Choosing the Right Prospect Research Consultant: 5 Factors
Prospect research is the process that allows nonprofit organizations to discover those prospects most likely to make an impactful contribution. There are three main ways that nonprofits can conduct prospect research. The three core approaches to prospect research include:
Do-it-yourself research.
Wealth-screening focused research.
Consultant-led research.
While each method has its own benefits and challenges, this guide won’t discuss the efficacy of one over another. Instead, we’re going to zero-in on the third method, working with a consultant, and discuss what that might look like for your own team.
Here at Donorly, we help small to medium-sized nonprofits craft expert fundraising strategies backed by donor data. With this overview, we hope to help your team better understand consulting in general and to dig into the key considerations you should keep in mind when choosing the right partner for your organization.
Here’s what we’ll cover:
Why hire a prospect research consultant?
The entire prospect research process involves accessing data from a variety of sources and databases. Then, that information will be aggregated and analyzed against a variety of capacity and affinity indicators in order to guide your fundraising efforts. You might use this data to identify brand new prospects in your community or screen your database of existing donors for individuals whose support can be stewarded and grown.
The exact approach that a nonprofit takes to prospect research will vary greatly based on any number of circumstances — their fundraising goals, the average giving capacity of their supporters, the types of gifts they’re looking to secure, and more. An organization’s own resources or bandwidth for conducting this research will also play an important role in how it ultimately gets done.
For instance, smaller nonprofit teams very rarely have the time or resources to devote to full-time research. It can take a long time to identify and successfully solicit major gifts, especially if you don’t already have a solid research strategy in place to begin with. This challenge can make it extremely difficult for small and mid-size nonprofits to sustainably grow their fundraising capacities over time.
That’s where prospect research consultants come in. These outside experts can support your prospect research efforts in a number of ways.
There are a few main reasons why an organization like yours might choose to work with a prospecting partner:
Your growing nonprofit doesn’t have the time or resources to conduct its own research in-house.
You need assistance with data analysis and developing actionable strategies to steward top prospects.
You have complex, niche, or specific prospect research needs that require custom strategy or support.
Does your nonprofit fit one (or more) of these categories? If so, it might be time to consider bringing in a consultant to support your prospect research efforts.
What does a prospect researcher do?
When you partner with a prospect research consultant, they will help develop custom research strategies to meet your organization’s exact needs. Some typical prospecting services include:
Screening your current, existing donor database. The goal of this service is to discover existing donors with high giving potential. From there, you’ll be able to steward individuals with the greatest potential for impact toward fulfilling this potential.
Supporting a particular campaign or event. This could mean building out a gift range chart for a capital campaign or discovering major donors to invite to a large charity auction event. These plans make it more likely that you’ll hit your campaign goals in order to further your mission.
Building stronger planned giving and major gift revenue streams. The goal here is to discover prospects for more general, ongoing fundraising efforts rather than tied to one particular campaign. It can help you when developing a plan for your annual fundraising initiatives or when crafting a fundraising budget for the year.
Improving any in-house prospect research processes. This includes reviewing your existing research procedures, improving them, and training the in-house research team to be successful. This way, you can make sure your team has the tools and skills you’ll need to conduct research both now and in the future.
Providing full-time or structured monthly support. Rather than conducting one batch of research, this is an ongoing partnership between the consultant and nonprofit to replace in-house research efforts. When you have ongoing support, you can focus on your programming and implementing enhanced fundraising strategies resulting from the prospect research.
Prospect research is most often associated with discovering major gift prospects. You’ll find, though, that there are a variety of goals that you can work toward with a consultant’s help. In this guide, we outline the four key goals that a consultant can use their expertise to help your team achieve:
Identifying major donors
Recognizing and reviving relationships with lapsed donors
Preparing for a major fundraising campaign, such as a capital campaign
Discovering matching gifts opportunities and other corporate connections
Preparing for face-to-face interactions with prospects at events like galas
While these may be a few common goals, the list doesn’t end there! The services of a prospect research consultant can also be directed toward efforts such as discovering planned giving opportunities, updating and revitalizing your organization’s database, and more.
