Prospect Research 101
When we talk about the fundraising cycle, we’re talking about identification, cultivation, solicitation, and recognition.
Stage One: Identification — Selecting prospects you should approach
Stage Two: Cultivation — Developing relationships with your donors
Stage Three: Solicitation — Asking for donations
Stage Four: Recognition — Showing appreciation for donors and stewarding them
Logic follows that in order to get to stages two through four, you have to first identify your prospects. And that’s where prospect research comes in.
Curious how?
This article is going to walk you through the ins and outs of prospect research, answering key questions to develop your understanding of the process.
After taking our “Prospect Research 101” course, you’ll be able to answer all seven questions listed below:
- What is prospect research?
- What factors predict future giving?
- What kind of information will a prospect screening reveal?
- How can a nonprofit get started with prospect research?
- Which prospects should be screened?
- How do you perform a prospect screening?
- What are the benefits of prospect research?
Let’s dive in!
1. What is prospect research?
When someone brings up prospect research, they are referring to a process that could generally be described as “getting to know your prospects and donors better.”
When someone brings up prospect research, they are referring to a process that could generally be described as “getting to know your prospects and donors better.”
Simple, right? Yes and no.
The concept behind prospect research is easy to grasp: a deeper understanding of your prospects leads to more informed fundraising.
The challenge is with figuring out how you actually deepen your understanding.
Prospect research does so by investigating specific traits about donors, including:
- Personal backgrounds
- Past giving histories
- Philanthropic markers
- Wealth indicators
- And more
All of this investigation is done to illuminate two key points about a donor:
- The prospect’s ability to give
- The prospect’s willingness to give
Those who have both the financial means to make a donation and the interest in doing so are going to be your ideal candidates. Prospect research will help you find them.
2. What factors predict future giving?
With the help of a prospect screening, you’re likely to collect a broad spectrum of data. In order to make heads or tails of it, you’ll need to know where you should focus your attention.
The following factors are the most notable predictors of future giving.
- Past giving to your organization: No other indicator has a stronger predictive capacity. Loyal donors are the most likely to make future contributions.
- Past giving to other organizations: Giving is giving, and if you can find prospects who have given multiple times to any nonprofit (even if it isn’t yours), that speaks volumes about their openness to donating. Bonus points if the nonprofits they’ve contributed to share similar missions and goals with yours.
- Nonprofit involvement: Outside of donating, there are plenty of other ways that people can show support of an organization. People who work for or with nonprofits not only have a philanthropic dedication but understand how valuable their gifts can be.
- Real estate ownership: Real estate ownership functions as both a wealth and philanthropic marker. There’s a positive correlation between the amount someone owns in property and their likelihood of giving.
- Political giving: Like real estate ownership, political giving is a wealth indicator and philanthropic marker rolled into one.
These five factors will be important for any donor you are researching, but they’re even more valuable in your hunt for major gift donors.
So, the next time your major gift officers head off to develop your donor pool, make sure they’re looking for these five traits.
Bonus! Learn more about major giving and prospect research and how they can unlock the door to planned giving here: Planned Giving – The Complete Guide.
3. What kind of information will a prospect screening reveal?
Prospect research doesn’t stop with the five types of highly predictive data listed in the previous answer. There’s additional informative data to come!
This list of data includes:
- Previous volunteering.
- Involvement in advocacy work.
- Holding a seat as a board member.
- And much more!
Essentially, any time you effectively perform a prospect screening, you’ll be looking for the standard data an organization would find valuable and then supplementing it with details that are of particular use to your organization.
For instance, you might have recently decided to actively promote matching gifts. In that case, donor employer data could be extremely helpful in your efforts.
The bottom line: Prospect screening can reveal as much information as you’re willing to dig for. Figure out what your team needs to effectively acquire donations and work to uncover that data.
4. How can a nonprofit get started with prospect research?
There are three main approaches to performing prospect research.
- Prospect Research Consultants
- In-house Screenings
- Prospect Screening Companies
Prospect Research Consultants
If you don’t have it in your budget to hire a full-time prospect researcher, it might be worth bringing on a consultant.
Consultants will usually come on for a set period of time and help your organization accomplish a round of screening. They’re often former prospect researchers themselves. And it’s quite common that they’ll use a combination of DIY techniques and screening services.
In-house Screenings
If your budget is tight, there are a number of steps your organization can take in-house to perform screenings. Think about hitting up your local library for free access to certain databases. Check your donor’s property value using Zillow.
At the end of the day, you’d be surprised by how much you can learn from hitting the books and a quick Google search.
Prospect Screening Companies
In order to take your prospect screening to the next level, you can look into donor research companies. Donor research companies do the heavy lifting for you, so your team can focus on putting all that data to good use.
When you’re deciding on a screening company to go with, think through what data they offer and how much support they provide. Both points should play a major role in informing your decision.
The bottom line: If you’re considering prospect research, there are plenty of options to help get you started. Find the screening solution that makes the most sense with your budget and needs.
5. Which prospects should be screened?
In an ideal world, we’d advise you to screen all your prospects, but time and money often have different plans.
As you narrow down your list of potential prospects to screen, you can divide out your plan according to three donor groups:
- Past Major Donors
- Event Attendees
- Loyal Donors
Past Major Donors
We’ve already touched on how valuable a predictor past giving can be. Now imagine the past gift in question was a major gift. The logic follows that you have a powerful predictive data point on your hands.
By researching past major donors, you’re expending energy where there’s likely to be a huge return on investment.
Plus, your screening might help you gain a greater understanding of a major donor’s personal and professional relationships, both of which you can potentially leverage to grow your support network.
