Here are the top seven reasons your organization should place an added emphasis on prospect research:
Refine major gift prospect outreachThe biggest cost to a fundraising campaign is not software, travel reservations, or event planning – it is staff time. Every minute your staff spends on a low quality prospect is a wasted fundraising opportunity. Prospect screening can help your development team identify which donors to focus on based on if they have given charitably in the past and have the capacity to make a major gift in the future. Additionally, understanding the specifics of a donor’s financial situation can enable you to refine the suggested gift amount to ensure it is both appropriate and capitalizes on a donor’s capacity to give.
Convert annual fund donors to major gift prospectsProspect screening can reveal which of your annual fund donors have the capacity to make a major gift. For example, let’s say you have a donor that has made multiple $100-$500 gifts over the course of their lifetime – clearly this individual has an affinity for your cause and loyalty to your organization, but that is all you know! Through prospect research, you identify an additional $5000 gift that they had made to another nonprofit organization – revealing their potential as a major gift donor vs. just an annual fund donor. For more on annual giving, check out our list of annual fund strategies. By identifying which of your loyal donors have made a major gift elsewhere, you can find new major gift prospects within your existing donor population.
Identify planned or deferred giving prospectsBequests are a donation type that continues to grow in importance for nonprofit organizations – according to an analysis by the U.S. Treasury, charitable bequests exceeded donors’ total lifetime charitable giving by 2.74 times. Unfortunately, many organizations struggle to identify donors who are strong candidates for this type of giving. As a result, they lose out on opportunities to counsel current donors about making bequests or deferred gifts. Prospect research can help your organization analyze charitable giving and wealth data to identify planned giving prospects within your list of existing donors. What’s more, DonorSearch has developed a proprietary planned giving prospect identification tool that uses modeling and analytics to determine which of your current donors have the highest likelihood of making a legacy gift to your organization.
Generate new prospectsWe understand that fundraising is more than just finding donations within your existing donor population – it means identifying new donors and educating them about your organization, its mission, and how they can help. Prospect research can reveal what corporate boards or charitable foundations your donors are involved with – opening the door to new relationships that your current donors can help facilitate. Another place to find donors is on the annual giving reports of other nonprofit organizations with similar missions or causes. DonorSearch created a prospect generator tool which allows nonprofits to browse the DonorSearch charitable giving database for annual reports by organization, location, and gift amount to help identify new prospects who already have an affinity for their cause or a history of charitable gifts.
Analyze donor giving patternsA donor’s historical giving data can tell a story of the causes they, their spouses, and their foundations have made charitable donations to over a lifetime of giving. By conducting a gift search on one of your existing donors, you can see what types of causes they support and analyze giving patterns. To this end, DonorSearch has designed a gift search function within our online tool that allows users to filter charitable gift amounts within our philanthropy database by year, amount, state, and other criteria.
Optimize ongoing fundraising opportunitiesThere are some nonprofits that have an ongoing cycle of new potential donors through the services they provide. Prospect screening can provide crucial information about these potential donors such as their charitable giving histories, financial indicators, or nonprofit involvement. This information will enable your development staff to prioritize which high potential donors to focus on. Here are two examples of how you can put prospect research into practice:
- K-12 schools/ colleges and universities – Implement screening for an incoming class of students, new parent events, or at alumni events.
- Healthcare organizations – Screen new patients on a daily, weekly, or monthly basis to identify patients that can make a significant impact on your organization.
Fill in gaps in your donor dataAre you missing key pieces of information about your donor population such as:
- Full name
- Spousal data
- Date of birth
- Email address
- Telephone number