Donor Prospecting 101

As a nonprofit development professional, you know that donor prospecting is a valuable part of maintaining a steady income from third-party gifting. Used to optimize current donors and pursue new wealth opportunities, this process can be paramount for your institution to raise funds for operations.

While donor prospecting is likely to already be on your radar, there are always plenty of new ways to grow and refine your practice of locating ideal donors and expanding your donor list. This is especially valuable when you’re preparing for Giving Season and finding high-value donors to meet your year-end giving goals.

It may seem like Giving Season is still far off, but it’s smart to get ahead of your donor prospecting plans well before you are busy with fundraising campaigns, events, and other tasks that make the end of the year hectic. In this article, we break down everything you should know about donor prospecting so you can feel well-prepared to enter Giving Season and meet your fundraising goals.

What is donor prospecting?

Put simply, donor prospecting is about identifying donors who could bring major value and funds to your institution. This means searching for philanthropic people who already give to places with missions that align with yours, creating donor profiles to better understand the giving potential of certain donors, and much more.

Donor prospecting requires a great deal of research, generally referred to as “prospect research,” but once the foundation has been built, it’s easy for institutions to conduct donor searches for high-level givers.

MORE: Better donor prospecting with Nexis for Development Professionals

How to conduct prospect research

Conducting and implementing prospect research requires an array of steps, starting from the donor prospects you’ve already manually gathered or brainstormed about, connecting with your larger network, and the building out profiles and outreach. Because of all the components, it’s best to create a prospect workflow and begin the process ahead of any major campaigns.

This allows you to spend time cultivating relationships during Giving Season or other major campaigns instead of frantically trying to research donors who will be a good fit.

Prospect research can be overwhelming at first, so let’s break it down into simple action steps.

Prospect identification research

To being with the process of prospect identification research, you can start from what you’ve already built and work from there. That means consulting your database of already established donors, leveraging your network through tools like newsletters, and using social media for outreach. Maybe you have donors who you formed a relationship with last Giving Season or at another event. Using that existing relationship will put you one step ahead, and it’s possible that those donors have contacts who may be a good fit for your organization as well.

From there, create a list of all the potential donors you’ve found to keep track of the wide range of prospects. For instance, if you notice that a partner organization has received regular, large donations from a benefactor whose general mission seems to align with your own organization, you can add that donor to your prospective list for future outreach. This can be done within a donor prospecting tool, like Nexis for Development Professionals, to easily organize and save the information you’ve begun to gather.

Creating prospect profile from research

Once you’ve created the general list of prospective donors, you can begin to build out each person’s profile with information that will be helpful in determining what would compel them to give and how much wealth they have accumulated, screening for their donation potential.

Look into aspects like a donor’s past Giving Season donations and interests. Maybe they gave to a local library whose main mission aligns with your institution, and that could be a great segue into asking them to give to your organization as well.

This funnels into another important category: personal background and news. A prospect’s past actions and associations could inform the kind of missions they might align with (i.e. someone who donates to arts organizations may be inclined to give to the city opera), plus information about their business life will help build a better picture of their wealth.

Wealth indicators like stock sales and acquisitions can also help compile a donor’s wealth profile, along with their corporate connections, board memberships, and civic/social affiliations, which in turn also imply specific principles.

Once all these factors are listed, analyze your research by piecing together the donor’s bigger story and finding patterns in similar donors. If, for instance, a corporate banking VP has served on a medical board dedicated to finding a cure for Alzheimer’s, he might be more likely to spread some of his wealth to organizations dedicated to a healthcare organization that addresses Alzheimer’s. These little clues can build a greater strategy, leading to great success for fundraising teams.

MORE: Donor prospecting versus donor profiles: What’s the difference?

Create your outreach strategy

So, what should that outreach strategy actually look like? Whether you’re prospecting during Giving Season or other times of the year, think of the ways that your donors might be engaging with other organizations and institutions in their lives. Younger generations might be more inclined to use social media, websites, and text messages as their primary modes of communication, while older generations might turn to television ads, e-mails, snail mail, and phone calls.

Keep in mind that many organizations are conducting outreach during Giving Season, so you’ll want to tailor your messaging in a way that stands out. This is where prospect research can play a part in your outreach strategy. While you’re not going to tailor individual messages for all donors, a specific, personal ask based on a donor’s profile can go a long way in convincing them to pledge support to your organization.

