Leverage Prospect Research to Fill Gaps in Your Donor Pyramid
Looking for ways to increase fundraising at your nonprofit? Enhancing your prospect research efforts is one of the best places to start.
When was the last time you looked at your donor pyramid? If there are big gaps, consider using prospect research to fill the holes in your pyramid and launch your nonprofit into a new level of fundraising.
In this helpful guide, the experts at iWave will take you through the ways prospect research can fill in the missing pieces of your donor pyramid. Regardless of the fundraising climate, you can start strategizing today for more successful campaigns tomorrow.
What Types of Nonprofits Use Prospect Research to Their Advantage?
A wide variety of nonprofit organizations across a range of causes use prospect research to boost their fundraising efforts year after year.
Education Sector & Social Groups
Schools and educational organizations use prospect research to screen parents, guardians, and other family members, as well as alumnae. Similarly, Greek organizations can gain insights to guide their alumni engagement strategy.
Healthcare & Social Services
Healthcare organizations stand to benefit a lot from prospect research as well. Since patients come and go quickly, it’s vital to track and connect with them as soon as possible. Nonprofits focused on serving a specific community likely have a broad list of potential donors, too. Reliable prospect research efficiently narrows down this list and keeps it current.
Healthcare and other social services organizations frequently engage with an extensive volunteer base and likely host events regularly. Prospect research is a one-way ticket to maintaining an organized, accurate log of all these participants.
Arts, Culture, & Faith-Based Entities
In the same way, arts organizations can rapidly breakdown their pool of participants into categories based on their level of interest and involvement. This includes members, recurring donors, one-time event attendees, and everything in between. Faith-based nonprofits or institutions can also take advantage of prospect research to rapidly distinguish major donor prospects in their pool.
With the right information in hand from a transparent donor research platform like iWave, you can make the right ask to the right donor prospect at the right time. This will ensure no money gets left on the table.
Rethink the Way You Conduct and Use Prospect Research
Nonprofit organizations of any size can benefit from more thorough prospect research.
Your development team uses prospect research to learn more about a potential donor’s personal background, past giving history, wealth indicators, and philanthropic motivations. Such information comprises a portrait that can tell you how likely a donor is to support your cause. Simply put, prospect research helps you find donors that match your goals and needs.
Focusing on just one type of donor, regardless of the research, is a trap some organizations can fall into over time. Instead, you need to leverage your research in new ways to fill gaps in your donor pyramid—gaps that can be of crucial value to your mission!
First things First: How to Find the Right Donor
Anyone can look for wealth indicators to find a donor with the capacity to give, but what makes this individual likely to support your nonprofit specifically? In order for prospect research to work, it needs to analyze a variety of unique factors, painting a clearer picture of the type of donor someone may be.
Those who have given in the past to your organization or like-minded nonprofits are more likely to support you since they stand behind your cause (or causes similar to yours).
Is there a volunteer who is very active within your nonprofit? What about active members on your board of trustees? Those who already have a place in your organization can turn into significant donors due to their affiliation with the cause.
Certain information including hobbies, interests, and public service can all help determine whether or not someone is inclined to support your nonprofit.
Real Estate Ownership
If someone owns a multimillion-dollar home or various vacation or investment properties, then they most likely have the means to become a major donor for your nonprofit.
iWave aims to provide a more granular look at real estate ownership. For example, some prospects may downsize their home later in life, after children are grown and they’ve moved into retirement. This doesn’t necessarily mean they have less capacity to give. Our platform takes such factors into account.
Stock ownership is another great wealth indicator. Stock ownership provides additional value in that it holds the potential for a future stock transfer gift ask.
This is a broad search but can extend to career information and therefore salary and other finance information.
Prospect Research vs Wealth Screenings: What’s the Difference?
Wealth screenings analyze wealth indicators to determine a donor’s financial giving capability. Obviously, ability to give is a critical factor to consider when uncovering potential donors, so you’ll want to make use of wealth screenings in your research.
However, prospect research goes a step further. Just because a potential donor has the ability to give doesn’t mean they will. As noted before, you also want to look for philanthropic indicators as well as a propensity to support your specific cause.
With prospect research, you’re building a more complete and more accurate donor profile, increasing your likelihood of receiving the gifts you need.
The Donor Pyramid: How Can it Help Your Organization Strategize?
