Prospect Research: A Socially-Distanced Fundraising Tool
The COVID-19 pandemic has transformed every corner of society, from schools and businesses to families and friends. Nonprofit organizations have also experienced consequences from the economic downturn and the era of social distancing.
But in many ways, the crisis has reinforced the need for nonprofits to return to basic principles. It’s not a revolutionary idea for a nonprofit to focus on community support and engagement, yet these are the concepts nonprofit professionals have turned to again and again as the pandemic has persisted.
Another foundational strategy to be emphasized is prospect research. Now more than ever, it’s critical that fundraising professionals have an in-depth understanding of donors and prospects. Luckily, this important tool is compatible with remote work environments and socially-distanced settings, so your development team can reap the benefits while staying safe.
At DonorSearch, we believe prospect research is fundamental to a sound fundraising strategy. We’ve helped thousands of nonprofits discover accurate and actionable information to guide their fundraising efforts, so we’ve seen firsthand the incredible impact that this step can make.
Developing a strong approach for prospect research will help your organization thrive in our current crisis as well as prepare for the road ahead.
Ahead, we’ll dive into why prospect research is the perfect addition to your organization’s pandemic toolbox, addressing questions including:
- What is prospect research?
- Why is prospect research a key resource in a socially-distanced world?
- What is the best approach for effective prospect research?
- How can prospect research boost my crisis fundraising?
Whether you’re fundraising for a local organization or a large academic institution, prospect research will provide key insights to inform your efforts. Let’s jump in!
What is prospect research?
At its core, prospect research is a tactic to learn more about potential or existing donors in order to evaluate their ability to give to and affinity toward an organization.
Through prospect research, organizations can identify potential high-value donors within their existing community and generate new prospects.
The information discovered through prospect research can come from your donor database, government sources and public records, online research, social media, and other sources. This information generally falls into two major categories:
- Wealth indicators. These records can reveal a prospect’s capacity to give financially to an organization. Typical wealth indicators include real estate ownership, stock holdings and transactions, business affiliations, and past political contributions. These records are most useful for estimating an individual’s overall wealth but also can help predict the likelihood of giving. For instance, someone who owns a piece of property valued at $2 million or more is 17 times more likely to make philanthropic contributions than an average person. Overall, though, it’s important to view wealth indicators in conjunction with philanthropic indicators to get a complete picture.
- Philanthropic indicators. This information shows an individual’s warmth to your organization or cause. Philanthropic indicators tell you more about someone’s willingness or likelihood to give than can be determined just through wealth. These can include previous donations or volunteer history at your nonprofit, contributions to other nonprofits (especially similar organizations), board service with other nonprofits, and personal information about demographics and interests.
While this is a very brief, top-level overview of the data that can be uncovered by thorough prospect research, it’s clear how useful this information can be. Fundraising professionals can leverage this data for more successful campaigns and increased revenue to power your organization’s mission.
Why is prospect research a key resource in a socially-distanced world?
It’s widely recognized that the implications of COVID-19 on the nonprofit sector have been both negative and massive. Whether or not your organization’s mission has specific pandemic-related needs, your operations have still been disrupted.
And for many nonprofits, fundraising efforts have taken the biggest hit. Raising money during an economic downturn is already difficult, and that’s without considering the unique safety concerns related to COVID-19.
In accordance with CDC guidelines, most in-person events are not feasible, including fundraising events. Everything from galas and silent auctions to walks and dance-a-thons have been adapted for online venues.
According to Pathable, virtual events are less expensive, more convenient, and more accessible than in-person events, so the necessary pivot hasn’t been without its benefits. But the time and energy needed to make this change can still be a burden.
Prospect research is already remote-friendly, so there’s nothing to pivot. It’s a powerful fundraising strategy that can be safely and effectively executed in any setting. This also means that when the pandemic is over, there will be nothing you need to re-adapt.
The data gained through prospect research can also help your organization evaluate how your community has been impacted by the pandemic. This information can help you forge stronger connections with your supporters as well as inform your campaign strategies.
