All nonprofits, regardless of size or field, benefit from knowing more about their donors. When the success of your organization depends on the kindness of your constituents, it is crucial that you use any available resources to improve the number, quality, and depth of those relationships.
Most successful nonprofits use fundraising research to learn about their donors and improve their fundraising strategies. Fundraising research is the practice of using publicly available information to identify new donors and strengthen your relationships with current and past donors.
Of course, learning new information is only useful if you have plans for how to implement it in your nonprofit’s overall fundraising strategy. Fundraising research can drastically improve your donor relationships and other areas of your nonprofit operation, but you must know how to apply the data you gather.
This is the area in which hiring a fundraising and prospect research consultant can take your fundraising to the next level. If you already conduct research as a normal part of your fundraising efforts and want to know how you can improve your methods, or if you are just getting started with fundraising research, hiring a consultant may be a great idea for your organization.
Here are some of the ways in which your research team or fundraising research consultant can use their skills to help your nonprofit:
To boost your fundraising and help your nonprofit, take advantage of fundraising research in each of these situations and consider hiring a fundraising research consultant to make the process smoother and more successful.
1: Fundraising research can identify major donors.
One of the most important benefits of fundraising research is that it can help you identify new opportunities for cultivating major gift donations. Major gifts are hugely important for most nonprofits’ fundraising efforts, so any opportunity to improve your major gift totals can be extremely beneficial.
Fundraising research can help you achieve new major gift heights in several ways. Your first step should be conducting fundraising research on all the current entries in your donor database software to identify those who may be open to transitioning from smaller gifts into major donations.
Since you already have a relationship with these people, fundraising research can help you take that relationship to a new level by providing a wealth of details that you can consider while you craft and deliver your pitch. Some of these details include:
Previous gifts to your nonprofit. If a particular donor has shown a willingness to make donations to your cause in the past, it may indicate that they are ready for a larger gift. Compare this information to wealth indicators to get an idea of whether a major gift will be feasible. A fundraising research consultant’s experience and knowledge of the tools will make this step a breeze.
Gifts to other nonprofits. This further indicates a willingness to give, and can also give you a better idea of the types of causes a particular donor cares about. A fundraising research consultant will know exactly where to look to find this information.
Other types of nonprofit engagements. Knowing if a prospect is a trustee or board member for a nonprofit organization, for instance, can further help you understand what kinds of philanthropic missions they support. A consultant can assist you in deciding how and when to approach these prospects.
Hobbies and interests. Having information about a prospect outside of their philanthropic and financial records can help round out a donor profile. This information can give you a point of approach or connection and help build a successful relationship with a prospect. This can be a tricky part of the research, as these data points are often not online, especially for older prospects. A fundraising research consultant can help you explore every avenue available to create robust, detailed donor profiles.
Real estate portfolio. Real estate serves as a primary wealth indicator, and might tell you if a prospect is able to offer a major gift. Although it is often a matter of public record, this information can be highly technical and difficult to decipher—a fundraising research consultant will come in handy here.
Business relationships. Having information about a prospect’s career can reveal their giving capacity and give you ideas for new prospects through their professional network.
Political donations. All political donations are public record, so this is easily available and extremely helpful information for telling you about a prospect’s giving capacity and philanthropic interests. A fundraising research consultant can help you connect those to your cause when it is time to reach out.
Fundraising research consultants offer intimate knowledge of the tools required to do this work.
Donor databases, research tools, and analytic tools all present their share of challenges to the inexperienced user in addition to the benefits they offer your nonprofit.
While researching prospects whose contact information you already have is pretty simple with a good prospect research tool, a consultant has the expertise and experience to know where to look for new prospects. They also know how to interpret and implement data uncovered through fundraising research, a skill which can take some time to learn on your own.
2: Locate opportunities for planned giving with fundraising research.
Similarly, fundraising research is a great tool to determine opportunities for planned gifts.
Planned gifts are large donations that are scheduled to be given at some point in the future, often at the time of the giver’s death. One major benefit of planned giving is that it is exempt from many of the taxes that other types of donations incur.
A fundraising research consultant will have deep knowledge about the different types of planned gift, each of which have different legal and financial components to consider. They can use their experience to help you secure planned gifts, one of the most crucial factors in developing your nonprofit.
This means they can assist you in finding the perfect candidate for such a gift using wealth and philanthropy markers.
Here are three of the most common types of planned gift, each of which may suit a different type of prospect:
Outright gifts. These come in the form of cash or assets that will be donated after they have appreciated in value. An outright gift lets a donor get maximum value out of their donation by growing it as much as possible before making the transaction.
Charitable gift annuity. This is a special type of donation in which a sizable amount is given upfront to the organization, who invests it and allows it to appreciate over time. The donor is a paid a fixed income from the account until their death, at which point the charity is given the remainder of the gift. These types of gifts offer the donor sizable tax benefits.
Charitable bequest. This gift comes from an official statement in a will or other legal plan that assigns a gift to a specific charity. These gifts also offer the donor tax benefits.
