Every year modern fundraisers are scrambling to top their previous campaigns and fundraising efforts. However, time and time again it’s clear that the better you know your donors and manage your donor data, the better you can develop fundraising strategies and make a genuine impact on your cause. Donor prospect research helps your future efforts.
If you’ve been working with nonprofits for some time now, you likely already know how important donor data is. The more you know about your donors, the more genuine your interactions are. Better personalize communications and give a more conscious effort to account for donor preferences.
The most important part about getting to know your donors is learning how to approach them and make the right ask during the right time. It’s important that you have a capable constituent relationship management (CRM) system or donor database to keep track of all these engagements and integration capabilities to ensure that all your data is accurate and centralized.
In this guide, we’re going to be talking about one strategy to maximize fundraising: donor prospect research. You’ve probably already heard of prospect research and how nonprofits have been leveraging it to increase their yearly revenue. However, it’s always a good idea to go over the basics and learn actual ways you can use prospect research to your advantage.
We’re going to examine prospect research through the following points:
- What is prospect research?
- Target your major donors.
- Engage donors on social media.
- Double your funds with matching gift programs.
- Optimize your online donation form.
Prospect research gives you meaningful insights into your supporters, like why donors give and when they might give. It also helps you identify high impact donors, meet potential donors, and learn the best way to engage with both. Let’s get started.
1. What is donor prospect research?
Donor prospect research is a strategy used by nonprofit organizations to better understand their existing donors and identify potential donors. This is done by taking your donor database and screening each supporter based on their personal backgrounds, giving histories, wealth indicators, and philanthropic motivations.
Many organizations that want to know their donors better will look into prospect research. For instance, education institutions, healthcare organizations, and other charitable organizations all have depended on prospect research to help bring their fundraising efforts to the next level.
While it’s possible for you to conduct prospect research in-house or even look into a consultant, many fundraising professionals find it easier to just invest in a capable prospect research tool. Prospect research tools can automate the entire process for you, easily taking your donor data and screening it against some of the most qualified philanthropic databases in the industry.
With a dedicated tool for prospect research, easily identify these key qualities of your donors:
- Affinity to give, or how likely the donor will give to your cause. Prospect research screens each donor for philanthropic indicators, such as past charitable giving, personal relationship to cause, involvement with other nonprofits, and political giving.
- Capacity to give, or how much the donor might give to your cause. Prospect research screens each donor for wealth markers, such as past giving amounts, real estate ownership, stock ownership, and business affiliations.
Donors with a high affinity to give and a high capacity to give are more likely to become large impact donors. These are your supporters who you know are charitable and have the means to give. From here, you can work on developing these relationships and hopefully start increasing donations.
2. Target your major donors.
When nonprofits invest in prospect research efforts, they often do so to increase their major gift revenue. One study says that 76% of giving comes from only 4% of donors, so these generous gifts are making some of the biggest impacts on your cause.
The faces behind these charitable acts, major donors, are some of your closest and most supportive donors for your organization and it makes sense to make the effort to further develop these relationships.
By using prospect research to identify those who have both a high affinity and capacity to give, you are targeting donors who are most likely to become major donors. However, just because you know who these people might be, that doesn’t mean you should send out fundraising asks whenever you’re approaching a deadline.
It takes a lot for someone to give up thousands of dollars to an organization. To help this become a reality, many fundraising professionals prioritize those relationships. Ensure you build a solid foundation so there is room and opportunity for future engagement.
Your best bet is to prioritize donor segmentation, personalize communications with certain segments, and increase your non-ask engagements. Consider these tips:
- Automate your tools to trigger a thank you email as soon as a gift is made, a volunteer event has finished, and other meaningful acts.
- Leave room for future involvement by sending them early-bird event registration links or discount codes.
- For those who made past major gifts, send them handwritten letters to show your appreciation.
By focusing on just a few prospective major donors, you can easily meet your fundraising goal without the exhaustive efforts of trying to effectively engage with your entire donor base.
3. Focus on your social discovery efforts.
According to DonorSearch, the typical adult has at least 3 social media accounts. Social media is not a new platform for the fundraising world and has helped many organizations expand their reach and spread their influence.
Social discovery is all about learning more about people through their social media activity and adapting that to your fundraising strategies. Though it is possible to go through each of your donors and browse through their social media, the best prospect research tools will have social discovery functionality.
A capable prospect research tool will be looking out for these key donor traits while screening their social media profiles:
- Personal passions. Get a better understanding of what your donors like to do, what they’re interested in, and how they spend their free time. This way, you can develop those relationships based on what your donors actually like.
- Followers. It’s a good idea to highlight donors who have a high follower count and thus a wide influence. This can come in handy if you’re considering initiating a peer-to-peer fundraising campaign.
- Basic personal information. To better form your donor communications and engagements, it’s always a good idea to include personal details.
There’s a big benefit in applying social discovery methods to your entire donor database. This way, you can watch out for common traits and meaningful insights that will help boost fundraising. Use these insights to optimize your marketing strategy and maybe even reach out to influencers.
Additionally, use this data to find others who might support your cause. Base your next campaign on the platform your supporters are more active on and target potential new donors.
4. Double your funds with matching gift programs.
Did you know that an estimated $4-7 billion in matching gift funds goes unclaimed per year? Corporate matching gift programs are opportunities for donors to increase their gift to a nonprofit without actually giving any more money. All they have to do is submit a matching gift request to their employer and, depending on the guidelines, their gift is matched at a 1:1 or higher ratio.
This sounds like a great chance for nonprofits to raise more funds, but in reality, most donors don’t even know programs like this exist.
Company matching gift programs aren’t advertised as blatantly as other company initiatives, so it might be up to your fundraising team to inform your match eligible donors that they can possibly double their gifts. Explore Fundraising Letters for a resource of matching gift letter templates written for various situations and organizations.
Using your prospect research tool, take a look at each of your donor’s business affiliations and determine if they might be matching gift eligible.
To automate this process even further, consider looking into a matching gift database with access to top matching gift companies and their guidelines. You can either use this tool yourself or embed it into your online donation page so donors can easily search their employer as they’re making a gift. If you want to learn more about matching gift programs and how the entire process works, read this guide.
5. Optimize your online donation form.
Though only a small portion of total fundraising, around 8.5%, is due to online giving, a good amount of donors still prefer it. Consider how to optimize this form and incentivize further giving.
Often, the reason why donors don’t give online is that the options are much more limited than talking to an actual live person. Using your prospect research data and what you know about your current donor pool, there are ways to enhance your online donation form with additional options:
- Provide suggested giving amounts. Take a look at your past gifts and get a sense of how much each contribution is. Offer suggested donation amounts that correlate with, but are slightly larger than, common past gifts. This way, donors who were going to give anyway will see the suggested amount and possibly increase their gift.
- Embed a matching gift database. As mentioned earlier, matching gift programs can greatly increase your funds but not every donor is aware that they might be eligible. Look at your prospect research data and determine if a majority of them are employed by companies with matching gift programs.
- Allow recurring donations. If you notice that some of your donors give gifts multiple times in the year, they might benefit from recurring gifts options. Sometimes people want to make an impact but don’t have the funds at the moment. Having the opportunity to give a small gift once a month is an easier solution and is more generous to their bank account.
Your online donation form should be one of the most visited pages on your website. Ensure that you’re providing enough options by looking at your prospect research data and anticipating your donors’ needs.
Prospect research isn’t just for identifying your major donors. Use this essential donor data to learn more about who your supporters are and the best ways to engage them, to increase your overall fundraising revenue.