Prospect research is one of the most valuable techniques in a nonprofit’s fundraising toolkit. To execute successfully, nonprofits need a solid foundation of knowledge to plan effectively, evaluate their options, and act decisively.

That’s why we created this guide – to empower nonprofits with the information necessary to successfully integrate prospect screening into their fundraising campaigns.

WHAT IS PROSPECT RESEARCH?

What is prospect research?

Prospect research is a technique used by fundraisers, development teams, and nonprofit organizations to learn more about their donors’ personal backgrounds, past giving histories, wealth indicators, and philanthropic motivations to evaluate a prospect’s ability to give (capacity) and warmth (affinity) toward an organization.

This guide has been divided into four parts. Click on any of the arrows below to jump ahead to a particular section. 

Understanding the Basics

Choosing an Approach to Prospect Research

Getting Started with a Screening

Refining Your Efforts

Understanding The Basics

WHAT ARE THE TYPES OF INFORMATION INCLUDED IN PROSPECT RESEARCH?

Philanthropic Indicators

Previous Donations to Your Nonprofit

As past giving has been proven to be one of the greatest indicators of a prospect’s willingness to donate in the future, previous donations to your nonprofit should be included as a part of a thorough profile.

Donations to Other Nonprofits

If a donor has given to other nonprofits in the past, it’s a solid indication of charitable habits. Prospect research profiles should incorporate information based on other nonprofits’ annual reports and recognition documents.

Nonprofit Involvement

Nonprofit involvement indicates that a prospect values and understands the importance of philanthropy. Foundation trustees, board members, volunteers, and advocates comprise likely future donors.

Personal Information

Beyond basic information, personal information around hobbies, interests, and habits that can be gleaned from public social media profiles can be extremely useful in determining prime prospects based on philanthropic interests.

Wealth Markers

Real Estate Ownership

As a marker, real estate ownership helps both determine wealth and predict a likelihood of future giving. Individuals who own real estate valued at $2+ million are 17 times more likely to give philanthropically than the average person.

SEC Transactions

Stock holdings at publicly traded companies are reported to the SEC and accessible through SEC.gov. They provide an informative window into a donor’s finances but need to be considered in conjunction with philanthropic markers.

Business Affiliations

Business affiliations account for a broader area of fundraising research than other markers. In terms of wealth, this research encompasses information on a donor’s career and, by extension, estimated financial situation.

Political Giving

Someone who has donated large sums of money to political campaigns has the financial capacity to donate a major gift. Plus, donors that have given $2,500+ are 14 times more likely to make a charitable donation than the average person.

WHAT IS WEALTH SCREENING?

What is wealth screening as it relates to prospect research?

Wealth screening is a part of the prospect research process.

The screenings analyze wealth markers such as real estate ownership, business affiliations, stock holdings, and more to determine a donor’s financial giving capacity. As such, this type of fundraising research is particularly helpful when a nonprofit is seeking new major gift prospects.

Comparing Prospect Research and Wealth Screening

What are the similarities?

Wealth screening is a necessary step in the prospect research process. Philanthropic indicators and wealth markers are two halves of the whole that is prospect research. Both provide valuable predictive insight.

What are the differences?

The difference lies in the big picture. Just because a donor has the capacity or wealth to donate to charity, it does not mean that they will possess the willingness or affinity for giving that philanthropic tendencies indicate.

Which is more effective?

Complete prospect research does provide a more accurate assessment of potential donors. Without philanthropic information, there’s no assurance that a donor who has the capacity to give would be willing to do so.

WHAT TYPES OF NONPROFITS CONDUCT PROSPECT RESEARCH?

Prospect research can be used by a variety of fundraising organizations to improve their fundraising efforts. Below, you’ll find a selection of the entities that take advantage of prospect research and descriptions of how each utilizes the data from the screenings.

K-12 Schools

Parents should be screened, especially at key times, such as the beginning of the school year, around graduation, and in between semesters.

Higher Education

Prospect research assists universities in the segmenting of their massive pools of alumni into potential giving groups, such as major gifts.

Greek Organizations (Sororities/Fraternities)

With a deep reserve of alumni who want to give back, greek organizations are ideal candidates for bulk screening services.