Fundraising research can help you find good candidates for these types of gifts and give you perspective for how to approach them. A fundraising research consultant can help you explain the tax benefits and other intricacies of planned giving to your prospect, saving you time on the in-depth technical research. This is especially useful for small and/or inexperienced nonprofits that have not dealt with planned giving in the past.
Another benefit of planned gifts for donors is that they can more precisely outline how they would like the funds to be used. Whether they’re a new prospect or a longtime donor who is ready to give more, let them know specifically how your organization will use their planned gift to help the cause they care about.
3: Use fundraising research to revive relationships with lapsed donors.
Fundraising research can also help you repair relationships with donors who haven’t donated in a while. Perhaps these donors once gave recurring donations and have decided not to continue, or maybe they showed special enthusiasm in the beginning of your engagement and have since fallen out of contact.
A fundraising research consultant will have the expertise to find new data on past donors, as well as the experience to help you apply it.
Generally, a donor is considered to be lapsed if it has been more than a year since they last donated. People can shift from normal to lapsed donors for many reasons, including:
A change in their financial situation
A change in their philanthropic interests or goals
A change in their address, payment information, or some other detail that may interrupt their recurring donation processing
They are too busy to make manual donations
Fundraising research can give you clues about why your past donor has become a lapsed donor so you can consider your approach to reengaging with them. For instance, if your research reveals a change in your donor’s financial information, you can prepare with new options that may work better for them.
In any case, you can use data gathered from fundraising research to refresh, revive, and renew these relationships.
You can also use fundraising research to review the details of any number of lapsed donors, so you can locate similarities and sure up your marketing strategies. If a large percentage of your lapsed donors come from a certain demographic, for instance, or if you have used a particular outreach technique with many of them in the past, you can revise your strategies to retain more such donors in the future.
Fundraising research consultants can help you improve your in-house research methods so you can prevent lapsing donors even after they leave. They can tell you what types of data to look for, where to look for it, and how to apply it to your fundraising and outreach strategies.
Fundraising research and consulting can contribute tremendously to donor stewardship, helping you develop your relationship with donors after their first time donating. A fundraising research consultant is prepared with strategies to implement donor data into your stewardship efforts, so that fewer donors lapse and more remain devoted to your cause.
4: Fundraising research can help you prepare for your next capital campaign
Capital campaigns, also known as brick-and-mortar campaigns, are specific fundraising efforts that last a set amount of time and are aimed at specific projects. These special campaigns are often intended to raise money for new facilities, equipment, or renovations.
Unlike with more general fundraising campaigns, donors know exactly what project they’re supporting when they donate to a capital campaign. Thus, researching and marketing efforts for these campaigns differ from those that a nonprofit would use during a general campaign.
Fundraising research can help you strategize and prepare for an upcoming capital campaign by conducting what is called a “feasibility study.”
Nonprofits may use feasibility studies for all sorts of fundraising projects, but they are absolutely necessary for capital campaigns.
A feasibility study prepares your nonprofit for its upcoming capital campaign by revealing the donors who are more likely to be interested in the campaign’s goal. This way, you can tweak the specifics of the campaign to match your constituents’ desires. A feasibility study uses research metrics to help you determine when to start your capital campaign, how much to spend, and how to market the campaign to your donors and to the public.
A capital campaign feasibility study involves interviewing key donors and community members, as well as key players within the organization itself, to assess and revise strategies before starting the campaign.
A fundraising research consultant can help you locate the important figures you should be interviewing, and give you advice on the type of information you should learn. They can use their experience of successful past capital campaigns to tell you when you’ve interviewed enough people and gotten enough information.
Ultimately, you want to use a capital campaign feasibility study to assess public perception of the campaign as well as the organization itself. Using this information, a fundraising research consultant can help you make a realistic decision on whether you are ready for your planned campaign. If not, they can strategize ways to grow budget, add staff, and garner more support in preparation of your next capital campaign.
Fundraising research consultants offer focused help during critical periods such as these.
If your nonprofit is going through an unprecedented period of growth or preparing for a critical capital campaign, working with a fundraising research consultant can help you make sure everything goes as smoothly as possible so your nonprofit can effectively transition to its next chapter.
A consultant can parse through large numbers of new leads and donors and help you to effectively engage with each and every one of them, keeping your organization from getting bogged down and enabling it to stay focused on help its cause. For any nonprofit, but especially for small- to mid-sized ones without dedicated research departments, hiring a fundraising research consultant can multiply the benefits gained.
Fundraising research and consulting can offer help to your nonprofit in multiple ways and on multiple levels. The data uncovered through fundraising research provides vital clues to your organization that can help it thrive in the competitive nonprofit space.
Looking for even more information on fundraising research and consulting? Check out some additional resources here:
Want to jump right in and start conducting fundraising research for your nonprofit? You’ll find more great fundraising research tips in Donorly’s guide to donor research.
Think your organization could use some additional expertise to boost your research? To get started with hiring a fundraising research consultant, go ahead and consult this list of the best fundraising consultants from Double the Donation.
Don’t know what programs to use to perfect your fundraising research? For some examples of great fundraising research resources, see Donorly’s list of donor prospecting tools.