By DonorSearch

Nonprofits rely on prospect research to unearth insights that lead to a more effective fundraising strategy. Prospect research is the process of identifying potential donors who are most likely to give to your organization based on a variety of wealth and affinity indicators. 

As a fundraising professional at a growing nonprofit, you know effective prospect research is the key to understanding your audience and creating a strategic approach to donor outreach. However, if you’ve never conducted extensive prospect research before or don’t yet have the internal processes or resources in place for it, the process might seem intimidating.

To ensure the prospect research process is successful, you’ll want to adhere to several best practices, including: 

  1. Keep your supporter database clean.
  2. Analyze both wealth and affinity indicators.
  3. Invest in robust prospect research tools.
  4. Incorporate insights into your fundraising strategy.
  5. Partner with prospect research experts.

Prospect research is all about leveraging your data to find the right donors who will stick with your organization for the long term and provide stable fundraising support for years to come. This process is typically associated with major donor fundraising, but the insights gathered during prospect research can be applied to all levels of fundraising and can help with ongoing stewardship efforts. Let’s dive in!

1. Keep your supporter database clean.

As you start to gather valuable information about prospective donors, don’t let your data points go to waste. Practicing good data hygiene is critical throughout the entire prospect research process so that you can easily sort through data points and avoid redundant research and time-consuming clean-up. 

Donorly’s prospect research guide recommends creating a process for organizing your prospect research data. Having a standard procedure in place allows you to reference accurate supporter contact information to enhance your communications. 

Strong data hygiene practices include:

  • Standardizing the process for inputting names, addresses, and other contact information. For instance, ensure your staff members/prospect researchers use the same rules and abbreviations for inputting street addresses. This ensures that you’ll have access to accurate, uniform supporter contact information to use when trying to get in touch with prospects. 
  • Creating a process for reconciling errors moving forward. Even after you create a standardized process for data entry, mistakes are inevitable. Ensure you formalize procedures for handling any data entry errors, such as duplicate or incomplete entries. 

With a concrete data management strategy in place, your organization will be well-positioned to start the prospect research process and make the most of your new data insights. Be sure to delegate the task of ongoing data maintenance to a productive staff member. This ensures there will be at least one person keeping a close eye on your donor database to make sure hygiene practices are being followed. 

2. Analyze both wealth and affinity indicators. 

In the process of learning about prospect research, you might have seen the term “wealth screening” arise. While wealth screening and prospect research are similar, they aren’t identical.

While wealth screening and prospect research aren't the same, they can go hand in hand.

Wealth screening focuses on identifying donors with a high capacity to contribute a larger donation. It’s typically used in major and planned gifts cultivation processes to identify wealthy prospective donors.

Double the Donation’s wealth screening guide highlights a few important wealth indicators that organizations identify through the wealth screening process, including:

  • Stock ownership: Determined through the website, this can provide insight into a prospect’s total wealth.
  • Real estate holdings: Owning real estate is another wealth marker. Real estate holdings not only demonstrate a prospect’s ability to give a larger donation, but also their propensity to do so. In fact, DonorSearch found that an individual who owns over $2 million in real estate holdings is 17 times more likely to give to a charitable cause than the average person!
  • Professional background: A person’s employer and job title can reveal plenty of clues about their wealth. 

Affinity indicators are characteristics that designate that a certain individual has a fondness for your specific cause. These indicators include factors such as:

  • Past contributions to similar organizations: Using a prospect research database, you can investigate donors’ history of giving to similar missions. This demonstrates that a prospective donor has an openness or willingness to give to your specific cause. 
  • Relationship to your organization: Prospects who relate to your cause, have been involved in the past as a volunteer, or who have been helped by your organization themselves are all more likely to want to continue supporting your mission.
  • Involvement in nonprofit leadership positions: If an individual has served on the board at a similar organization or held another nonprofit leadership position, it demonstrates that they’re likely more philanthropically minded than the average person. 

Effective prospect research combines wealth screening with affinity research. By combining research on wealth with warmth indicators, you can get in touch with donors who not only have the capacity to make a larger donation, but also the desire to actually do so. 

If you’re interested in conducting a full-fledged prospect research process, it’s important to consider both wealth and affinity factors equally. This gives you a more complete picture of prospects and allows you to get in touch with those who’ll be most likely to provide long-term support. 

3. Invest in robust prospect research tools.

If this is your first time conducting prospect research, you’ll find that there are three general approaches to the process: the do-it-yourself (DIY) approach, a wealth-screening-focused approach, and a consultant-led approach. 