Event Attendees
Whether you screen before or after an event, prospect research can be extremely beneficial.
Screening RSVPs before an event will help your team locate high-quality prospects among the guest list and map out their time accordingly.
Screening attendees after an event can assist your team in planning post-event follow-ups and determining which giving level each guest is best suited for, thereby customizing outreach.
For a complete list of event ideas and inspiration, check out this list that @Pay put together.
Loyal Donors
While focusing on past major donors can yield fruitful results, it’s important that you widen your search and screen who we call “loyal” donors.
What qualifies as loyal will depend on the makeup of your unique donor pool, but you’ll ultimately be aiming to research donors who have contributed multiple small- and medium-sized gifts.
In your analysis, look for donors on that list who have notable wealth markers or who have contributed large donations to other organizations. Both points indicate that you might have a major gift prospect on your hands.
The bottom line: With all three of these prospect groups, you’re channeling your research efforts to yield the highest return on your team’s investment of time. When your budget is tight, you have to be very strategic about which screening path you take.
6. How do you perform a prospect screening?
Whether you’re using the services of a screening company or have hired a professional researcher, your team is going to need a process in place for how prospect research fits into its larger fundraising strategy.
We recommend a 5-pronged approach:
- Put a plan in place.
- Clean your donor database.
- Establish a solicitation plan.
- Evaluate the screening results.
- Ask for donations
1. Put a plan in place.
When you first get your screening results, it’ll be tempting to dive right in. But your efforts will be much more effective if you have a plan guiding your efforts.
You’ll want to:
- Map out your fundraising goals.
- Decide who will lead your screening process and incorporate it into your fundraising strategy.
- Figure out which high-level fundraising activities you’ll be using your results for (major gifts, planned giving, etc.).
For example, consider how you might plan your efforts if you’re using prospect research for a capital campaign’s quiet phase.
According to the DonorSearch guide,
“The quiet phase of a capital campaign occurs before the campaign is made open to the general public…While all amounts should be welcomed, the focus during the quiet phase of a capital campaign is on major gifts.”
In the case of a capital campaign’s quiet phase, you’re looking for high-quality donors who would be interested in contributing to a very specific project in a condensed time period. I.e., you’re looking for a very specific donor. And that specificity will guide your plans.
2. Clean your donor database.
After a screening, you’re going to have an influx of new donor data. It’s vital that you don’t pile all of your new donor information on top of out-of-date or unreliable data.
Before incorporating all you’ve learned from your screening, you’ll need to clean your existing database with an eye for:
- Relationship and affiliation data.
- Records of internal giving.
- Basic contact information.
All three areas will play a significant role in what you’re able to do with your screening results, so you want to start things on the right foot.
3. Establish a solicitation plan.
This speaks to your larger efforts in fundraising, but you do need to note how your screening results will factor into your solicitation strategy.
And since prospect research is such a key player in major gift fundraising, you’ll especially want to consider how your results will inform the work your major gift officers are doing.
4. Evaluate the screening results.
Evaluating screening results is all about taking a large influx of new donor data and sorting through it to find the details that are most relevant to the work your nonprofit is doing.
In other words, you need to decipher the data. Depending on the screening route you take (in-house, consultants, company), you’ll have to be more or less involved in the data analysis.
To make the most of your team’s time, your goal should be to prioritize efforts by taking your newly researched list of prospects and giving them capacity ratings. In other words, you’ll want to rank your prospects according to their respective capacities to make donations.
5. Ask for donations.
At a certain point, you just need to go for it! Use what you’ve learned and make the most informed donation requests that you can. No matter how much research you do, you cannot secure a gift that you don’t ask for.
The bottom line: No matter the scale of your research efforts, your organization should go in with a clear sense of how things will play out.
7. What are the benefits of prospect research?
As you can likely tell from the discussion thus far, prospect research is incredibly beneficial. We couldn’t cover all the benefits in one short article, but let’s highlight some of the most pivotal positives that prospect research affords fundraising organizations.
- Improvements in major gift outreach
It’s been touched on throughout this article, but one of prospect research’s biggest assets is its ability to identify major gift prospects. Major gifts are immensely valuable, and any opportunity to find quality prospects should not be ignored.
- Upgrading existing donors
Also briefly touched on elsewhere in this article, it’s important to note that many of your donors could be capable of giving more than they currently are. Use prospect research to find supporters with upgrade potential and plan your donor engagement accordingly.
- Identifying new prospects
While it’s advised that you look to your current donor pool to locate upgrade candidates, don’t forget about all the potential waiting outside your existing network. Screenings can find new prospects on donation lists of similar organizations, among other places.
- Studying up on donor behavior
Take a step back from your new data and see what it tells you about the bigger picture. Learning donor giving trends and patterns can prove extremely useful.
For instance, you might realize that a large selection of your new prospects have all participated in peer-to-peer fundraising campaigns. If they’re that popular with your donors, you could consider organizing a campaign of your own to encourage new prospects to donate.
- Completing donor profiles
Even with the best record keeping and a well-maintained donor database, there are bound to be gaps in donor data. Your database is constantly growing and changing. And as you add new donors to the fold, you don’t always get a complete rendering of their contact details.
Prospect research remedies that issue by filling in any gaps in donor data.
The bottom line: When used effectively, prospect research can have far-reaching benefits for your organization.
Congrats on completing Prospect Research 101! Now that you have a strong foundation of prospect research knowledge, it’s time to decide the right path forward for your organization.
Whether you choose to have your existing team test out some screening techniques or use the services of a company, you’ve taken a great first step. You’ve done your research on prospect research!
