5 Ways To Use Prospect Research In Major Gift Fundraising
Every fundraising campaign needs a reliable structure to support the cultivation of major gift donors. Prospect research provides the foundation for any fundraising efforts that seek to identify and engage new or existing major gift donors.
Prospect research can help your fundraising team unearth a wealth of information about prospective donors such as:
- Previous charitable donations
- Involvement in nonprofit foundations
- Donations to political campaigns
Knowing how to leverage this information can drastically improve your major gift fundraising.
Here are five ways you can expect to see improvements in your major gift solicitation:
- Identify Major Gift Prospects
- Update Biographical Information
- Find New Prospects
- Map Out Cultivation
- Explore Engagement Opportunities
Let’s discuss each area on its own.
1. Identify Major Gift Prospects
Major gift prospects tend to be donors who give $5,000 or more to your nonprofit (although that minimum number can vary by organization).
The top giving indicators include a combination of both philanthropic and wealth markers. These markers include:
- Charitable giving to your nonprofit.
- Charitable giving to other organizations.
- Involvement as a volunteer or board member of a nonprofit or foundation.
- Political giving.
- Real estate ownership.
It’s important to research both the philanthropic histories and the wealth capacities of donors.
- According to our research, donors who gave $5k-$10k were about 5 times more likely to donate to another nonprofit, while donors who gave $100k+ were over 32 times more likely to donate elsewhere.
This positive correlation is also seen in wealth markers, such as real estate.
- Donors with the highest valued real estate, valued at $2 million or more, were over 17 times more likely to give to another nonprofit.
Knowing the predictors to look for is the first step, but digging into that information and what it means reveals that, once you understand who your major gift donors are, you can further segment them into groups, such as your highest quality major gift prospects.
Both philanthropic and wealth indicators can be powerful predictors on their own, but when the two come together, you can discover not just willing donors and not just wealthy donors, but willing donors who can give significant gifts.
Potential major gift donors could be:
- Loyal donors who give smaller gifts to your nonprofit but larger gifts to other organizations.
- People who have never given to you but donate to similar causes.
- Relations of other donors, whether major givers or not, who, with the aid of prospect research, you identify as having the capacity to give generously to your nonprofit.
If you know what to look for, prospect research can make a major gift prospect stand out from the crowd of seemingly similar donors.
2. Update Biographical Information
Dialing wrong numbers, calling someone ‘Mrs.’ instead of ‘Ms.,” and talking to a Patriots fan about how great the Jets are can waste valuable time and money. It’s important to stay updated on basic prospect information, such as:
- Contact Information. Name, address, phone number, email, employment status, etc., can all change with the natural passage of time. Knowing whom to call, where to call them, what to call them, and other basic information goes a long way towards both building trust and establishing a relationship in the first place. It’s essential that you pay careful attention to donor phone numbers, especially with the rapidly evolving capabilities of mobile giving.
- Marital Status. Is a donor single? Married? Knowing this information is important because spouses may have the potential to become major gift prospects too.
- Hobbies and Interests. Interests can reveal the causes prospects care about, how they think, and discussion topics both to humanize conversations and to help you relate better to what they invest themselves in. For example, Jim might be a former football player while Sandra spearheads a book club. If you can relate your nonprofit to football for Jim and a crime novel for Sandra, then you take the step from being just another nonprofit seeking money to a nonprofit who gets it and cares that each and every donor is giving to a cause that truly matters to him or her.
This information makes it easier to contact donors and allows you to tailor pitches to the individual prospect. With this biographical data at your fingertips, you can ensure you’re capitalizing on the time and energy you spend cultivating each prospect, guaranteeing that each contact is as valuable as possible.
3. Find New Prospects
Finding new donors is all about uncovering connections to your existing donors as well as discovering the donors of similar nonprofits.
Connections that indicate potential prospects include:
- Board members of nonprofits and foundations.
- Business, personal, and familial relations to existing donors.
- Donors to similar nonprofits.
Prospect research allows you to obtain new names and then discover if those prospects are good fits for your nonprofit.
Step one is gaining more names, and step two is narrowing that list down to legitimate prospects.
Step three is taking your short list and determining the optimal way to pursue the names in front of you.
First, you’ll want to look to your current support network and see who they know and have affiliations with. Make note of potential prospects with whom you have a mutual contact.
Rather than performing some type of cold outreach strategy to get in touch with a potential major gift prospect, you can ask your mutual contact to make the introduction. With a proper introduction, the hope is that you begin your relationship on solid, trusted footing.
And if you don’t have any mutual contacts, you want to steer toward prospects who have given major gifts to similar nonprofits.
Your nonprofit already has a leg up with someone who has given to a similar cause — they’re clearly interested in aiding the kind of work you do.
You can leverage their interest, alongside the various biographical details you obtained, to craft a solicitation strategy that is customized for that particular prospect.
At the end of the day, successful acquisition of new major gift prospects is all about finding those who are not only qualified but who your nonprofit can make a connection with.
4. Map Out Cultivation
It’s been alluded to throughout this article, but it warrants noting here that one transformative benefit of prospect research is how it helps you personalize your cultivation and solicitation strategies.