Healthcare Organizations

Because there’s such a high turnover rate within healthcare institutions, it’s important to conduct prospect research early and often to grow grateful patient programs.

Community Foundations

With a potential donor base as broad as ‘anyone within the community,’ prospect research helps community foundations narrow down the list.

Advocacy and Social Service

Their large volunteer pools and event attendee lists mean there are always new prospects to screen and analyze for future giving potential.

Arts and Culture

Screening event attendees and membership holders can mean the difference between a one-time concert-goer and a major gift supporter.

Environmental Groups

With a calendar full of events and volunteer activities, they should be screen attendees beforehand for more targeted cultivation.

Faith-Based Organizations

Churches, mosques, and synagogues  can pinpoint the people in attendance at services who are likely to be major gift donors.

Choosing an Approach to Prospect Research

Screening Companies

Screening companies can compare thousands of donors against various major databases and help you rank your prospects according to potential.

Consultants

Instead of hiring a full-time prospect researcher or having an existing staff member take on the responsibilities, you can bring in consultants to take the lead with your screenings.

DIY

If your budget is tight and your nonprofit is in its earlier stages, the best approach might be to have an existing team member take the lead and research donors ad hoc.

In-House

Larger fundraising institutions, like universities, will often have whole teams of prospect researchers in place to handle the research of their ever-changing and growing donor pools.

Screening Companies

 

If you’re considering going the route of screening companies, it’s important to first ask yourself these crucial questions.

Are you looking for major gift prospects?

If, indeed, you are actively seeking out major gift donors, then prospect screening is a great fit. A screening can tell you not only who among your donors would be an ideal candidate but also how much you can reasonably ask for in your solicitation.

Do you have a large number of records in your database?

If you have a large number of records in your database, then a bulk screening could potentially help you sort through the masses of information. Bulk screenings sift out only the most pertinent and useful donor data and serve it up in a nice, neat package.

Do you regularly have new prospects?

Many organizations encounter the fortunate issue of bringing in a number of new members and donors on an annual basis. Prospect screening services can help you to keep track of, sort, and assess all of the new prospects in your donor pool.

Do you have a system in place to handle a lot of donor data?

With diligent prospect research comes a substantial amount of donor data. While data is wonderful and infinitely useful, it can also get overwhelming. If you’re considering using a screening service, you’ll want to make sure that you have ample room within your database to accommodate the influx of helpful info.

Consultants

If you’re considering going the route of prospect research consultants, it’s important to first ask yourself these crucial questions.

What are you looking to gain with prospect research?

What are you looking to gain?

Consultants can be a fruitful addition to your existing team, but you have to be strategic about who you hire.

And your first question should be, “What are we looking to gain?” In other words: “What kind of research do we need, and what do we need it to yield?”

Once you have an answer to that question, whether it’s identifying X amount of major gift prospects in a certain region or creating a short list of top prospects, you’ll be in a better place to make a decision on which consultants you choose to go with.

Additionally, knowing what you’re looking for from a consultant will help them succeed in the long run because you’ll be able to provide them with guidance and direction.

What kind of access do you have to prospect research consultants?

What kind of access do you have to them?

From a logistical standpoint, you need to consider what sort of access you’ll have to your consultant(s).

  • Will they be working remotely?
  • Will they work from your office?
  • Are they nearby?
  • Will they be available full-time?

Every consulting firm isn’t right for every nonprofit.

Consider the level of assistance and support your team will need and recruit accordingly.

Do the prospect research consultants have samples of their work?

Do they have samples of their work?

As you make your decision, review samples of the types of profiles your consultants put together. Most have a few examples of the various donor profile options they offer.

Not only will this preview give you a sense of the options you’ll have, but it will also provide an example of the quality of their work.

You should have a good sense of what their finished products will look like before bringing them on to help.

Learn more from the consultants themselves.

There are numerous top-notch prospect research consultants to choose from. Read more about a few of them by clicking the buttons below.

DIY: Do It Yourself

If you’re considering a DIY approach to screening, it’s important to first ask yourself these crucial questions.

When is DIY the right approach?

This won’t be a solution on a grand scale, but it’s a means to begin prospect researching at your organization so that you can seek major gifts and grow on the whole.

Where can I find training?

There are plenty of great resources available through popular prospect research channels. From prospect research flash classes to webinars, there’s no shortage of information available.

