What is prospect research?Well, ask and you shall learn because this entire post is dedicated to helping answer that very question.
Is your organization looking to grow its pool of major gift prospects? Are you hoping to upgrade annual fund donors? Do you wish you knew more about your prospects during cultivation?
If you answered yes to any of those questions or find yourself in very similar situations, your nonprofit could likely benefit from prospect research.
So, what is it? Let’s define prospect research.
Definition of Prospect ResearchProspect research is a technique used by nonprofit organizations to learn more about potential or existing donors’ personal backgrounds, giving histories, wealth indicators, and philanthropic motivations to evaluate a prospect’s ability to give (capacity) and warmth (affinity) toward an organization. Now that we have the definition out of the way, let’s get into the nitty-gritty. In our discussion of what prospect research is, we’re going to address four key questions:
- How does it work?
- Which types of organizations perform prospect research?
- What are the common prospect research terms?
- What are the benefits?
- How does prospect research fit into your fundraising strategy?
- A nonprofit’s internal development team (including the major gifts officer).
- A specialized prospect research consultant.
- A prospect screening company such as DonorSearch.
- Education (K-12 schools, colleges)
- Healthcare (hospitals, hospices, clinics)
- Greek organizations (sororities, fraternities)
- Arts, culture, and humanities organizations (museums, theaters, performance groups)
- Faith-based groups (churches, synagogues, mosques)
- Advocacy groups (lobbyists, activists)
- Environmental groups (environmental awareness, wildlife conservation, forest preservation)
- And more!
1. Fundraising ProspectA prospect is an individual or philanthropic entity, such as a foundation, with the potential to make a donation to your organization. Prospects may be new to your organization or may have made one or more donations in the past.
2. Philanthropic MarkersA philanthropic marker is a type of prospect screening information that speaks to a prospect’s charitable inclinations and helps predict the likelihood of that prospect making a donation. Top philanthropic markers include:
- Past giving to your nonprofit
- Past giving to other organizations
- Nonprofit involvement as a board member or trustee
- And other similar traits.
3. Prospect ResearcherA prospect researcher is a role within or coordinating with the fundraising operation that is responsible for compiling data on fundraising prospects. Based on the situation, the prospect researcher may also be responsible for the consolidation and/or implementation of data into the fundraising activities.
4. Prospect Screening CompanyA prospect screening company is a company, such as DonorSearch, that provides prospect research tools and screening services to support nonprofits or consultants in gathering, verifying, and synthesizing data on prospects.
5. Wealth IndicatorsA wealth indicator, like a philanthropic marker, is a type of prospect screening information. However, instead of helping forecast charitable inclinations, wealth markers assist in gauging a prospect’s financial capacity to make a donation. Popular wealth markers include:
- Real estate ownership
- Stock holdings
- Business affiliations
- And other similar traits
6. Wealth ScreeningA wealth screening is the financial analysis portion of prospect research. When someone performs a prospect screening, they’re looking at both philanthropic markers and wealth indicators. A wealth screening encompasses the research and analysis surrounding wealth indicators and helps determine if a prospect has the financial capacity to donate a gift. You’re bound to come across each of these terms (and their various iterations) as you embark on your path to prospect research. The better you understand the terminology, the better equipped you’ll be to get up to speed on all things prospect research and launch an effort at your nonprofit.
1. Taking a more nuanced approach to major gift fundraisingOne of the main reasons why many organizations incorporate prospect research into their fundraising process is to improve major gift fundraising. Screenings will point your team in the direction of qualified prospects and inform the ways in which you cultivate those prospects, thereby increasing conversion rates.
2. Finding major gift prospects among your donor poolThis point is directly related to the first benefit listed. When you start screening for major gift prospects, it’s important to search inward and among your donor pool. You never know which donor on your annual fund list has the capacity to become a major gift donor.
3. Recognizing prospects for planned givingIdentifying planned giving prospects can often feel like an elusive task. The markers for planned gift prospects are not as readily apparent as they are for other types of donating, such as major giving. Prospect research will illuminate those less than apparent markers and identify high-quality candidates for planned giving.
4. Identifying new prospectsUsing prospect research, you can uncover valuable personal and professional connections your donors have and ask those donors to help facilitate introductions. For example, you might realize that one of your loyal donors is a colleague of a high-value prospect that your major gift officers are interested in cultivating. You could then ask that loyal donor to introduce one of your officers rather than have a team member perform some cold outreach.
5. Studying donor giving patternsA major asset of prospect research is its ability to teach you more about your donors. By taking your screening results, you can study up on your donors’ giving patterns and better predict their future charitable behavior. There are even more benefits than the five listed here. To get the full list, check out this comprehensive article on prospect screening benefits!
We hope this article has helped you find a thorough answer to the question, “What is prospect research?” If you’re ready to experience the process firsthand, take a DonorSearch demo out for a spin to see the tool in action! For more information on prospect screening, keep reading these additional resources:
- Prospect Research for Hospitals. Hospitals and other healthcare organizations can learn a lot about their potential supporters through prospect research. Learn more about how healthcare organizations can conduct prospect research.
- Prospect Research Ultimate Guide. For more in-depth information on prospect research, read this detailed guide. It will take you through everything your organization needs to know about researching potential donors.
- Prospect Profile Templates. Creating a profile of every prospect is a must if you want to perform successful prospect research. Get our free templates to get you started!