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When “Free” Isn’t Free

What if Google charged you $3.00 to conduct a search?

When your organization looks up constituent contact information on the web, it is likely spending that much or more. Not in fees to Google, of course. Nor in technical or software fees. That is all “free.”

So where is all that money being spent? Your time.

In addition, what you are not doing when you are conducting these ostensibly free searches may be costing your organization far more in something you may vaguely remember from your school days: Opportunity Cost.

Put staff time and opportunity cost together and it’s quite a bit of money.

That doesn’t mean we shouldn’t conduct research, of course. Knowing more about constituents helps us to focus our time on the right opportunities in the right ways and to treat our friends and contributors with intelligence and sensitivity. The question is rather how we use the vast treasure trove of data now available to us efficiently and effectively.

In order to make that leap, it’s important to first face the reality that our time isn’t free. A staff member paid $35,000 plus benefits costs $0.39 per working minute. A supervisor paid $65,000 plus benefits is clocking in at $0.73 per minute. Assuming you had a staff member engage in a five minute internet search and that you also applied a reasonable supervisory time allocation (20%) to that activity, the cost of time would be $2.68. (Yes, that’s 5 x $0.39, or $1.95, for the staff member and 20% of 5 x $0.73, or $0.73, for the supervisor.) Do it another way—say an Executive Director or Vice President for Development searching for something on the web—and the staff time costs could be significantly higher.

In the grand scheme of things, $3.00 may be a small price to pay for vital information gathered quickly and efficiently by a knowledgeable and responsible member of the staff already under salary and working for you.

To make clear the cost implications, however, let’s look at the matter more holistically. Rather than doing one lookup, we might perhaps do this simple task 25 times a month. Just like those occasional calls on your cell phone that surprise you when they all show up together on the bill at the end of the month, little things do add up. Those 25 lookups are over 2 hours of time and a minimum of $67 per month or $804 annually. Just imagine how you might spend that money differently if you could!

But of course you can’t. This is staff time not cash. So perhaps an even more important consideration might be whether you could apply that time to a task that would generate more revenue. In other words, what is the opportunity cost, or the cost of passing up another opportunity, of having people typing searches into web browsers. This is, of course, even more critical when we have line fundraisers conducting their own research since the alternative could be actually visiting with donors and asking for gifts.

Again, none of this is said to dissuade us from conducting research. Quite the contrary!

In fact, if we truly recognize the value of our time, both in terms of cost to our institutions and in the opportunities that we can pursue when focused on our most important work, then we can sharpen the edge on research and make a greater commitment to it as well.

How do we begin? Make a general plan for research which is centered in the belief that knowing donors better can bring efficiency to our offices and more money to our institutions. This plan might define what constitutes a prospect, for example, so that everyone is operating with the same concept in mind, both bringing the right prospects to the table and taking action on those provided to them. The plan might also determine what type of research is most desirable and establish the preferred sources to be used in order to discourage staff from looking endlessly for information or checking source against source in an effort to understand a person or institution perfectly before engaging them. In addition, the plan might address how and when it’s best to use products and services to take care of functions like ongoing address updating (batch processing through a vendor) or large scale prospecting for a campaign (with a database screeening). Finally, the plan can establish research goals, determine research priorities, make a commitment to resources and staffing and set down policies and procedures for obtaining and handling information in a secure, ethical and confidential manner.

Such a plan could be written in a day and be no more than three pages long. It could written by the Director of Development or, if you are lucky enough to have one, the Director of Research. But it should be written down, approved by the top of the shop and made an integral piece of the development plan.

It is precisely because most organizations neither have the benefit of professional prospect research staff nor any policies and plans governing development information that we get confused about what research is, what it can be, what it costs and how much more money it can help us to raise.

To many around us, it might appear that “Googling” is research. And a pretty cheap way to do it, too. But it’s not. And in fact the “free” aspect of it is precisely what makes it so very expensive. So the challenge to us all is to stop dabbling and to take the research opportunity seriously, making a plan and providing the resources and staffing to do so.

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