Tag Archives: donors

Prospect Research: The Breakthrough Guide to the Basics

Prospect research can be a complex subject, but it’s vital to growing and developing your nonprofit’s donor base.

With over $373 billion donated last year, giving is on the rise, which means that prospect research is more important than ever for capitalizing on your donors’ generosity and building strong relationships with them.

In this guide, we’ll cover all of the basics, from the definition down to the nitty-gritty details of how prospect research can work for you!

Specifically, we’ll answer these questions:

Let’s get started!

What is prospect research?

Prospect research is the process of learning more about a specific donor or a group of donors so that your nonprofit can cultivate and manage them more effectively.

Prospect research is often used to identify and learn more about potential high-level donors who are giving below their true capacity. Major donors and planned gift donors, in particular, are often the subjects of this research.

To actually perform this important research, nonprofits can either:

  • Pinpoint an existing donor and fill in missing information that can give the organization a better sense of the donor’s giving capacity.
  • Screen a group of supporters, such as event attendees on an RSVP list, to identify new donors who may have high giving potential.

In both cases, the nonprofit seeks to gain a better understanding of their contributors by finding and assessing key data fields. Let’s talk about this point in more detail.

What data does prospect research target?

Nonprofit CRMs are full of data fields that compose your donors’ profiles (or those of your volunteers and board members). Some data points can be quite telling when it comes to understanding your donors.

Specifically, you’ll want to learn more about a donor’s ability and affinity for giving. That means that you need to understand how much your donors can give and their willingness to do so. Both of these factors are vital for gaining a comprehensive understanding of who your donors are.

We can break down these characteristics into specific data points.

A donor’s giving ability can be understood through:

  • Real estate ownership.
  • SEC transactions.
  • Business affiliations.
  • Political giving.

While this information could be captured in a wealth screening, it’s not enough to know how much your donors can give. It’s also important to know how invested they are in your cause, so that you can make an appropriate ask (and in the case of a new prospect, ensure that they want to give to your nonprofit in the first place!).

That’s why it’s important to analyze a donor’s giving ability in tandem with their affinity.

A donor’s affinity for giving can be understood through:

  • Past gifts to your nonprofit.
  • Past gifts to other nonprofits.
  • Philanthropic involvement.
  • Personal interests and connections.

With this data, your nonprofit can better understand your donors’ value to your organization so that you can make targeted asks that don’t leave money on the table.

Prospect research takes the fear out of fundraising; not only will your team know who to ask, but they’ll also have a better understanding of how much to ask for. This insider information can inspire confidence in your frontline fundraisers.

Now that you understand what prospect research is and what kind of information it identifies, let’s outline how a nonprofit can actually perform prospect research.

How does prospect research work?

To actually perform prospect research, your organization will need to invest time, resources, money, or a combination of the three. There are several strategies to choose from, depending on the size and stability of your organization.

To get started, let’s outline your options!

Prospect Screening Company

A prospect screening company can be ideal for larger organizations with the means to handle a lot of data.

Screening companies compare your donors against thousands of databases to fill in gaps in your prospect profiles and reveal information that you wouldn’t have known.

Then, these companies rank your prospects according to their potential, so your nonprofit can start strategizing.

This DonorSearch resource breaks down the questions you should ask before seeking out a screening company, so that your organization is as informed as possible!

Consultants

Consultants are experts who can lead prospect screenings or otherwise advise your nonprofit about all things prospect research.

Consultants are ideal for organizations who need to analyze a large batch of data all at once.

Since they’re temporary hires, your organization can save money in the long run by working with consultants only when you need them.

DIY

If you’re a small or new nonprofit, you may need to take on the task yourself. Public databases and resources can be utilized by talented team members to find out more information about important donors.

Though this method can be time-consuming, it saves funds where they’re tight.

In-House

Established organizations may have a full team assigned to prospect research that works internally.

This model is popular with universities, where donor pools fluctuate with every graduating class.

Why is prospect research important?

All of your donors are valuable, and you should be grateful for their gifts! However, developing your donor base is vital to making progress toward your mission.

It’s much more cost-effective to retain your donors than it is to acquire new ones; prospect research can help you make the most of the donors you already have and reach out to only your most likely prospects, saving your resources.

Plus, major and planned gift donors really keep nonprofits afloat. Their gifts will constitute a large piece of the fundraising pie, and prospect research is key for finding these high-impact contributors in the first place.

After all, major donors may be hidden in your database. It’s not unusual for donors with high giving capacities to give smaller gifts to online fundraising campaigns, such as large scale crowdfunding initiatives. This is often the case because they’re not comfortable sending large gifts over these channels.

Without prospect research, you’ll never know which donors have more giving potential. It’s highly unlikely that they’ll reveal themselves without a direct ask. That’s why it’s important to look into your database, especially as online fundraising grows in popularity.

Most importantly, nonprofits can use prospect research to build stronger donor relationships. You need your donors to accomplish your mission; the least you can do is meet them halfway by learning about who they are.

How can I use prospect research?

Aside from identifying major donors, prospect research can also enhance your fundraising strategy on the whole. After all, the more data you have, the better you can take your donors’ preferences into account.

