Your Prospect Research Playbook for Deep Donor Relationships
Know more, raise more—it’s the essential philosophy that grounds all nonprofits. The more you know about your donors, the more meaningful relationships you can build with them. As a result, you’ll raise more support for your cause.
How can your nonprofit learn more about its existing supporters? Better yet, how can you identify potential donors who have yet to engage with your organization? Enter prospect research: the key to growing the number and depth of your donor relationships. This guide covers everything you need to know to get started:
- What Is Prospect Research?
- Prospect Research Indicators To Look For
- How To Conduct Prospect Research In 6 Steps
While this guide is a great starting point, talking to a prospect research expert can help your nonprofit access a more personalized approach. We’ll discuss more about what working with an expert looks like as we dive in.
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What Is Prospect Research?
Prospect research is the process of gathering and analyzing information about potential major donors to understand their ability to give and cultivate strong relationships with them. This method, also called donor prospecting or donor research, enables nonprofits to learn about individuals within and beyond their donor pools.
Whether your nonprofit is researching donors for the first time or revamping its existing approach, reviewing the basics is essential to an informed approach. Let’s answer some commonly asked questions about prospect research.
Who Uses Prospect Research?
From faith-based nonprofits to schools to healthcare organizations, numerous types of nonprofits can leverage donor prospecting. This process is beneficial to various organizations because of its widespread fundraising capabilities, helping you secure:
- Major gifts. 88% of a nonprofit’s revenue comes from the top 12% of its donors. In other words, the largest individual contributions your nonprofit receives are responsible for funding your mission-critical activities. Prospect research equips nonprofits with the data needed to identify potential major donors, cultivate relationships with them, and secure high-impact gifts.
- Planned gifts. Thorough research helps nonprofits identify donors who are viable candidates for various types of planned giving, such as bequests or charitable gift annuities. This involves considering factors such as a donor’s age, wealth, and philanthropic activity.
- Capital campaign contributions. Donor prospecting lays the foundation to reach specific fundraising goals, such as raising enough building capital by a predetermined deadline. Thorough research reveals individuals with both the ability and willingness to fund a specific project, helping you reach your capital campaign goals.
- Corporate gifts. Donor research can highlight opportunities to give through an individual’s employer, such as matching gifts or volunteer grants. Employment data signals a prospective donor’s eligibility for these programs, while other markers indicate the donor’s willingness to participate.
Prospect research can also support industry-specific fundraising efforts depending on your nonprofit's vertical. For example, healthcare organizations can use it to identify former or current patients willing to participate in a grateful patient program. Colleges and universities could use it to maximize alumni giving by segmenting potential donors who have already graduated.
Why Does Donor Research Matter?
Prospect research is often defined in the context of enriching major gift fundraising strategies. However, learning more about your supporters yields numerous other benefits, helping you:
- Fill gaps in your donor data. Seeking additional information about your nonprofit’s donors allows you to uncover new details that could otherwise go unnoticed. For example, perhaps you already know a donor’s philanthropic affiliations and employment history. Learning more personal details, such as a family member’s passing, provides a better understanding of the individual’s behaviors and motivations.
- Deepen donor relationships. A holistic view of existing and potential supporters is critical to connecting with them personally. For instance, a representative from your organization might offer condolences to a donor who recently lost a family member. This touchpoint can serve as the gateway to a long-lasting relationship between your nonprofit and the individual or their family.
- Grow your base of support. Thorough research allows your nonprofit to build upon its existing network of supporters and reach new donors. This means connecting with individuals, corporations, and even other nonprofits that can catapult your fundraising efforts in numerous ways.
- Identify giving patterns. Comprehensive data collected over time reveals trends in donors’ giving behaviors, which your nonprofit can use to optimize its fundraising efforts. Evaluate the timing of donors’ gifts, their motivations, and other factors influencing their decision to support your organization.
Ultimately, prospect research is about more than securing major gifts—it’s about cultivating genuine relationships with the community that powers your nonprofit.
What’s The Difference Between Prospect Research and Wealth Screening?
Wealth screening is a commonly used method for identifying potential major donors that involves analyzing donors’ wealth markers to determine their giving capacity. It can be thought of as one component of prospect research rather than a different technique altogether.
Unfortunately, many nonprofits stop here in the research process, neglecting to analyze other critical information that impacts an individual’s decision to give. In reality, there are numerous indicators, or markers, beyond wealth that you should consider during donor prospecting.
Prospect Research Indicators To Look For
Viable prospects exhibit three main indicators that prospect researchers should look for:
- Philanthropic activity. Philanthropic activity can signal an individual’s inclination to give. This might include previous donations to your nonprofit or other like-minded organizations. For example, a donor who contributes to the National Humane Society may also want to support your local animal shelter.
- Affinity. Individuals who resonate with your nonprofit’s mission are more likely to support your work because they have an affinity for your cause. Affinity markers include personal details, like demographic data, and other types of involvement with similar causes.
- Capacity or wealth. Wealth markers, such as real estate ownership, business affiliations, and other assets, indicate an individual’s capacity to give. Understanding a donor’s financial position can help you not only identify high-impact prospects but also ask for the right amount when it’s time to solicit their support.
To identify these markers, nonprofits should follow a structured donor research process. Establishing consistency in your research ensures the greatest understanding of prospects and continuous updates on their status.
How To Conduct Prospect Research In 6 Steps
Ready to start researching existing and prospective donors? Here are the six steps your nonprofit should follow.
