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Magazines > Searcher > September 2006
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Vol. 14 No. 8 — Sept. 2006
FEATURE
Around the Fundraising Campfire
Stories of Dismal Failure, Near Misses, and Great Success

by Cecilia Hogan | Director, University Relations Research, University of Puget Sound, Tacoma, Washington

Headline : Alumnus Gives $10 million to State College; First Visit to Campus in 20 Years

Readers pass by stories of war and political high jinks to savor tales of luck gone good. Filled with anecdotes of accidental meetings, impulsive decisions, and unbridled generosity, the stories behind the headlines seem almost too good to be true.

Headline : Movie Star Raises $5 million to Fight Hunger

In fact, the stories usually are too good to be true. The back story, the story rarely told, usually involves the strategic cultivation of a wealthy donor who has the capacity to give or facilitate a large gift to a nonprofit.

Headline : Foundations Rush in with Millions to Aid Homeless in Devastated City

Charity on this scale doesn’t just happen. In most cases, it represents the culmination of a direct and concerted effort on the part of the nonprofits who receive the assistance. Even in the case of natural disasters, many relationships between donors and nonprofits have been built long before the critical moment. The reputations of the receiving nonprofits have been well-established in the minds and hearts of major gift donors before the moment when support is needed.

In most cases, that big gift from an alumnus, former hospital patient, or museum patron begins months or even years before the public hears about the gift. And it often begins when the potential donor’s name draws the attention of a nonprofit researcher.

The Perfect Campsite

When we last met, I shared basic concepts of philanthropic research with you. I told you about the critical qualities to watch when seeking a donor who has the potential to give a large gift — affiliation, capacity, and interest. You’ll remember that affiliation is a measure of a potential donor’s past contact or involvement with a nonprofit. Capacity is the dipstick on philanthropic potential. Does this individual have the option to give large gifts? Finally, interest is twofold. When it comes to philanthropic experience, where does this individual stand? And, when it comes to the cause we need supported, is this person interested?

We looked at the way each nonprofit defines a major gift. The definition emerges out of each organization’s relative donor history and the size of the gifts it has experience recruiting. For small nonprofits, a major gift might be $10,000. For large, long-established nonprofits, the threshold to define a gift as major might be $100,000. It’s all relative.

We also discussed the fiscally responsible approach to fundraising that drives researchers and fundraisers. We are entrusted with that first donor dollar and the expectation that we will use it to raise many more donor dollars. The “many more” dollars come in large part from donors who are highly capable philanthropically. Fundraisers hold that 80 to 90 percent of gifts to any large effort come from 10 to 20 percent of the donors asked to support the effort.

Dry, level ground. A bit of sun and a bit of shade. We are getting close to the perfect campsite, aren’t we? What else do we need? Water and firewood nearby and a panoramic view will just about do it. Oh, and a backpack full of supplies and tools.

The Right Backpack

Our mission is recognized as altruistic and our methods as reasonable and nonprofit- and donor-centric. Our information sources are those already available to the public. We are not detectives or competitive intelligence researchers. Our relationships with our constituents, or the subjects of our research, are friendly and respectful. We are researching and writing stories of philanthropy and philanthropy-to-be.

We used to sit in rooms full of reference books. Now we have fast computers with dedicated Internet access and fee-based reference resources. Our “favorites” or bookmarks have become our reference collections. We protect them with the dedication of any librarian. We back them up and use bookmark/favorite managers to house them (Backflip at http://www.backflip.com/ or Furl at http://www.furl.net/, for example). We rely on research colleagues who create Web pages of resources. Our friends from coast (University of Vermont’s researchers at http://www.uvm.edu/~prospect/index.html) to coast (USC’s researchers at http://www.usc.edu/dept/source/) keep us up-to-date no matter where we go.

Just like pioneer researchers, we are once again in charge of identifying and constructing our own resources. We take overgrown and abandoned trails to find the information we need. We follow information travelers whom we barely recognize, more robust and better-funded explorers, such as corporate and legal researchers, to find the data sets that contain bits and pieces useful to us.

We design ways to look deeply into our donor databases. We attend data mining seminars to learn how to predict who our next major gift donors will be based on the qualities of our already known donors. We don our miners’ lanterns and baby-step our way down information shafts. Don’t worry; we carry the canary with us.

