Rising Dow and Looming Tax Code Changes create Big Opportunities for Prospect Researchers

The Dow Jones Industrial Average closed out the month of October 2010 at 11,118, having gained 269 points or 2.5% during the month. Since the beginning of September, the Dow steadily rose by over 980 points, representing an increase of almost 10%. The stock market's solid advances, as well as looming capital gains tax changes that will take effect in 2011, likely influenced the significant increase in stock sales by US executives during the month of October.

Donor Watch's most recent report, which covers stock sale transactions in October by wealthy college graduates, covers $4.6 billion in sales, a significant up-tick over last month. The top sellers that were reviewed in the analysis all received undergraduate degrees from major US colleges and universities.

Topping the list were the University of Chicago and the University of Southern California, both of which had total alumni selling activity that was greater than $350 million in stock during the month of October. Like the 3rd Quarter of 2010, UofC's Marc Benioff of Saleforce.com (CRM) and USC's Larry Ellison of Oracle Corp (ORCL) led their respective universities in cash raising transactions.

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Finding prospects flying under the radar: A nuts and bolts approach

Let’s say you’re a prospect researcher in higher education. You’re getting some pressure – from your boss, from some of the gift officers you work with, maybe the campaign director – to come up with a list of new prospects. They use different words, but their message is clear:

“We’ve picked the low hanging fruit. We don’t want to keep going back to the same alums who’ve been helping us out in a big way for a long time. We need to find some new people who have the capacity and willingness to make a nice gift. Maybe not a huge gift, but a nice gift.”

If you’ve been working in the field awhile, this isn’t the first time you’ve faced this problem, nor is it the first time somebody has offered advice on how to solve it. Truth be told, you may have gotten too much advice:

• “You haven’t done a screening for five years. You need to do a new one.”

• “Our company has gotten very sophisticated about predictive modeling as well as gift capacity ratings. Use us.”

• “You’re not using social media resources effectively. Facebook and MySpace are great places to find out about alums who have lots of financial resources and are philanthropically inclined.”

• “You need to learn how to do data mining and predictive modeling or add somebody to your staff who already knows how to do it.

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