Capacity can be defined as the ideal ability to make a major gift over five years and does not include liabilities or propensity to give. Your own definition may vary. However you define capacity, the key is to initially keep wealth analysis separate from propensity to give. This will produce a cleaner, less subjective capacity rating. We are not talking science here. There still is a good measure of judgment and gut-feeling involved. As such, capacity is best expressed as a range.
Essentially, you can divide your study into two elements: income and assets, paying particular attention to earning assets in a portfolio, such as stock holdings. Typically, rules-of-thumb are then used to infer capacity. See Estimating Net Worth for a discussion of industry formulas and related issues.
Register your vote on the net worth controversy.
Can researchers achieve a reasoned estimate
of capacity to give? Email the Prospector.
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INCOME
CEO Compensation:
EDGAR is a great source for executive compensation
info. Be alert for bonuses, as well as retirement packages.
ASSETS How current is your data?
Growth Stocks: |
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Salary Surveys (17) http://www.internet-prospector.org/salaries.html/ Such surveys provide an excellent source of information to help qualify a customer. In addition to the 17 surveys linked above, conduct your own search to find a particular survey of interest. Searching
for Salary Surveys Here's a searchable national database of some 1700 association links. ( http://www.asaenet.org/gateway/onlineassocslist.html ) [Browser tips presented
here are based upon WWW Tip: Want to bookmark a URL or download a page from your hit list without launching the hypertext link? Simply right-click on your mouse and select "Add Bookmark" or "Save Link As." The latter command will connect your computer to the remote host, but will not load the page to your browser. Netscape then prompts you for a filename to save the document. Dividend Yields Yield equals the dividend divided by the stock price. A stock selling for $20 a share with an annual dividend of $1 a share yields the investor 5%. Make it easy on yourself. Stock research sites, such as bigcharts.com, provide data on yields. Further, the same stock that pays a dividend has the potential
for capital appreciation. In the case of the S&P 500, prices have
nearly doubled in the last three years. Real
Estate Holdings For instance, property titles may be in the name of an individual, partnership, trust, company, or other entity. Records may be located at your local county assessor or strung across the nation. Remember, too, databases are only as good as the last time they were updated. Months may pass after a deed is recorded at the county clerk's office before it makes it online at the tax assessor's office, particularly in cases of subdivisions or unplatted land. No doubt about it. Real estate analysis is hard rock mining. But it is doable. Internet to the rescue: more and more counties are putting land records online. Once you access the data, you essentially have two capacity evaluation approaches to choose from:
http://realestate.yahoo.com/realestate/homevalues/ You will like this national database of actual sale prices of homes. http://www.glorecords.blm.gov/ Follow the title chain. Here are more than two million records for the Eastern Public Lands noting the initial transfer of land titles from the federal government to individuals. Public Companies
Insider Stock Holdings Stock Options Dazed and confused by annual reports and financial statements? Find relief with "Guide to Financials: A Basic Introduction to Reading Financial Statements"Official State Corporate Records Some 25% of the 50 United States provide online access to official corporation records (be alert for family or private foundations with your prospect's name), as well as selected charity or foundation databases and uniform commercial code databases (clues to assets and debts). Minnesota's Web site of charities and foundations annual reports for a good example of this type of electronic democracy. See the Internet Prospector's 2000 edition of Locating U. S Corporation Records Online, which includes a national directory of secretaries of state Web sites and contact information. (http://www.internet-prospector.org/secstate.html/). Using the directory above, look for the official Web site of the state where your subject resides. However, consider out-of-state incorporations too. Then select the agency in charge of corporate records (usually the secretary of state). If your target state has its corporate records online your are in luck. If not, try email or fax to request documents. Telephone calls are an alternative, but expect to encounter busy signals. State laws vary regarding the extent of corporation information available to the public. Typical incorporation records show the corporation's officers/directors and addresses. Once you have retrieved an incorporation record, review the record carefully. Is your subject listed as a registered agent of a corporation? The registered agent status may only be a lawyer/client relationship, if your prospect is an attorney. However, your subject could be a registered agent for her own company or foundation. Other records available at secretary of state offices include annual reports. Most annual reports online are abstracts, noting basic contact information. Seldom will you find asset information. However, if you combine secretary of state information with other sources, such as news reports, trade journals, Dun & Bradstreet reports, you can begin to understand the elements that describe a company's financial position. See the "Guide to Understanding Financials" above. Business
Evaluations Gift and estate tax planners, financial analysts, accountants, attorneys and others who study market value and profitability of companies have developed methods and survey results that can aid the prospect researcher. Such evaluations are particularly pertinent to private or closely-held companies where public information is sparse. Traditionally, this specialized aspect of research requires years of financial background. However, for the lay person, selected industry ratios and rule-of-thumb valuations based upon surveys and case studies are available in print. Such studies use three general methods to value a business:
Such industry ratios and specific business valuations are a rare find on the WWW. Until such data is available, see the sites below to learn more about assessing private companies. Search Tips for Business Evaluations:
http://www.onlineinc.com/onlinemag/JulyOL/tudor7.html/ Good article on how to approach business valuation on the Internet. Includes search-engine strategies. http://www6.americanexpress.com/smallbusiness/resources/starting/ valbiz.shtml More discussion on valuation methods. Check out American Express' financial ratio calculators. http://wwwbusinessvalue.com/valarticles.htm/ Provides white papers on selected valuation topics and methods. Includes articles regarding gift tax planning.
http://www.bizbuysell.com National database of actual businesses for sale. Data fields include asking price, cash flow and location. Biz also provides a discussion of valuation rules of thumb. http://www.bizquest.com Another national database of businesses for sale. However, this site excels with its interactive search features. http://www.bbn-net.com/lsearch.html Still another national database. Searching on the term "Internet" returned 27 hits. Each hit includes a business description.
Good review of issues and related rules-of-thumb for estimating capacity. http://www.hamilton.edu/personal/acastle/ Browse A. Castle's "Giving Women" for a listing and description of selected gifts. http://fdncenter.org/phil/philmain.html/ Searchable donor/trustee/officer index to News Digest stories on donations and donors. Retrieve full-text. http://www.forbes.com/tool/html/toolbox.htm/ Forbes Magazine has a solid reputation as one of the premier sources for biographical wealth profiles. Explore Forbes' databases of America's and the world's rich, as well as top company lists. Presents a search form that allows you to create your own custom list, based upon state of residency, industry, wealth, etc. http://www.ipocentral.com/ http://www.ipodata.com/ http://www.internet-prospector.org/portfolio.html Do you have a prospect who is an insider of one or more public public companies? Identify how many shares your prospect owns using SEC documentation above, then track the current value of your prospect's portfolio via Galt Technology's Networth. Cecilia Hogan describes how in this Internet Prospector document. http://www.soc.american.edu/campfin/ Download federal campaign contributions files. http://www.fec.gov/ Federal campaign contribution information. Learn how to access individual contributor's data, which includes address and profession. Some fees apply. Look for information on how to obtain financial disclosure statements of elected officials. http://motherjones.com/mother_jones/ND98/400intro.html/ Search itemized contributions database. Includes profiles of top contributors. BACK to Locator Tools BACK to Introduction REFERENCE DESK Suggest an Internet nugget. Write the Assay Office -- credit to the finder. Copyright © 1994:1999 Internet Prospector Inc. |
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