Let’s break down the ways in which prospect research can elevate your fundraising strategy.

Determine your campaign

Understanding your supporters can help you create engaging fundraising campaigns and events that will bring in a lot of donations.

Prospect research can reveal donors’ interests to provide these insights. For example, if you notice that donors have given substantially to charity auctions hosted by other organizations, then you might want to adopt this event into your annual campaign.

As such, prospect research can help you narrow down your fundraising ideas and determine the campaign that works best for your donors.

Maximize your communications

Part of prospect research is filling in important data fields that tell you about your donors.

These data fields include a donor’s communication and giving preferences. In other words, how do donors want to interact with your organization and how do they want to give?

You can send donors more effective communications that they’ll actually respond to if you pay attention to their preferences.

For example, donors may prefer to communicate with your organization via:

  • Email.
  • Traditional mail.
  • Phone calls.
  • Your website.
  • Text messages.
  • Social media.
  • In person conversations.

Knowing how your donors want to speak with you can help you send them the most targeted, effective appeals.

Additionally, you can also use prospect research to determine your donors’ preferred giving methods so that you can craft the most effective multichannel marketing.

If, for example, a donor prefers to send checks to your organization, but enjoys the ease of online communications, you may find that an e-check or direct debit strategy would work well for this individual. If you find these giving patterns across your donor data, then you can use what you’ve learned to appeal to your donors on a mass scale.

Build your donor network

Some of the most important data that prospect research can uncover are your donors’ personal and professional relationships.

If you learn that your donors are friends with other high-value prospects, then you can leverage those relationships to gain an “in” with a new donor.

Similarly, a donor’s business affiliations can help you identify opportunities for corporate philanthropy. Donors who work at matching gift-eligible companies can be informed of the application process, so that they can double the impact of their future gifts.

Even more so, your organization can seek out partnerships with companies who can support your future fundraising events.

If many of your donors work for a company, then the CEO may be more inclined to lend a hand with in-kind donations, event support, or traditional (but invaluable) monetary donations.

To learn more about the top matching gift companies, check out this 360MatchPro resource!

Now that you have the basics of prospect research down pat, it’s time to apply what you’ve learned so that you can develop your understanding of your donors.

Then, you can take an informed, data-driven approach to fundraising, build stronger donor relationships, and and ultimately raise more for your cause!

The Alford Group is pleased to partner with DonorSearch, a prospect research, screening, and analytics company that focuses on proven philanthropy. This article was contributed by Ryan Woroniecki, Vice President of Strategic Partnerships at DonorSearch.

Giving USA Numbers and Beyond

TAG group photo2Photo: Alford Group staff at As Good as It Gives: America’s Philanthropy Today on June 17, 2016 at Mesirow Financial in Chicago.

 

The Alford Group co-sponsored As Good as It Gives: America’s Philanthropy Today with Mesirow Financial in Chicago to share this year’s Giving USA numbers and discuss what the numbers mean for not-for-profit organizations.

Here are the main takeaways:

  1. Giving is on the rise

The Alford Group’s Executive Vice President Sharon Tiknis and Senior Consultant Diane Knoepke presented to the room and reported that 2015 was America’s most generous year ever, as donors collectively gave over $373 billion. Slide 7Giving is on a two-year increase, as 2014 was previously charted as the most generous year of giving. Since the Great Recession ended in 2009, giving has increased by 23 percent. Individuals continue to represent the majority of giving in America at 71 percent of total giving in 2015.

 

  1. Today’s donor looks less like Ned Flanders and more like Montgomery Burns
Flanders-Burns

Dr. Daniel Hungerman from the University of Notre Dame spoke to us about long term giving trends. Even though giving to religion-affiliated organizations currently makes up approximately one-third (32 percent) of all giving, the trend is that as religion declines in the U.S. so does giving to religious organizations (fewer Ned Flanders donors).

[Simpsons characters Ned Flanders (left) and Montgomery Burns (right).]

At the same time, there is a rise in the inequality of giving. Dr. Hungerman reviewed the findings in his research showing what has long been the 80/20 rule now looks more like a 90/10 rule in philanthropic giving where 90% of the funds raised come from just 10% of donors (more Montgomery Burns donors).

Disheartened by this news? Don’t be. Despite this fact, philanthropy continues to be quite democratic in the United States, according to Dr. Patrick Rooney at the Lilly School, and when you consider that there are more American donors than American voters, those small gifts add up to make a meaningful difference.

  1. The way forward is through mission alignment

What does this all mean for you and your organization? The most effective way forward is to think strategically about mission alignment. This means aligning your operations with the outcome-focused vision from which your organization was built.

Specifically, this means aligning your strategy and tactics with your mission to ensure you are efficient and effective. This also means aligning your impact measurement with your mission to measure the outcomes of your work versus the outputs of your work. Finally, this means aligning donor messaging with your mission so that you are appealing to the donors’ passions rather than only the organization’s needs. The key is to always have your mission and your donors in mind.

To go even deeper and tackle these topics and more, please join us for The Alford Group Summer Webinar Series where we will explore bold strategies to advance philanthropy. We hope you can join us!

