Enhancing Your Prospect Research Efforts: 3 Things to Try

Picture this: You’re taking a shot in the dark with a potential donor. You think they might be willing to contribute to your large-scale project, and they’ve agreed to meet with you at their office to chat. You arrive at the meeting prepared to talk about your mission and its importance. After you finish your presentation, the potential donor thanks you for your time and effort, but admits that they don’t feel a strong connection to your work and aren’t interested in contributing to your organization at this time.

If you want to avoid situations like this and make more informed fundraising asks, you’ll need to approach your donor interactions prepared. One of the best ways to prepare is to conduct thorough prospect research. Prospect research is the process of using tools like your donor database and government records to identify potential donors who have the financial ability and personal interest in your cause that together signal they may want to contribute to your organization.

Perhaps you’ve never tried conducting prospect research before, or what you’re currently doing is ineffective. This might mean you need to re-evaluate your approach and readjust how you’re conducting your prospecting. That’s where this article comes in. In it, we’ll explore three tips for enhancing your prospect research efforts:

1. Invest in the right tools.
2. Look for both affinity and capacity markers.
3. Work with a prospect research consultant.

As you’re working to improve your approach to prospect research, it may be valuable to thoroughly review the basics of prospecting first. Check out the Donorly guide to prospect research for an overview of prospect research that includes the who, what, and how of the process.

Let’s get started!

Invest in the right tools.

Having the right tools for donor prospecting can make all the difference in discovering more about potential donors. Without the right tools, you could go into a donor relationship missing valuable information about the donor’s values, interests, and financial situation. Worse, you could miss the mark altogether, like the scenario described above.

So, what are the right tools for donor prospecting? While social media platforms and search engines can get you started, you’ll also need access to the following:

• Your organization’s CRM: Your CRM can tell you if a prospect has volunteered or donated in the past and if any of their family members, friends, or professional colleagues have a history of involvement with your organization.
• Prospect research database: A dedicated prospect research database can help you access a potential donor’s demographic information as well as their charitable giving, employment, and political involvement history. Plus, some prospect research databases allow you to view donor lists from other organizations, meaning you can find donors who might be interested in causes similar to yours.

• SEC and FEC filings: Filings from the Securities and Exchange Commission can provide information on a potential donor’s stock ownership, whereas filings from the Federal Election Commission can help you learn more about a donor’s political contributions.
• Matching gift database: Using a matching gift tool, you can discover if a potential donor’s employer offers gift matching. Since donation matching can help increase a donor’s impact, this valuable knowledge can impact your relationship with a donor moving forward.

• Real estate property records: If you need to know more about a potential donor’s real estate holdings, a database like LexisNexis can be invaluable to your prospecting work.

Tools like these empower fundraising professionals to take a holistic approach to prospect research, as they can help you identify individuals with both the financial capacity and the interest in your cause that together mean they could be a great asset to your work.

Look for both affinity and capacity markers.

While one goal of prospect research is to raise more money for your cause, you also want to cultivate lasting donor relationships with people who truly care about your work. This is why both capacity and affinity markers will play a key role in who you decide to start cultivating relationships with.

Let’s take a closer look at capacity markers first. Capacity markers are signals that a potential donor has the wealth or financial capacity to contribute to your cause. A few examples of capacity markers include:

• Stock ownership
• Real estate holdings
• Business affiliations
• Matching gift eligibility

Each of these markers can indicate that a potential donor has the means to make a major gift, be part of your planned giving program, or maybe even donate land toward the building of a new facility.

Affinity markers, on the other hand, help prospect researchers look beyond the hard numbers, and instead, to the person behind the wealth. They show whether a potential donor may feel a personal connection to your organization’s work and want to be a part of it. Affinity markers might include:

• Past donations to or involvement with your organization or organizations with a similar cause
• Political involvement
• Professional or personal connections to other donors in your database

Too many nonprofits make the mistake of focusing on capacity markers alone, honing in on potential donors’ ability to contribute financially and forgetting that caring about a cause is why major donations are made.