My Southern mother would ask, “What are your prospects for getting a date for the dance?” Well, each nonprofit’s fundraising team is sitting around a virtual table this morning asking, “Hey, Researcher, what are our prospects for getting support for _________?” Fill in the blank with “those who can’t afford college” or “a new surgical wing” or “practice rooms for symphony musicians.”

That word, “prospect,” actually became shorthand for our line of work. We are prospect researchers. Prospective donors are called prospects.

Note to Self: Build a Fire

Kindling, that’s what we need. Dry kindling and a couple of sticks to rub together.

The most efficient way to raise money is to succeed in attracting donors with the capacity to give large gifts. The math equation is simple. When there are 1,000 donors to a cause and $1,000,000 is raised, 100 or so of those donors gave about $900,000 of the mil, while the remaining $100,000 came from the other 900 donors. Amazing, isn’t it? You see, you don’t have to do the math; you just have to find the big donors.

How many donors? Get your pencils out — it’s another industry-centric math problem. This one is based on the experience of many fundraisers in many nonprofits. Each fundraising effort (or “campaign,” as we call them) is a vortex in which the amount to be raised meets the number of projected donors at a given level. Nonprofits use a range of multipliers to predict success; the most common one is that the nonprofit will cultivate and solicit three donors for each major gift received. So, for that $1 million we just raised, we needed 300 major gift donors (prospects) to get the 100 gifts that generated $900,000.

Here is another set of numbers to rub together to get this fire going. Fully developed nonprofits generally receive about 10 to 20 percent of their support from corporations and foundations. The balance of their major gift support comes from individuals. Several groups keep statistics about fundraising. If you’d like to learn more, you might begin at the Charity Navigator site [http://www.charitynavigator.org/index.cfm/bay/content.view/catid/3/cpid/42.htm].

How can we predict which donors will give what amounts? That’s where the spark begins to smoke. To estimate giving capacity, prospect researchers have to become students of wealth. Time sifting through miles of information about wealth and capacity sharpens a researcher’s ability to recognize potential. Researchers seek out information about philanthropy. The National Center for Family Philanthropy [http://www.ncfp.org/], The Chronicle of Philanthropy [philanthropy.com], and other organizations whose central mission is large-scale giving can guide us.

Prospect researchers have to strike the match of foundation giving histories, gross company sales, and compensation studies against concepts of what inspires people, what moves each soul to generosity. Researchers use the diagrams left by researchers who have gone before them to predict giving capacity. They follow a virtual trail littered with U.S. Securities and Exchange publications, foundation reports, and Dun & Bradstreet company profiles. Yawn, you say. But this stuff becomes infinitely interesting to researchers.

Donor Ghost Stories

Remember those nights around the campfire when you were a kid? The best part of the evening was when the stories began. Some were funny, some moving, and some were downright scary. Come closer — we’ve arrived at that point in this camping trip.

From the viewpoint of a nonprofit with a fully developed fundraising process, a successful story is one in which a major gift donor has been drawn closer to the decisions of the nonprofit. In the best scenario, the donor has experienced the appreciation of the nonprofit for his sacrifice. The donor has had a chance to meet those whose lives are being changed by the gift. At the highest levels of these developments, the donor has moved into leadership circles that make key decisions about how the nonprofit will grow and what services it might provide next. That’s a fundraising success story.

Fire Roaring, Marshmallows Melting, Great Success

That alumnus who gave $10 million to State College after his first visit to the school in 20 years? He was initially contacted by the college’s fundraising team after the prospect researcher saw a news story about the success of his company. He’d founded the company during a biotechnology boom. Having majored in chemistry and minored in business in college, he managed to complete his degree with the help of scholarships and low-interest loans.

Success came quickly after he graduated. In fact, one of his chemistry professors helped him formulate the first concepts that led him to invent the product he envisioned. He spent a busy 20 years building his company to a phenomenal success. Although he didn’t get back to the small town where he went to college, he attended several get-togethers hosted by fellow alumni in the city where he located his company. He had even hired a few alumni he met at those events. The college’s fundraising team contacted him about 2 years before that favorite professor retired. The sale of his company presented the perfect moment to honor his old professor and the college that had helped him earn his degree by establishing a scholarship and an endowed chair.