A donor pyramid is a graphical breakdown of your current donors showing what giving levels they fall into based on donation amount (or frequency). For example, the lowest tier on the pyramid is the largest and consists of one-time donors. At the top, you’ll find planned givers who are less frequent but whose donation can help your organization enact major change.
Chances are your team probably built one of these pyramids in the initial strategic phase, but have you revisited it recently? Donor pyramids can be helpful for all stages of fundraising (especially when combined with your prospect research) so it pays to return to it and update on a regular basis.
For example, changes in the general fundraising climate or the world at large may require a shift in strategy. As an example, whereas previously you were relying on major donors or planned givers, maybe now it’s time to look for more annual givers.
Examine your donor pyramid to determine where gaps currently exist. Then, hold those gaps (or areas of opportunity, as we like to think of them) up against current prospect research. Such comparisons may illuminate possibilities you hadn’t considered previously.
Choose the Right Approach to Prospect Research
Before diving into the finer points of using prospect research to fill out your donor pyramid, let’s go over some options for conducting research. You have three main avenues: in-house researcher, external consultants, or companies that offer fundraising intelligence solutions.
When you should use this option: Researchers can be valuable for organizations of all sizes. We’d recommend them for almost any team.
Those teams taking a do-it-yourself approach will enjoy conducting research in house. You’ll designate specific team members to scan through documents to analyze an array of factors.
Your staff will then build a list of who in your community would make an ideal donor. This is especially helpful if you plan on fundraising solely in your local community.
- The Pros: Saves money and is ideal for smaller budgets.
- The Cons: The required work can be very time consuming for researchers.
Prospect Research Consultants
When you should use this option: If you have the finances but are internally strapped for time.
Consultants will work in the same fashion as an in-house team in terms of performing wealth screenings; however, they are experts that are not affiliated with your organization. This option can be helpful if your team lacks the time to perform wealth screenings themselves but has the budget for consulting.
- The Pros: Saves time and can uncover more prospects.
- The Cons: Costly and doesn’t involve members of your own team.
Fundraising Intelligence Companies
When you should use this option: If your nonprofit needs to quickly find new donors on a daily basis.
Regardless of the size of your nonprofit, the help of a fundraising intelligence platform can really heighten your efficiencies. A company specializing in fundraising intelligence will provide technology to aid in more comprehensive prospect research. Such software can analyze data quickly, helping you expand your donor search outside of your immediate community.
If you’re using a platform such as iWave’s, you’ll know how much you should be asking for—making your solicitation process more successful. iWave’s platform is fully customizable, too. You can adjust the parameters to fit your organization’s mission and needs. What’s more, you’ll have valuable prospect insights so you can see, for example, who your Hidden Gems are.
- The Pros: Saves time and can find unlikely prospects.
- The Cons: Requires a budget.
More Ways Prospect Research Can Help Your Nonprofit Prosper
When it comes to your donor base, it helps to have plenty of people to reach out to. But if the information isn’t clearly segmented, it becomes difficult to know where, when, and who to turn to over the course of your fundraising campaigns. Prospect research removes the guesswork, so you can direct your organization’s time and resources towards carefully engaging your donor prospects.
Once your current datasets look clean and clear, iWave’s fundraising intelligence can continue integrating your new donors and members in an orderly way. Additionally, it can easily be incorporated into your current system, which means you won’t have to reinvent the wheel when it comes to your fundraising and solicitation strategies.
Building Out Your Donor Pyramid: Best Practices
After picking a method for prospect research, you’re ready to get started filling in the gaps in your donor pyramid! Once you’re ready to dig into your donor pyramid, following these important steps will help you make the most of this approach.
- Update all Information
An outdated donor pyramid won’t do much to help your cause. Comb through your pyramid and make sure every bit of information is as accurate as possible. This may include deleting any duplicate profiles, taking out lapsed donor information, and ensuring all contact details are current. In the long run, taking the time to verify information will ensure better results!
It’s important to keep in mind that although more accurate information is always better, your donor datasets don’t need to be flawless to yield valuable results. Using a donor research and wealth screening platform can streamline this process further, so you can focus your time and energy elsewhere.
- Look for Gaps
With your new pyramid in hand, look for where there may be holes. Taking stock of your current donor pyramid from the start can help you set the best possible fundraising goal for your organization, one that will ensure a lasting impact.