Giving USA: The Annual Report on Philanthropy is the seminal publication reporting on the sources and uses of charitable giving in the United States. The production and release of Giving USA is the result of the collaborative efforts of Giving USA Foundation, a public service initiative of The Giving Institute, and Indiana University Lilly Family School of Philanthropy. The Alford Group is a founding member of the Giving Institute.

People Keep Giving Money Away!

Today, June 20, 2011, the latest Giving USA numbers were released by the Giving USA Foundation estimating the giving for 2010 based on the recently released actual numbers for 2008 to include their re-revised numbers for 2009.  In past years the revised numbers were usually revised upward.  Due to the recession that began in late 2007 and carried through 2008 and 2009, the revision was downward and has created a little (or a lot of) angst among some in the not-for-profit community. Continue reading

The Economy in a Stall

Two weeks ago everything seemed bright on the economic horizon with the stock market moving well and unemployment numbers from April looking better and better all the time.  What a difference a fortnight makes.

The news this past week from Wednesday on was not cheerful, and was not bright.  Only 58,000 jobs were created over the month of May, well short of the number required to have impact on the unemployment rate.  It would take gains of 350,000 per month to truly impact the numbers and lower the unemployment rate, which rose to 9.1% nationally due to more people entering the work force and actively looking for work.  There are 7 million fewer people working in our country now, than 2006.  That is a sobering thought.

No wonder there is such a lull in economic activity and no wonder there is such caution in spending on the part of those who are working.

In 1992 I took a position with the Sisters of Providence Health System in Springfield, MA and the unemployment rate in Massachusetts at the time was 11%.  As we planned our fund raising activities, board members (and others) questioned our strategies; I repeatedly mentioned that we were going to focus on the 89% of the people who were working.  During my three years there we increased the number of donors from 600 annually to more than 3,500 annually.

Even now throughout our country, more than 90% of the people are working and being very productive.  They are not spending and they are concerned that they may be laid-off or lose their jobs.  Debt is being reduced (short term debt continues to shrink) and savings is increasing.  Thus the savings rate in America is at an all time high having exceeded the 5% level for 10 consecutive quarters.  Currently there is $2.7 trillion (yes…trillion) in money funds in America earning less than .3% annually.  This does not count savings accounts, checking accounts or short term certificates of deposit (less than 6 months).  There is a tremendous amount of money still sitting on the side lines as people are cautious with their spending.  At the current savings rate, the economy will make a fundamental shift at some time – there will come a moment when we shift from being a nation of consumers to a nation of investors.  But when is the question.

So in this lull, what should you do to support your organization?

  • Stay focused on the needs in the community that your organization is serving
  • Continue to ask for gifts that will change people’s lives
  • Be bold and confident
  • Have a vision for the next 3 to 5 years
  • Demonstrate results and success
  • Seek community endorsements for the good work you are doing
  • Stay close to your donors keeping them informed in a variety of ways
  • And continue to seek philanthropic support – last week 3 donors gave our clients significant 7 figure gifts!

These are difficult times still, but over time the difficulties will pass.  They always have, and they always will.

All the best,

Tom

There are donors and then there are donors!!

This past week I was away from Seattle doing client work for a national organization with many programs around the country and the world.  They are doing incredibly good work for a large number of people and have significant volunteer and donor support.  Over the past four years they have seen a decline in their giving to one particular program and they are attempting to discover why—hence our firm’s involvement.

One of their affiliates arranged for two focus groups.  The first was comprised of people who did not support this particular program, the second was comprised of people who did.  It was a wonderful contrast of communication, style, personality, trust and values.

A common trait was that both groups are generous and both groups significantly give of their resources especially for local programs.  I find it very rewarding to be around generous people: they know who they are; they know what they value; they care about the community, their neighbors and people they may never know.  It was enjoyable to discuss the programs with both groups, who asked specific, well-stated questions.

Here are several things I discovered from these two groups:

  • Some people just need more information than others.  The donor group was trusting and required little information to respond to the need.  The non-donor group needed a lot of data and felt they were not getting it.
  • Some people judge an organization as a whole, while others are selective in their judgment.  The non-donor group had larger issues with the national organization and although those issues did not relate to the program being discussed, it kept them from responding to the financial need.  The donor group had the ability to put aside any issues they may have around other national policies or procedures and respond to this particular need.
  • “Connectivity” is different for different people.  The individuals in the non-donor group felt more connected locally and wondered why a national connection was necessary.  The donor group felt connections both locally and nationally.  They valued being connected nationally because they, as individuals, could do even more and have greater impact on people’s lives, than they ever could as an individual or local group.

After the time spent with both groups, I also discovered the importance of leadership around these three observations.  Leadership (staff and volunteer) needs to take the observations above to heart as they communicate with both donors and non-donors.  Why are these programs important?  Why must we respond to the need the programs are addressing?  What is the impact now?  What will be the impact in the future?  Will you join with me and the many others in our organization who financially support these programs in giving what you can?

As you reflect on the ideas and observations here, let me or the other readers know your thoughts or experiences around donors and non-donors.  I look forward to reading your comments.

All the best,

Tom