What are the top DIY practices?

DIY prospect research usually involves a member of the development team sitting down with a list of your very top prospects and performing online research through sites like Google and LinkedIn.

In-House Research Teams

If you’re considering an in-house approach to screening, it’s important to first ask yourself these crucial questions.

What is in-house research?

In-house research refers to screenings performed by prospect researchers who are part of your organization’s staff.

This encompasses mid-size organizations with 1-2 researchers all the way up to the largest universities you can think of with 20+ researchers working in advancement. Your researchers will coordinate their efforts with frontline fundraisers and other development staff.

What should you look for in a prospect researcher?

Prospect research is a challenging role that requires a combination of both extensive fundraising experience and know-how and a naturally inquisitive and investigative disposition.

Researchers take masses of raw data and turn it into usable, digestible information. Look for candidates with analytical minds who understand the minutiae of databases and know how to synthesize data.

Getting Started with a Screening

The Process Behind Prospect Research

1. Create a plan of attack.

Once the data is in your hands, it’ll be tempting to dive into the results first and ask questions later. To ensure that your team is taking the most responsible and reasonable approach possible, it’s best to plan out exactly how you’ll be handling the process prior to beginning.

Ask yourself:

  • What are our fundraising goals?
  • What high-level fundraising approaches will we implement with our data?
  • Who will manage our prospect screening process and incorporate it into our overall fundraising strategy?

With answers to those questions, you’ll have a clear sense of the best path forward. Your plan should include:

  • Setting screening goals (such as how many new major gift prospect profiles you’ll want to add).
  • A timeline for the project.
  • Instructions on departmental responsibilities.

The better your planning is, the better you’ll be able to utilize your results.

2. Clean up your data.

Cleaning up data before you conduct fundraising research is essential to receiving the most accurate and helpful results.

Database areas to focus on include:

  • Donor contact information.
  • Important internal giving data.
  • Existing relationship data.
  • And more.

How extensively you clean up your data depends on the state of your existing information. Your data doesn’t need to be perfect; it just needs to provide enough information to reap usable results.

3. Validate results.

Once your results are in, you’ll want to validate them. You need to ensure that they’re accurate and make the most logical sense.

For instance, if a donor has a common name, the research might have pulled data for someone else who shares that name. Or, you might not have the most up-to-date real estate records on a prospect.

If you take the time when your results first come in to ensure their accuracy, you’ll have to spend less time on the other end accounting for misinformation.

Prospect research is an immensely useful tool, but only when it’s done correctly. Whether your in-house team put together your profiles or a screening company did a bulk screening of your donor list, you’ll want to validate the results.

4. Analyze your prospect research results.

Your screening results will provide a wealth of useful information. The best step you can take once you have this data at your fingertips is to analyze it.

Part of the analysis process is devising a system to rank your prospects and sift out the candidates who would be most likely to contribute the most.

Obviously, this analysis provides a way for your organization to decide precisely who it is that you want to target for cultivation and solicitation.

5. Make a solicitation plan.

Planning for the big ask is a crucial step in any fundraising research process you go through. You have the necessary and pertinent information gathered together, sorted, and properly ranked.

Now is the time to take those different segmentations into account and craft appropriate strategies for soliciting donations based on what you know.

6. Solicit donors.

Now that you’ve done your homework and plotted a course, it’s time to get to asking!

Take everything you’ve learned and let it inform your work. After research, you should have a better sense of:

  • How much you should ask for.
  • What communication channels a donor prefers.
  • What your donor connects with at your organization.
  • And more!

You’ve spent considerable time building out your donor profiles, so you should use them! And, continue to make additions.

Especially as you cultivate major donors, keep track of your efforts in your database so that your team can make adjustments.

7. Make improvements.

After you’ve gone through all of the steps of researching, cultivating, and soliciting, it’s time to take a step back and assess.

No process is streamlined during the first pass. And that’s perfectly okay. As with any other effort your nonprofit makes, getting the hang of prospect research will involve a learning curve.

Improving your technique will take time, but in the end, the efforts you expend to refine your process will be well worth it.

Prospect Research Tools

This list of prospect research tools can help you get started with preliminary fundraising research. These key pieces of the puzzle can help you to assemble a meaningful picture of your prospects as individuals, volunteers, donors, and so much more.

