And we share that information with our development committee. Remember that part of its charge is to help us cultivate lead donors. Many of our best prospects are on the board, which, not surprisingly, is true at many institutions. Can you smell a problem brewing?

Well, for starters, committee members will know what we expect or desire from other trustees. That's not so bad, unless those other trustees know what's going on. Then people might squirm a bit.

Even more troubling, though, is when committee members see themselves on the list. I've heard many board members, at various institutions, claim that all prospects should be on such a list, regardless of their relationship to the institution. That way, we get a complete picture of the college's fund-raising potential. Works in theory, but not always in execution.

Let's say you're new to the board and to the development committee. We plunk the list in front of you and there you are with a prospect rating of $500,000. Now you know what we assume you're capable of giving, and so do your committee colleagues. What if you were thinking more on the magnitude of $100,000? Does that rating set a tacit expectation among your fellow trustees? Will they consider you cheap if you come in at $250,000?

The rating may change over time, as cultivation continues and inclination comes into focus, but once the number appears on paper it becomes emblazoned on people's craniums.

Armed with such misgivings, my fellow staff members and I arrived at a development-committee meeting holding two lists. One rated all of the trustees minus the development-committee members. The other list included them, just in case it was requested.

It was. We watched carefully as they perused the information. Brows furrowed. Throats cleared. Pins dropped. No one expressed immediate concern, but we later learned that some were uncomfortable seeing the numbers in print. A few questioned how we'd arrived at those figures and wondered what other juicy morsels we might be holding.

That brings me to the second level of information, the prospect profile. Development researchers use all of the relevant data they collect to construct a profile of each prospect. It paints a financial picture and recounts a person's giving patterns and contact history. It also draws some conclusions about a person's interest in giving and the causes he or she might support.

It's one thing to show a trustee (or anyone else) a dollar figure representing what we might expect for a philanthropic gift. It's quite another to show him a profile detailing asset information, real-estate transactions, and presumed liabilities, such as tuition payments. To be fair, most of this is public information (certain tidbits, like donations to other nonprofit groups, aren't necessarily public, but can readily be found), yet to some it still smacks of spying.

What's more, the profile might also contain snippets from call reports -- i.e., notes from development officers recounting their visits and conversations with potential donors. As I mentioned in a previous column, prospect research aims to determine a donor's capacity to give and, to a lesser extent, his or her inclination. In turn, fund raisers, through visits and conversations, learn more about an individual's interest in making a gift and the true potential amount. What we discover -- those small nuggets and nuances that color our judgment -- is often included in a donor's file, and excerpts sometimes find their way into the prospect profiles.

All of which nicely segues into the third level of information, the file. Here we find all relevant documentation and correspondence, along with the full call reports.

I've written my fair share of call reports, and have seen plenty more. Along with relaying the facts of the meeting (such as the date and the nature of the visit), the reports feature fund raisers' interpretations and recommendations. We might comment on a person's home, noting items that imply affluence. We might convey bits of conversation that we feel give insight into someone's capacity to give. We might suggest strategies such as invitations to certain campus events or membership on some committee. Or we might outline a solicitation plan involving key members of the administration.

Such comments are meant to spur internal discussions and to inform future fund-raising efforts. They're not meant to be shared with the prospect.

In our development-committee meetings (and in those I've attended elsewhere), trustees routinely have perused prospect profiles. On more than one occasion, members have speculated on what's in theirs. Right about then, my gastric juices start bubbling up.

Assuming the profile contains comments culled from contact reports, as is customary, we can't always guarantee it won't offend the subjects. Some trustees may feel they're being manipulated or that a certain confidence has been violated. Seeing one's financial situation front and center can cause consternation. Others might not care a whit. But you always take that chance.

And what if someone wants to push things a bit further and view his file? What then? Are you obligated to share it?

According to the Association of Professional Researchers for Advancement, no case law clearly outlines a donor's right to access such files, be they paper or electronic. Therefore, "advancement researchers should work with their institutions' legal counsel to develop an institution-specific policy regarding this access." So the answer is maybe, depending on your college's policies.

I suppose the solution is to control what goes into the file in the first place. Call reports that include potentially unsettling comments should perhaps be cleansed. To wit, the professional association says that fund raisers should seek and record "only information that is needed for effective fund raising for our organizations and avoid the collection of unnecessary peripheral data that might compromise an individual's privacy." What is unnecessary or peripheral is yet another one of those gray areas.

So back to our development committee. We've since dispensed with reviewing donor information that relates to any of the trustees. The committee members instead focus on external prospects and leave board cultivation up to the staff. It was, in retrospect, a valuable exercise that we had to experience before making that decision. Not unlike spending the night with the dry heaves to prove you exceeded your drink limit.

But we still don't have a policy governing access to personal files. I suppose we'll get around to creating one when we find time to stop raising money.