The search for potential donors is a task that never ends. No matter how big your current donor list is, there’s always a need for more.
Common nonprofit marketing strategies can get the job done, but which tactics bring in long-term contributors? With good, targeted research you will uncover those reliable supporters while creating a solid base with which to find even more.
Conducting sound potential donor research may seem like a daunting task but it is invaluable in the time, money, and effort it can save you in the long term. Brush up on the facts of targeted research and what it can offer before you begin your next search for donors.
What information is uncovered when conducting donor research?
Along with basic information, like names, addresses, and phone numbers, a search for potential donors should also provide information directly related to their involvement with charitable institutions. Good research will include their giving histories, wealth markers, and philanthropic motivations, too.
Benefits of prospect research
From the information gathered you will get a better understanding of the candidate’s wealth and his or her fondness for organizations like you’re your own, as well as their readiness to donate. All this data leads to better predict who will most likely be an active donor.
Evaluating the data
Once you’ve received the results of the research focus your attention on those people who share one or more of these traits.
- Donors who care and have the money to show it.
- Major donors, whether that be in money, property, or other valuable gifts.
- Regular contributors.
- Planned giving or legacy prospects.
- Donor behavior in regards to how they engage with fundraising efforts.
- Current fundraising activities.
Prospect research methods
Here are three ways to research potential donors, and each one carries with it pros and cons.
- In-house research provides the most cost-effective method, but results rarely provide the same level of verifiable, quality information that professional research can offer. It can also steal valuable time and resources away from other areas of your organization.
- Prospect screening consultants can offer advice, research tools, and screening services to support a nonprofit’s efforts to gather, verify, and synthesize their own researched data. However, they can only work from an outsider’s view of your organization and you are taking a chance on getting valuable leads for the cost of the service.
- Research companies are experts in acquiring and digging into in-depth prospect research. They carry with them the expertise and experience to prioritize their efforts and locate the best profile matches for your requirements. Along with that, they may understand the search tools better and have access to databases you may not be aware are available. Also, this is the best option if you can’t sacrifice your daily workflow to accommodate your research. On the flip side, they are most likely to have restrictions around the work that could limit the amount of information they find or the avenues to explore and their services are often costly.
Which research method to employ?
Determining which method to employ has as much effect on the outcome as the data you glean from the research. Consider what each method can offer and what information is most valuable to your mission as you consider which method to employ. Cost considerations are always a factor and review the past successes of any outside help you receive.
Who are the subjects of your research?
The big three of potential donors are the big gift givers, loyal donors, and event attendees. They all share a history of active engagement with nonprofit organizations and have proven they have resources to contribute.
Putting your research strategy to work
Now that you have are ready to begin your research you need to examine your process to make it efficient and effective. Using this five-step approach you can be assured that you are getting the most out of your search for new donors.
- Prepare a strategy
- Clean up your prospect database
- Develop a solicitation plan
- Analyze the research
- Approach new donors
Analyzing the data
There are seven indicators of a likely donor that should come to light in your research.
- Giving history – According to statistics, donors who gave between $5k-$10k were about five times more likely to donate to another nonprofit. Donors who contributed between $100k+ were over 32 times more likely to donate elsewhere.
- Wealth – It’s no surprise that those have the resources to give often contribute more consistently and for a longer period of time.
- Nonprofit involvement – Not all giving is monetary. Look into the personal involvement of a donor beyond the financial backing they’ve provided to find the big gifts or valuable connections they can offer.
- Business life – There is much information that can be found in the type and activities of a person’s business life. Who are their associates, where is their business most active, and do they donate through their business as well as personally?
- Business investment activities – Delving into the history of a donor’s history of giving through their business can provide you with another avenue to understand their giving records.
- Real estate ownership – Donors owning highly valued real estate ($2 million or more) were over 17 times more likely to give to a nonprofit.
- Political giving – While this is out of the scope of a nonprofit, donations to political campaigns indicate a donor who is willing to put money out for projects they believe in purely based on good faith in the organization.
Putting the data to work
Once you’ve identified your target list it’s time to go after those new donors! Divide potential donors into groups that reflect who would most likely contribute and consider how best to approach them. Maybe through a fundraising event, traditional marketing, or through your already established network. Keep your eye out for anyone who has contributed to your organization in the past and maps out ways to rekindle relationships with them or cultivate a strong rapport with new prospects.