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Why Your Nonprofit Needs Prospect Research

Bill Tedesco

Your nonprofit wants philanthropically inclined, wealthy, connected donors, and prospect research provides the data that allows you to identify major gift donors fast and effectively. Prospect research helps you find prospects who are most likely to give the large gifts that make it possible for your nonprofit to achieve its mission. You’ll be like a pirate, booty in hand, laughing as he sails into the sunset, except you’ll smell good and say thank you for the generous donations.

Like the shovel that digs for the elusive chest, prospect research strives to unearth the information that allows you to identify and learn more about the major gift donors you want:

  • Previous donations to your nonprofit – Loyal donors rock. Find them. Cherish them. Ask them for money again and again. Prior donations to an organization is the number one indicator of future charitable giving.
  • Donations to other nonprofits – Past philanthropy to other nonprofits matters when identifying major gift prospects for your organization. Donors who give $100k or more to at least one nonprofit are 32 times more likely to make a donation elsewhere than the average person.
  • Political giving – Donations to political campaigns predict an affinity for nonprofit giving and demonstrate a capacity to give. Donors who have given over $2,500 in FEC and charitable giving are 14 times more likely to donate to a nonprofit than the average person.
  • Real estate ownership – Those who own mansions tend to be able to afford much more than just a big home. Donors who own $2+ million in real estate are 17 times more likely to engage in philanthropy than the average person.
  • Business affiliations – Perhaps the prospect has friends or colleagues who might also be good fits as major gift prospects. Additionally, employer information lets you know if a donor is eligible to submit a matching gift.
  • Securities and Exchange Commission (SEC) Insider Stock Transactions – One of many useful indicators returned as part of a comprehensive prospect research process is stock ownership in publically traded companies.
  • Personal information – It is one thing to know that someone is a major gift prospect and another thing to call that person at the right phone number. Prospect research can help your organization identify or confirm donor phone numbers, mailing addresses, email addresses, and other basic contact information.

By focusing on philanthropy and wealth indicators, prospect research returns comprehensive data that lets you more efficiently discover and solicit major donors, which saves your organization time and resources that can be dedicated to other fundraising efforts.

There is no right or wrong way to conduct prospect research, but, depending on your budget, staff, and other circumstances, there are a few preferred methods for nonprofits to choose from:

  1. Do-It-Yourself (DIY) – Organizations can employ one staff member or a team to conduct your prospect research in-house. They compile information from publicly available or subscription-based databases, but, even with the proper tools, it can be a pain to organize all of that information into easily useable and understandable documents, so make sure you have the proper number of staff equipped with the proper resources.
  2. Prospect Screening Consultants – These prospect research gurus can save your nonprofit valuable time and resources. They can help with a variety of needs, such as finding the best prospects in your donor pool, training your staff on prospect research, and developing better prospect solicitation strategies. Take your time to find the consultant who fits the pace and attitude of your organization.
  3. Prospect Screening Companies – It’s a financial commitment to invest in a prospect research company, but it’s an investment that will pay for itself, and then some. Moreover, your information comes organized and easy-to-use, so you’ll save time and resources that can be allocated to other fundraising efforts. Make sure to do your homework to figure out what information varying companies offer and their prices in order to find the best fit for you. It’s important to make all of the right considerations to ensure you’re working with a vendor who can adequately address your needs.

A screening company is a cost-effective prospect research solution that more than returns on its investment. If you go the route of prospect screening, make sure to approach the process with a strategy that will allow your nonprofit to take full advantage of the opportunity:

  1. Prepare a strategy for handling prospect research – You don’t want to pursue prospects without defined intentions. What are your fundraising goals? Who manages your prospect screening process and implements it into the broader fundraising strategy?
  2. Clean up old prospect data – It is one thing to call a major gift prospect at the right number and another to get Edna the crazy cat lady on the other line. Make sure that your old data is updated so that you’re not piling new research on top of an outdated mess and struggling to contact important prospects.
  3. Develop a solicitation plan – How will you contact prospects? Who will contact them? What solicitation strategies will you use?
  4. Analyze prospect screening results – You’re looking for significant donors hidden among a list of less formidable prospects, so it’s important to know what to look for in a major gift prospect.
  5. Land the money – Spritz on the cologne or iron that blouse and get the major gifts that you’ve worked so hard to find. Major gifts take time, so be patient, but persistent, and never forget that it’s better to have solicited and lost than to have never solicited at all.

Different types of nonprofits use prospect research to better identify major gift prospects:

  • Arts and cultural organizations
  • Universities, colleges, and community colleges
  • Healthcare organizations
  • Fraternities and sororities
  • Arts and humanities organizations
  • Religious organizations

Major gift prospects don’t just fall out of the sky. Finding them requires a dedicated approach based upon a comprehensive analysis of prospect information. Start using prospect research today and receive the information you need to maximize the time and resources of your fundraising campaign.

 

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