3 Ways to Apply Prospect Research at Your Nonprofit

If you’ve worked in the nonprofit sector for some time, you know how critical major donor fundraising is to achieving your organization’s most ambitious goals. You’ve likely also realized from experience that you need to know potential major donors well in order to successfully solicit contributions from them. 

Comprehensive prospect research lays the foundation for getting to know these supporters. In addition to showing you if supporters are viable major donor candidates, prospect research helps you understand their backgrounds and interests. However, you’ll need to adapt your prospecting processes for each of the different initiatives major donors support at your organization. 

In this guide, we’ll dive into three common applications of prospect research and the donor data analytics that are most important to prioritize with each one. But first, let’s get a general idea of the information you can find through prospect research and why it’s important.

What to Look for When Conducting Prospect Research

Generally speaking, prospect research should allow your nonprofit to identify individuals who are able and willing to make a major gift. While the wealth screening processes of the past focused on giving ability, today’s fundraising professionals are increasingly understanding that wealth alone doesn’t make someone a good prospect. They also need to be philanthropically inclined and demonstrate an affinity for your specific organization and cause.

When conducting prospect research, look for these three overarching types of data (also known as markers or indicators) that will help you find viable potential major donors:

• Capacity (wealth) indicators: Real estate ownership, stock holdings, business affiliations, political giving history
• Philanthropic indicators: Previous donations to your nonprofit or other similar organizations
• Affinity indicators: Connection to or passion for your mission, history of nonprofit involvement outside of donating (volunteering, event attendance, board service, etc.), other relevant personal information (e.g., interests, values, or family ties).

High-quality data is essential for correctly identifying the best prospects and starting the cultivation process off on the right foot. In addition to your donor database and public records, invest in a prospect research solution that compiles data from a variety of trusted sources, has a high accuracy rate, and is updated regularly to ensure you can always find recent, reliable information on potential donors.

Common Prospect Research Applications

Now that you understand general prospecting criteria, let’s dive deeper into this process’s most popular applications according to DonorSearch’s ultimate guide to prospect research.

Capital Campaigns

Capital campaigns are focused fundraising efforts that generate revenue for large-scale initiatives over defined periods of time. Prospect research should be the last step in your capital campaign planning process so you enter the quiet phase (the first fundraising phase where you’ll bring in 50-70% of your revenue from major gifts) with a strong starting point for outreach.

However, there are a few unique considerations that come with capital campaign prospecting, including:

• Finding the right number of prospects who could give specific amounts. One key campaign planning document you’ll create is a gift range chart, which outlines the major gift amounts you need to secure to hit your quiet-phase fundraising target. You’ll need to identify two to four prospects you could ask to give at each level. That way, you can ensure you get the amounts you need, even if your first-choice candidates turn you down.
• Keeping your deadline in mind for donors who may give in installments. Not only do capital campaign prospects need to be able and willing to give the amount you ask for, but they also have to contribute it within your campaign’s time frame. If your campaign will last three years and a prospect’s financial situation is such that they’d need four years to give the amount you want to ask for, you should put them at a lower level of your gift range chart so they can make their entire donation by the deadline.
• Ensuring potential donors’ interests align with your campaign’s focus. Prospects’ interests and values will often match certain fundraising initiatives better than others, so you need to approach those who would want to support this campaign’s goal. For example, a university fundraising team should prioritize prospects with different interests when launching capital campaigns to build new science labs, sports stadiums, and performing arts spaces, respectively.

Capital campaigns take a lot of effort and resources to execute well. The more time you put into identifying and prioritizing prospects during the planning phase, the easier it’ll be to cultivate donor relationships and solicit gifts once the campaign is underway.

Annual Fundraising

While donors at all levels can contribute to your nonprofit’s annual fund, most of your donations will likely be at the major giving level. Some factors specific to annual fundraising to take into account as you research prospective donors include:

• Donors’ desire to restrict their contributions. Many major donors want some control over how your organization uses their fundraising dollars, so they’ll designate their gifts for specific purposes. However, annual fund donations are supposed to be unrestricted so you can put them toward any of your nonprofit’s expenses, including overhead. Ensure prospects’ alignment with your mission is strong enough that they’d be okay with letting their money go without any specific designations.
• A strong focus on employment data. Business affiliations don’t just provide insight into prospects’ financial situations—they also let you know which potential donors could tap into corporate matching gift programs to essentially double their annual fund donations without contributing extra out of pocket. Then, you can mention matching gift eligibility in these donors’ appeals to maximize your annual fundraising potential.
• Assessing past donors’ potential to upgrade their support. A common misconception about prospect research is that it’s only useful for finding brand-new potential major donors. In reality, screening previous annual fund donors can help you find individuals who could level up their giving—even to the point of becoming a major donor!

As you dive into annual fundraising, remember that transparency—about your nonprofit’s financial situation, the purpose of your annual fund, and how you’ve incorporated donor data into your processes—facilitates the trust needed to solicit donations successfully.

Planned Giving

Planned or legacy giving is a diverse area of fundraising. According to FreeWill’s planned giving guide, these contributions can take the form of bequests, charitable gift annuities, charitable lead trusts, charitable remainder trusts, and various other vehicles for contributing assets to your nonprofit.

When identifying potential legacy donors for your organization, keep these prospecting considerations in mind:

• The increased relevance of certain wealth data points. Major giving capacity indicators like real estate and stock ownership are still important with planned giving, but prospects who have a life insurance policy and a signed last will and testament are especially good candidates. Also, don’t limit your search to major donors—mid-level supporters can also make legacy gifts because they appreciate in value over time.
• Demographic targeting. Although some younger donors make planned gifts, prospects in the 45-65 age range are among the best to target because they’re likely starting to think about the future of their assets, but their estates may still increase in value before you receive their gifts.
• Ensuring donor loyalty. A strong affinity for your organization and its mission is even more important with planned giving. By building strong relationships with donors, you can prevent them from redirecting their gifts between when they’re pledged and when they’re paid out.

Many nonprofits treat planned gifts as a nice surprise, but it’s more beneficial to actively pursue them. Planned giving is at the top of the donor pyramid, even above major giving in its value to your organization. Creating a dedicated planned giving program, marketing these opportunities, and researching prospective donors will help your nonprofit secure these critical gifts and future-proof its operations.

The applications above are just three of the many ways prospect research can aid in your nonprofit's fundraising efforts. When you understand what indicators make a good major donor, invest in the right tools, and set clear goals for each initiative, you can adapt your prospecting approach to find potential donors who will meet all of your organization’s needs.