Government-Related

SEC

Using SEC.gov’s free search tool, you can uncover records of corporate filings and learn about a prospect’s stock ownership.

FEC

The FEC.gov site offers free access to comprehensive data on political contributions.

County Tax Assessor's Site

These sites allow you to search for the real estate records of donors and learn property values.

Social Connections

Facebook

Facebook provides key information about hobbies, interests, and other vital personal facts about donors.

LinkedIn

This social media site allows your nonprofit to see relevant professional relationships and history all in one place.

Google

Don’t overlook the value in a quick Google search to reveal key details about a person.

DonorSearch Resources

DonorSearch's Blog

Our blog features a variety of educational articles on topics including prospect research, major giving, capital campaigns, and more.

DS Giving Search

DS Giving Search is a free, online prospect research tool that gives its users access to a condensed version of DonorSearch’s philanthropic data.

Charitable Giving Database

Our charitable giving database is one of the largest and fastest growing collections of philanthropic data in the country.

Benefits of Prospect Research

Creating New Opportunities

Generates New Prospects

Funding your endeavors means more than just pooling resources from your existing donor base.

A large part of fundraising as a whole relies on researching new potential donors from outside of your current network, aiding with new donor acquisition.

Prospect research not only helps nonprofits identify who among their existing contributors would be most likely to give, it also provides the opportunity for pinpointing new possibilities.

Fills in Gaps in Donor Data

Donors move, get married, and change their phone numbers (not necessarily in that order). For any number of reasons, the data that you have may be inaccurate or not up-to-date.

Perhaps you only captured a name and email address and are looking to make a personal call to appeal to a potential major gift donor.

Prospect research can help you fill in those gaps through data appending.

Refines Major Gift Outreach

It’s no secret that prospect research and major gifts go hand-in-hand.

The benefit of prospect research is that it allows your organization to save time and therefore money by steering your efforts away from prospects who are unlikely to give.

Conducting this level of research also allows your organization to make an educated decision with regard to the amount you’ll be asking for.

Optimizes Ongoing Fundraising Activities

For some organizations, like schools and hospitals, there is a high rate of turnover that occurs naturally. This also means that there is new data to be mined at any given point.

Prospect screenings provide valuable and immediate insight into the vast number of patients, parents, and alumni who filter through your organization.

With prospect research tools at your disposal, you can conduct screenings as often or as seldom as makes sense for your nonprofit.

Improving Existing Relationships

Converts Annual Fund Donors to Major Gift Prospects

Prospect screening has the potential to reveal who of your annual fund donors has the capacity to contribute a major gift.

Look for candidates who:

  • Possess wealth markers that indicate they have the financial capacity to make a larger donation.
  • Have given large gifts to other organizations.

For instance, through your research, you could learn that one of your annual fund donors has given $10,000 to another charity. With that knowledge, your frontline fundraisers can pursue upgrade opportunities with that prospect.

By focusing the research microscope inwards, you can end up finding major gift prospects right under your nose.

Analyzes Donor Giving Patterns

Through analysis of historical giving data, you can ascertain much about a donor’s preferences and past philanthropic behavior.

A search of past gifts can tell you both the donor’s average gift amount and the types of causes and organizations they’re inclined to support.

By studying these patterns, you’ll have a clearer sense of their future giving trajectory.

Identifies Planned or Deferred Giving Prospects

Historical giving data combined with wealth indicators can predict which donors may be good candidates for planned giving.

Many organizations don’t actively seek planned gifts because they have trouble identifying the top prospects. With the support of prospect research, though, an organization can confidently move forward in the search.

When it comes to planned giving, it’s crucial to focus first on philanthropy and a donor’s ties to your organization and then widen your prospect analysis to include wealth markers.

Planned gifts are legacy gifts, and donors leave legacy gifts with the organizations that they hold nearest and dearest to their hearts. Philanthropic indicators, therefore, should lead your search.

Refining Your Efforts

How to choose what prospects to screen?

 

Largest Gift Size

Another way you can refocus your efforts to maximize your return on investment is by segmenting your donors by historical gift size.

Practically speaking, this means setting your sights and conducting screenings on donors who have already given large amounts in the past.

It may seem counterintuitive, but the research bears out that even major gift donors who have given once are likelier to give in the future than anyone else.

