Prospect Research: What You Don’t Know — and How It Can Hurt You

If you haven’t thoroughly researched prospective major donors before you meet with them, you might as well leave a wad of cash on the table when you walk out the door.

August 2007 By Margaret King

multipage

A few years ago, one of my clients requested rush research on a prospective donor. The client, a development officer at an independent school, explained that the headmaster was planning to meet with a parent to ask for a gift. He believed that the prospective donor had the capacity to make a $300,000 gift, but the development officer thought the number might be higher.

The completed research supported my client’s feeling; the school revised its strategy and asked for a $1 million gift. The meeting was a great success — the donor agreed to make a gift totaling $1.3 million over a three-year period!

Without understanding the donor’s capacity to give, my client would have received a much smaller gift, and the donor might not have felt as connected to the school.

Prospect research should be considered the invisible yet indispensable arm of a major-gifts program. It helps you understand a prospective donor’s giving capacity, among other things.

Unfortunately, many nonprofit development offices are not using research to understand the giving capacity of their prospective donors because they believe they can’t afford to set up a research department. As my client’s story illustrates, you can’t afford not to have some level of research.

What is it?
Prospect research typically is a multifaceted process of retrieval, analysis and dissemination of biographical and financial information. This information can be at the core of identifying, cultivating and soliciting major-gift prospects. It often uncovers:

• shared values,

• prospective donors’ friends and

• associates who can help form a basis for institutional involvement.

 

To develop donor profiles, researchers consult biographical and general reference books, scan journals and newspapers, and search computerized databases, and unpublished public records to cull the necessary information. As I’m sure you can imagine, the Internet plays a big role in research.

With access to the Internet, we are exposed to incredible amounts of information. In fact, a Netcraft Web Server Survey concluded that there were 80 million Web sites on the Internet in April 2006 — double the number from 2003.

Sorting through the vast amount of information can make prospect research a time-consuming and labor-intensive process.

Fortunately, there are some great tools to help researchers find information in a timely manner. Using good research tools can help organize your research and reduce the amount of time you spend searching for relevant and reliable information. (Click here for some fabulous free sites, or here for a handful of great, inexpensive and moderately priced resources.)

• MORE ON
• CAMPAIGNS / FUNDING SOURCES
• DATABASE / DONOR RELATIONSHIP