5 Factors to Consider When Hiring a Consultant
Do you think a prospect research consultant would be a valuable resource for your team? If you don’t have the resources to conduct your own research, you’re seeking specific information, or if you’re looking for assistance creating a strategy to use the data—a consultant could certainly help!
However, it’s crucial that you don’t rush into hiring a consultant. As with other types of support specialists, a prospect research consultant could be a game-changing, long-term teammate for your organization—but only if you choose the right expert for your unique needs.
Prospect research consultants will have different approaches, services, and track records. Each of these considerations should be carefully reviewed before entering a partnership with a new consultant. By taking these considerations seriously, you can prevent your team from investing time and resources in a consultant who’s not the right fit.
Let’s break down the five key considerations you should use when evaluating consulting candidates.
1. Scope of Your Needs
As we’ve discussed, a prospect research consultant can help your team discover new major gift prospects, planned giving prospects, matching gift prospects, and more. A consultant’s expertise in the donor research process can lead to breakthrough insights for your team and highlight new long-term strategies to pursue when fundraising.
“Discovering gift opportunities” is an incredibly broad way to define the services of a prospect research consultant. There are a variety of specific tasks and services within that greater umbrella, and it’s important for you to understand the services your team needs from an effective consulting relationship.
The exact scope of your needs could include:
Reviewing and screening existing donor lists to find key areas for growth
Providing guidance on the prospect research process
Reviewing in-house prospect research techniques
Providing guidance around a specific event or campaign, such as a capital campaign
Outlining data management best practices in the event of an influx of new donors
Providing structured monthly support in any specific element of the research process
Each need entails a different scope of involvement from both your team and the consultant. Confer with your team and conduct an internal analysis to ensure you have a strong understanding of your needs when speaking with a consultant.
At the end of the day, fundraising is work. It takes genuine effort on behalf of both you and your consultant. It’s important that you have a clear vision of what you want to be accomplished and what targets you need to hit to prevent misaligned expectations on either end of the relationship.
2. Time and Location Requirements
Each consultant will have a unique approach to the process, and that includes the frequency/timing of services and the location at which these services take place. It’s important to account for this early, as time and location are directly related to the level of support and engagement your organization receives from the consultant.
Start by asking your team the following key questions:
Depending on the scope of my project or campaign, about how much time do I expect to need from a research consultant?
Do I need consulting for a finite amount of time, or a consistent amount of research support on a regular basis?
Can we effectively work with this consultant remotely?
These questions are fairly straightforward, but your team’s answers can greatly narrow down the field of potential consultants. For example, some consultants may only offer one-time support whereas your team may be better supported by ongoing research services.
We believe flexibility is a key quality for any prospect researcher your team works with. That said, if the consultant has a more set-in-stone methodology, it’s crucial that it aligns with the exact level of access your team seeks.
3. Consultant’s Track Record
Whenever researching a consultant or any other type of specialized support, referencing their track record can give you a good sense of the quality of their work, the size/type of organization they tend to work with, and any areas of expertise in which they can really deliver.
When it comes to prospect research consultants, there are a few different ways to review the quality of their work and their research approach:
Ask the consultants for samples of their past work.
Look up the consulting firm’s past clients and their fundraising histories.
Reach out to past clients and ask for feedback.
Start a conversation with the consultant and ask about their approach and track record.
Ask the consultant to put together a project proposal (for major projects).
Keep in mind that a consultant may only want to put together a proposal if they’re fully assured of your interest to hire them. So, only seek this from consultants as a final review.
Bonus! Another key point to look for is a consultant who prioritizes data hygiene. An effective prospect research consultant will understand that staying organized and developing tidy reporting protocols in your database is essential for generating meaningful insights. This way, their work remains fully actionable for your team even after your engagement draws to a close.
4. Cost Considerations
Your nonprofit likely wants to keep the costs of fundraising as low as possible, so the cost of consulting is a key determining factor.