Cloudy, View Obscured, Matches Wet, Dismal Failure

OK, “dismal” may be too strong a word. But fundraisers and researchers have favorite donor stories, and the best stories do not involve big gifts that were, well, uncultivated. An uncultivated gift is one that falls out of the sky onto the nonprofit. No one saw it coming. It’s not bad news for the nonprofit. Who could say more support is bad news? But it isn’t the best news. To fundraising professionals, an uncultivated gift is probably only a portion of what the gift might have been, the theory goes. An uncultivated gift is a missed opportunity to effectively steward (say “thank”) a donor.

Every story of giving doesn’t evolve as the love fest the alumnus who honored his respected professor experienced. Some donors miss, to paraphrase the Beatles, to take the love they make. At each performance for 40 years, a woman sat in the front row of the concert hall in her home town as the symphony orchestra played. She never seemed to miss a single evening of beautiful music. She saw the orchestra nurture young musicians, some who went on to become nationally famous. She listened to renowned musicians who came to her town to share their gift with music lovers living far from the world’s biggest stages. She read about the orchestra’s outreach programs to bring its type of music to schoolchildren.

The lady scurried out of the hall at the end of every performance. She didn’t ask to volunteer to help with the programs for children; she didn’t believe that she had anything to offer. She longed to meet the famous performers who came to town, but was too shy to attend the receptions held for subscribers.

When she died, the woman left a portion of her estate, a surprising $1 million, to the nonprofit that runs the orchestra. The nonprofit’s staff were delighted to learn about the gift, but saddened to realize that the woman didn’t get to know the orchestra even better. They were disappointed to learn that she had taught music to children many years ago, but had missed the chance to see the children who benefited from the orchestra’s outreach program.

Matches Damp, Strike, Strike, Blow Hard — A Near Miss

Here’s one of my favorite near-miss stories. It’s short and sweet.

Year 1 : Family establishes hometown company making widgets.

Years 2–15 : Company grows and grows. Family members grow older. They use the community’s services, particularly the sheltered workshop that provides a steady stream of well-trained and reliable workers for the family’s factory.

Year 16 : The family sells the company in a private sale. The newspapers cover the sale, even interviewing the patriarch of the family about the company’s years of success.

Year 17 : The family establishes a foundation with a portion of the enormous proceeds from the sale of the company.

Year 20 : The family’s foundation gives $5 million to the sheltered workshop.

Shall I write the headline or will you? Foundation donates $5 million to sheltered workshop. The story would take about 3 inches of copy space. There would be little mention of the company sold a few years earlier. The link between the foundation, the family, and the nonprofit might be missed. The family members’ time spent serving on the sheltered workshop’s board of trustees would be overlooked. The years of interaction between the family and this nonprofit would have faded into the background for anyone not closely involved. But the researcher didn’t miss the tiny news story. That’s not all she didn’t miss.

The researcher noticed when the family began hiring the nonprofit’s graduates. She recommended then that fundraisers contact the family for annual gifts. As the family drew nearer to the nonprofit, she recommended one or two family members for mentorship roles and the family’s patriarch for trusteeship. The nonprofit’s leaders drew the family into the inner circle of decision makers. They saw the deep value in the family’s experience with the nonprofit. The family became good coaches about how to develop even more successful training programs.

The researcher saw the news story about the sale of the company. She tracked other stories in trade publications, sources too obscure to interest the average reader. When the fundraiser assigned to keep the family on a funding path told the researcher that the family planned to establish a foundation, the researcher made a plan to check foundation reporting sources such as the Foundation Center [http://fdncenter.org] and GuideStar [http://www.guidestar.org] for the foundation’s assets, giving history, funding priorities, and proposal guidelines.

Had the nonprofit lost track of the family when the company stopped hiring the nonprofit’s graduates (when the company was sold), the $5 million gift might not have happened. Had the researcher missed the story of the company sale, the gift might not have happened. Had these two entities — the nonprofit and its services and the family and its factory — not merged their brainpower and hearts over 20 years, the magic might not have happened.

Pond or Fast-Moving River?

Several years ago I spoke to a group of potential researchers (really fundraisers with few prospects) from very small nonprofits. I shared the first steps of prospect research with them. After I explained the research triad (affiliation, capacity, and interest) and the process of cultivation and solicitation, one attendee raised her hand. “Do you mean to say,” she asked, “that they won’t give to us unless we ask them?”

