This is a guest blog from Bill Tedesco, CEO and Managing Partner for DonorSearch, a company that provides wealth screening, philanthropic reviews, and online prospect research tools exclusively to the nonprofit market.
Prospect research is exactly as it sounds: research that nonprofits gather on their donor prospects.
Once you compile this information, you can analyze it to determine a prospect’s ability to give to your organization (their giving capacity), as well as their affinity to give to your nonprofit.
The more your organization knows about prospects, the better equipped you’ll be to make successful and engaging asks. However, the process of learning about your prospects can sometimes seem anything but simple.
Luckily, we’re here to help. Ever wonder how you can improve your nonprofit’s prospect research tactics?
Start using prospect research like a pro by following these 4 strategies:
- Make the most of your prospect research.
- Build better donor profiles.
- Know the difference: wealth screening v.s. prospect research.
- Reach out to a third-party prospect research service.
Ready to engage your donors more effectively through a solid prospect research strategy? Let’s get started!
1. Make the most of your prospect research
When conducting prospect research, it’s important to be strategic in your approach. You don’t want to collect data haphazardly, and you won’t be able to accurately analyze data that was compiled inconsistently.
Throughout the prospect research process, you’ll want to maintain some general best practices:
Research with a goal
Develop a clear understanding of what you want to learn before you begin. Obviously, one thing you want to learn is details about your donors, but prospect research is much bigger than that.
Whether you want to research for a capital campaign or other campaigns, a clear goal for your fundraising outcome can create the biggest difference in your campaign success. Especially with campaign feasibility studies, prospect research can also help you assess the reasonability of your goals.
Consider your current donors
While growing your donor pool is always good, don’t forget to appeal to your current constituents to help you reach your fundraising goals. You can use prospect research to analyze data you already have on your donors, as well as use the research process to improve your donor data.
Your current donors are actually the perfect place to start doing prospect research for upcoming fundraising campaigns. They have already shown an interest in the mission of your organization, so further research can help you engage them again!
Analyze prospect segments
You certainly can analyze many prospects at once, but it’s easier, quicker, and more informative if you segment prospects during the analysis process. This gives you a better idea of how different donor demographics relate to one another, which can help you make more successful asks.
2. Build better donor profiles
Sometimes, nonprofits are content to fill their donor profiles only with information they collect as they move along throughout the donor life cycle. These profiles might feature incomplete donor histories, some contact information, a few wealth indicators, and other miscellaneous data.
However, when it comes time to donate, passively constructed donor profiles aren’t enough to bring your fundraising strategy to the next level. Here’s where prospect research comes in.
With detailed prospect research, you can build even better donor profiles. You can use prospect research to improve upon existing donor data, or to help you build a comprehensive understanding of your ideal donor prospects.
In either case, what’s important is collecting the right information on your donor prospects so you can make the right kind of donation requests when the time comes.
Throughout the prospect research process, you should learn the following information on donor prospects:
Personal information
Don’t skimp on the basics. You need to know every prospect’s full legal name, age, contact information, etc. However, you should also enhance that knowledge with data on their hobbies, interests, social media presence, etc., so you can better engage with your prospects.
Donor history
Who have they given to in the past? Have they gone above and beyond for a nonprofit and, for instance, ran a peer-to-peer fundraising page? How much have they donated? Your prospect research can supplement any donor history an individual has with your organization by offering insight into how they’ve engaged with other nonprofits in the past.
Philanthropic affiliation
Similarly, your research should uncover their current and past relationships with philanthropic organizations. Are they active volunteers, or once-a-year givers? Do they seek out organizations with a similar mission to yours, or do they align themselves with different types of causes?
Political giving
Prospect research can reveal an individual’s political giving history. Not only can this offer insight into their political affiliations, but it can also give you an idea of their capacity to give. If they’ve donated generously to a political party or politician, it’s likely that they are financially able to give to your cause.
Wealth indicators
Some other valuable metrics that prospect research can uncover are wealth indicators. Publicly available information such as real estate holdings and SEC transactions can all paint a picture of how capable a prospect is of contributing to your cause.
