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Nonprofit Prospect Research: How to Effectively Expand Your Donor Base

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Published February 6, 2024 Reading Time: 6 minutes

Finding new donors often feels frustrating and difficult, but it doesn’t have to be.

Unlock the power of prospect research to seamlessly identify, comprehend, and engage with individuals who align with your passion and possess the resources to champion it.

Below, we’ll show you how to identify your ideal donor profile and use cutting-edge tools and ethical practices to establish lasting relationships with loyal changemakers.

What Is Prospect Research?

Prospect research involves gathering and analyzing detailed information about potential donors to understand who they are, what drives them, and how they might connect to your cause. However, it’s more than just demographic data: it combines data analysis and qualitative understanding.

Elements of prospect research often include:

  • Personal backgrounds: Unravel the story behind each potential donor. Who are they? What’s their history with charitable giving? Understanding their personal narrative helps you tailor your approach.
  • Philanthropic histories: Investigate past giving behaviors to source predictive insights into future generosity. These philanthropic indicators include donations to other nonprofits, participation in community events, political giving, and support of similar causes.
  • Wealth screening: Identify financial capacity with wealth markers. It’s not just about net worth—it’s understanding a donor’s ability and willingness to give. Wealth indicators can include real estate holdings, stock holdings, and business affiliations.
  • Charitable motivations: Delve into the “why” behind their giving. Which causes do they care about? What inspires their generosity?

Nonprofit fundraisers and development teams use prospect research to determine how much prospects have the potential to donate and how inclined they are to support particular causes. They tap different databases, historical records, and other research methods to collect specific, accurate information, such as:

  • Past charitable gifts: Classy data shows that once someone has given on our platform, they’re more than twice as likely to give again. It’s also worth noting that annual donors who give to you regularly are the most likely to scale into major gift donors.
  • Political donations: Donors who make political donations prove they are willing to take action on behalf of the causes they care about most. They may be inclined to do the same for nonprofits like yours.
  • Nonprofit involvement: Nonprofit board members are typically some of the most deeply involved individuals in organizations’ work, meaning they know how important it is to support organizations’ financial goals through fundraising and donations.
  • Real estate ownership: Donors who own $2+ million in real estate are 17 times more likely than the average person to give to a nonprofit.¹
  • Employer information: Prospective donors likely have colleagues who make similar salaries and engage in philanthropy. If these co-workers give to nonprofits with similar missions, they may also choose to give to you.
  • Personal information: Prospective donor information that gives insight into their hobbies, marital status, and basic contact information helps to inform your outreach and make it more personalized.

No matter your mission or size, all nonprofits can use prospect donor research to save time and resources while making their fundraising strategy vastly more efficient.

Why Use Nonprofit Prospect Research?

Prospect research involves getting the data you need to raise more dollars for your cause.

Collecting this information allows you to:

  • Drive hyperpersonalized content: Leverage prospect research data to deliver highly personalized communications. Understanding your prospects’ specific interests, giving patterns, and motivations helps you create content that speaks directly to them, getting through the digital noise and fostering a deeper connection.
  • Inform major gift outreach: Use donor data to identify potential major donors ready to make larger gifts, such as those who give to your organization annually.
  • Identify planned/deferred donors: Check giving histories and understand who may fit this appeal well. Understanding that long-term supporters are often likely to make planned gifts, dig into donor data to source the names of these individuals and tailor your outreach accordingly.
  • Discover new donors: Learn which organizations your prospects already support. If your cause aligns, it’s likely these donors may be inclined to give to you too.
  • Obtain cleaner donor data: Update your donor databases with prospect insights to help shape your donor profiles and keep track of those approaching the conversion stage. That way, you’re ready to take action when appropriate and mitigate the risk of losing a new donation opportunity. After all, prospect research is only helpful if organized.

Current Challenges and Blockers

Recent trends indicate a shift in public perception: for the first time, people place more trust in businesses than nonprofits.² This shift represents a significant hurdle for nonprofits, especially when reaching out to new prospects unfamiliar with their work.

In a time when trust in nonprofits is waning, your initial contact with potential donors holds even more weight. Prospecting isn’t just about outreach—it’s about making a strong, credible first impression. The perception they gather from that interaction will likely shape their willingness to engage and donate to your initiatives.

This is your opportunity to educate potential donors about your mission, goals, advocacy, and impact. However, with the existing trust deficit, your storytelling must quickly communicate how your work impacts the communities you serve. The story you share must engage, but more importantly, it must radiate transparency and competency.