Many organizations find value in pursuing an in-house approach to prospect research if they have the time and resources to devote to the process and development professionals to lead the charge. In a DIY research process, your organization must formulate a strategy and access resources to learn more about your donor base and prospects. 

Before you can start the DIY prospect research process, you’ll need access to several tools for gathering information on prospective donors. These tools will enable you to find key information on prospective donors, later helping you determine which individuals are most likely to give to your cause. 

These tools include:

  • A prospect research database: A comprehensive prospect research database, like DonorSearch, can provide you with detailed donor information. These databases round up all publicly available information about donors’ political giving, charitable giving history, employment information, and more. 
  • Internal database/CRM: Organizations will need to reference their supporter database (CRM) to conduct effective prospect research. Top prospects have likely already interacted with your organization. A robust, organized CRM makes it easy to learn more about your existing donors and gives you a centralized location to store new prospect insights over time. 
  • SEC and FEC filings: The Securities and Exchange Commission and the Federal Election Commission are both critical prospect research tools because they disclose information on individuals’ stock ownership and political contributions. Those data points can be used to determine individuals’ capacity and inclination to contribute to philanthropic causes. 
  • A matching gift database: Corporate philanthropy is a powerful source of nonprofit funding, but it’s often overlooked by organizations. By investing in a matching gift tool that compiles known corporate giving programs, you can research individual donors’ eligibility for matching gifts through their companies, which can help maximize the impact of individual donations. 

Check out this guide to prospect research tools for a complete list of resources that research professionals use every day. You can use these yourself to pursue a DIY approach to prospect research. Additional tools can assist with finding grants, determining property ownership, and identifying employment information.

4. Incorporate insights into your fundraising strategy.

After you’ve conducted a round of prospect research, don’t let it go to waste! Use your newfound insights to develop a plan for reaching out to potential donors and fostering relationships with them. 

For example, let’s say you’re interested in improving your organization’s approach to major gift solicitation. Once you’ve identified major donor prospects through your research process, create a communication strategy that includes several different touchpoints between prospects and your nonprofit. 

DonorSearch recommends a plethora of additional major donor engagement ideas, such as:

  • Host events tailored to major donor acquisition. Invite your prospects to “exclusive” events, such as galas, auctions, and interviews with special guests. Use these events to share more information about your organization and the work that you do so your prospects get to know and feel connected to your cause on a deeper level. 
  • Invite prospects to join volunteer opportunities. Volunteering is a great way for prospects to learn more about your cause and gain hands-on experience working with your organization. Plus, prospects will be able to see the potential impact of their donations first-hand. 
  • Share specific fundraising metrics. Your prospective major donors will be interested in knowing what their contributions will help accomplish. Be sure to share specific statistics on fundraising results. For instance, let them know that a gift of $5,000 helps fund the creation of a new garden at the community center. This helps prospects visualize the powerful impact that their donations can have.

Make sure to tailor your prospect outreach strategy to your organization’s and your individual prospects’ specific needs. You want to make sure that you show your prospective donors an authentic, personal look at your organization and what you have to offer. Events and messages that speak to the heart of your organization are much more effective than generic outreach emails.

5. Partner with prospect research experts.

For growing organizations that don’t have the time or expertise to pursue a DIY approach to ongoing prospect research, partnering with a consultant or research service might be the perfect solution.

Prospect research specialists can provide the knowledge and experience needed to set your organization up for long-term success with prospect research. These consultants perform the following functions:

  • Screen your existing donor information to identify prospects using the data you already have.
  • Provide support and guidance surrounding specific fundraising campaigns, such as a capital campaign or major donor acquisition push.
  • Build stronger revenue streams for your nonprofit by establishing strategies for better major and planned giving stewardship.

Prospect research consultants offer customized fundraising plans that match your organization’s goals and needs. If you’re interested in hiring a consultant, be sure to find one who has experience with similar organizations or campaigns. This ensures you’ll have access to relevant, tried-and-tested advice. Plus, the consultant relationship will go much more smoothly if you have a shared passion for your mission and fundraising philosophy. 

Prospect research isn’t an instantaneous process. It takes time and effort to get to know your potential donors and start building relationships with them. Whether you’re pursuing a DIY approach, wealth-screening centric approach, or a consultant relationship, keep these best practices in mind to make the process a success.

Founder and President Sandra Davis leads Donorly with 30 years of fundraising experience and leadership. Sandra has consulted on numerous capital campaigns, led strategic planning and feasibility study efforts, and managed board development and recruitment efforts, planned giving, special events, and annual giving programs. Under her leadership, Donorly has grown to support the fundraising efforts of over 75 clients to date.

5 Important Prospect Research Best Practices