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As a result of the pandemic, many nonprofit organizations had to revisit some of the basic principles of fundraising. One of these key foundational strategies is prospect research. It’s critical that fundraising professionals like yourself have an in-depth understanding of their current and future donor base to develop a strong approach to prospect research that will help your organization thrive during both unexpected events and on a daily basis.
We’ll dive into why prospect research is the perfect addition to your organization’s fundraising toolbox, addressing questions like:
- What is prospect research?
- Why is prospect research a key resource?
- What is the best approach for effective prospect research?
- How can prospect research boost my fundraising?
Whether you’re fundraising for a local organization or a large academic institution, prospect research will provide key insights to inform your efforts. Let’s get started.
What is prospect research?
Prospect research is a tactic used to understand more about potential or existing donors to evaluate their ability and affinity to give to an organization. Through prospect research, organizations can identify potential high-value donors within their existing community and generate new prospects.
The information discovered through prospect research can come from your donor database, online research, social media, government resources and public records, and other sources. This information generally falls into two categories:
- Wealth indicators. These markers reveal a prospect’s capacity to give financially to an organization. Wealth indicators include real estate ownership, stock holdings and transactions, business affiliations, and past political contributions. These records are most useful for estimating an individual’s overall wealth but also can help predict the likelihood of giving. For instance, someone who owns a piece of property valued at $2 million or more is 17 times more likely to make philanthropic contributions than an average person.
- Philanthropic indicators. This information shows an individual’s affinity for your organization or cause. Philanthropic indicators tell you more about someone’s willingness or likelihood to give than can be determined just through wealth. These indicators include previous donations or volunteer history at your nonprofit, contributions to other nonprofits, board service with other nonprofits, and personal information about demographics and interests.
Fundraising professionals can leverage this useful data for more successful campaigns and increased revenue to power your organization’s purpose.
Why is prospect research a key resource?
During the pandemic, many organizations turned to virtual events and remote work to continue their operations. Virtual events are often less expensive, more convenient, and more accessible than in-person events, so the necessary pivot wasn’t without its benefits. Today, nonprofit organizations and businesses alike continue to leverage the benefits of both virtual fundraising and remote work to maximize their revenue. For instance, each of these methods allows for nonprofits to engage and collaborate with donors and staff outside of their local communities.
Prospect research is already remote-friendly, so your organization won’t need to pivot its approach to a virtual setting. It’s a powerful fundraising strategy that can be effectively executed in any setting, helping you expand your outreach to prospects across the nation or the globe.
What is the best approach for effective prospect research?
Gathering and processing a huge amount of records to glean the most useful information can require a lot of time and effort, but there are also ways to experiment with prospect research on a smaller scale. The prospecting method you select will depend on the size of your organization and the resources you have available.
Your main options for implementing prospect research are:
- DIY. Someone already on your development team can manage the responsibilities of screening your prospect lists. There are many training resources available online to help guide this process. If you’re working with limited staff and funding, this may be the best option.
- In-house research staff. If your organization has the resources to hire additional full-time team members, you can bring in experienced researchers to screen and analyze prospect data. This option is best for mid- to large-size organizations.
- Consultants. Consider bringing in a consultant who specializes in prospect research, and make sure to be strategic about what goals you’re trying to accomplish. You’ll want to choose someone with plenty of prior work experience and samples from organizations similar to your own.
- Screening services. A prospect screening service is the best way to sift through large amounts of data for easy analysis. Prospect screening services can help you find major gift prospects, and many companies offer integrations with other software you’re already using to ensure your prospect data is accessible exactly where you need it.
No matter which option you choose, you’ll have access to valuable data that can identify high-impact donors.
How can prospect research boost my fundraising?
The most effective fundraising is driven by a strong base of donor data. Prospect research enables you to make smarter decisions about your campaigns so you can make the most of the funds you allocate to fundraising.
Specifically, prospect research can help your organization:
- Identify prospects
- Optimize fundraising strategies and set realistic goals
- Identify corporate giving opportunities to maximize revenue
- Develop donor segments and conduct targeted outreach
- Edit and update existing donor data
- Efficiently use fundraising resources and reduce costs
Each of these benefits can amplify the impact of your fundraising efforts. Next, we’ll break down a few specific use cases to explore how prospect research can make an impact on different types of organizations.
If you’re a fundraising specialist, event coordinator, or major gifts coordinator at a nonprofit organization, prospect screening can save you and your team precious time.
Prospect research can help your organization find new prospects or donors already in your system who may have a larger capacity to give. By focusing your efforts only on prospects with the highest potential impact, you can optimize your outreach.
Additionally, with access to more information about prospects’ backgrounds and histories, you’ll be better equipped to maximize revenue from corporate giving programs. Identifying donors who are eligible for matching gifts from their employers will ensure your organization doesn’t miss out on free money.
If you’re employed in a development office at a higher-education institution, you have a huge pool of alumni to analyze as potential donors.
According to DonorSearch’s guide to alumni giving, it’s becoming increasingly important to identify and secure high-impact donors. Prospect research can help you determine which alumni have the strongest affiliation with your institution and a significant capacity to give, allowing you to optimize your outreach.
Research can help you segment these alumni into smaller groups to create more targeted asks and cultivate stronger relationships. You can also use the information you learn to set realistic fundraising goals for campaigns like a dedicated Giving Day.
Making data-driven decisions with prospect research
Investing in prospect research is a useful and remote-friendly tactic to support your organization’s fundraising efforts. Regardless of the method you choose to investigate prospective donors, the wealth and philanthropic information you discover will help you make data-driven decisions to put your organization on the most efficient track to success.