1. Prepare A Research Strategy
First, establish clear objectives for your research. Do you want to identify potential major donors among your existing donor base? Or, are you looking to join forces with new major or planned giving donors? Perhaps you want a broader approach that accomplishes both!
Outline your goals according to their urgency. For example, you may need to acquire major gifts quickly for a capital campaign with an upcoming deadline. Stewarding mid-level donors to upgrade their giving is a more time-intensive process, meaning it could be a long-term goal for your research after securing capital campaign gifts.
Then, decide which tools you’ll use to pursue these goals. There are various research tools available to help you learn more about prospects, such as:
- News alert service. Automatically receive current and historical donor information from news sources through a news alert service. For example, Insightful Philanthropy is powered by over 14,000 news sources from 200 countries. Our platform delivers real-time major donor intelligence not found in search engines or databases, allowing nonprofits to access donor information from often overlooked sources.
- Nonprofit CRM. Your nonprofit’s CRM, or donor database, stores all information about your donors. From contact details to giving histories, this system is necessary for tracking each interaction with existing donors and planning your next move.
- Matching gift database. Determine which donors are eligible for corporate donations through a matching gift database. This software can help you target opportunities for additional revenue and identify prospective donors by exploring your current supporters’ professional connections.
Review the top prospect research tools to determine which solutions will be the most effective for your goals. Different tools serve different purposes, so consider investing in a variety of solutions for the most comprehensive view of your prospects.
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2. Clean Your Database
Nonprofits must have accurate and well-organized data to extract meaningful insights from donor research. Implement these data hygiene best practices before starting your research:
- Audit your current database. Evaluate your existing donor database to identify errors or missing information. This might include duplicate entries, typos, and outdated donor details.
- Identify and fill any gaps. Highlight any missing data, like contact information or employment details. Also, identify missing data you’ll seek according to your research goals, such as wealth indicators or philanthropic activity outside of your nonprofit.
- Create uniform data standards. Establish rules for updating current records and adding new ones. This typically refers to formatting standards, such as using “Dr.” instead of “Doctor.”
Communicate any data standards established during this step to your entire team. This ensures everyone using your database has the same expectations for handling donor data and minimizes the corrections you’ll have to make later.
3. Research And Validate Your Findings
The preparation is over! With the right tools at your disposal and a clean database, your nonprofit is ready to start researching donors.
Use the tools you’ve invested in to start gathering donor information and identifying trends. Keep your data standards in mind when inputting new information into your database, and verify any findings by checking various sources.
As you collect data, organize it into prospect profiles, highlighting key details that will impact your approach when reaching out to them. This could include:
- Demographic data, such as age or employment information
- Financial indicators, like net worth, political contributions, and SEC transactions
- Interests, including any hobbies or affiliations that align with your mission
Remember that you’ll need to analyze donor data on an ongoing basis after the initial research process. Leverage prospecting tools with automation to continue monitoring data in the background of your other activities. This way, your technology can do the heavy lifting for you and notify you once new information is available.
4. Create A Solicitation Plan
After identifying viable prospects, decide how you’ll reach out to them. Many nonprofits develop a stewardship matrix to determine how they’ll cultivate relationships with all levels of donors, and this step can take a similar approach.
Regardless of how you approach the planning process, your plan should include:
- Prospect segments. Group prospects according to shared characteristics. For example, prospects who are business owners might have an affinity for a nonprofit’s mission to make professional development opportunities available to underprivileged community members.
- The purpose of your outreach. Not every interaction with prospects should be a request for a donation. Plan different outreach goals, such as inviting them to connect or recognizing previous gifts.
- The method. Determine what action you’ll take to achieve your outreach goals. For instance, the nonprofit in the above example might invite business owners to lead a professional development course.
While this plan is a solid starting point, the best way to genuinely connect with prospects is through personalization. Use what you know about each individual from your donor research to craft unique messaging that resonates with their interests and motivations.
5. Build And Strengthen Donor Relationships
Start reaching out to prospects to put your plan into action. Keep in mind that relationship-building is a continuous process—you won’t secure a major gift or a prospect’s loyalty overnight.
Take your time, relying on insights from donor prospecting and what you learn through cultivation to personalize your outreach and develop authentic relationships with each prospect. Track all of your interactions and make adjustments as necessary, such as reaching out via a different communication channel or using a prospect’s preferred name instead of their legal name.
Remember that relationships are a two-way street! Rather than solely focusing on learning about prospects, encourage them to learn about your nonprofit, too. Provide regular updates on your organization’s activities and the impact of donors’ contributions. Then, when the time is right, you’ll be ready to ask for a donation—and prospects will be ready to give.
6. Establish A System For Continuous Monitoring
Think about donor prospecting like a long-term friendship. A pair of friends will watch one another go through various changes as years go by, asking questions and learning about each other along the way.
Similarly, prospect research isn’t a one-and-done process. Over time, your prospects will change jobs, move to new cities, and experience other life-changing events that influence their connections to your organization. As a result, they may donate one year and not the next or attend some events and miss others.
Your nonprofit should be in it for the long haul, meaning you must continue researching existing and prospective donors on an ongoing basis. Dedicate this role to one or more individuals on your team to ensure someone is constantly monitoring your donor data.
Expert Insight: Tap Into Donor News For Fruitful Prospect Research
Prospect research is the pathway to deeper, transformative donor relationships. An attentive and intentional approach yields the best results, which is why nonprofits need a solution that conducts searches for them. By automating the research process, your team can focus on cultivating relationships with prospects.
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