Whether your charity is large or small, the key to effective fundraising lies in understanding your potential donors. One way to do that is through prospect research. Prospect research is the process of gathering information about potential donors or supporters to help you make the most of your supporter database, find new prospects or secure funding from grant-makers. In this guide, we break down prospect research into three easy-to-follow steps.
Step 1: Identify potential donors
The first step in prospect research is identifying potential donors, also known as ‘prospects.’ These could be individuals, businesses, trusts or foundations likely to donate to your charity.
Start by exploring your current supporters. These are the people already invested in your cause and may be well placed to offer additional support. They might increase their donations or introduce you to their network, expanding your list of potential donors.
Next, consider individuals and organisations who haven’t donated yet, but have shown interest in your cause. These could be attendees at your charity events, subscribers to your newsletter, or followers on your social media channels.
Lastly, consider people supporting similar causes. If someone has donated to a charity with a mission similar to yours, they could be interested in your work as well.
A good prospect will have the ability to give to your cause (capacity), an interest in your organisation’s work (affinity) and be easy to reach (proximity).
Step 2: Understand your prospects
Now that you have a list of potential donors, it’s time to get to know them better. This step involves conducting research to understand who your prospects are, what they care about, their potential capacity to donate and their connection to your cause.
For individuals, you might want to find out about their profession, personal interests, past donations and philanthropic tendencies. For businesses and trusts, understand their charitable giving policies, past beneficiaries and areas of interest.
Remember, when it comes to fundraising activities, you need to be transparent about how you collect and use personal data. It’s essential you follow data protection regulations such as GDPR (General Data Protection Regulation) and ensure that donors are informed about the types of prospect research you may be conducting.
Even though you are likely to rely on legitimate interest for your research, you still need to give your supporters the opportunity to opt out of the research. You should be clear about the types of data you are collecting for research and how you plan to use it. Being transparent and respectful of people’s privacy is not only the right thing to do, but it will help build trust and develop an ongoing relationship with your donors.
Step 3: Develop a personalised approach
Once you’ve researched your prospects, you can develop personalised strategies to engage them. This is where you convert your research into action.
Use the information you’ve gathered to tailor your communications to each prospect’s interests. For instance, if a prospect is passionate about education, highlight your charity’s projects related to education when you reach out to them.
Consider their donation capacity when planning your fundraising ‘asks.’ If your prospect is a major corporation, you might want to approach them for a substantial, long-term partnership. If a smaller business, you might want to start small and build up to a long-term relationship. On the other hand, an individual donor may want to test the waters with a moderate gift before donating at more significant levels.
Nurture your relationship with each prospect. Involve them in your charity’s activities, keep them updated about your work and highlight the impact of their potential contribution. Building a relationship makes your prospect feel valued and involved, increasing the likelihood of their support.
Prospect research is a powerful tool for charities. By identifying, understanding and engaging potential donors effectively, you can ensure your fundraising efforts are targeted, personalised and, ultimately, successful.
At Prospecting for Gold, we specialise in research, wealth screening, consultancy and regulatory compliance, making fundraising more effective and successful. To find out how we can help you on your fundraising journey, get in touch with us today.