Kim Becker Cooper is a guest contributor for Nonprofit Hub and the Marketing Director at DonorSearch, a prospect research and wealth screening company that focuses on philanthropy. She has ten years of experience serving as a frontline fundraiser, prospect researcher and consultant for nonprofits.
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Finding major gift donors without prospect research is like searching for a needle in a haystack. Fundraising is all about time. You can’t dedicate excessive effort to every prospect, so you don’t want to waste your finite resources pitching to donors who either don’t care or don’t have the capacity to give. With prospect research, you can pinpoint the best prospects and allocate your time accordingly.
What is Prospect Research?
Prospect research reveals personal backgrounds, wealth indicators and philanthropic history so you can quickly identify and focus your attention on the best prospects. You’ll be able to predict both a prospect’s giving capacity and his affinity for your nonprofit. Fundraisers, development teams and nonprofits all use prospect research.
Does the prospect own a boat? Does he volunteer on the board of a nonprofit? Does he like to watch the sunset while sipping a glass of sweet vermouth? Okay, so prospect research can’t reveal everything, but the data will paint a vivid portrait of who your prospect is, how he/she spends his time, their affinity for charitable giving, and their capacity to give. This information not only unearths new prospects, but allows you to tailor your fundraising pitch to the individual.
How Can Nonprofits Conduct Prospect Research?
Nonprofits have three ways to conduct prospect research (none of which involve magic):
1) Do-It-Yourself (DIY)
This is the low cost option, but it requires both time and manpower. You may have a single staff member or a team to conduct your research, but, even with the proper tools, there are a lot of databases to sift through. Then there’s the challenge of organizing all of that information into comprehensible documents. You can conduct prospect research in-house, but realize that it’s a full-time job.
2) Prospect Screening Consultants
Consultants tend to be former prospect researchers who are familiar with the nonprofit space. They’ll find the best prospects in your donor pool, train your staff on prospect research and develop better prospect strategies while supporting prospect relations. Remember—it is important to take the time to find the right consultant for your nonprofit and bring them up to speed with the ins-and-outs of your organization.
3) Prospect Research Companies
You can pay for a company to conduct the research for you, which saves your most valuable resource—time. However, do take time to figure out what information you want and what information the various prospect research companies provide. Any data is not as valuable as necessary data.
What Information Should You Seek?
Prospect research returns tons of information, and you only have so much time to decipher it all, so you want to focus on the data that best predicts charitable giving. Those indicators are:
1) Previous Donations to Your Nonprofit
Donors who consistently give are prospects to give future major gifts. Pay attention to your loyal donors and give them the necessary attention.
2) Donations to Other Nonprofits
If a prospect gives to similar nonprofits then he’s a good candidate to give to you. When a history of charitable giving is present, you can focus your job on convincing the prospect that your cause is worth a significant donation.
3) Political Giving
A positive correlation exists between political donations and charitable giving. If a prospect gives generously to campaigns and has the capacity to give more, then your nonprofit may be the destination for those additional funds.
4) Nonprofit Involvement
Employees of nonprofits, volunteers and nonprofit board members understand the importance of charitable giving and tend to be receptive to donation asks.
5) Real Estate Ownership
Not only does property ownership and the value of that property indicate wealth, but donations can come in forms other than money, such as in real estate. Some prospects don’t have money to give, but they do have significant real estate. Prospect research lets you know what type of gift to request.
6) Business Affiliations
You can find more donors by identifying where the prospect works and who he works with. Also, it’s smart to figure out if the prospect works for a company that offers matching gift grants, which allows donations to be doubled at no additional cost to the donor.
7) Securities and Exchange Commission (SEC) Insider Stock Transactions
Stock is another form of charitable gift, as well as a wealth indicator. You can also learn what the prospect cares about from where he invests.
8) Personal Information
You may never know if your prospects write poetry while the sun sets, but you can gain insight into hobbies, as well as learn of basic contact information and marital status.
Prospect research doesn’t have to be a hassle, and it can teach you invaluable facts about prospects. You’ll find new prospects, easily identify major gifts donors and be more efficient with your fundraising efforts.