This cost will likely directly correlate with the scope of your organization’s needs. There are a few common ways that prospect research consultants, as individuals, teams, and services, structure their pricing:
Customized per-project fees based on the scope of your project
Flat monthly or annual fees for retained services
Hourly pricing structures to provide scheduled research support
The most reliable pricing structures for smaller and mid-sized nonprofits tend to be a mixture of fees for retained services, hourly research support, and ongoing membership plans.
This pricing approach will offer your organization the flexibility to direct the focus of your research on an hour-by-hour basis, while allotted membership or monthly hours gives your prospect research consultant the time to develop a big-picture strategy.
When considering pricing, we recommend prioritizing flexibility. This ensures that you won't be held to a time requirement or price tag that's out of line with the scope of your needs. Hourly and membership structures are an indicator that a research consultant values giving their clients’ options. However, if you are looking for support with a specific, time-bound campaign, custom per-project fees can often be the most straightforward and efficient option to consider.
5. Organizational Culture
Last, but most certainly not least, it’s crucial that a consultant fits well with your organization’s overall culture. Your team should enjoy working with the researcher!
Building a relationship of trust and respect is essential for the productive exchange of information, guidance, and direction. Your organization’s culture and your consultant’s approach should complement one another.
Consider factors such as:
Your mission and constituency
The goals of your campaign or project
Your consultant’s track record
Their areas of expertise
Simply put, your candidate should understand your mission, have relevant experience, and think of fundraising in the same ways you do. Aligning expectations is critical, and it will ultimately provide you with the most valuable connections you’ll need to build more productive, long-term relationships with new donors.
Our Recommendation: Hire a Fundraising Consultant That Offers Prospect Research
Throughout this guide, we’ve discussed prospect research-specific consultants. However, we highly recommend hiring a full-service fundraising or nonprofit development consultant that offers research services.
Why is that? Because prospect research impacts all aspects of your nonprofit’s fundraising (and more), so a full-service consultant will often be in the best position to help your team take that research and put the new information to action.
The needs of small to medium-sized nonprofits often extend far beyond just research. These organizations could invest in acquiring data and quickly realize that they don’t have the internal resources to compile and carry out an actionable plan using that data.
A full-service fundraising consultant can step in and expand the capacity of the team, giving them the needed internal resources to achieve more. In addition to research, this could involve services such as:
Fundraising assessments that examine your organizational culture and existing processes and to determine any existing or potential roadblocks.
A written fundraising plan that addresses the opportunities to improve your current strategy and lays out step-by-step recommendations for more effective fundraising.
Guidance and coaching to help your team implement the new plan and strategies.
Capital campaign-specific services, such as conducting feasibility studies and providing campaign counsel.
Embedded development staffing that builds out your team for success, such as providing a development director, donor research manager, major gifts expert, grant writer, or another necessary team member.
By working with a fundraising consultant that has experience with donor research, you not only access the benefits of a general consultant—you can also rest assured that these services are backed by research and data. To learn more about this type of comprehensive approach, contact the Donorly team today.
Prospect research can be a complicated process— especially for organizations that have a smaller internal capacity, have never conducted their own research, or have particularly specific needs. For this reason, prospect research consultants can be game-changers for small, mid-sized, and large nonprofits alike.
With these tips, you’ll be well on the way to choosing the right team member to help you reach your development goals. To learn more about consultants and prospect research more generally, check out the following additional resources:
Nonprofit Development Consultants: 6 Common Questions. Still unsure of what a nonprofit consultant does for nonprofits? Review this Donorly guide to learn the ins and outs of nonprofit development consultants.
4 Ways Fundraising Research and Consulting Help Nonprofits. Read this guide to explore the many ways a consultant can help your team. Hint: It goes way beyond discovering major gift prospects!
7 Smarter Donor Prospecting Tools and Services for Your Team. Are you interested in taking a DIY approach to research? Explore these donor prospecting tools and services to begin your effort.
