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The Role of Prospect Research in Major Gift Fundraising
Prospect research is a crucial component of major gift fundraising, which helps you be strategic, build stronger relationships, and cut stewardship costs.
Indiscriminately asking people for a major gift to your nonprofit probably isn’t going to result in much success. Donors give major gifts when they have the capacity for such an ask and a strong connection to your cause. Prospect research is how you sort through potential donors to find those who are the best match for your organization.
This process is a crucial component of major gift fundraising for nonprofit organizations. It lets you be strategic, build stronger relationships, and cut stewardship costs. Prospect research involves gathering and analyzing information about potential donors to identify those with the capacity and inclination to make significant contributions. Below are five ways it can help your organization secure major gifts.
1. Identify Potential Donors
Prospect research helps you identify potential donors who are likely to make significant contributions to your organization. The process involves looking at donor information such as:
- Giving history, frequency, and gift amounts
- Wealth markers, such as real estate or stock holdings
- Business and organizational affiliations
- Personal background and charitable motivations
When looking for potential donors, create profiles of the type of person who would make a good match for your organization. As you conduct prospect research, you can then compare what you find about different philanthropists to your profile to see if they’d make a good match for your nonprofit. Prospect research helps you identify patterns and trends to form your fundraising strategy.
2. Focus Your Fundraising Efforts
By identifying potential donors with the highest likelihood of giving, prospect research allows you to focus your fundraising efforts on those who are most likely to contribute. This helps you use your resources more efficiently and effectively.
Recruiting and retaining major donors comes with costs. You have to budget for donor lunches, staff time, marketing materials, and other stewardship activities. Since prospect research lets you target the donors most likely to give to your organization, it saves you the expenses of cultivating an individual who is not a fit for your cause.
3. Develop Personalized Cultivation Strategies
Prospect research provides valuable insights into donors’ interests, values, and giving history. This information can help you develop personalized cultivation strategies that resonate with donors and encourage them to deepen their commitment to your organization.
For example, you may learn that a prospective major donor has a specific interest in donating real estate, or that they’re looking for planned giving opportunities. When you make your request for support, you can emphasize these donation options.
Or, you might find that a major donor loves to volunteer. Instead of organizing a sit-down lunch, you could invite them to help serve meals at your emergency shelter and chat with them afterwards about giving options.
Prospect research will help you match your major giving cultivation strategies to the individual.
4. Maximize Donor Retention
By understanding donors’ giving patterns and preferences, prospect research can help you develop strategies to maximize donor retention. After a major donor gives their first gift, you’ll want to continue to engage them. This helps them feel appreciated, shows them how you’re using their gift, and plants the seed for additional major gifts in the future.
Prospect research can help you identify opportunities for donor upgrades and develop stewardship plans that keep donors engaged and committed to your organization. With robust knowledge of your major donors’ interests and capacity, you’ll know what to ask for and when the time is right to do so again.
5. Support Capital Campaigns
Prospect research can be particularly valuable for capital campaigns, which require significant fundraising efforts to achieve specific goals. By identifying donors with an interest in supporting these goals and a capacity to give, prospect research can help you lay the foundations for successful fundraising.
For example, you can look for individuals, family foundations, and corporations that have given to other capital campaigns in your geographic region or to similar nonprofits. You might find playgrounds, buildings, or programs in your research that have been named after a particular donor. Use that information as a launching point to learn more about those donors and whether they’d be a good fit for your capital campaign too.
Leverage Prospect Research to Sustainably Grow Your Major Gifts Program
By incorporating prospect research into your major gift fundraising strategy, you can identify potential donors, focus your fundraising efforts, develop personalized cultivation strategies, maximize donor retention, and support capital campaigns. Remember, prospect research is a valuable tool that can help your nonprofit build strong and lasting relationships with major donors and achieve its fundraising goals.
Instil offers a user-friendly platform for tracking prospect research as well as the cultivation and stewardship process of building major donor relationships. Learn more at our website!