Four Ways Donor Research Fuels Organizational Growth
For nonprofits looking to grow, it can often be a chicken and egg game. On the one hand, you need to increase your staff to increase your revenue that will support your expanded work. On the other hand, you may also need to increase your revenue to support your expanded staff. Sometimes capacity building gifts and grants are there to help kick this process off, but they can be hard to come by.
In these situations, what’s needed most is a way to take your fundraising to the next level. Let’s admit that you’re not going to get there by running your staff ragged, extending their work hours, or setting unreasonable (and unrealistic) expectations. But what will work is making your fundraising strategies more efficient and effective.
That’s where prospect research comes in!
Prospect research will help you identify new prospective donors, prioritize your existing donor and prospect lists, and make connections to new institutional and individual donors. The information gained through prospect research will help you and your fundraising team to best organize your time so that you can focus on the most viable prospects and make asks that result in larger gifts.
Let’s review these four approaches to prospect research:
Wealth Screenings and Prospect Ratings
Foundations Research
Donor Biographies
Making Connections
1 | WEALTH SCREENINGS AND PROSPECT RATINGS
A wealth screening is an automated process by which a list of prospects is assessed based on their capacity to make a charitable gift. If you are conducting a screening on a list of current or prior donors, and include each person’s giving history as part of the data to be screened, you will also receive a composite assessment that combines the donor’s capacity with their likelihood of making another gift to your organization.
Taking the time to conduct a wealth screen and review the results is a very important first step in identifying who on your contact list might become a first-time donor, and who on your donor list might upgrade to a larger gift in the future.
It is important to note that while wealth screenings rarely return false negative results, they can sometimes return false positive ones. False positives typically happen in cases where someone on your list has the same name as someone else with a higher capacity. This is where your prospect ratings come in handy!
At Donorly, we conduct ratings through a manual process that provides a snapshot of a prospect’s capacity to make a gift, and inclination to donate to an organization like yours. This work requires the time and insights of a professional researcher, who can quickly review factors such as someone’s property ownership and history of charitable giving. At Donorly, we always use manual prospect ratings to verify the results of a wealth screening by looking at those prospects that scored highly to make sure that they do, indeed, have the ability to make a gift.
So, how does this process promote organizational growth?
In order to grow your contributed revenue sustainably, you must increase the number of donors to your organization, as well as increase the sizes of existing donors’ gifts. Wealth screenings and prospect ratings are the most effective way to take a long list of current or prospective donors and prioritize them based on the likelihood that they will either become a new donor, or renew at an increased level of giving.
In the long run, being able to prioritize your list—rather than approaching it by throwing spaghetti at the wall to see what sticks—will save you time and energy. With valuable capacity and inclination information in hand, you will be able to accomplish more without having to add staff hours to support your work.
For instance, on a list of 100 prospects, you might determine that 20 are highly rated. You can then focus your cultivation efforts on those 20, rather than trying to spread yourself thin across all 100.
As your donor pool grows, you will likely need to expand your development staff, but hopefully at that point your increased revenue will support the addition of another position.
2 | FOUNDATIONS RESEARCH
Foundations Research is crucial to making sure that the institutional funders you are preparing applications for are the most likely ones to fund your organization. You may be thinking, I have no time for a deep dive into the world of foundations! The truth is that if you invest a small amount of time on foundations research on a regular basis—say, 30 minutes per week—it will pay off in a big way in the long-term. What’s more, you don’t need a professionally trained researcher to get the most out of your Foundations research.
You can take on foundations research by subscribing to tools, such as Foundation Directory Online or Instrumentl, and pulling lists on a quarterly, biannual, or annual basis. Then, chip away at these lists by covering 3-5 per work session to help round out your grants calendar and focus your attention on funders who are a strong match. Instrumentl will even automate the prospecting process for you by sending regular emails as they identify new possible matches for your organization or project.
When researching foundations, pay attention to their stated funding areas, location preferences, and desired populations served. It is also important to note any details available that describe past or recent awards made, so you can fine tune your case for support.
As with prospect research for individuals, taking the time to conduct foundations research and review the results is a very important first step in identifying who on your prospect list might become a first-time funder, and who might upgrade to a larger gift in the future.
So, how does this process promote organizational growth?
