How Prospect Research Powers Nonprofit Fundraising Campaigns

If you’re an experienced nonprofit professional, you know that accurate donor data is critical to successful fundraising campaigns. Understanding your audience’s behavior and preferences can help you communicate with them more effectively, choose more effective fundraising methods, and achieve more ambitious campaign goals.

For campaigns that depend on large gifts, prospect research is necessary for thorough donor data collection. Rather than simply learning about your supporters in the aggregate, you’ll need to get to know each potential donor individually so you can create a tailored strategy to get them to make a significant contribution.

In this guide, we’ll review the general principles, process, and applications of prospect research to help your nonprofit leverage it for greater fundraising success. Let’s dive in!

According to DonorSearch, “Prospect research is a technique used by nonprofit fundraisers, major gift officers, and development teams to identify high-impact donors within and beyond an organization’s current donor pool. Through this process, nonprofits gather an immense amount of data—information about donors’ backgrounds, past giving histories, wealth indicators, philanthropic motivations, and more details that help determine prospects’ likelihood of giving.”

In conversations about prospect research, you may have heard the term “wealth screening.” Traditional wealth screening—evaluating potential donors’ financial giving capacity—is just one part of thorough prospect research. After all, just because someone can make a major gift doesn’t necessarily mean they want to contribute a large amount to your organization.

Comprehensive prospecting looks for three types of data points on each potential donor:

• Capacity indicators include the traditional wealth data that provides insight into prospects’ giving ability, such as real estate and stock holdings, business affiliations, and political giving history.

• Philanthropic indicators demonstrate prospects’ charitable tendencies and include donations to your nonprofit and other similar organizations.
• Affinity indicators show prospects’ likelihood of supporting your specific nonprofit due to their passion for your mission; past engagement through event attendance, volunteering, advocacy, or board service; and personal information like interests, values, and family ties.

A potential donor needs to exhibit all three types of indicators to be considered a viable prospect for your nonprofit’s major giving initiatives. The importance of each of these indicators may change from campaign to campaign, depending on how much funding you need and what you plan to do with the donations you receive.

Prospect research is most useful for campaigns where you’re reaching out to just a few potential donors, each of whom will give a significant amount of money. This is because it usually takes at least a few months to cultivate an individual relationship with each prospect at these levels, so you need to go into those conversations with as much knowledge as possible to guide your strategy.

Some fundraising initiatives that particularly benefit from prospect research include:

• The quiet phase of a capital campaign. At the beginning of a large-scale fundraiser to launch a construction project or major investment, you’ll create a gift range chart of all of the major contributions you need to secure. Then, prospect research can help you find the right donors to contribute each amount on the chart.

• Annual fund solicitations. A large portion (often around 60%) of most nonprofits’ annual funding comes from major gifts. Not only can your organization use prospect research to secure these contributions, but you might also screen past annual fund donors to see if it would be feasible for them to upgrade their support this year.
• Planned giving programs. According to NXUnite’s legacy giving guide, “People who have a will, life insurance policy, property, or other significant assets are more likely to give [planned gifts].” By conducting prospect research on potential legacy donors, you can actively solicit these high-impact contributions from strong candidates, securing your nonprofit’s future.

Some fundraising organizations also conduct prospect research for unique, mission-specific initiatives. For example, a university could use prospect research to identify potential donors for scholarship funds, or a hospital might leverage it when creating a grateful patient donor program.

To develop a modern, robust prospect research process for your organization, you’ll need to incorporate two types of software into your strategy:

• Databases provide the basic information you need to identify viable prospects. To supplement the internal supporter data in your nonprofit’s CRM, use a third-party prospect research database that compiles wealth and philanthropic information from various trusted sources, such as government investment records and other nonprofits’ annual reports.
• Artificial intelligence (AI) tools enhance the prospecting process by helping you sort through, analyze, and draw actionable conclusions from the information in your databases. The best kinds of AI solutions for prospect research include predictive modeling tools that help you visualize data and prioritize prospect lists, as well as prospect reporting platforms that generate summaries of essential information on each potential donor for easy reference.

Whenever possible, choose prospect research tools that integrate with each other and with your existing CRM. This will help streamline information transfer, reduce the risk of human error, and prevent data silos from forming during the process.

While prospect research is most commonly used to identify donors at the beginning of a campaign, it’s most effective when you continue developing and leveraging screening data throughout a supporter’s entire relationship with your nonprofit. Here is a quick overview of how this works at each stage of the donor lifecycle:

• Acquisition: Conduct an initial round of research to identify potential donors, prioritize your prospect list, and create a data-driven outreach strategy.

• Cultivation: Compile your prospect research data and information gleaned from interactions with each potential donor into profiles to help you adjust your strategy and determine the right time to request a donation.

• Solicitation: Revisit your prospecting tools to ensure you have the most up-to-date information on each prospect as you create your ask.

• Stewardship: Use your collected data to choose the best recognition method for each donor after they give.

• Retention: Refer to your donor profiles as you re-establish a regular communication cadence and promote opportunities to stay engaged with your mission.
• Upgrade: Leverage your prospect research tools to update your information on each donor again so you can decide when and how much to ask for when requesting your next, larger donation.

Additionally, your nonprofit likely experiences donor attrition at all stages of the donor lifecycle. However, by screening lapsed donors when you launch a new campaign, you can increase your likelihood of bringing them back into the fold since you’ll understand their preferences and current situation more deeply, which will inform your strategy.

Prospect research can elevate many aspects of your nonprofit’s fundraising campaigns, no matter your mission or goals. Just make sure to use high-quality tools to find comprehensive data that will give you a deep understanding of your potential donors and lay the foundation for successful relationship-building throughout your initiatives. Happy fundraising!