Maybe you’re just breaking into the nonprofit world, or you’re a seasoned fundraising fiend. Either way, taking the time to learn or review prospect research is key to keeping your nonprofit aimed toward success.
Are you looking to get more out of your current donors? Are you looking for new donors? Maybe you’re looking to upgrade your major gifts program or target more planned gifts?
Prospect research is the answer to your questions.
It’s a data-driven, proven technique for identifying promising donors and learning more about your donors as a whole. By gaining an in-depth understanding of prospect research, you’ll be well-equipped to learn as much as possible about your prospects, and in turn, build the best, most informed relationship with your donors.
1. What is prospect research?
Prospect: A prospect is a potential donor for your organization. Prospects can be previous donors with upgrade potential, or they can be entirely new donors.
Research: In this case, research means identifying likely donors—specifically, it educates you on potential or existing donors’ backgrounds, giving histories, wealth indicators and philanthropic interests.
The goal is to better understand a donor’s ability and affinity for donating so that both your nonprofit and your donors can reach their full potential. Effective prospect research should consider both:
1. How much a donor is able to give.
2. Their willingness to donate to a charity in the first place.
This process analyzes a large group of prospects to create a prioritized list of your most capable and likely donors. Prospect screenings are usually performed by third-party companies.
When it comes to actually performing prospect research, you’ll need to be aware of the different tools available to you. One important term to familiarize yourself with is prospect screening.
A prospect screening company should consider the ability and affinity factors that we listed above and rank your prospects accordingly. Using the data they provide, you can target the most likely donors for your specific purposes.
2. Why should I use prospect research?
There are two key characteristics to understand when it comes to thinking about your prospects’ likelihood of supporting your charity: philanthropy and wealth.
Philanthropic markers can be indicators of a prospect’s affinity for charitable giving, and include:
Past giving: Whether they’ve given to you or to another nonprofit, past donors are your prime targets for future gifts. They’ve already demonstrated their willingness to support nonprofits, and they may have even shown support for your cause in particular.
Nonprofit affiliations: From board members to event staff, people who are affiliated with your nonprofit are already invested in your cause. By considering nonprofit affiliations, you can tap into a potential donor base with a demonstrated affinity for your mission. Showcase the multitude of ways these volunteers can contribute to your organization by crafting a carefully considered ask to guide these volunteers into donor territory.
Personal information: If a prospect’s interests align with your nonprofit’s mission, then you have a great platform to initiate or develop contact. You can tailor your ask with a program that is likely to appeal to your prospect, or you can explain how their interests can be enacted with a donation to your nonprofit.
Wealth markers are indicators of a prospect’s ability to give, and include:
Real estate ownership: Someone who owns a lot of properties is likely to have a large capacity to give, but even more so, they’re likely to be a major donor. Yes, real estate really does matter in prospect research. Why? Because statistically, those who own $2 million or more in properties are 17 times more likely to make a charitable donation.
Political giving: This might seem like a separate realm from nonprofit work, but it’s important because:
• People who’ve donated to political causes have shown they’re willing to give money to support causes that they care about.
• If their political interests align with your nonprofit’s mission, they’ll likely be open to supporting your work.
Business affiliations: A person’s job title can be a hint at their salary, and their connections in the business world can be leveraged to solicit a donation. Corporations often sponsor or fund nonprofit events; use the connections you’ve made to reach invested employees.
3. What are the limitations of wealth screenings?
Wealth screenings solely analyze wealth indicators in prospects—they are valuable, but not in isolation. They simply do not provide enough information to be useful. Wealth alone does not indicate a likely prospect. After all, the Scrooge stereotype exists for a reason; not every wealthy person will have an inclination to give to charity.
The best approach is a complete approach. By being holistic with prospect research, you can identify prospects who are wealthy and generous! But even more so, you’ll have the opportunity to know more about your donors than their assets.