Understanding Prospect Research Basics
What kinds of information is included in prospect research?
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 indicates that a prospect values and understands the importance of philanthropy. Foundation trustees, board members, volunteers, and advocates comprise likely future donors.
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.
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.
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 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.
Someone who has donated large sums of money to political campaigns has the financial capacity to donate a major gift. Plus, donors that make substantial political contributions are 14 times more likely to make a charitable donation than the average person.
Parents and guardians should be screened, especially at important times such as the beginning and end of the school year, around graduation, and in between semesters.
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)3
With a deep reserve of engaged alumni, Greek organizations are ideal candidates for bulk screening services.
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.
With a potential donor base as broad as “anyone within the community,” prospect research helps community foundations narrow down the list.
Advocacy and Social Service6
Their large volunteer pools and event attendee lists mean there are always new prospects to screen and analyze for future giving potential.
Arts and Culture7
Screening single ticket purchasers, special event attendees, membership holders, and consistent donors can mean the difference between a one-time concert-goer and a major gift supporter.
With a calendar full of events and volunteer activities, they should be screening attendees beforehand for more targeted donor cultivation.
Churches, mosques, synagogues, and other places of worship can pinpoint the people in attendance at services who are likely to contribute major gifts.
How does prospect research differ from wealth screening?
What is wealth screening?
Wealth screenings analyze wealth markers such as real estate ownership, business affliations, 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.
What is the difference?
While both prospect research and wealth screening provide valuable predictive insight, the difference lies in the big picture. Just because a donor has the capacity or wealth to donate to charity, it doesn’t mean they have the willingness or affinity for giving.
Which is more effective?
Complete prospect research does provide a more accurate assessment of potential donors than wealth screening alone. Without philanthropic information, there’s no assurance that a donor who has the capacity to give would actually be willing to do so.
Choosing an approach to prospect research
IN-HOUSE PROSPECT RESEARCH
DIY: Do it yourself
When is the right approach?
This approach involves having an existing staff member take responsibility for screening your prospect lists.
If your nonprofit is just starting out or if you have a tight budget, this may be the best option for you.
It 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.
How do you get started?
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.
If you’re interested in more in-depth training, there are plenty of great resources from ash classes to webinars that are available through popular prospect research channels.
Full-Time Research Staff
When is it the right approach?
In-house research refers to screenings performed by prospect researchers who are part of your organization’s staff.
If you’re a mid- to large-size organization with enough financial means, this may be a good choice.
Usually, organizations bring on research teams if they have a large prospect pool and need to free up regular staff members’ time for other efforts.
How do you get started?
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.
As such, you should look for candidates with analytical minds who understand the minutiae of databases and know how to synthesize data.
Prospect Reasearch 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?
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 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 they have samples of their work?
As you make your decision, review samples of the types of proles your consultants put together. Most have a few examples of the various donor prole 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.
Prospect Screening Companies
Assist in finding major gift prospects
If you are actively seeking out major gift donors, then prospect screening is a great tool. 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.
Help sort through large amounts of data
If you have a large number of records in your donor 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 that your organization can easily analyze.
Manage all 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.
Integrate with existing databases
A good screening company will be able to be easily incorporated into your existing software and general workflow, meaning that you’ll get the data you need when and where you need it. Many screening services offer comprehensive integration support to help make the transition as smooth as possible.
Getting Started With Prospect Research
The Process Behind Donor Prospecting
1. Create a plan of attack.
Once the data is in your hands, it’ll be tempting to dive into the results rst 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.
2. Clean up your data.
Cleaning up data before you conduct fundraising research is essential to receiving the most accurate and helpful results. Usually this involves consolidating duplicate proles, updating outdated contact information, and removing lapsed donors from your list.
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 your 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.
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 for prospect development, in which you’ll foster relationships and learn more about your prospects as individuals.
Taking those different data segmentations into account craft appropriate strategies for soliciting donations based on what you know.
6. Solicit donors.
After your prospect 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.
You’ve spent considerable time building out your donor proles, so you should use them!
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.
Benefits of prospect research
IDENTIFIES CORPORATE GIVING OPPORTUNITIES
This social media site allows your organization to view relevant professional relationships and history all in one place.
Corporate giving is when companies invest in making positive social change. These programs are part of corporate philanthropy and involve charitable giving to nonprofit causes.
Prospect research can help you identify donors who are eligible for matching gifts. This can be done by using prospect screening to determine past giving history, personal data, and employer information.
If you also invest in a matching gift automation platform, you can automate your outreach to donors after they’ve contributed to your nonprofit to immediately notify them that they are match eligible. The platform does this by identifying donors through their personal information, such as email addresses, to determine whether their employer will match their donations.
GENERATES NEW PROSPECTS
Funding your endeavors means more than just pooling resources from your existing donor base.
Prospect research not only helps nonprofits identify who among their existing contributors would be most likely to give, but also provides the opportunity to pinpoint new donor possibilities.
REFINES MAJOR GIFT OUTREACH
Prospect research saves you time and therefore money by steering your efforts away from prospects who are unlikely to give while also allowing you to make an educated decision with regard to the amount you’ll be asking for.
Additionally, prospect screening has the potential to reveal who of your annual fund donors has the capacity to make a major gift.
By focusing the research microscope inwards, you can end up finding major gift prospects right under your nose.
OPTIMIZES ONGOING FUNDRAISING ACTIVITIES
For organizations with a high rate of natural turnover, there’s a ton of new data to be mined at any given point.
With prospect research tools at your disposal, you can conduct screenings as often or as seldom as makes sense for your organization.
ANALYZES DONOR GIVING PATTERNS
Analyzing past giving data can yield much insight into a donor’s preferences and past philanthropic behavior, such as average gift amount and types of causes they prefer 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.
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.
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.
Prospect research can help you ll in those gaps through data appending.
Refining Your Prospect Research Efforts
How do you choose which prospects to screen?
One 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 counter-intuitive, but the research bears out that even major gift donors who have given once are likelier to give in the future than anyone else.
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’ve given to other similar nonprofits. Perhaps their loyalty lies with a certain cause and not just that particular organization.
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 organization’s cultivation and stewardship strategies moving forward.
What factors predict future giving in prospects?
1. Past Charitable Giving
Past giving is the greatest indicator of future giving — in fact, a donor who has made a gift of $100k+ to a nonprofit organization is 32 times more likely to donate charitably than the average person.
Thus, donors who have given in the past to your organization should be first on your list of candidates who are likely to give again.
Behind past giving to your organization, prior giving to other nonprofits is a close second in terms of predictive behavior.
Those with strong histories supporting other causes have proven that they are willing to demonstrate that support fiscally.
2. 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.
Political contributions are an excellent indicator of giving potential because they represent very real commitment.
3. Participation In Chartible Organizations
Those who participate in charitable foundations understand nonprofits and the work that goes into fundraising.
Simply put, they get it!
In fact, 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.”
4. 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 but also the affinity to give.
What areas of fundraising can prospect research help?
Corporate giving programs are driven by employee contributions. The more employees give to nonprofits, the more their company will donate. If you know that certain donors work for companies with these matching gift programs, you can more effectively reach out to them.
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.
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 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.
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 front-line fundraisers can begin the cultivation process.
Like hospitals with grateful patient programs (/healthcare/), 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.