Prospect research is a data-driven approach to gift planning and fund development for nonprofit organizations. It involves learning more about current or prospective donors’ backgrounds by studying their giving histories, philanthropic motivation, previous engagement levels, and wealth indicators.
With this information, nonprofits can gauge a specific donor’s affinity for a particular cause, as well as their willingness and capacity to give. Specifically, prospect research is most helpful to organizations seeking major gift donors, but in the next section, we’ll explore types of fundraising campaigns that can benefit from this approach.
3 Fundraising Campaign Types That Require Prospect Research
1. Major Giving
Prospect research is a very useful strategy when conducting major fundraising campaigns. It allows you to examine your current donor database to find those who may be ready to move into the major gift category.
By looking into past giving records, you may notice regular donation patterns, volunteer or other engagement activities. These patterns may signal a donor’s major contribution to your nonprofit, as well as steady increases in their donation amount over the years. Then, you can reassess the way you approach and communicate with these newfound major donors.
2. Annual Giving
Annual giving campaigns are a staple in the nonprofit industry. They allow organizations to continue providing their services and creating awareness for their cause throughout the year.
By including prospect research in your annual giving campaign process, you can discover existing donors who have been most active or engaged throughout the past year. Additionally, this process allows you to tailor your approach to donors who may have fallen off in the past few years in terms of donations and overall engagement.
3. Capital Campaigns
A capital campaign is a long-term fundraising effort usually affiliated with a large project such as securing an endowment, new buildings, or acquiring long-term resources.
Capital campaigns operate similarly to investment rounds, relying on a set number of major gifts privately, known as the “quiet phase,” before inviting the public to contribute in what’s known as the “public phase.”
Prospect research can be instrumental in developing and implementing such campaigns as it can help you appropriately research and allocate donors to each of these phases. This way, you can stay organized and work efficiently on each phase of your capital campaign.
What are Prospect Research Indicators?
Now that we understand, abstractly, what prospect research is and the campaigns to which it can be applied, let’s discuss the indicators needed to conduct this type of research.
These indicators are grouped into two categories: Philanthropic indicators and Wealth indicators.
1. Philanthropic Indicators
Philanthropic indicators refer to donors’ and prospects’ historical donation records and nonprofit involvement. They include:
- Previous Donations to Your Nonprofit: This information is the easiest to locate, as you can simply pull it out from your existing donor database. Past giving is helpful to predict future donor behavior. Since you already have a relationship with the donor, you can encourage their giving habits and steward them to become major donors.
- Donations to Other Nonprofits: Many donors, and philanthropists, make contributions to multiple nonprofit organizations. By gathering information about donors’ contributions to other nonprofits, you can get a dynamic and well-rounded view of their giving habits and determine the types of causes or activities that are a priority to them.
- Nonprofit Involvement: Looking into donation history is incredibly useful, but there are other ways that donors make contributions to and engage with nonprofits. From volunteering, board membership to becoming peer-to-peer fundraisers, many activities can signal a donor’s willingness, or likelihood, to engage with your organization’s cause.
- Personal Information: Details such as your prospect’s hobbies, interests, and demography can help you learn more about their motivations. With this information, you can personalize and tailor your communication to strike the right tone with prospects.
2. Wealth Indicators
Wealth indicators include real estate ownership, business affiliations, stock ownership, and political contributions or involvements.
- Real Estate Ownership: Prospects, who own real estate with significant property value, are 17 times more likely to give than the average individual. Real estate ownership is a vital wealth marker and a great way to identify prospects who may become major givers.
- Business Affiliations: Assessing your prospects’ business affiliations could indicate their capacity to make corporate donations or be involved in capital campaigns.
- Stock Ownership: Information about your prospects’ stock ownership is an excellent indication of their wealth and capacity to give. In most cases, you can find this information online but keep in them that easily accessible data is limited to publicly traded companies.
- Political Contribution: Prospects who make significant monetary contributions to their political affiliation of choice tend to have the capacity to give to major fundraising and capital campaigns. Additionally, the kinds of political donations they make (in terms of campaign promises, platform, etc.) could indicate their interest in specific causes.
How AI Helps Conduct Prospect Research
Many organizations are saddled with tons of fundraising data but cannot analyze and make sense of them. This is where AI-powered fundraising enablement tools like KIT come into play.
With these tools, you can review key philanthropic and wealth indicators that point you to the best prospects for your next fundraising campaign.
Here are three ways AI-powered tools can help you conduct prospect research:
1. A Tailored Fundraising Approach
When conducting prospect research, the best place to start is with the information or donor data you already have. AI-powered nonprofit tools can give you a nuanced view of your donor list and an accurate assessment of your prospects.
With the insights gathered from these assessments, you can send personalized appeals to donors who have the capacity, and willingness, to contribute to your organization.
2. From Prospecting to Cultivating
Artificial intelligence in fundraising goes far beyond identifying prospective donors. It also helps you nurture donor relationships.
As prospects become contacts, and donors, AI-powered tools, like KIT, can accurately segment them as major donors even if they have not yet made a larger donation to your nonprofit. This opens up the door for personalized interactions and engagements. Furthermore, AI tools can recognize when a one-time, regular donation may be a step to a larger one.
With these insights, you can customize, improve and get the most out of your donor stewardship and cultivation plan.
3. Portfolio Management Made Easy
It may have taken several days, or even weeks, to appropriately analyze nonprofit data in previous years.
Nonprofits had to outsource their data analysis projects to gather insights about their donors. This was an expensive, time-consuming process for organizations. And by the time nonprofits received the analysis reports, they couldn’t apply the findings to their work because the datasets were outdated.
Today, AI-powered tools can assess your donor database or portfolio in record time, providing you with up-to-date, actionable insights. Most importantly, these tools can recognize a decrease in engagement, so you know when it’s time to move onto new prospects.
What are the Prospect Research Tools Available for Nonprofits?
1. KIT for Fundraisers
KIT syncs directly with leading donor management systems so you can leverage the power of AI to make sense of your fundraising data and raise more funds. KIT integrates with donor communication, social media, and wealth intelligence tools to create a powerful and rich dataset that can be used to improve your fundraising campaigns.
DonorSearch is a prospect research and wealth screening tool for nonprofits. If your goal is to find more major gift donors for your organization, then DonorSearch is a great tool to consider. It saves you time, and money spent combing through prospect databases and helps you identify your ideal donors.
Windfall empowers nonprofits with precise net worth data needed to prioritize, segment, and engage donors. Their technology can help your organization better understand which donors have the most capacity to give so you can nurture them effectively.
Find Your Nonprofit’s Ideal Prospects with KIT
Like many administrative tasks, prospect research may seem time-consuming. However, by taking advantage of the tools mentioned above, you can get back to what matters—your cause and programs.
Using technology to take care of the mundane fundraising tasks allows you to free up more time to create a more meaningful impact in your communities. Whether or not a new tool is a right fit for your organization, knowing the fundamentals of prospect research is always an excellent tool to have in your back pocket. To get started, book a demo to learn how KIT’s AI-powered tool can help you conduct prospect research accurately and efficiently.