What is the best approach for effective prospect research?
By now, you understand some of the benefits that prospect research can bring to your organization, and you may be ready to get started. But when done right, prospect research is a lot of work!
Gathering and processing a huge amount of records to glean the most useful information can be a massive undertaking, but there are also ways to experiment with prospect research on a smaller scale.
Prospect research can be executed in a few main ways, and the method you select will depend on the size of your organization and the resources you have available.
Your main options for implementing prospect research are:
- DIY: Someone already on your development team can manage the responsibilities of screening your prospect lists. There are many training resources available online to help guide this process. If you’re working at a small organization or with a small budget, this may be the way to go, but it’s not feasible on a larger scale.
- In-house research staff. If your organization has the resources to hire additional full-time team members, you can bring in experienced researchers to screen and analyze prospect data. This makes the most sense for mid- to large-size organizations.
- Consultants. Consider bringing in a consultant who specializes in prospect research, but be sure to be strategic about what goals you’re trying to accomplish. You’ll want to choose someone with plenty of prior work experience and samples from organizations similar to your own. This guide offers some useful questions to ask if you’re considering hiring a fundraising consultant.
- Screening services. A prospect screening service is the best way to sift through large amounts of data for easy analysis. Prospect screening services can help you find and major gift prospects. Many companies also offer integrations with other software you’re already using, ensuring your prospect data is accessible exactly where you need it.
No matter which option you go with, you’ll have access to valuable data that can identify high-impact donors.
How can prospect research boost my crisis fundraising?
The most effective fundraising is driven by a strong base of donor data. In a crisis, you want to be sure the efforts and dollars you put towards fundraising are stretching as far as possible. Prospect research enables you to make smarter decisions about your campaigns.
Specifically, prospect research can help your organization:
- Identify prospects
- Optimize fundraising strategies and set realistic goals
- Identify corporate giving opportunities to maximize revenue
- Develop donor segments and conduct targeted outreach
- Edit and update existing donor data
- Efficiently use fundraising resources and reduce costs
Each of these benefits can amplify the impact of your fundraising efforts. Next, we’ll break down a few specific use cases to explore how prospect research can make an impact on different types of organizations.
If you’re a fundraising specialist, event coordinator, or major gifts coordinator at a nonprofit organization, prospect screening can save you and your team precious time.
Prospect research can help your organization find new prospects or donors already in your system who may have a larger capacity to give. By focusing your efforts only on prospects with the highest potential impact, you can optimize your outreach.
Additionally, with access to more information about prospects’ backgrounds and histories, you’ll be better equipped to maximize revenue from corporate giving programs. Identifying donors who are eligible for matching gifts from their employers will ensure your organization doesn’t miss out on free money.
If you work in public media development, prospect research can transform your individual giving strategies.
Prospect research data can help you craft messaging for a more traditional membership program or pledge drive. You’ll be able to appeal to the motivations of your most high-impact audience members as well as set more accurate goals overall.
Especially in the pandemic, your station will be more successful if you rethink your fundraising approach. Prospect research can support your brainstorming efforts so that you combine creativity and innovation with a deep understanding of your audience.
If you’re employed in a development office at a higher-education institution, you have a huge pool of alumni to analyze as potential donors.
According to DonorSearch’s guide to alumni giving, alumni participation and acquisition rates are dropping, so it’s increasingly important to identify and secure high-impact donors. Prospect research can help you determine which alumni have the strongest affiliation with your institution and a significant capacity to give, allowing you to optimize your outreach.
Research can help you segment these alumni into smaller groups to create more targeted asks and cultivate stronger relationships. You can also use the information you learn to set realistic fundraising goals for campaigns like a dedicated Giving Day.
Investing in prospect research is a useful and remote-friendly tactic to support your organization’s fundraising efforts.
Regardless of the method you choose to investigate prospective donors, the wealth and philanthropic information you discover will help you make data-driven decisions—and stay safe while you’re doing it. Good luck!
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