Prospecting: How to Identify, Qualify, and Segment Your Donors

Donor acquisition continues challenging nonprofits, so a robust prospecting strategy — which helps you find likely prospects for your organization — is paramount to success. Prospect research uncovers current and prospective donor backgrounds, philanthropic histories, wealth markers, and charitable motivations. This method allows fundraisers, development teams, and nonprofits to evaluate a prospect’s capacity to give (how much money they have) and their affinity for an organization (desire to give to that specific cause).

Oftentimes, prospect research helps organizations discover major gift donors. For most fundraising campaigns, the majority of funds comes from a small number of donors who give generously, so finding major gift donors is crucial to fundraising success for nonprofits of all sizes.

Applying Prospect Research

A fundraiser’s time is limited. With prospect research, nonprofits gain valuable insights for more accurately choosing which donors to direct their focus.

Prospect research allows you to:

• Refine major gift outreach. Leveraging your nonprofit’s data reveals which annual donors have the capacity and potential affinity to make a major gift.
• Identify planned or deferred gift prospects. Consistent annual donors are the most likely to give planned gifts in their wills. Use philanthropic and wealth markers to determine who these annual donors might be.
• Generate new prospects. Gain access to the donation lists of similar organizations. Donation lists are effective for finding new prospects, as people who give to similar nonprofits may also be more likely to give to your organization.
• Assess fundraising opportunities. View previous giving histories to see who prospects give to, how often, and how much money they donate. Your nonprofit can analyze donors immediately to formulate better fundraising strategies to land more major gifts.
• Clean up your donor data. Receiving this donor information is an opportune time to clean up your old data. Update donor information, fill in missing fields, and organize your data to make navigating it easy for your fundraisers.

The specific benefits of prospect research vary according to nonprofit type. For instance, hospitals can use prospect screenings to find major gift donors and create a successful Grateful Patient program.

PROSPECTING UncoverS VALUABLE data

Data resulting from prospect research allows fundraisers to make better decisions and includes the following:

• Previous nonprofit donations. Your nonprofit’s past donors are the best predictors of future major gift prospects. Donations to similar nonprofits also indicate prospects who may be apt to give to you—perhaps in a big way.
• Political gifts. Donations to political campaigns and causes demonstrate an affinity for prospects to give to the causes important to them.
• Nonprofit service. Prospects serving on nonprofit boards and foundations generally have money, know nonprofits’ needs, and should be more inclined to give.
• Real estate ownership. Real estate ownership is a wealth predictor, demonstrating a prospect’s capacity to give so you can formulate more accurate ask amounts.
• Employer info. Many prospects work for employers offering matching gift programs. Focusing on matching gift-eligible employees can increase donations and boost your fundraising campaigns.
• Stock transactions. A potential donor’s stock portfolio can also help you predict what prospects invest in and how much.
• Personal information. Glean basic contact info, marital status, hobbies, and other personal data to make fundraising easier.

Prospect research puts the power of data into the hands of nonprofits. This data can directly aid fundraising and help other nonprofit efforts, such as strengthening donor relations. Whatever you use prospect research for, it is more data at your organization’s disposal, and knowledge is power when crafting personalized communications donors receive well.

WAYS TO conduct prospect research

Hire a Prospect Research Consultant

An effective prospect research consultant will leverage all available resources to gather your desired donor data. Consultants might also help train your staff to conduct prospect research, develop better prospect strategies, and support your prospect communications.

Use a Prospect Screening Company

Screening companies, sometimes called prospect research companies, will screen prospects for you, saving researchers time from sifting through databases and organizing the data. Screening companies provide the donor information you want in readily accessible and downloadable formats. This allows you to analyze many donors simultaneously, as screening results can be returned the next day or within the week, allowing your researchers and fundraisers to focus on other important tasks.

DIY Donor Research

You may also choose to conduct your prospect research independently when you have a staff researcher or team of researchers who can search databases, organize information, and make it accessible to your fundraising team. There are online databases and other information sources to sift through, so equip your researchers with the proper tools.

At CCS Fundraising, we have developed a 3-stage process to develop new prospects and expand your donor pipeline, called “Donor IQs” (Identification, Qualification, and Segmentation). Should your nonprofit choose to conduct donor research independently, we recommend the following steps:

1. Identifying Prospects

Prospects can be grouped into 3 buckets to prioritize to qualify and segment them appropriately.

Prospects	Suspects	Unknown Prospects
Existing and lapsed donors	Individuals with a connection to your organization who have not yet given	Individuals not yet affiliated with your organization

2. Qualifying Prospects (The 3 As)

Ask yourself the following questions when attempting to determine the quality of a potential prospect.

• Does this individual have the ability to give?
• Does this individual have an affinity for my organization?
• Do I have access to this individual?

To answer these questions, think about the following in terms of your prospects.

• Ability markers include an affluent address(es), a wealthy lifestyle, and corporate executive or business owner roles.
• Affinity can be evaluated by giving history to your organization or one similar or has a direct connection to you as a patron, student, alum, patient, parishioner, etc.
• Access connection to the prospect via professional networks, local communities, alum organizations, religious affiliations, philanthropic activities, interest groups, and family/friends.

Prospects with all 3 factors—ability, affinity, and access—are the most likely to make a gift to your organization at the leadership level.

Some people do not qualify as promising prospects at this point in their lives. For example, young or new CEOs are still early in their careers and probably cannot be major donors. Additionally, when people are philanthropically overcommitted, they may not prioritize your organization in their choices. Lastly, celebrities may seem like a good choice, but they are approached by various organizations and are often unlikely to choose yours.

3. Segmenting and Tracking Donors

Segmenting and tracking prospects are the foundation for managing the donor base. When done well, these processes drive positive results by refreshing the prospect pool, focusing efforts on the right prospects, controlling the process, and building excitement around the organization.

Building a Donor Pipeline

The first step in tracking prospects is building the donor pipeline. The pipeline will serve as your tool for generating the donor lists for cultivation. We recommend including the following data points in the pipeline:

• Name
• Solicitation status (Ask, Brief, Cultivate)
• Target ask and project
• Key relationships
• Affiliations
• Strategy
• Next steps
  

Other information may be useful, such as residence and contact information, organizational giving history, pledge payment status, charitable affiliations, and other major gifts. Of course, the additional information should be tailored to your specific organization or sector.

The donors in the pipeline should be segmented into these main buckets:

High	Medium	Low
Top 25 list Leadership/strategic solicitations “Players on the field”	Next 50 list “Players on the bench”	Unlimited number Long-range list “The farm team”

Make Your Donor Pipeline Work for you

The pipeline is your best way to manage a large prospect pool. It is a fluid, ever-changing document that is constantly added to and updated. When used well, it can be a powerful tool for understanding your donors and helping staff engage them meaningfully.

Managing prospects can be exciting as you reconnect with lapsed donors, engage existing donors on a higher level, or find new donors with an affinity for your organization’s mission. Simply put, well-researched donors allow you to focus on likely donors rather than spending valuable time on those not ready to give.