The Basics of Prospect Research

By | Engagement, Fundraising, Industry, Organizational Health | No Comments

Prospect research is a fruit salad. It’s not just pineapple or watermelon or honeydew, but all varieties of research techniques that help fundraisers, development teams, and nonprofits to find major gift prospects.

The fruits of prospect research’s labors include background on donors such as:

  • Previous Donations – Past gifts to your organization and similar nonprofits are the top indicators of high quality fundraising prospects.
  • Nonprofit Involvement – Nonprofit board members, foundation trustees, and directors all understand the importance of philanthropy and are more likely to give.
  • Political GivingDonors of $2,500 or more in political gifts are 14 times more likely than the average person to make a philanthropic donation. Political giving is an indicator of philanthropy and should not be confused for a wealth marker.
  • Business Affiliations – Discover new prospects through people your donors are connected to as well as eligibility for matching gift grants.
  • Wealth Markers – Real estate ownership, stock holdings, and boat ownership are examples of wealth indicators that reveal a prospect’s capacity to give.
  • Personal Information – Don’t forget to check up on mailing addresses, phone numbers, spousal information, and other information in order to contact the major gift prospects you find.

This data helps to determine whether or not a prospect has the capacity and affinity to make a charitable donation. While wealth matters, a history of philanthropy matters more, because the goal is to find philanthropically inclined prospects first and capacity to give second.

While prospect research does help find prospects who can give large gifts, typically of $5,000 or more, it does much more than merely provide names on a list:

  1. Identification – Some gifts can take a long time to cultivate, and you may not receive them until a donor passes away. Learn who is apt to be a planned or deferred donor in order to leverage significant donations from those who tend to give minor amounts.
  2. Generation – A great place to find new donors is on the donor lists of similar organizations. You can also look to nonprofit foundations and boards for wealthy people inclined to give charitably. While your list of annual fund donors is the best place to look for major gift prospects, and the best place to start, prospect research opens up the opportunity to find entirely new donors, too.
  3. Conversion – Past giving is the top indicator of future giving, so be sure to research your annual donors to discover who has the capacity to give more.
  4. Refinement – Time matters, and prospect research allows you to pinpoint major gift prospects so that you can allocate your resources accordingly and move on to other phases of fundraising.
  5. Optimization – For organizations that have constant influxes of donors, it’s important to routinely screen prospects in order for staff to focus fundraising efforts on the right people. It’s also important to analyze giving patterns and update missing information in your nonprofit’s database in order to create a more efficient fundraising effort with more specific ask strategies.

There is no right or wrong way to conduct prospect research, but you don’t want to show up for the fishing trip with an insufficient rod. A feasibility study can help you to determine which of the three most common prospect research methods is right for your nonprofit:

  1. Prospect Screening Company – Save time by employing a screening company to research large batches of donors against a plethora of databases. You’ll receive philanthropic indicators, wealth markers, and individual and group prospect overviews. This allows your staff to spend more time on other fundraising efforts.
  2. Prospect Research Consultant – A good consultant will dig deeper than a screening to discover the specific information you need to deliver better pitches to your high quality prospects. Some consultants will also train your staff on prospect research, develop cultivation strategies, and help to manage your relationships with high-profile prospects.
  3. Do It Yourself – You can do it! Or the prospect researcher on your staff can. By providing your researcher or team of researchers with the proper tools to find and organize donor information, you can conduct prospect research in-house, and to the detailed degree of your choosing. If you’re a smaller nonprofit that can’t afford a staff researcher then consider the ways to conduct makeshift prospect research on a budget.

Prospect research is best used in tandem with other habits that lead to effective business outcomes, as it is one thing to obtain more prospect information and another to have the systems in place to maximize that data’s potential and turn it into more major gifts for your organization.

3 Ways to Engage Donors

By | Engagement, Fundraising, Industry | No Comments

Did you know that engaged members are 3x more likely to give?

According to a study by NTEN and Charity Dynamics, nearly half of donors give a majority of their annual total donation to the charity to which they feel most connected. While these supporters may donate to multiple charities, they are likely to become engaged with a single organization.

How can you best engage your members, donors, and community to keep your cause top-of-mind? Some tips to increase engagement and increase giving:

  1. Think like a donor. According to Harvey McKinnon’s book, The 11 Questions Every Donor Asks and the Answers All Donors Crave, thinking like a donor is key to understanding roadblocks to engagement and giving. Donors wonder, “Why me?” Donors want and need to know that they are important for reasons other than their checkbook. Interacting with them outside of solicitations is important. For more ways to think like a donor see our Industry Blog Post on the subject.
  2. Ensure their first engagement happens quickly, preferably within 24 hours. Daxko membership and engagement consultant, Lori Swann believes that engaging members and donors quickly should be the first priority at every non-profit. In addition, Daxko fundraising expert, Sarah Kleban states, “Taking the time to thank each donor with a personal call is a special way to recognize donors and make them feel like they are valued.” The same theory applies to members. Member-based non-profits should reach out to new members quickly, even if it’s just to thank them for becoming a member and ask them if they have any initial questions. It’s a great way to set the stage for a long-term relationship.
  3. Tell stories. Success stories not only provide living proof of donations in action, but they also inspire members and donors with stories of real people. Share these stories on your website, through social media or even through local news outlets. A great example of nonprofit storytelling is provided by, Michelle Amaral, PhD, who spearheaded a campaign to reunite pets lost in the devastating Alabama tornadoes in April 2011. Through a simple Facebook page, countless animals were returned to their owners and the page garnered more than 35,000 “likes” on Facebook through stories of animals being reunited with their owners.

3 Steps to Think Like a Donor

By | Fundraising, Industry, Leadership, Organizational Health | No Comments

We have written so many times about engagement from the membership perspective.  But, engagement is also important when thinking about donor relations and your non-profit. Veteran fundraiser, Harvey McKinnon’s excellent book, The 11 Questions Every Donor Asks and the Answers all Donors Crave: How You Can Inspire Someone to Give Generously, helps non-profits think like those donors. Connecting with and engaging these donors is the key to successful and rewarding fundraising campaigns at your association.

  1. “Why me?”  McKinnon points out, whether spoken or not, is a donor’s first question. He says “…by asking it, the donor is trying to situate himself in the world or at least in your world.” For successful donor relations, donors want and need to know that they are important for reasons other than their checkbook. As a donor, I don’t recognize my importance to an organization and you know what? I need someone to tell me.
  2. “Why your organization?” The first answer that comes to many people’s minds is, “we do good work.” Think about this though, many organizations do good work. You need to dig deep enough to find your organization’s distinguishing feature which McKinnon calls your “unique selling proposition.” What is your unique selling proposition? Your stories. McKinnon reminds readers that people will most likely forget facts, but they will remember stories that trigger their emotions. These stories are why your organizations deserve support.
  3. “Will my gift make a difference?” This is a question that you know the answer to. Staff members at your organization are on the front line everyday either helping shape or watching the transformations of these donor relations stories. Your members, the people you serve, all have real life stories. Share these stories. Donors want and need to see that their support changes lives. McKinnon points out that donors need this assurance. And you know what? The donors may be so moved by the expression that they may feel compelled to give even more…

We will continue to explore these questions and others your donors may ask when considering a contribution. McKinnon’s book provides an excellent reminder that looking at donor relations from the donor’s perspective helps them understand exactly how their contribution helps the organization and drives the mission.