Major gift acquisition is extremely challenging. It’s high stakes and high rewards.
As such, your team deserves to be able to prepare with as much information as possible. Standardized asks and templated requests won’t work when you’re asking for a game-changing gift.
After the gift is secured, you should pay careful attention to your traditional follow-up methods, like donation receipts.
Major gift donors aren’t your average donors and therefore require more than your average practices.
Thanks to the help of prospect research, you can identify the best plan for successful solicitation. This could include:
- Inviting prospects to events that match their philanthropic interests.
- Hosting informational luncheons.
- Asking prospects to join a major giving society.
- And more!
In short, with the right information, you can draft the right plan.
5. Explore Engagement Opportunities
Because prospect research is so closely tied to the early phases of the major gift process, it’s often forgotten about in conjunction with continued engagement. But that shouldn’t be the case!
Even though prospect research is vital to the identification stage, that doesn’t make it any less helpful during later stages.
Major gift donor retention is paramount.
The major gift acquisition process is extremely involved and time-intensive. That being the said, don’t let all that work only count for one donation. If you properly engage donors you could have major gifts coming in from them for years to come.
The data you gather during prospect research can play a big role in determining what post-solicitation engagement opportunities you offer donors.
After you’ve properly thanked your donors and expressed sincere gratitude, you should use your research to think through what areas of your work they might also be interested in participating in. Consider the following examples:
- Planned Giving. Many of your major donors are going to be excellent candidates for planned giving. And often, the planned gifts will be even larger than those major donations. Research shows that charitable bequests exceed donors’ lifetime charitable giving by 2.74 times.
- Volunteering. Although it might feel strange to ask someone who’s given a sizeable amount to your organization to also volunteer their time, it can be quite a successful strategy if handled correctly. The right volunteering experience can give your donor both a deeper understanding of the work you do and a greater appreciation for the impact their fund can have.
- Capital Campaigns. During a capital campaign, there are numerous opportunities for your major gift donors to get involved. Whether they help out with your feasibility study, donate during the quiet phase, or offer introductions to other prospects, your major gift donors should always be involved in your capital campaigns.
- Corporate Giving Programs. If you can find major donors who work for companies with corporate giving programs (matching gifts, volunteer grants, etc.), you might be able to secure even more money at no cost to your donors. It’s an opportunity worth exploring.
Each of these instances builds from your existing relationship with your major donors and allows you to pivot to new fundraising arenas.
Plus: Consider Hiring a Prospect Research Consultant
Of course, adding all these new tasks to your nonprofit’s workflow can be difficult. If you want to grow your fundraising through prospect research but your staff is already stretched thin as it is, consider hiring a prospect research consultant to carry the bulk of the weight.
A prospect research consultant will come to your organization equipped with the expertise and experience necessary to get started right away with in-depth prospect research, so you don’t need to spend time learning tools and deciding which prospects to prioritize.
A prospect research consultant can quickly improve your fundraising totals without interrupting the daily work of your organization.
In order to determine whether hiring a prospect research consultant is the right call for your organization, and to enable your consultant to be as effective as possible, there are a few things you should consider before taking the plunge:
- Determine your organization’s needs. Research what kinds of services a consultant would potentially offer, and decide which ones would be the most valuable for your nonprofit.
- Consider the costs. Determine how much your organization can afford to spend on a consultant and compare that against the agency’s advertised prices. They generally offer different plans for higher or lower levels of engagement.
- Review their past successes. Any consulting firm showcases examples of their past successes. Do the agency’s case studies reflect the types of value you hope to get from a prospect research consultant?
Hiring a prospect research consultant may be a good idea if you want to boost fundraising revenue without heavily modifying your daily workflow. They will use their nonprofit knowledge and experience to turn up the most promising prospects for your cause.
Next: Create a Solicitation Plan
You’ve got all this new data and lists of potential prospects. How do you manage it all? Planning, of course, which entails answering a few necessary questions:
- How many major gift prospects would you like to add to your portfolio?
- How many prospects do you realistically have the time and resources to obtain?
- What specific increase in money are you looking for?
- Are you willing to travel to speak with donors?
- Will you host events to entice prospects?
The data prospect research returns can feel overwhelming, but it’s better to know your prospects through-and-through than to go in blind.
Developing a plan of attack forces you to organize your data such that it’s easily accessible, understandable, and available to all relevant staff.
As Double the Donation advises, “Careful planning, thoughtful execution, and meaningfully fostered relationships with donors will help ensure that your fundraiser will go smoothly and will result in the biggest pay for your organization.”
Additionally, when your staff has a plan to follow, they’ll be both more efficient with their efforts and better focused on the right prospects and how to speak to each one according to their individual profiles.
There are many ways to increase major gifts, such as through stewardship, but prospect research stands as a superior strategy that can support any and all discovery methods.
It’s important to remember that fundraising is not a temporary fix but an ongoing effort that endures seasons of change.
Prospect research can unearth the major gift prospects who will transform your fundraising efforts into a more formidable nonprofit structure.