A lot of donor information is hidden. Most donors aren’t advertising their net worth or telling us about the other nonprofits they donate to.
So it’s up to us to do the research in advance of our conversations with them.
Nonprofits have three options for conducting this research:
- Conducting In-House Research — Larger nonprofits with the financial means often build dedicated research teams into their organizational structure.
- Hiring a Consultant — Instead of hiring a full-time prospect researcher or having an existing staff member screen donors, you can bring in consultants like LAPA Fundraising to take the lead.
- Enlisting a Screening Company — Screening companies can compare thousands of donors against various major databases and help you rank your prospects according to potential.
The Art of Knowing What to Do with the Donor Data
Many nonprofits invest in donor research services that promise to deliver insights about their donors that are not in public view.
Unfortunately, these data vendors overwhelm you with information that is not actionable.
Advanced prospect research cuts through this noise by identifying the most relevant donor data and marrying this information with your cultivation and solicitation path. (We will show you how to use advanced prospect research to increase revenue at our free webinar on June 15 at 11 a.m. ET. Register now. I hope you’ll join us).
Knowing what to do with your donor data is the real art of advanced fundraising. That is usually outside the scope of service of the vendor who sold you the data, but it is of central concern to fundraisers.
Understanding Charitable Giving Indicators
Through years of experience, I’ve learned which data points are most instructive in gauging a donor’s capacity and willingness to give.
We have identified more than 100 indicators. Here are just the top ones:
- Giving to Other Nonprofits — Donors who give $100,000 or more to at least one nonprofit are 32 times more likely to make a similarly-sized donation elsewhere than the average person.
- Political Giving — Donors who have given more than $2,500 in federal election contributions and charitable giving are 14 times more likely to donate.
- Real Estate Ownership — Donors who own real estate valued at more than $2 million are 17 times more likely to engage in philanthropy.
These indicators will help you know which of your current donors are more likely to support your organization at a higher level. They can also help you identify new prospective donors.
Segmenting Your Donors
You should create donor segments. Your donors can be segmented into the following categories:
- Transformational donors
- Major donors
- Annual fund donors
- “Bread and butter” donors
The criteria for these segments differ from nonprofit to nonprofit — and each of these segments are refined as we conduct further research. Some nonprofits have more than 100 donor segments.
These segments help you better understand the motivation behind each donor group and, in turn, develop tailored campaigns.
You can also use the insights gained through advanced prospect research to prioritize and segment prospective donors — and build relationship maps (RelSci), which allow you to find the fastest path to connect.
Secure Higher Gifts
Prospect research generates donor data that allows you to efficiently surface and solicit donors at every level. You will know the size of the donations to request, or at least the range of past giving, so you’re not asking for more or less than the individual’s capacity to give.
This advanced knowledge increases your likelihood of securing higher gifts.
All of this fuels your organizational growth — allowing you to fulfill your mission.
By investing in advanced prospect research, your nonprofit will have the resources to truly make a significant impact.
What’s your experience with prospect research? Please share this post with a colleague who may appreciate it.