High Loyalty

In addition to large gifts being a positive sign of donor affinity, the frequency and recency with which a donor has given is a fantastic predictor of their warmth toward your organization.

Whittle down your donor lists for screening by narrowing your focus to include only donors who have given frequently over time.

You may also want to look into screening donors who have given generously and often to other similar nonprofits. Perhaps their loyalty lies with a certain cause and not just that particular organization–you won’t know unless you do your homework!

Event-Specific

You can either choose to screen your event attendees before or after a major fundraising event, such as a gala or a donor dinner.

The advantage to screening before lies in the fact that you can use your findings to target specific attendees over others.

Alternatively, you can conduct a screening after an event has occurred to inform your cultivation and stewardship strategies moving forward.

What Factors Best Predict Future Giving?

 

The Factors That Best Predict Future Giving

Past Giving to Your Organization

As we’ve said before, past giving is the greatest indicator of future giving. And the data bears that claim out. A donor who has made a gift of $100k+ to a nonprofit organization is 32 times as likely to donate charitably as an average person is.

If you’re looking to quantify past giving, look no further than an RFM score.

An RFM score factors in three pieces of data:

  • Recency of giving: How recently has an individual made a charitable donation?
  • Frequency of giving: How often has an individual donated? (i.e., weekly, monthly, annually)
  • Monetary contribution: How much has an individual given?

Past Charitable Giving to Other Organizations

Behind past giving to your organization, prior giving to other nonprofits is a close second in terms of predictive behavior.

Someone who has given between $5k and $10k to a nonprofit is 5 times more likely to make a charitable donation elsewhere!

Those that have strong philanthropic histories with other causes have proven that they both see the value in supporting causes and missions that they care about and are willing to demonstrate that support fiscally.

Participation in a Charitable Foundation

Those who participate in charitable foundations understand nonprofits and the work that goes into fundraising. Simply put, they get it! The proof is in the data.

Through analysis of charitable giving to over 400 nonprofits, we’ve come to the conclusion that participation in a charitable foundation as a trustee or nonprofit director is an incredibly powerful predictor of future giving — so much so that it’s more predictive than any wealth indicators.

Cultivation is far easier when the person you’re cultivating is already “in-the-know.”

Political Giving

A single lifetime FEC gift of $250 puts your constituent into the top 6% of the US population.

What’s more, a single lifetime FEC gift of $1,000 puts your constituent into the top one tenth of one percent.

The data around political giving as it’s linked to donating to nonprofits is astounding and overwhelmingly positive.

If you think about it, it makes sense. People who contribute to political campaigns do so because they’re passionate about a cause. This same fervor lends itself well to major giving to your nonprofit.

Real Estate Ownership

Believe it or not, real estate ownership doubles as both a wealth marker and a philanthropic indicator. Why is that, though?

Research has shown that an individual that owns $2+ million worth of real estate is 17 times more likely to give philanthropically than the average person.

Much like political giving, substantial real estate ownership shows that a donor has not only the capacity to give but also the affinity to do so.

What areas of fundraising can prospect research help?

 

Major Gifts

When seeking major gifts, it’s vital to include prospect research as one of the steps you take in the identification phase. With the help of prospect research, it becomes far easier and less overwhelming to try to pinpoint potential major gift donors.

Capital Campaigns

A huge factor in the success of your capital campaign will come down to how well you handle the quiet phase; or, rather, how well you’re able to acquire major gifts before the campaign goes public. Prospect research will point you in the direction of the best candidates for major giving.

Planned Giving

Planned giving prospects are often viewed as difficult to identify. Although they share some traits with major gift prospects, their markers are not as universally known. Prospect research will highlight the key traits you need to know to locate planned giving prospects.

Annual Giving

Many of your best candidates for major and planned giving are already part of your donor pool as annual fund donors. Prospect research takes your existing donor list and highlights the top prospects among it so that your frontline fundraisers can begin the cultivation process.

Alumni Giving

Like hospitals with grateful patient programs, schools (both K-12 and universities) have a high turnover rate, but theirs is because of the natural progression of students. Parents of new students and graduates themselves should be screened yearly to evaluate giving potential.

We hope you liked this guide and learned something new. Please enjoy exploring our other prospect research resources.