How to Create a Prospect Research Strategy

Funding, donor acquisition, and donor retention are consistently reported as top challenges for nonprofit professionals. Prospect research, the process of identifying promising major donors, offers a powerful solution for accessing significant contributions from loyal and committed supporters. 

A structured prospect research strategy equips nonprofits to cultivate strong donor relationships, which yield increased gift size and frequency. Knowing more about prospective donors enables your organization to reach the right people with the right message, increasing the chances they’ll respond to your invitation. In other words, your nonprofit can use data to raise major gifts — but only when you implement an effective strategy. Let’s review the phases of a strong donor research strategy.

1. Identify Your Ideal Donor Profile

A donor profile is a digital record of key information about an existing or prospective supporter. Identifying the key characteristics of a promising prospect empowers your nonprofit to prioritize likely donors with tailored messaging and campaigns.

Use a combination of national benchmarks and your nonprofit’s own data to identify key donor characteristics. For example, the average age at which major donors in the U.S. make their first large gift is 66 years old, but your supporters’ past giving trends may indicate your major donors tend to be younger. Look for demographic and psychographic markers, such as age, occupation and net worth, that might predispose them to support you.

Related story: 7 Types of Donors That Could Be Your Next Major Gift Prospect

2. Gather and Analyze Prospect Data

Conduct research to identify individuals exhibiting the characteristics outlined in step No. 1. Your research should assess various data sources, such as public records (including property ownership, Securities and Exchange Commission filings and business affiliations), philanthropic databases and even social media or other online engagement.

Technological advancements increasingly streamline this process — for example, machine learning achieves 92.2% accuracy in predicting major donors (opens as a pdf). Ensure your nonprofit leaves no stone unturned by leveraging prospect research tools, such as:

• News alert services. These provide real-time alerts based on news articles, obituaries and other public records that can help you leverage potential major giving opportunities.
• Wealth screening tools. These analyze giving capacity and flag high-potential prospects based on net worth and philanthropic history.
• Network mapping tools. These illustrate connections between prospects and your nonprofit’s supporters to uncover relationships that may lead to fundraising opportunities.
• Database tools. These aggregate prospect data to highlight giving trends and preferences that may influence your outreach.

You can also evaluate data from existing donors to determine if any of your mid-level supporters might upgrade their support. However, keep in mind that 70% of mid-level donors indicate they’ll continue giving the same amount of support, meaning your efforts might be better spent on new prospects with high giving potential.

3. Prioritize and Qualify Prospects

Using the insights gathered from your research, prioritize prospects according to their likelihood of giving. Prospects with the highest chances of contributing major donations will meet three criteria:

• Capacity. The prospect has the financial means to contribute a major donation.
• Affinity. The prospect resonates with your mission and cares about your cause.
• Philanthropy. The prospect was previously involved with similar causes.

Your nonprofit should invite high-priority prospects to get involved as soon as possible while nurturing low-priority prospects for a later ask. 

For example, let’s say your nonprofit finds a prospect whose recently deceased uncle gave monthly to your organization. This prospect has the financial means to give, but hasn’t demonstrated an affinity for your cause and has no philanthropic history. This individual might not be ready to give immediately, but could potentially become a dedicated supporter after successful stewardship.

4. Personalize Outreach and Stewardship

Next, create customized engagement strategies that target your fundraising appeals according to prospect motivations and preferences. You may segment prospects according to shared characteristics, but don’t limit your personalization to these categories. 

Let’s continue with the example of a prospect whose uncle recently passed away. Considering that 33% of donors worldwide give tribute gifts (opens as a pdf) and this individual’s uncle was a long-time supporter of your organization, the prospect might be willing to give in his honor. In this case, you might periodically reach out to this prospect with your condolences, specific details about their uncle’s impact and an invitation to continue his legacy.

Beyond securing their initial gift, prioritize stewarding long-lasting and authentic relationships with major donors. Since major donors make such significant contributions, your stewardship strategies should be highly intentional and thoughtful — think VIP lunches with your nonprofit’s leadership, behind-the-scenes tours of your facilities or formal appreciation events in honor of your major donors.

As time passes and new audiences of prospects develop, your nonprofit must refine its research and outreach efforts. Continuously monitor and update your strategy as needed, keeping ever-changing trends and insights in mind.

The preceding post was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.