Prospects want to see clear evidence of where their contributions go and the impact they will have. They seek assurance that your nonprofit operates with integrity and effectiveness. This means showcasing your nonprofit’s achievements, efficiency, and impact. It’s about proving that you’re not just another organization seeking donations but a competent, results-driven organization making a tangible difference.

Expert Psychology Insights for Effective Storytelling

How to Conduct Donor Prospect Research

While there are plenty of methods and tools to use for prospect research, we’ve provided a step-by-step research process to get it right from the get-go:

Step 1: Define your ideal prospect profile

Start by envisioning your perfect donor. Consider demographics, philanthropic interests, and values that align with your mission. This profile guides your research and helps focus your efforts.

Step 2: Use various prospect research tools

Lean heavily on first-party data (information you’ve directly collected from your existing donor interactions, surveys, and website analytics) to gain valuable insights into new donors who have likely engaged with your cause in the past and learn how they prefer to interact with your organization. Also, explore social media for more context into prospects’ interests and connections and consider consulting public records for verifiable data.

Step 3: Evaluate philanthropic history

Identify whether prospects are active on peer-to-peer fundraising platforms like GoFundMe and dig into their giving history with other organizations. The campaigns they support can paint a clear picture of the relationships and values they hold closely to their hearts.

Step 4: Determine financial capacity

Review donor’s income, asset ownership, and previous donation amounts to gauge their potential giving capacity. This is a great screening tool for prioritizing your list.

Step 5: Find connections to your organization

Identify personal or professional links between the prospect and your nonprofit. Shared connections or interests can foster a stronger relationship.

Step 6: Rank and prioritize your prospects

Rank your top prospects based on their alignment with your ideal profile and their potential impact as donors. After all, not all prospects have the same giving potential.

Step 7: Develop personalized engagement strategies

Craft hyperpersonalized engagement plans for each prospect. Tailor your communication and outreach based on their data-backed interests and history to get through the noise of typical mass communications.

Step 8: Maintain ethical standards

Respect donors’ privacy and adhere to ethical guidelines in your research. Follow data collection and usage privacy laws (such as the GDPR and CCPA), and respect your donors’ communication preferences (such as unsubscribes, opt-outs, and frequency requests).

Step 9: Update your database regularly

Keep fresh data on prospects and current donors. Regular updates ensure your strategies center on the most accurate and relevant information. A modern data stack makes this possible and is well worth the investment.

Engage Your Potential Donors with Classy

Prospect research is the first step toward expanding your nonprofit’s reach and impact. However, it’s only half the battle—the real magic happens when you effectively engage new donors and begin working together to achieve your organization’s goals.

And that’s where we can help.

Classy’s comprehensive suite of tools helps turn your research into action. Use our intuitive fundraising platform for the following:

  • Donation websites and direct giving: Create customized donation websites and donation forms tailored to your unique brand, goals, and donor preferences.
  • Events: Classy powers in-person, virtual, and hybrid fundraising events through its innovative nonprofit event management software, Classy Live. Whether selling tickets, securing registrations, or enabling peer-to-peer fundraising, Classy Live offers various solutions to engage your community.
  • Peer-to-peer fundraising: Amplify your message and build your community with our best-in-class peer-to-peer fundraising tools. From DIY fundraising to team campaigns, Classy empowers your supporters to fundraise creatively and effectively on your behalf.
  • Donor data intelligence and analytics: Keep your finger on the pulse of your campaigns with robust analytics and reporting capabilities. Understand what works and refine your strategies for even better results.

Classy’s fundraising platform helps nonprofits transform prospect research into dynamic, effective campaigns and donor interactions. We simplify the fundraising process and empower nonprofits to easily and effectively design, manage, and grow their fundraising efforts with confidence.

Request a demo with a member of our team to see for yourself.

Copy Editor: Ayanna Julien

Article Sources:

  1. “Major Gifts: A Guide to Securing Large Donations,” DonorSearch, last modified November 10, 2022, https://www.donorsearch.net/resources/major-gifts-guide/.
  2. “In business we trust. People trust businesses more than governments, nonprofits, media: survey,” USA Today, last modified January 16, 2023, https://www.usatoday.com/story/money/2023/01/16/trust-business-more-than-government-nonprofits-media-survey/11062453002/.
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