Work with a prospect research consultant.

Some organizations conduct prospect research themselves, investing in the tools and resources necessary for thoroughly identifying potential donors and their associated affinity and capacity markers. While this can work well (especially if one staff member or an entire team is solely focused on the task of conducting prospect research), smaller organizations may struggle to conduct their own research in-house.

This is where prospect research consulting firms come in. Hiring a prospect research consultant can be extremely beneficial to organizations that don’t have the resources to conduct research themselves, who want to do a comprehensive overhaul of their strategy, or who have complex goals that require unique strategies.

If you think that working with a consultant is right for your organization, ensure you approach the process of hiring one with a strategy in mind to make the most of your partnership with them. Here are five things to consider:

1. Your organization’s needs. Does your nonprofit need assistance prospecting for a large-scale campaign you plan to run in a few years? Are you just interested in general prospect research to seek out major gifts? Before hiring a consultant, work with your organizational leaders to identify what you need help with.
2. Time and location requirements. How long are you expecting your partnership with your consultant to last? Are you willing to work with a consultant remotely, or would you rather have them work alongside you in your office? Time and location will be two big factors in whittling down your list of potential consultants.
3. The consultant’s track record. It’s a good idea to familiarize yourself with a consultant’s work before putting them on your shortlist. Don’t be afraid to ask for samples of their work or ask their past clients for feedback on their performance.
4. Cost. Go into the process of hiring a consultant with a general budget in mind, and make sure you and your board are on the same page before you do!
5. Organizational culture. It’s critical that your consultant will work well within your organization. They should understand your cause and goals and have a similar fundraising philosophy.

Taking the time to go through the hiring process thoroughly will ensure you end up working with someone who can truly help your organization improve how it finds donors and solicits support.

Bonus Tip: Add a personal touch to prospect outreach.

Thorough prospective research is really only the first step to securing a major donor’s support. Once you’ve conducted your research and feel confident about approaching a prospective donor, you’ll need to do so with great care to create a genuine relationship that will lead to successful donation asks and long-term retention.

Here are a few ways you can start building rapport with the donors you find through prospecting:

• Get to know them in a low-stakes setting. Your first interaction with a new potential donor should be a basic get-to-know-you conversation. Meet over coffee or lunch and chat with the individual about their work, family, interests, and values. Give them a quick overview of your nonprofit’s work, but avoid making a fundraising ask during this first interaction.
• Invite them to subscribe to your email newsletter, social media profiles, and other communications. Once you’ve gotten to know the potential donor and told them a bit about your organization, invite them to subscribe to your organization’s communications so they can get ongoing updates on your operations. This will put the potential donor in the loop so they can learn more about your work and, eventually, how they can contribute.
• Thank them for allowing you to introduce them to your organization. Expressing gratitude is a great way to build rapport with a potential donor. After your first few meetings, send them a thoughtful thank-you note letting them know you appreciate them taking the time to chat with you and learn about your mission. According to Fundraising Letters’ guide to donor thank-you letters, creating this habit of showing gratitude to your donors can go a long way in helping you retain their support down the road.

Much like prospect research itself, getting to know the prospective donors you’ve found through your research will take time, but rest assured knowing that this is time well spent. Making the effort to forge a genuine connection with a potential donor will pay off in the end as you find ways to work together to further your cause.

Prospect research is a complex process, and it takes time and resources to get it right. However, as you incorporate these tips into your efforts, you will find more potential donors for your organization. You’ll also start building relationships and identifying ways they can support your mission. Good luck!

About the Author

Sandra Davis, Founder & President of Donorly

Founder and President Sandra Davis leads Donorly with 30 years of fundraising experience and leadership. Sandra has consulted on numerous capital campaigns, led strategic planning and feasibility study efforts, and managed board development and recruitment efforts, planned giving, special events, and annual giving programs. Under her leadership, Donorly has grown to support the fundraising efforts of over 75 clients to date.