Want to be able to spend your time talking to more responsive donors and experience a delightful increase in donations? You should consider integrating prospect research into your fundraising process.
What is prospect research?
Prospect research is a fundraising technique that helps uncover the personal backgrounds, philanthropic histories, wealth markers, and charitable motivations of donors and prospects. It’s used by fundraisers, development teams, and nonprofit organizations in order to evaluate a prospect’s capacity to give (how much money he or she has) and his or her affinity for an organization (desire to give to that specific cause).
The most common use of prospect research is to help discover major gift donors. For most fundraising campaigns, the majority of money raised comes from a small number of donors who give very generously. Finding major gift donors is crucial to fundraising success for nonprofits of all sizes.
Why use prospect research?
Your fundraisers can only call so many people, follow up on so many emails, and meet so many prospects for coffee. With prospect research, nonprofits gain valuable insights that allow them to more accurately choose which donors they should focus on.
The benefits of prospect research include:
- Refine major gift outreach – Philanthropy 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 a great way to find new prospects, as people who give to similar nonprofits may be more likely to give to your organization, too.
- 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 at a glance to formulate better fundraising strategies in order to land more major gifts.
- Clean up your donor data – The receipt of all of this donor information is a great chance to clean up your old data. Update donor information, fill in missing fields, and take the opportunity to organize your data so that it’s easy-to-use for your fundraisers.
Specific benefits will vary by the type of nonprofit. For instance, hospitals can use prospect screenings to find the major gift donors among their constant influxes and departures of patients.
What data do nonprofits receive?
Unfortunately, you won’t learn what brand of refrigerator your prospects use. I know, how people chill their food can be a great predictor of how chill they are in social situations, but prospect research focuses on data that helps nonprofits to make better fundraising decisions.
Data gained from prospect research includes:
- Previous nonprofit donations – Past gifts to your nonprofit are the best predictors of future major gift prospects. Donations to similar nonprofits also indicate prospects who may be apt to give to you, and, eventually, in a big way.
- Political gifts – Donations to political campaigns and causes demonstrate an affinity for prospects to give to the causes they care about.
- Nonprofit service – Prospects who serve on nonprofit boards and foundations not only tend to have money, but they know the needs of nonprofits and should be more inclined to give.
- Real estate ownership – The monetary value of real estate 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 that offer matching gift programs, some of which are interestingly unique. Focusing on matching gift eligible employees can result in doubled donations, which can be an added boost to your fundraising campaigns.
- Stock transactions – Another wealth predictor, you’ll know what prospects invest in and how much.
- Personal information – Glean basic contact info, marital status, hobbies, and other personal data that can make fundraising easier.
How do nonprofits conduct prospect research?
Prospect research is generally conducted in one of three ways:
- Do it yourself – It’s best to conduct prospect research on your own when you have a researcher or team of researchers on staff. They’ll know how to search databases, organize information, and make it accessible to your fundraising team. There are a ton of online databases and other sources of information to sift through, so it is important to equip your researchers with the proper tools.
- Prospect research consultant – A good prospect research consultant will leverage all available resources to gather the donor data you want. Consultants might also help to train your staff about prospect research, develop better prospect strategies, and support your communications with prospects.
- Prospect screening company – Screening companies, who sometimes refer to themselves as prospect research companies, will screen prospects for you, saving researchers time from sifting through databases and organizing the data themselves. Screening companies provide the donor information you want in easily accessible and downloadable formats. They’re great for researching a bulk of donors at once, as screening results can be returned the next day or within the week, allowing your researchers and fundraisers to focus on other important tasks.
The method your nonprofit chooses might be a combination of these strategies. Conducting prospect research is about asking yourself how much you’d like to invest in finding major gift prospects. Typically, the money raised from major gifts is more than worth the cost of prospect research. Be sure to choose the approach that best fits your available resources and fundraising needs.
Prospect research puts the power of data into the hands of nonprofits. Not only can the data directly aid fundraising, but it can help other nonprofit efforts, such as strengthening donor relations. Whatever you use prospect research for, it’s more data at your organization’s disposal, and we all know that, when it comes to crafting the types of personal communications that donors will actually respond to, knowledge is power.
Nonprofits can boost their major gifts strategy by better understanding major donor pathways through data analytics.
This article includes six key steps to communicate donor and fundraising data more effectively to inspire action.