When trying to implement prospect research at your nonprofit, you first must get a handle on the benefits, targets and methods of prospect research.
1. What types of donors can prospect research identify?
The top donors for targeting your prospect research are:
Major gift donors
By ranking prospects according to their ability and affinity to give, prospect research enables you to pinpoint major donors.
Some donors may have given small- or medium-size donations to your annual fund but have contributed major gifts elsewhere. Learning to identify these donors who are already residing in your database can help you craft a targeted ask, so you can turn them into a major gift donor.
Planned gift donors
Planned gift donors have their own unique identifiers, such as age and loyalty. According to this DonorSearch resource, 78% of planned gift donors had given 15 times or more to the nonprofit listed in their will.
Donors who have given to other organizations or those who have been involved in volunteering or board work, for example, can be identified so that you can start cultivating new relationships to keep your nonprofit thriving.
2. What can prospect research help you improve?
Becoming skilled at prospect research will allow you to more strategically:
Craft targeted asks.
Prospect research can identify personal interests and past generosity. Use this information to inform your ask. Pitch a program that aligns with the prospect’s philanthropic interests and then thank them for their giving spirit, even if they’ve only given to other nonprofits.
Update your donor database.
Previous donors aren’t guaranteed for the future—what happens when a major donor moves, and you send your persuasive pamphlets to the wrong address? Having accurate, up-to-date information will help ensure that your donors are being reached.
Recognize donor patterns.
Understanding your donors’ giving patterns can help you better cultivate your relationships. For example, does Joe usually donate to your annual fund around January? Match your ask time to his beginning-of-the-year habit. Or, perhaps Amy only responds to your annual fund inquiries when they’re mailed. You wouldn’t want to email her important information; she might not even read it!
But prospect research can improve your giving program as a whole, helping you strategize and make the most of all the time and energy that you put into your asks.
3. Where should you target your prospect research?
With donors granting their gifts using everything from checks to smart phones, it can be difficult to keep track of where you should direct your prospect research.
You’ll need separate segmentation and strategies for your two donor categories: current and potential. For example, current donor segmentation may place more emphasis on past giving to your nonprofit, while new donor segmentation may focus on broader philanthropic interests. You might need to research specific types of donors depending on your nonprofit’s needs and goals.
You can target your research toward:
Donors in the database
Specifically, focus on your most loyal donors who give medium-size donations regularly. They may have given large donations to other nonprofits, which makes them prime candidates to become major donors in your own organization.
Events have a large draw, pulling in new donors who want to join in on the fun. With such large crowds, you’ll want to budget your event time wisely and invest in your most likely donors. Be sure to capture their contact information, either through event registration or day-of methods like business card drawings and other sign-ups.
Use prospect research to build a plan, and check out Booster’s Guide to Planning a Fundraising Event for more information.
4. What are the four key approaches to prospect research?
To start off, you’ll need someone to lead the charge. These are the key options available:
1. Screening software company
A screening company will perform a prospect screening for you—a valuable resource for developed nonprofits. These companies cut out the time and effort that it takes to sift through large databases, allowing you to focus your energy on using the information the company has gathered.
A consultant is usually a temporary resource in your prospect research, and they might even use a screening software on their own. Consultants are highly trained professionals who know the ins-and-outs of prospect research and can support and guide nonprofits who don’t have a full-time prospect research team.
Large nonprofits, such as universities, often have prospect research teams in-house. Having a number of hands on board can allow each team member to use their skills in the most productive way. Once your team has gathered information on your most likely prospects, your major gift officer can apply that information to set up in-person meetings.
A smaller or newer nonprofit might not have the resources to bring in outside support, but prospect research is too important to bypass. Using public databases at your local library or free sites, such as Zillow, to do your own research will take time, but it’s a proven means of getting your program to the next level—so that you won’t have to be on your own for long!
5. What are the four steps to performing prospect research?
Now that you know how to perform prospect research, you’ll need to break your research plan into steps. After all, prospect research offers you information; it’s what you do with it that counts.
Follow these quick steps to start your prospect research off right:
Step 1: Prepare your donor database.
Organizing your database involves removing inactive donors and cleaning up the information you currently have. Specifically, it will make room for new donors while updating outdated information.
Step 2: Start research.
Because prospect research is so versatile, you’ll need to formulate a plan of attack to maximize your efforts.
You’ll need to consider:
• The kind of donors you’re seeking.
• How many prospects you can thoroughly contact.
• How much time you can spend with each prospect.
Continuously ask yourself these questions, and contextualize your answers within your larger fundraising goals.
Step 3: Implement information into asks.
Prospect research will give you information that you can use to customize your asks. You might learn new things (such as age, business affiliations and personal interests) about your current donors that will personalize your ask the next time you make it.
Step 4: Thank donors.
Retaining donors is just as important as finding donors. Once you’ve identified your prospects, you’ll need to keep them invested in your organization.
For example, you can write meaningful thank-you letters to your donors, showing your gratitude for their contribution. This step will help ensure that you’re making the most of your prospect research.
To put prospect research into practice, you’ll need to be strategic in your planning and intentional in your execution. Following the steps in this overview will help you smoothly integrate prospect research into your existing programs. You know how vital prospect research is to your success—now, decide how prospect research best fits into your organization and get out there!