Donor Prospect Research

What is donor prospect research?

Donor prospect research refers to techniques nonprofit fundraising and development teams use to gather data about their current and prospective donors to expand a donor base and drive more high-impact donations. 

This data includes biographical information, past giving history, corporate and philanthropic affiliations, donor affinities, and wealth screening. Fundraising professionals then use this data to build outreach strategies that target new and past donors who have the potential to make significant gifts, support capital campaigns, and increase their annual giving. 

Donor prospect research software streamlines this process, pulling data from an organization’s donor database as well as public sources like Form 990s, tax returns, annual reports, and social media. Information pulled from this software feeds back into a nonprofit CRM,  allowing fundraisers to build a prospect pipeline and set action steps for outreach. 

Benefits of conducting donor prospect research

The benefits of conducting and using donor prospect research include: 

• Maximize contributions from current donors: Donor prospect research uncovers hidden insights within a nonprofit’s existing donor base that provide context to giving patterns. Some donors may have the potential to make major gifts but only donate small yearly amounts. 
  Armed with prospect research, fundraisers can build a strategy to engage these donors and increase their annual giving contributions. Similarly, this research can uncover missed corporate giving opportunities from matching gift programs that employees are not utilizing.

• Identify prospective donors: Donor prospect research software helps nonprofits identify prospective donors who make philanthropic contributions to similar organizations. These tools mine public sources to reveal donor affinities, average donation amount, and estimated net worth. By accessing this information, fundraisers can reach out to individuals more likely to support their organization’s mission.
• Improve major giving: Donor prospect research gives fundraisers access to several wealth indicators for donors that make it easier to target specific individuals who have the giving capacity to make a significant donation. 
  This ensures that fundraisers optimize their time cultivating donor relationships and securing major gifts. This can also uncover hidden major donors from an organization’s existing donor base and provide additional background information to help strengthen the relationship with those donors and increase their annual giving.

• Maintain accurate donor records: Donor cultivation and solicitation relies on accurate, up-to-date information for donors. Donor prospect research software helps maintain accurate records for donors, including their address, marital status, employment affiliation, and contact information, by pulling from publicly available sources like post offices, government databases, and social media,

Basic elements of donor prospect research

Donor prospect research consists of two major data elements:

• Philanthropic indicators and affinities: Philanthropic research helps nonprofits understand how and why donors give and rates a prospect’s willingness to give to a specific organization. 
  These indicators include past donations to the fundraiser’s organization and other organizations like theirs; past and current nonprofit involvement as a board member, activist, or volunteer; and personal and biographical information that provides deeper insight into the hobbies and interests of prospective and current donors so fundraisers can target ideal candidates for giving.

• Wealth screening: Wealth screening shows a prospective donor’s ability to contribute. These indicators include real estate and stock ownership, corporate affiliations, career and salary history, and political contributions. 
  Wealth screening allows fundraisers to assess a prospective donor’s net worth and average contribution size. Concerning corporate affiliations, fundraisers can also utilize this information to target sponsorship opportunities.

Donor prospect research best practices

To make donor prospect research work, follow these best practices:

• Identify fundraising goals: To maximize the results of donor prospect research, nonprofits should first determine their fundraising goals. For example, if they’re targeting donors for a capital campaign project, they should understand their timeline and target amount to raise for each phase. 
  For smaller nonprofits, they should be realistic about what a major gift looks like for their organization. This will make targeting specific individuals who will most likely help reach those goals easier.

• Clean the existing donor database: Cleaning the current database before conducting donor prospect research ensures the most accurate results. 
  By eliminating outdated personal information, duplicate records, misspelled names, and other related errors, fundraisers can cut down on distractions that diminish the effectiveness of the research. This also can save costs when utilizing prospect research tools that charge per report.

• Validate and segment the research results: Nonprofits should screen the data to ensure total accuracy, regardless of the source. Once errors have been identified, corrected, or omitted, fundraisers should start plugging this data into their workflow. Can the data support any outreach with existing donors? Which prospective donors should be targeted first? 
  Typically, modern donor prospect research software provides a score when pulling reports on donors, giving fundraisers a clearer picture of a donor’s likelihood to support their organization. 

• Establish a cadence for recurring research pulls: To ensure accurate, up-to-date information, nonprofits should determine the appropriate cadence for conducting repeat prospect research on their target donors to ensure tailored outreach and stay ahead of any changes to giving capacity.

Learn more about donor acquisition strategies to ensure you have a steady flow of revenue to accomplish your nonprofit's goals.