In order to expand your institutional giving revenue as part of your overall growth, you must increase the number of funders to your organization and increase the sizes of existing grants. Foundations research can help you efficiently cut through the noise of long, unwieldy prospect lists, and develop a list of potential funders based on funding priorities, past giving, and other eligibility criteria (such as budget size or location).
Using research to identify even ten additional prospects (that are a good fit for your organization) over the course of a year may expand your institutional giving program in both the short-term, and even more likely, the long-term.
As your grants calendar becomes more robust, you will likely need to expand your grant writing and management capacity, but hopefully at that point your increased revenue will support the addition of another position.
3 | DONOR BIOGRAPHIES
Donor Biographies are an important tool for understanding the lives and interests of your prospective and current donors. Rounding out your CRM records with the details from these bios will allow any person in your organization to have updated donor and prospect information at their fingertips.
At Donorly, Donor Biographies include an individual’s professional role and affiliations, education history, property ownership and other assets, past and current board memberships, philanthropic interests, recent giving, and estimated capacity for making a gift. Where applicable, the Donor Biography includes the same details for the person’s spouse or partner. This information can help you and your team prepare tailored cultivation touch points and specific solicitation approaches, especially when it comes to major and mid-level donors.
There are several paid and free tools that are available online and can be helpful in delving into this level of research. If you’re just starting out, you may want to consider hiring an experienced prospect research consultant who will not only conduct the research for you, but can also help guide you through the process of deciding which prospective donors to research.
However you decide to approach the research, Donor Biographies will help to organize your cultivation strategy for key prospects and donors. The information you uncover will inform who you assign as the primary solicitor for the prospect, what kinds of touch points you create to keep the prospect engaged, and even whether the prospect is a good fit for the vision and values of your organization.
So, how does this process promote organizational growth?
Donor Biographies can help you expand your donor base strategically and efficiently. Perhaps you will discover that a prospect has an interest in education, which could lead you to pitching a gift to support your organization’s youth programs. Keep in mind that the results of a Donor Biography might even lead you to determine that a certain prospect is an unlikely candidate to support your organization. If that is the case, you can then redirect your time to stronger leads.
In the long run, the details provided in Donor Biographies will help you to build a strong pipeline of prospective donors and help you make efficient (and effective!) decisions about whether and how to engage them.
4 | MAKING CONNECTIONS
While some research processes are designed to identify specific pieces of information about your donor or prospect, what we at Donorly refer to as Connections Research can be used to unearth unknown relationships that can help to grow your donor pool and increase your contributed revenue. It can also be a lot of fun! When you have identified a specific prospective donor or institutional funder that is too good to pass up, but there is no clear path forward to getting to know them, turn to Connections Research!
Connections Research creates a series of narratives that describe a path from Subject A (you or your organization) to Subject B (your prospective individual, foundation, or corporate donor) through first and second-degree connections.
For example:
Let’s say April is a member of your board, and she is also on the corporate board for The Now Corporation.
Then let’s say May is also on the corporate board for The Now Corporation with April, as well as a Trustee for The Later Foundation.
If The Later Foundation is a prospect, then your research stops there and you can start strategizing with April about how to engage May.
But, connections research could even take it a step further. Perhaps The Later Foundation’s funding priorities aren’t a match for your organization, but there is another Trustee on The Later Foundation’s board, let’s call her June, whose personal philanthropy indicates that she’d take an interest in your work. Then your conversation with April might be about leveraging her relationship with May to get an introduction to June.
In other words:
April (The Now Corporation) leads to May (The Now Corporation, The Later Foundation) leads to June (The Later Foundation, individual philanthropist).
Taking the time, or spending the resources, to put connections research to work can help you open doors to new contacts that may have otherwise been out of reach—a worthwhile, and relatively easy, way to take your donor prospecting to the next level.
So, how does this process promote organizational growth?
Connections Research can be important for activating your organization’s extended network. With a relationship to a prospect clearly mapped, you can outline concrete steps for donor outreach from engagement to cultivation to solicitation and stewardship. Even without having target prospects in mind, your connections research can even help identify contacts your Board Members might not even realize they have!
In the long run, each new relationship can open doors to even more relationships and Connections Research can be an important catalyst for broadening your donor network.