A Prospect Research Primer

Report from Wisely by Martha Chomyn

How to find valuable prospects, build portfolios and save donor relationships without running a single complicated query

Has this ever happened to you? 

You’ve been working at your nonprofit organization for a few years and a team member has left and you’re asked to “help out” with their old duties “until we hire someone else” and suddenly you’re a prospect researcher? It happens more often than you’d think! (Or maybe exactly as often as you think). But I’ve got good news for you: prospect researching is a great skill to have in your back pocket! It can only enhance your efforts as a fundraiser. 

But this can also be an intimidating arena to enter when you haven’t had any formal training. After all, aren’t researchers constantly running queries and data mining and manipulating excel spreadsheets? 

Traditionally, yes. But an organization shouldn’t be penalized potential fundraising dollars because no one on the team has a data science degree. Wisely has taken the most complicated parts of prospect research and simplified them so that anyone, regardless of skill level, can take advantage of mining their database.  

If you’re thinking about taking the plunge and exploring the world of prospect research, or if you’ve (un)officially been dubbed your organization’s PR, here’s a quick overview of what is typically involved in the role.

Prospect Research Basics

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There are generally 2 parts to the job of a Prospect Researcher:

  1. Data analytics (finding ideal donor prospects)

You can’t ask people for money if you don’t know who to ask. This is where the data mining aspect of the PR job comes into play. Researchers use queries and spreadsheets and other tools to scour the organization’s database to find the donors who fit within the specific parameters they’re looking for (ex. Gave a gift in the last 5 years, gave a gift in the 10-25K range etc…) they determine who is worthy of being assigned to a fundraiser. 

2. Research (learning more about those ideal donor prospects so fundraisers can develop relationships!)

Once a list has been created of people that match the specific parameters of the types of donors you’re looking for, the next step is to start doing research that will help your gift officers develop relationships with them. Find out who they are as individuals, how they’re connected to the organization, what sort of capacity and affinity they have for your organization etc… This is the more qualitative side of prospect research — sure, you’ll look up facts and figures, but this is also the time to find out if the donor is a sports fan or prefers theatre, do they have kids? When it comes down to it, what’s their story? 

Everyone knows it’s easier to retain an old donor than it is to go out and gain a new one. That’s why it’s vital to make sure that, as an organization, you are getting the maximum value out of your existing database. As gift officers come and go from organizations, it’s not uncommon for donors to get lost in old, inactive portfolios because they’re not reassigned to a new fundraiser. That means that donors who care about your cause and have previously established relationships with your organization are not giving as they could because no one is talking to them. When a database is properly mined and analyzed, valuable donors are not left behind and your organization is prevented from leaving money on the table! 

Traditional Prospect Research: How it’s done

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Traditional Prospect Research

One of the most common ways that prospect researchers start to mine data is by running queries to create an RFM score.

Often they begin by looking at how recently donors have given a gift (the “R” in the RFM model). Next, they might look at how frequently donors have given (there’s the “F”), and finally the monetary range (rounding it out with the “M”) of donor gifts.

Examining the entire donor database through these 3 values helps to identify how engaged a donor is, how relevant the organization is to them, and their capacity for giving. For example, a researcher might run a query with the aim of finding people that donated a third gift within a certain gift range within the last year. 

Typically the goal with using an RFM model is to narrow down the folks in your database into a smaller, more manageable list that has gone through some degree of validation because the people in it fit into a specific range of recency, frequency and monetary parameters. To generate a list like that, a great deal of time is typically spent manipulating spreadsheets to look at averages, and find trends and patterns. 

Prospecting with Wisely

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Wisely’s approach incorporates best practices of prospect research, but we’ve automated the complicated RFM process to make it easy for just about anyone to find the people in your database who should be assigned to a fundraiser.

Using our machine learning models, we are able to automate a lot of the analysis that a prospect researcher would do to come up with a shortlist of donors for assignment. In addition to this, Wisely also makes a prediction about when a donor is likely going to give their next gift and how much it will be.

By doing this, we give prospect research and fundraising staff more time to devote to qualitative research and getting to know a donor. More time spent on relationship building leads to a better chance at securing a gift. 

Wisely’s machine learning models also help to eliminate bias by expanding focus beyond the top 10-20% of donors in the database. This helps diversify and expand your pool of potential gift sources. By making it easy to find people based on a gift range or time period, you can conduct more frequent searches for donors (without relying on time consuming data analysis) and distribute new donors to portfolios more frequently. 

The prospecting tool can easily help you see donors who are expected to donate within a certain dollar threshold and within a certain time period. For example, if you want to find people who are likely to donate between $10,000 – $25,000 and recently gave in the last two years, Wisely will automatically shorten the list of available donors in your database to those that fit that criteria. We try to take away a lot of that manual effort for the people who are coming in and being asked to wear the prospect research hat but don’t have the time to spend 80 hours doing an RFM analysis of the entire database.

How to use Wisely in your Prospect Research Journey

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If you are new to prospecting you may feel unsure of where to begin or how to incorporate Wisely into your work. Whether you are prospecting daily, weekly or monthly, the most important thing you can do is set aside some dedicated time to focus on finding those donors within your database.  

  • Regularly schedule time for prospecting
    • Prospecting is not a twice-yearly activity. Stay focused on upcoming opportunities and resist the temptation to add 500 prospects who might give in the next 12 months. Soon enough you will find a rhythm for how frequently you need to be prospecting and distributing donors. Making sure you are consistently setting aside time to look for new prospects ensures that no one is missed and portfolios are regularly refreshed.
  • Communicate with your team and ask them questions so you can better understand the types of donors you should be looking for and how to distribute them
    • How many new people do they think they could handle reaching out to in a week? A month? What is their ideal portfolio size? Do different fundraisers focus on different types of donors? Make sure you understand who should be handling who
  • Trust your gut
    • Wisely is good at making predictions, but we don’t know your database the way you do. If a prospect comes up that doesn’t seem right for assignment, dismiss them and share your feedback with our team. We’re always working to make our models the best they can be, and we can only do that with your feedback!

Stop Researching, Start Reaching Out 

At a certain point, you need to move beyond analysis and into action. It’s easy to spend a lot of time in deep analysis with your data, especially if you have a lot of it! It may be tempting to keep going and going with your research, but don’t let this delay you from taking action.

Getting deep into the data can lead to a list of 500 donors that your or your fundraisers are now expected to research and contact. Each person takes time to research and a list that gets big and unwieldy.

Finding the right time to stop researching and moving on with assignments hovers between being an art and a science. There’s no definite right or wrong time to do it, so go easy on yourself! Just remember that the ultimate goal is to engage the right donors for your mission. As long as you enable fundraisers to do so, you are on the right track. 

  • At a certain point stop you have to reach out and start developing a relationship
  • Don’t fall into the trap of over-researching 
  • Stick to a manageable list — there will always be more donors to research!

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