Prospect research and annual giving go together like peanut butter and jelly, like Simon and Garfunkel, like Turner and Hooch.
What I mean to say is that prospect research and annual giving are a great pair, and prospect research should certainly be used to assist your annual giving campaigns.
To best explain how the two fundraising components fit together, we’ve provided detailed answers to the 4 most common questions regarding the relationship between prospect research and annual giving.
Question 1) Why is annual giving so important in the first place?
I won’t mention any names here, but in case the definition of annual giving has slipped your mind, let’s refresh everyone’s memory.
Annual giving campaigns focus on donor acquisition and retention, with the goal of keeping the gifts coming and steadily increasing in value.
As an added bonus, annual gifts are usually unrestricted, meaning that your nonprofit can use them for whatever it needs.
The importance of annual giving cannot be oversold, because it:
- forms the foundation of nonprofits’ support bases
- is critical in the process of donor acquisition
- aids in identifying opportunities for repeat giving and gift upgrades
- helps nonprofits stay connected with donors
Annual giving leads to major gifts and planned gifts.
An organization without an annual giving program is like a building that’s missing its first flight of stairs. The upper floors might be design magazine worthy, but without a proper point of access, who can get up there?
Question 2) How can prospect research help?
Annual giving is sounding pretty great right about now, so why don’t we bring prospect research into the discussion?
Prospect research can help your annual giving campaign in numerous ways, such as identifying:
a. New Major Gift Prospects —
Prospect Screening will comb through current donors to see who might be able to step up to a major giving level.
Annual fund donors are great candidates for major gifts because they have already demonstrated a vested interest in your organization.
Prospect screening will reveal who of your annual fund donors has the capacity to give more based on an investigation of the screened supporters’ wealth markers, like real estate.
A screening can also determine your annual givers who have contributed major gifts to other charities.
If those donors have a connection to your cause as evidenced by their annual giving and a clear willingness to give major gifts as evidenced by their giving to other causes, they are prime candidates for your own program.
b. New Planned Giving Prospects —
Planned gifts can be an incredibly lucrative source of funding for nonprofits.
There is a big problem with planned gifts though. They can be very unpredictable. It is difficult for nonprofits to find planned gift prospects to cultivate.
Prospect research will find loyal annual fund contributors who fit the profile of someone who could become a planned giving donor.
78% of planned giving donors gave 15 or more gifts to the nonprofits named in their wills during their lifetimes. With a percentage that high, there is a great chance your annual fund donor list has potential planned donors in it.
Let prospect research uncover those funders.
c. Other Prospects Who May Be Interested in Your Mission —
We can’t forget that prospect research is a great tool for donor acquisition. Learning as much as you can about prospects is crucial to successful relationship building.
Just like prospect research can help your nonprofit single out donors to make the jump from annual giving to major gifts, it can also find prospects to make the jump from potential donor to annual fund donor.
d. Opportunities to Deepen the Organization’s Relationships with Donors —
Simply put, prospect research helps organizations get to know their constituents better.
You should check to see if the donors on your list who have given charitably year over year are being engaged.
Are they getting invited to events?
Just because a donor might not be able to make a major contribution today, does not mean that that donor isn’t important.
Question 3) What types of nonprofits would benefit from using prospect research for annual campaigns?
The short answer…most nonprofits would benefit.
Prospect screening is popular in numerous industries, such as:
- K-12 education
- Higher education
- Faith-based organizations
- Environmental groups
- Greek organizations (fraternities and sororities)
- Arts and culture organizations
- Advocacy groups
- Social service organizations
- Healthcare organizations
That’s a pretty extensive list. Prospect research use spans the whole nonprofit sector.
For annual giving, although any organization type could use prospect research, the two most common types are:
- Universities, Colleges, and Community Colleges
- Public Radio Stations
Question 4) Once you’ve decided to do so, how can you prospect screen?
There are 3 ways organizations can go about prospect screening.
a. In House —
Prospect research can be done in house. A development staffer, either preexisting or a new hire, should be able to cull together a good bit of background on various donors through a combination of public and private databases.
The drawback here is that the process is incredibly time consuming. A current staff member would be pulled away from the main focus of his job. Adding a new employee to be the prospect researcher is the better option here, but there is a cost that comes with that.
b. Contract a Consultant —
One option is hiring an independent consulting group that specializes in prospect research.
Consultants will offer a variety of services like:
- identifying high quality prospects among your current donors
- creating prospect solicitation methods
- training your staff for prospect research
With hiring consultants, keep in mind that there is an expiration date. They won’t be around full time, long term.
c. Working with a Prospect Screening Company —
A great option for prospect research efforts is working with a prospect research company like DonorSearch.
A prospect screening company will take your donor list and compare it against major databases to create a comprehensive profile about each of your donors.
Prospect research companies give your organization invaluable information without your staff having to sacrifice their own time and energy.
The important takeaway here is that you have prospect research ready and waiting to be used.
Annual giving is the core of most fundraising and prospect screening will enhance any annual fund it’s used for.