Along with hiring a prospect researcher, a nonprofit planning to find support through large gifts develops and maintains a process for tracking the progress of the engagement. Think of the tracking as the spots where the progress down the stream is monitored. Each time a prospect reaches a new spot in the stream, a new set of tasks begins. Nothing in the process is stagnant or still. Movement is forward and deliberate. All oars are in the water and rowing in the same direction.

In the tracking process, the researcher often finds the next tasks. As donor cultivation progresses, some prospects move to the riverbank. Their potential — either in interest, capacity, or affiliation — was misidentified. As fundraisers engage prospective donors, the waters churn. As potential fades or as some donors pass through the giving gates and into stewardship channels, fundraisers need more prospects.

The team turns to the researcher over and over again. Donor engagement progresses; new information emerges. Life goes on, we might say. Stocks split, companies merge, people become presidents and partners. A donor gets older and begins to wonder what legacy to leave on this earth. A researcher stands by to note these life moments and, from her spot on the river, to pass them on to the fundraisers.

Line Out, Casting, Reeling, Casting Again

A prospect researcher practices catch and release. A researcher is not attached to any specific bits of captured information, nor to any prospective donor identified. The researcher’s role is to develop bucketfuls of opportunities for their nonprofit. We net great masses of relevant information and toss back the stuff that doesn’t prove useful for the major gift process.

Researchers set Web information alerts to catch the “life happens” stories. Spiders trawl the Internet for the researcher, harvesting the keywords in the alerts when they appear on Web sites and in newspapers and business journals. Alerts are available through Google, Yahoo!, Hoover’s, and other Web sites. Since alerts continue to be relatively primitive tools, researchers monitor other information aggregators. They track superlative lists — the largest in sales, biggest by number of employees, and the highest paid. Business journals (e.g., http://www.amcitycom) publish superlative lists in nearly every issue, but many lists are available only to subscribers. Forbes [http://www.forbes.com] and Fortune [http://www.fortune.com] publish superlative lists, too, and theirs are usually searchable by a number of factors. The lists produced by Forbes and Fortune are the super-superlatives. These are the national and international rich lists.

Researchers hit the information mother lode when they find a “superlative” story (top entrepreneur, largest foundation, business leader, or philanthropist of the year). A superlative story has almost all the information a researcher needs to “activate” a prospective donor’s formal cultivation process. The news reporter’s detailed story will provide the answers to many of the researcher’s questions. The how, what, when, where, and why that intrigue reporters (and news readers) are the same elements that shape a story of present and future philanthropy. How did this individual get the options in life to be so dynamic? What is the trajectory of this individual’s career? What are his connections in the community?

Compass in Hand, We’re Back on the Trail

Remember the “interest” piece of the research triad? That’s where research gets tough. Philanthropy isn’t the top news story of the day in our society. In fact, stories of philanthropy are rare. But researchers need a path to stories of philanthropy. After all, that’s where we’ll find news about donors. Some of them may be our affiliates.

Prospect researchers subscribe to newsletters that tout the biggest stories of philanthropy. The Chronicle of Philanthropy’s Philanthropy Today [http://philanthropy.com/services/daily/] drops into a researcher’s e-mail box. Philanthropy News Network sends PNN Alert [http://www.pnnonline.org] to the e-mail boxes of those who sign up, too. A few information providers assemble and sell donor giving data sets gleaned from publicly distributed donor reports. Waltman’s Donor Series [http://www.donorseries.com] gathers donor reports from nonprofits and has a searchable database of giving. NOZA [http://www.nozasearch.com] just recently added to the stable of information sets that make up the iWave [http://www.iwave.com] fee-based product and has developed a searchable database of donor gifts, too.

Researchers without access to these fee-based resources have a more-tedious foot trail to explore. Don’t worry, though, they are ready. They have been training at the knees of the search engine Sherpas. Our Sherpas tell us that search engines do a better job of indexing dynamically generated pages. (We are holding back a chortle.) Some search engines index PDFs. Most search engines don’t index deeply. And search engines can’t get by Billy Goat Gruff because a spider can’t tote passwords.

