Data is a critical tool for any business and in fundraising that means prospect research. Some nonprofits may be unfamiliar with this area of fundraising so I invited my colleague, Jen Filla, President of Aspire Research, to demystify the world of prospect research so any nonprofit can understand and utilize it.
The for-profit sector has been leveraging market research since the 1920s. And yet, small and emerging businesses still struggle with using data to drive revenues and decision-making.
The non-profit sector has mirrored this same pattern. Large institutions such as universities and hospital systems have had prospect research teams for decades and they are now divided into subspecialties, such as research, analytics, and prospect management. But smaller nonprofits struggle to make the leap into leveraging data and information to raise more funds.
What is prospect research?
Prospect research supports all the activities that organizations perform to move prospective donors from identified to solicited to stewarded, using internal data, publicly available information, and the highest ethical standards. For many organizations, prospect researchers are the first to create and promote data practices that protect donor privacy.
Why has prospect research become more accessible to smaller nonprofits?
Smaller nonprofits have benefited from research software in the nonprofit marketplace that has become more affordable and best practices that have become more widespread. Also, the professionalization of prospect research has occurred in tandem with the rapid advances in information technology. All nonprofits now have more opportunities to learn up-to-date practices.
How is donor privacy protected?
Donor information is safeguarded by applicable laws, but also by the privacy, data, and fundraising policies of an organization. Ideally, these policies include all the information collected about an organization’s donors – even the publicly available, external information collected by researchers.
Is prospect research ethical?
Yes. Prospect research professionals follow the ethical guidelines of various associations, but in comparison to common practices of for-profit companies, such as Facebook, Google, or even your local drug store, we are a very careful profession. For example, Facebook amasses huge amounts of data on you across the internet, even when you are not logged in. When finding information that a donor posted publicly on Facebook, a prospect research professional will ask a question. First, is it relevant to the purpose of the research? Second, is it likely that you intended it to be public? We keep rigorous ethical standards!
Why would a nonprofit choose to use prospect research?
Typically, an organization first looks to prospect research when there is a new and substantial pressure to raise more funds. This could be in advance of launching a campaign for a building or simply to fund a growing mission. Whatever the reason, when the current practices aren’t enough, research can break through to higher giving.
How can prospect research help a nonprofit raise more money?
The first research steps might be to (1) identify donors who are giving below their potential, (2) identify donors who show strong alignment with the organization, or (3) prioritize the list of donors to be contacted personally for a gift. All these efforts help development staff focus on the right people at the right time.
What is a typical first step?
To identify and prioritize prospective donors, a nonprofit usually purchases a prospect wealth screening, which has dropped in price since its debut in the late 1990s. A screening takes a file of donors and matches the names and contact information directly to public information databases containing information on real estate, public giving, and more.
By matching wealth indicators and giving directly to the person, the screening algorithms can then calculate what size gift a person might be able to make. When this information is married to patterns in giving history to the organization, a large group of donors can be segmented into smaller, more manageable groups for personalized outreach – and research.
Which staff perform prospect research?
Often, in organizations with no dedicated research staff, the first person who takes on prospect research responsibilities is the database administrator or development assistant. This is the person who knows how to pull reports from the database and get the screening scores into the database. And it’s often the same person who does some initial background research on the donor before the development director makes the phone call. Once there is a dedicated major gifts program established, many organizations hire a trained prospect research professional to support the effort.
Can it be used by nonprofits without a dedicated fundraiser?
While prospect research is now a profession with an association, best practices, and ethical guidelines, anyone and everyone who interacts with donors or donor data can perform prospect research. When you ask a donor where he likes to give and why, or what kind of work she does, you are performing prospect research.
How can I determine if my organization is ready?
The first step is to evaluate your current fundraising performance. If you need to get better at asking for and stewarding gifts, prospect research probably won’t be able to help you much. But if you do have good relationships with donors and are ready to grow your giving, or want to prioritize existing donors for personalized outreach, prospect research can have a significant positive impact.
What does it cost to implement?
You can start using prospect research best practices with $0. Really! Sort your list of donors by total lifetime giving and start calling the largest, most generous donors first. Find their company bio or LinkedIn profile, like you would do for any business meeting. Call and visit. Or you can spend $750-$2,000 with a research consultant to help you prioritize and identify opportunities. Or you can spend $5,000 or more on your own screening.
What free resources are available to learn more?
There are so many free resources! You can find a comprehensive collection of resources curated by my company at www.protopage.com/prospectresearch.
Jennifer Filla is President of Aspire Research Group LLC, a fundraising research consulting firm. She can be reached at email@example.com. Notes on Nonprofits is produced by Alyce Lee Stansbury, CFRE, President of Stansbury Consulting. Send your questions and feedback to firstname.lastname@example.org. To learn more from Jen, join us at Noon on July 13 for Notes on Nonprofits Live!
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