Do you have a lot of one-time donors while annual fund supporters are very low? You may have thought certain programs were performing well, but then you look at your updated donor pyramid and notice there’s a severe imbalance.
- Perform Targeted Donor Research
Once you identify theses areas of improvement, you’re ready to start researching. Perform your prospect research with specific targeted parameters for the program you want to build out. The more factors you’re searching for, the greater chance you have of uncovering the right supporters.
You can also screen your current donors to see who can potentially move up a donor level!
- Look for Commonalities
Take the time to build out donor profiles for each giving level to see what they all have in common. After you’ve identified these shared characteristics, you can screen for more prospects with those same traits.
Once again, the more specific you are with your searches the more likely you are to yield the results you’re looking for.
- Refocus and Reach Out
Then, after you’ve refocused your donor research parameters, you’re ready to find supporters and start crafting your gift asks!
To ensure proper accountability throughout this process, it helps to set clear intentions and assign team roles for using your donor pyramid with prospect research. This might consist of specificizing a timeframe, divvying up tasks, and setting a donor prospect goal, as well as an overarching fundraising goal.
How to Choose the Right Prospects for Your Nonprofit
In effectively filling those gaps in your donor pyramid, not just any prospect will do. Choosing the right donors during prospect research streamlines the process and leads to the greatest benefits.
How do you ensure your in-person or virtual fundraising events go as smoothly as possible? Spend time crafting a strategic guest list that fills in donor pyramid gaps and appeals to a highly viable swathe of prospects. For events, conduct research specifically on current supporters since they will be the most likely to attend.
Frequency, Recency, and Gift Size
Frequency and recency are two of the most accurate factors in determining if a donor will support your cause. Use prospect research to narrow down prospects based on those who have given recently and to similar organizations. Using this information, you’ll be able to determine the size of the gift they’re likely to provide.
As mentioned before, you can wealth screen prospects before a gala or event to build a guest list. You can also do a wealth screening following events when you inform top prospects of future fundraising events or donor programs. Such efforts encourage cultivation and stewardship.
How Prospect Research Helps with Donor Cultivation and Solicitation
After incorporating prospect research into your nonprofit fundraising strategy, you’ll have a clear path forward when it comes to soliciting and engaging your donor base. A few of the main takeaways you’ll have include:
- Which aspects of your nonprofit each donor relates to most.
- How much you can reasonably ask for from each donor prospect.
- The methods and level of communication each donor prefers.
By considering a donor’s capacity and affinity together, you’ll be well positioned to reach out to your top donor prospects and to cultivate stronger donor relationships.
Prospect research can help you identify opportunities to solicit corporate gifts. Employer matching-gift programs have the power to instantly increase your donations by a significant amount with almost no extra effort on the part of your organization or the donor.
If you make it easy for donors to find out if their employer participates in matching gifts, this may even further incentivize them to donate.
New Donor Prospects
In addition to sorting your current donor datasets, prospect research can also identify new donor prospects you may not be connected with.
Prospect research provides you with the necessary data to make an informed decision when it comes to soliciting major gifts. Not only will you know who has the capacity and affinity to do so, but you’ll also have a sense of how much to ask for.
This is especially important for a successful quiet phase of a capital campaign, which is when you’ll want to secure major gifts.
Planned Gift Givers
By compiling information about a donor prospect’s wealth indicators and giving history to your organization, as well as other like-minded nonprofits, prospect research can help you identify the donors most likely to make a planned gift, also known as a legacy gift.
Current Donor Datasets
Prospect research can also keep you in the know about your donors’ life changes, such as marital status and contact information.
By analyzing donor prospect datasets for you and providing insights into a donor’s giving patterns, actionable fundraising intelligence helps you stay a few steps ahead. Whether you want to increase your alumni donations or annual donors, prospect research paves the way.
Reflect Along the Way
After you’ve gone through the steps of building your donor pyramid, using prospect research, nurturing connections, and soliciting donations, it’s critical to reflect on how it went. Doing so will give your organization the opportunity to make any necessary adjustments and to course correct as you go.
Prospect Research and iWave: The Perfect Pair
At iWave, our mission is to empower nonprofits. The best way to do that is with our industry-leading platform. We’ll do much of the hard work for you, scanning through billions of datapoints as quickly and accurately as possible.
In addition to uncovering the right prospects for your mission, we’ll also show you Hidden Gems, so you can confidently fill out your donor pyramid from top to bottom.
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