In the meantime, many nonprofits post their governance board rosters, annual reports, and top donor lists on the Web via dynamically generated pages or buried deep in their Web site on PDF documents. To make conclusions about philanthropic experience, a researcher will visit the Web sites of the largest or best-known nonprofits and civic organizations in a donor’s region. A good researcher will have those Web sites in their backpack. They’ll keep their “favorites” collection in its own location, perhaps a folder named Other Nonprofits with subfolders named by cities. One by one, a researcher will review board rosters and top gifts made in the city where this nonprofit’s donors live.

What are researchers learning on the philanthropic information trail? Donors who serve on nonprofit boards acquire both leadership and philanthropic experience at the major gift level. Most established nonprofits consider giving capacity in recruiting board members. A researcher may even find indicators of a prospect’s giving (facilities, scholarships, or awards bearing a family name, for example). Remember our “efficient use of the first dollar” mantra? Well, affiliates with philanthropic experience are the most likely to become philanthropic toward your nonprofit.

In Praise of Tradition

As the Ancient Ones will tell you, not everything about the old ways is wrong. Researchers gather the relevant information they collect into documents resembling biographies. For some researchers, this document is word processed and neither interactive nor automatically updated. But it may be rich in nuances that our current bevy of donor databases doesn’t allow. Other researchers have patched together methods of making database-generated biographies go beyond a page of too-tiny print awash in numbers and unformatted paragraphs of text. Researchers try to keep their readers in mind. Information unread is information unshared and unused.

Along the path to a major gift, researchers are often asked for more research and sometimes information deeply analytical in nature. Prospect researchers become knowledgeable about enzymes, thoroughbred horses, patents, and price-earnings ratios. Their weigh stations are Web sites such as Bioworld Online [http://www.bioworld.com], Thoroughbred Breeding Farms [http://www.equineinfo.com/horsebreeders.htm], U.S. Patent and Trademark Office [http://www.uspto.gov/], and Investorwords [http://www.investorwords.com/].

Around the Campfire: Righteous Circles

About a decade ago, I attended a seminar designed around an interesting idea. Someone thought seating prospect researchers and fundraisers on the same dais would be a good way to get researchers to talk about what they liked and hated about fundraisers and vice versa. It worked. In graceful tones, two sometimes fidgety partners in the fundraising dance talked. The fundraisers talked about biographies steeped in information, but devoid of analytical conclusions and recommendations. The researchers talked about fundraisers who missed chances to cultivate and solicit the best prospects.

One fundraiser was asked for her opinion about how the entire information trail worked. She was asked to describe how she got all the elements of the fundraising effort pulling in the same direction.

“I build righteous circles!” she shouted. You could feel the spark in the room. A righteous circle, she explained, is a group of individuals with different tasks and responsibilities whose work converges to make the whole meaningful. A perfect way to describe an empowered, purposeful group in any context, I thought. I’ve repeated that phrase to many groups in the intervening years.

Every prospect researcher knows who sits in her righteous circle. Data entry folks and gift processors readily stand up and stretch out a hand. Without accurate data at the onset, a researcher is lost. Misspelled names, missing middle initials, or inaccurate contact information all circumvent a researcher. A dropped “Southwest” or a mangled “avenue” means hours of back-tracking.

The nonprofit’s administration holds hands with the researcher in their righteous circle. A researcher depends upon an administration that values prospect research. If that’s missing, the researcher might as well go home. No one on the team will respect and use the research if those at the top fail to do so. The broad and deep message has to indicate belief and support for the work.

Who else joins hands in a researcher’s righteous circle? Fundraisers do, of course. Don’t tell them, but we think of fundraisers as “field researchers.” There are bits of information that only a fundraiser can discover through contacts with donors. Those bits are often the key answers to affiliation and interest questions. Those bits often help quantify capacity. Donors look to fundraisers for guidance in how to best help a nonprofit. Fundraisers and researchers become the dynamic duo in the righteous circle when they effectively merge their information sets.

Every smart researcher builds one more righteous circle. It is a circle of research colleagues across the globe. A funny thing about a prospect re­searching: As we wind our way through a research task, we learn single topics well. You might say that w become near-experts on each topic. Fundamentally, we uncover the trail to the facts on that topic. We research research, you might say. Our projects in a single week might take us from silver mines to skyscrapers to race cars to ship building. So, each researcher becomes the person-in-the-know about how to research a collection of subjects. And each researcher’s subjects contain unique topics. California researchers know about orange groves, beachfront property, the Silicon Valley, and Hollywood. New York researchers know about investment banking and international trade. Together, talking to one another on listservs and in professional groups, researchers become a collective of information trackers and brokers. Many brains join to make this circle strong.

