Frequently Asked Questions About Prospect Research
The Elements of Prospect Research
Prospect Research Tools You’ll Need
Your Nonprofit's CRM
The internal data you already have can provide important information about your organization’s fundraising trends and can be a starting point for learning more about current donors and their connections to prospects.
SEC investment records and FEC political contribution records
These government records can show you which prospects or donors have the capacity and motivation to give a large gift.
Prospect research databases
A comprehensive database such as DonorSearch’s Gift Search Plus will provide your organization with information about prospects’ charitable giving, business connections, real estate ownership, stock holdings, corporate giving opportunities, and more.
Prospect generator solutions
A prospect generating tool like DonorSearch’s ProspectView Online can provide you with lists of prospects who give (or have given) to causes similar to yours.
Matching gifts database
A matching gifts database is important for finding out which donors and prospects have the opportunity to seek out gift matching from their employers.
Prospect Research Indicators to Know
During the prospect research process, you’ll be looking for two kinds of indicators: philanthropic (warmth) indicators and wealth (capacity) indicators. Note that these indicators can also be referred to as “markers.” Let’s dig into each of these indicators in detail.
These indicators show that a donor or prospect may be willing to give a donation to your organization because they have an affinity for your work. Here are a few examples of philanthropic indicators:
previous donations to your nonprofit
As past giving has always been 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 prospect profile.
donations to other nonprofits
If a donor has given to other nonprofits in the past, it’s a solid indication of charitable habits, especially if these nonprofits have missions similar or related to your own. Prospect research profiles should incorporate information based on other nonprofits’ annual reports and recognition documents.
nonprofit involvement history
Nonprofit involvement indicates that a prospect values and understands the importance of philanthropy. Foundation trustees, board members, volunteers, and advocates are likely future donors.
Beyond basic information, personal information about hobbies, interests, and values can be gleaned from public social media profiles or internet searches. This information is useful in determining prime prospects based on philanthropic interests.
These indicators help you to know whether or not a donor or prospect is in a financial position to give a large gift, and can assist you when determining how much to ask for down the line. Here are a few examples of wealth indicators:
real estate ownership
Real estate ownership helps determine wealth. Plus, 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 available through SEC.gov. They provide a clear window into a donor’s finances.
With these indicators, you can learn about 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 make a major gift. Plus, you may find that a prospect’s political leanings give them greater affinity for your mission.
Exploring Your Options: 3 Approaches to Prospect Research
The 7-Step Process of Donor Research
1. Create a plan of action.
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 analysis process prior to conducting research.
2. Clean up your data.
Remember that your organization’s CRM will be a valuable tool during the prospecting process. So, cleaning up your data before conducting fundraising research is essential to receive the most accurate and helpful results efficiently. Usually this will involve consolidating duplicate profiles, updating outdated contact information, and removing lapsed donors from your records.
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 to ensure that they’re accurate and make the most logical sense. For instance, if a donor has a common name like “Tim Smith,” the research might have pulled data for someone else who shares that name. Or, you might not have the most up-to-date contact information for a prospect.
Take the time when your results first come in to ensure their accuracy. This way, you’ll spend less time on the other end accounting for misinformation.
4. Analyze your 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 thoroughly analyze it.
Start by organizing portfolios for each of your prospects. Through this process, you’ll establish qualification criteria for different giving levels, helping you determine the prospects you should reach out to first.
5. Make a solicitation plan.
Planning for the big ask is a crucial step in any fundraising research process. You have the necessary and pertinent information gathered together, sorted, and properly ranked. Now is the time for donor cultivation, in which you’ll foster relationships and continue the qualification process to learn more about your prospects as individuals.
Take different data segments into account to craft appropriate cultivation and solicitation strategies.
6. Solicit donors.
After prospecting, you should have a better sense of the following:
-How much you should ask for
-The communication channels a donor prefers
-Your donor’s giving motivations and connection to your mission
You’ve spent considerable time building out your donor profiles, so you should definitely 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 to your prospect research process.
No process is streamlined during the first pass, and that’s perfectly okay! After you’ve gone through all the steps of researching, cultivating, and soliciting, it’s time to take a step back and assess.
As with anything else in the nonprofit world, becoming a prospect research expert might involve a steep learning curve. But in the end, the efforts you expend to refine your technique will be well worth it as you’re able to find more prospects and grow your organization!