Matching gift status
Some donors might work for a corporation that matches charitable gifts. Be sure to research whether prospect’s employers will match their gifts to make the most of their giving opportunities. (One great resource for this information is Double the Donation’s matching gift database.)
3. Know the difference: wealth screening vs. prospect research
On that note, you can improve your prospect research strategy by better understanding how to use wealth screening to your nonprofit’s advantage.
Wealth screening describes the process of analyzing wealth indicator data to paint a complete picture of a prospect’s ability to give.
Before you make your ask, you should know what to expect from your potential donor. Your ideal gift might be out of their price range, or you may be leaving money on the table by requesting too modest of a donation.
While prospect research and wealth screening offer insight into your prospects’ giving capability, the difference between the two lies in what kind of analysis you can come to after you complete your research.
In short, prospect research holistically gathers information on prospects that not just gives you an idea of an individual’s capability to give, but also of their propensity to give to your cause in particular.
On the other hand, wealth screening helps you figure out how capable a prospect is of donating particular gifts.
While they might have different objectives, when paired together, prospect research and wealth screening can help you improve your fundraising strategy. Using the two methods, you can:
Find prospects for major gifts
Using wealth screening data, you can identify prospects who are able to donate at the level you need to reach your goals. Then, with information gathered through prospect research, you can analyze these major giving prospects and decide who is more likely to want to give to your cause.
Segment donors
You might not have a particular gift in mind, but that doesn’t mean you can’t use wealth screening and prospect research productively. Segment your donors using a combination of wealth screening and prospect research to have ready-made lists of prospects for future giving opportunities.
Identify demographic gaps
Wealth screening and prospect research can also give you insight into demographic gaps in your constituency. Are there groups of donors with whom you’d like to engage, but who aren’t represented in your membership? Identify who you’re missing, and then build on that knowledge to strategize future donor acquisition.
4. Reach out to a third-party service
Prospect research is all about filling in gaps in your prospect knowledge. You want to develop the most comprehensive understanding of your prospect pool, and if you’ve been hindered by organizational blindspots, your fundraising strategy could suffer.
Your nonprofit might be limited by time, resources, or manpower. With some outside support, you can supplement your nonprofit’s prospect development strategy with the power of professional prospect research.
If you decide to reach out to a third-party prospect research service, you can choose one of two options:
A fundraising consultant
Fundraising or research consultants can help your organization to build a plan around compiling and using your prospect research. Typically, fundraising consultants work with you to develop a prospect research plan.
There are also consultants specifically trained to help organizations with prospect research. If you choose to hire a prospect research consultant, you may get more direction with both this planning process as well as the actual research itself. These consultants use research software as resources to conduct research on behalf of your organization.
Prospect research software
A form of fundraising software, prospect research software searches through databases to efficiently provide you with prospect research information. Then, the software analyzes this information against consistent metrics to give you a comprehensive understanding of your prospects.
How to choose the best solution
Both of these unique methods can help your nonprofit bring its fundraising strategy to the next level. However, before choosing either, keep a few things in mind:
- What is your budget? There are consultant services and prospect research software options at every price point. With both options, you can choose to engage in continually updated research, or decide to engage in one-time research. While a long-term contract may be a greater financial investment, it may pay off in the long-run.
- What are you planning? Your prospect research can help you in diverse ways, but you need to know the types of things you want to do with it before starting the research process. Will you be planning a capital campaign? Are you trying to increase online donations?
While you’re more likely to get tailored insight through a fundraising consultant, some fundraising software services will work with you to develop a prospect research strategy to fit your goals. Depending on how well you grasp your prospect research needs, you might want more direct guidance.
If you’re interested in hiring a fundraising consultant, check out DonorSearch’s guide to the top fundraising consulting firms in the market. If not, you may choose to invest in prospect research software.
If your nonprofit wants to make better asks, you need to strategize your prospect research process. With these tips in mind, you’re now ready to use prospect research like a pro!
About to get started on an online fundraising campaign? Solve the online fundraising puzzle with our helpful guide.