Building righteous circles is plenty of work, but maintaining them is a yeoman’s task. It is hardest for development teams not even housed in the same place as the researcher. Making righteous circles work over distances takes concerted outreach. Those of us lucky enough to be able to stick our heads in one another’s offices and, metaphorically, at least, extend that hand on a regular basis, know the value of proximity.

The Wonderland Trail

You thought I meant the Internet, didn’t you? The Wonderland Trail is a 93-mile hike located at the 3,000- to 7,000-foot level around Mt. Rainier, which is among the tallest mountains in the contiguous 48 states and the state of Washington’s own wonderland [http://www.nps.gov/trail/wonder/htm]. The trail rises “from lowland forests to subalpine meadows.” Hikers who complete the entire trail (which takes about 2 weeks) manage more than 25 significant elevation changes. The cumulative elevation change is about 20,000 feet. Think “up, down, up, down.”

OK, I admit it. The Wonderland Trail does remind me of researchers and the Internet. We could drive the comparisons into the ground (off a cliff?), but then you’d lose faith in me as a guide to prospect research, wouldn’t you? Stay with me for another minute.

Let’s say this: Just like Mt. Rainier’s hikers, researchers train to manage the changes in elevation they meet on their quests for the right information, the information that enriches their nonprofit’s opportunities for major gifts and facilitates engagement for philanthropists in the making. They become master searchers, keenly aware of the options they have on the trail.

We’ll skip the rigorous route comparisons and focus on two things: equipment and toes. You can’t possibly pack everything you need for a 2-week hike without taxing your internal resources to the breaking point. Add a too-heavy backpack to the rigor of elevation changes and you’ll face defeat. The secret to success on the Wonderland Trail is stashing your food and clothing changes at drive-to spots along the trail before you start the hike. You might say that every good hiker plans to have resources available ahead of them.

Toes, you ask? What do toes have to do with prospect research? The funny thing is that it isn’t going up that gives you trouble on the Wonderland Trail. It’s going down. As you go down a trail, you jam your toes into the front of your boots. That’s the toughest part of the elevation changes. Hikers are ready for the rigors of going up. Most people aren’t ready for blisters when they expect the downhill path to make it easier.

The point of defeat becomes one of spirit, not skill. The best prepared seekers are ready for the route to change, twist, and drop a few thousand feet. They are ready to take a few near misses and a dismal defeat or two. The bigger goal, making our way around the mountain, keeps the sparkle in our eyes. You can see it, can’t you?

Tweet Tweet

Miners used to carry canaries in cages when they descended into the depths of mines. Why? The canary would be the first pair of lungs to know when the atmosphere was filling with poisonous gas.

Our canary? It’s the prospect research code of ethics. When we joined our professional organization, the Association of Professional Researchers for Advancement (APRA), we agreed to abide by the code of ethics our wise elders established [http://www.aprahome.org/advancement/ethics.htm]. Our sister organizations, the Council for Advancement and Support of Education (CASE) and the Association of Fundraising Professionals (AFP) have fundraising codes of ethics for their members [http://www.case.org/Content/AboutCASE/Display.cfm?contentItemID=2570; http://www.afpnet.org/ethics].

I know, ethics statements are boring. But they are important for a group’s identity. Ethics statements set the standard for behavior. They protect the miners. We approach our research tasks from a position of thoughtful respect. We agree to be forthright in our mission as we gather information. We gather only what is relevant to the task at hand, collecting just the information that can further the philanthropic cause and no more. The information we gather and analyze is public information, available to anyone and everyone. Our aim is to efficiently find opportunities for financial support for good causes, the “brother’s-keeper” angle on life that our governments do not cover. Just as the world’s wealth lies in the hands of a surprising few, the world’s large philanthropic capacity lies in the hands of a few (and the few usually overlap).

Cecilia Hogan is Director, University Relations Research at the University of Puget Sound in Tacoma, Washington. Her e-mail address is chogan@ups.edu

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