
Whether you work for a university launching a new scholarship fund, an art museum opening a new gallery wing, or an animal shelter purchasing new veterinary care equipment, securing major gifts is critical for all types of nonprofits to achieve their most ambitious mission-related goals.
However, you first need to find the right potential donors before you can successfully solicit major gifts, which starts with conducting thorough prospect research. As DonorSearch’s prospect research guide explains, “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 this guide, we’ll walk through four tips for effective prospect research to help your organization build a major giving program or strengthen its existing one. Let’s dive in!
1. Screen Prospects Holistically
In discussions of prospect research, you might have heard the term “wealth screening,” which traditionally refers to researching potential donors’ financial backgrounds to determine their giving capacities.
But just because a donor’s wealth suggests that they could make a large gift to your nonprofit doesn’t necessarily mean they’re a strong major giving prospect.
Instead, collect a broader range of information that helps you learn whether prospects would be both able and willing to contribute significant amounts to your organization. Look for the following data points (also known as indicators or markers) as you conduct prospect research:
Capacity indicators help you gauge prospects’ giving capacities and include wealth details like real estate ownership, stock holdings, business affiliations, and political giving history.
Philanthropic indicators demonstrate prospects’ charitable tendencies and encompass past donations to your nonprofit or other similar organizations.
Affinity indicators show whether a prospect would be inclined to give to your specific nonprofit. They include a strong connection to your mission, a history of nonprofit involvement besides donating (volunteering, event attendance, board service, etc.), and other personal information like their interests, values, and family ties.
For your organization to consider someone a viable major giving prospect, they need to have all three types of indicators. The stronger their philanthropic tendencies and affinity for your nonprofit, the higher they should be on your outreach list.
2. Leverage Your Nonprofit’s Database
Uncovering all of the capacity, philanthropic, and affinity markers above requires leveraging third-party resources like a prospect research platform, SEC records for stock holding information, and FEC records on political giving. However, your nonprofit’s donor database also plays several critical roles in the prospect research process, including:
Helping you identify existing supporters who would be able and willing to become major donors.
Storing prospect research data in organized donor profiles for future reference.
Tracking the results of your prospecting efforts so you can hone your processes over time.
To maximize these opportunities, integrate your donor database and prospect research platform for seamless data transfer. Additionally, 360MatchPro recommends following data hygiene best practices such as standardizing data entry, regularly updating and validating records, and taking security precautions to ensure donor and prospect data remains safe and useful at all times.
3. Enhance Your Process With AI Tools
Artificial intelligence (AI) use is growing quickly in the nonprofit sector—58% of organizations have incorporated some form of AI into their work. With prospect research, AI is helpful for sorting through data to gain actionable insights you can take with you as you cultivate prospects and solicit donations.
The best types of AI tools to leverage during prospect research include:
Predictive modeling solutions. These tools use machine learning to sift through your prospect research data and rate each potential donor’s likelihood of giving. They then prioritize your prospect lists accordingly so you know which donors to contact first, saving you time and resources while improving your outreach results.
Prospect generator platforms. Use these tools to create AI-driven prospect reports that summarize the most important details about individual donors. This way, you’ll have a unified reference point when developing your cultivation strategy for each prospect.
Content generation tools. Once you’ve drawn conclusions from prospect research, AI content generation tools will help you create tailored outreach materials more efficiently and effectively. Look for a nonprofit-specific content generator that integrates with your predictive modeling solution, which allows your prospect research data to automatically and directly inform your content creation.
Despite its rapid growth, nonprofit AI is still an emerging field. Work with trusted providers who are committed to promoting responsible AI use with their solutions, and be transparent about how your organization uses AI to maintain trust with your community.
4. Use Prospect Research Data to Inform Donation Requests
Prospect research shouldn’t end after your nonprofit reaches out to potential major donors. Instead, continue researching as you build relationships with prospects to ensure you always have the most up-to-date information on them.
As you prepare to request a donation from each prospect, use the data you’ve collected to tailor essential elements of your solicitation to their needs, including:
Timing. There is no set length of time for major donor cultivation—you need to gauge when your relationship with each prospect is in a good place to ask. However, if you discover that their financial situation has changed or they recently made a significant gift to another organization, you should probably hold off on your request.
Amount. Tracking prospects’ financial information and philanthropic engagement elsewhere during the cultivation process can also help you hone in on a dollar amount to ask for that doesn’t leave money on the table but isn’t so high as to offend them.
Designation. Most major donors designate their gifts for specific purposes to have some control over how your organization uses the money. Dig deeper into prospects’ nonprofit involvement, interests, and values throughout their relationship with you to decide which of your projects or programs would benefit most from a major gift and align with their preferences.
Contribution format. Very few major gifts are paid in cash up front. Donors’ financial information and past charitable giving can help you figure out a possible payment plan or suggestions for combining cash contributions with non-cash gifts like stock donations or grants from donor-advised funds. Plus, some prospects you find might be better candidates for your planned giving program than major giving, so keep that in mind as you do your research.
To create the best possible donation requests, combine what you learn through prospect research with the information prospects share as you build relationships with them. Data lays a strong foundation, but personal connections are critical for fully understanding your donors and making fundraising asks they’ll respond positively to.
Implementing these tips at your nonprofit will likely take time, effort, and a little trial and error. Every organization’s goals, technology access, and staff bandwidth are different, so you’ll need to adjust your approach based on these factors. However, the payoff of effective prospect research is massive—securing the most impactful gifts you’ll bring in for your mission!
Commentaires