Additionally, seasonal meetings and events are a great way to connect with donors face to face. If you are a music organization, you might have a gala or concert in which donors can see the results of their donations. Likewise, if you run a local foodbank, consider hosting a volunteer event for donors where they get the chance to see exactly who they are impacting.

Creating connections during events year-round gives you great starting places for conversations with donors because philanthropic people like to know that their donations have meaning. When you’re conducting your Giving Season outreach, you can jog their memory by referencing a past event and remind a donor of the impact they make.

MORE: Harnessing the power of storytelling: Inspiring donors during Giving Season

Who is donor research for?

The short answer is: just about anyone who wants (and can legally accept) donations. The types of organizations who tend to do donor research include arts nonprofits, environmental organizations, hospitals, colleges and universities, and many more. Usually, when an institution has a fundraising team, prospective donor research is a part of those roles, worked in as a main way for the organization to grow its income.

This type of research also spans types of donors. You can have someone who’s reliably donated to your organization for decades, and it might still be helpful to build them a donor profile and analyze outreach to know when they have wealth changes or new patterns in their charitable giving records. It’s also a pivotal way to find new donors, like people who are engaged in similar causes who might be a great fit for your organization but may have never even heard of it before.

MORE: The best wealth screening tools for major gift officers

Benefits of prospect research

There are many benefits of prioritizing donor prospecting before Giving Season. For starters, having donor profiles and thorough research makes for a more efficient fundraising process. Not only have you taken work off your plate by planning in advance, but you are also more likely to be reaching the right people, hosting events with more optimized guests, and making the most of your marketing and communications strategies.

This process also helps organizations to leverage wealth screening and assess current donors’ capacity to give. By ensuring that the people on your lists have the right financial standing to be able to meet your donation calls, you’re making sure that your outreach is appropriate and worthwhile, saving you time when you need it the most.

Once you’ve become more accustomed to prospective donor research, you will also become better at spotting trends and patterns, which can inform overall budgets and Giving Season projections. For instance, a homeless shelter that consistently sees spikes in donations during the winter may choose to allocate more resources to increasing those donations rather than doing big outreach campaigns in other seasons.

Donor Due Diligence

Of course, any time donors are discussed it’s important to mention donor due diligence as another pivotal part of any fundraising effort. Doing your due diligence requires identifying past and current transgressions, donor reputations and potential risk factors, and news monitoring to ensure you’re aware when donors might be falling into places of concern.

Some of those risk factors can include things like sanctions lists, watchlists, and even major lawsuits that would put your donors into hot water, thereby putting your own organization’s reputation on the line. Tools like Nexis Diligence+ help scan for these topics so that you have frequent alerts and can get ahead of any rising concerns.

Conducting donor due diligence means keeping abreast of the current climate, and in turn makes sure that the goals and mission of the organization are aligned with the ethos of the donors it is accepting funds from. Incompatible or unethical donors could create major public relations crises for an institution, with the potential to greatly impact your reputation and trustworthiness.

MORE: The ultimate donor due diligence checklist

Important considerations for ethical prospect research

When compiling so much data for prospective donors, you should also be aware of the ethics involved in storing and analyzing that data. Donors deserve privacy and discretion—you should keep your donor information secure and encrypted so that you are not putting those people at risk, and you should also be discrete when important news comes in. For instance, if a donor publicly loses his job, it might not be the best idea to email and ask him if that employment change will impact his annual donation.

Being responsible and courteous with your donor research builds a reputation and relationship of honesty and trustworthiness and makes donors more inclined to be involved with your institution.

Conduct prospect research with Nexis^® for Nonprofits

Giving Season is a chaotic time, so don't make your donor research harder than it needs to be. Streamline your research by searching for donors, build profiles of prospects, and securely store and share your lists to make your prospecting more efficient. Nexis® for Nonprofits is a one-stop solution for every donor prospecting to-do, to help you spend less time researching and more time creating lasting relationships and meeting your mission’s fundraising goals. 

For even more tips on making your Giving Season fundraising a success, download our new e-book "Giving Season 101: The Ultimate Guide to Giving Season".