Prospect Research

Category Archives — Prospect Research

Prospect Research by the Numbers for a Small Nonprofit

High quality prospect research—learning everything you can about your major gift prospects—pays for itself many times over. It is a key best practice used by successful major gift programs. 

Prospect research is important to:

  1. Learn more about the donor, especially financial resources, inclination to give and connections to your organization you may not have known about
  2. Get the “ask” into the right ballpark.
  3. Use your time profitably.
  4. Reassure the person doing the asking–don’t under-estimate the importance of boosting the confidence of your “asker”!

How do you learn more about your major gift prospects?

  • By talking to them:  A visit to a prospect’s home or office is the picture worth 1,000 words. This is an information-gathering visit, not an “asking” visit. You are getting to know the prospect better and vice versa. You’re asking lots of questions.  You’re writing-up meeting notes.  You’re assessing whether or not the prospect is ready to be asked the next time around.
  • By researching publicly available information and assembling a donor profile. The idea is to assemble a comprehensive picture of your prospects:  where they live; family; business ties and dealings;  who they know; where they belong (memberships; board service; volunteering); where they give (in addition to you); how much they give (to you and others); asset value, e.g., real estate, stock holdings; income; and any other relevant information.  Put it all together and you have a sense of financial position, inclination to give and connection to your nonprofit.

How does a small organization develop donor profiles?

  1. Purchase them from an independnt prospect research company or freelance prospect researcher.
  2. Do your own research with a subscription to an online prospect research tool such as WealthEngine through which you can run an unlimited number of prospects.  Please note that online subscription services are tools, not researchers. The data must be cross-checked, analyzed and developed into a meaningful donor profile.  Trained staff is a necessity.
  3. Do your own research for free. Between Google and the assessors office, it is possible to learn something about your donors real estate holdings and much else as well.

Prospect Research by Numbers:  Return on Investment (ROI)

Assume you use a a professional prospect researcher. At $200 per profile, for example, research on 20 prospects will cost you $4,000. From the 20, let’s say you set up 10 asks and 2 say “yes” to $25,000 and 4 say “yes” to $10,000.  That’s $90,000 in gifts for which you paid $4,000 in research.

That’s a $22.50 for every $1 you spent on prospect research–or an ROI of 2250%!

How to fund your prospect research:

If you are screaming: “Hey, I’m small—how on earth am I supposed to do research?  I don’t have the money.  I don’t have the time.”

  •  Maybe a board member or donor will underwrite the research once he or she understands the whopping ROI.
  • Perhaps you can recruit a “Google-oriented” volunteer (remember to emphasize confidentiality if this is your solution).
  • Or, maybe you can squeak funds out of your collateral budget. “Glitzy brochure” is not on the list of requirements for successful major gift asks.

Prospect research resources include:

Prospect research sitting on the shelf is expensive.  Prospect research used to make “asks” is a goldmine.

Prospect Research: In-house Subscription Service or Contracted Prospect Researcher?

If you are serious about your major gift program, invest in a prospect research subscription service or contract a prospect research consultant.

The amount of information available in the public domain is staggering. Yes, you can “Google” and “Yahoo” prospective donors, but it is time-consuming and incomplete.  Plenty of data in the public domain is stashed in places that generic search engines don’t reach. For example, to what other nonprofits has your prospective donor made contributions—and how much?  Yes, that information is out there.

Save Time: Umbrella Prospect Research Subscription Services

There are lots of subscription services:  some focus on real estate, some on stock holdings and others on gifts to nonprofits or board affiliations.  You may be familiar with subscription services like LexusNexis, Dunn & Bradstreet or Marquis Who’s Who. (Nonprofits are not the only entites looking for wealth-related information.  Financial service firms are, too.) Others may be totally unfamiliar:  DataQuick, Waltman’s Volunteers & Directors and Guidestar.

Umbrella subscription services have relationships with multiple individual subscription companies—as many as 25 of them. As a result, you see real estate, stock holdings (if public), campaign contributions, gifts to other nonprofits, board affiliations….all in one place.  Sold as annual subscriptions, the services start at around $2,750 per year. 

Two leaders in the “umbrella” arena are WealthEngine and BlackBaud Analytics.  You may want to check them out.

Caution: Subscription Services are tools, not prospect researchers!

Data needs to be cross-checked and analyzed.  More than once, I have seen an unverified donor profile shot down by board members who are acquainted with the prospective donor.  Name confusion is a prime cause of inaccurate profiles. For example, the subscriptions may mistakenly blend the information about one John Smith, for example, with that of another. Subscriptions are a necessary starting point, but a researcher is also required. So if you decide to purchase a subscription service, make certain you have someone on staff who can verify the results. (It is possible to have a current staff member trained to do this.)     

Prospect Researchers: Analysis Plus

Good prospect researchers have a knack for ferreting out the right information. “Verify” is their middle name, they have excellent analytic skills and they produce accurate, useful donor profiles.

When you contract out, the researcher will have the subscription services he or she needs to get the job done (you can sound knowledgeable by asking which subscription service(s) he or she uses). Fees are either per donor profile or per hour.  As a smaller nonprofit, the 2 to 3 hour profile that costs under $200 should do the trick.

Your Prospect Research Decision

Weigh purchasing a subscription service, which requires in-house staff capacity, against contracting for donor profiles from a professional researcher.

Either approach, properly executed, will build your donor knowledge base and maximize your “ask” results.