Nonprofit organizations of all shapes and sizes rely on prospect research to support their work. Without the generosity of major donors, the ability of these organizations to pursue their missions would be severely limited. Clearly prospect research is important — it creates the essential network of connections that keep the nonprofit world humming along.

Prospect research is the process of identifying and learning more about potential major donors for your nonprofit. These planned or major one-time gifts help nonprofits in a variety of ways, including:

  • Covering a large portion of annual operating costs
  • Providing major support for specific mission-related campaigns
  • Funding growth or expansion with gifts to capital campaigns
  • Offering structured support through planned giving arrangements
  • Giving major support for nonprofit grant-making initiatives and institutions

Before jumping into prospect research, though, it's important that your organization understand what type of support it needs. The research process and its parameters will differ depending on your final goals. For instance, the processes for identifying a major donor for your next capital campaign and for identifying a planned donor interested in offering structured future support will be different. 

If your organization wants to learn how to do prospect research, or if you're looking for resources to support your prospecting efforts, there are a few key approaches you should be familiar with.

There are 3 main strategies that nonprofits use to conduct prospect research. The usefulness of each strategy for your organization will depend on a number of factors, most importantly the size of your team and the amount of resources (and time) you have to commit to prospect research. Let's walk through a few essential points as well as the 3 core prospect research strategies:

Once you've studied up on the basic approaches to prospect research, dig a little deeper into more comprehensive details with our donor research guide. For now, let's get started with some general context on the process itself:

An overview of what prospect research is and how to do prospect research

An overview of prospect research

Let's cover a few basics of prospect research more generally before diving into specific strategies. There are a few important benefits of conducting prospect research, some of which are fairly self-evident:

  • Securing new major gifts to support your mission
  • Kicking off a capital campaign or other major project
  • Growing your base of support beyond your immediate network
  • Identifying new planned giving prospects
  • Refining your fundraising strategies
  • Updating your prospect data

Before jumping into the research process, it's important that your team understand what type of support it needs. The process and data you'll use to identify a major donor for a capital campaign will be different from what you use to find a new planned donor interested in providing structured support. Prospect research should always be goal-specific, not one size fits all. 

While soliciting major donations is of course the end goal of prospect research, building relationships is how you get there. That's why effective prospect research is so valuable for nonprofits. Learning more about the people who support your mission is essential for building the meaningful relationships required to make a successful solicitation.

For instance, simply appreciating your mission isn't nearly as powerful a motivator for major donors as is the feeling that your nonprofit will treat them as a philanthropic partner, carefully stewarding their gift. Understanding your prospect's wider range of philanthropic, professional, and personal interests is the key to building that relationship organically.

But how exactly do you conduct prospect research? The 3 main strategies each work best in different situations and for different nonprofits. Most organizations use a combination of all 3 strategies as they grow and adapt, but considering your team's current needs, goals, and resources can direct you to the most appropriate strategy for getting started.

The first strategy for how to do prospect research involves hiring an expert consultant.

Strategy 1: Do-it-yourself research techniques

With the right tools in your arsenal you can come up with your own strategies to start revealing new prospecting insights. Nonprofits with very small budgets often need to rely on DIY prospect research, but large nonprofits with more generous budgets take this approach if they have the time and energy to invest in the process.

Learn how to do prospect research on your own if your nonprofit can afford to invest time and energy into the process.

[Image text: Conduct your own DIY prospect research if: your large nonprofit has the team members to devote to it, like a major gifts officer; you have the money and time to invest in new tools and resources; your team already has a strong grasp on the essentials of prospect research.]

There is a huge range of strategies you might pursue as you start your own prospect research. With all the resources out there, it can definitely feel overwhelming if your team has never conducted this type of research before. 

For the best results, consider taking on a professional guide who can show you the ropes of how to do prospect research. This is especially important for your first prospecting projects. There's a reason that larger nonprofits have their own dedicated major gift officers — the process takes a lot of time, resources, and experience to yield actionable results.

If you choose to conduct your own research, make sure that your team takes as comprehensive an approach as possible. Study up on wealth markers, dig into more personal and philanthropic data, and ask plenty of questions. Start by exploring some of the more accessible resources like these:

  • Nonprofit organization databases like Guidestar
  • Federal records of stock transactions and political contributions
  • Corporate philanthropy databases
  • Social networks, especially LinkedIn
  • Real estate websites

Remember that consultants and services can put you in touch with even more tools and resources that might prove incredibly useful down the line as your prospect strategies develop!

The next strategy for how to do prospect research involves using specific data services.

Strategy 2: Wealth screening and other services

Wealth screening and other prospect research data services are a great way to either get started with research or to support your ongoing prospect research efforts. Put simply, a wealth screening service analyzes your donor database to find any existing donors with the capacity to give more. This can then direct your prospect development and cultivation strategies as you encourage those donors to give more.

There are a few specific situations where this strategy is a smart move, mainly if your nonprofit can afford its own in-house prospect research but needs more supplemental data.

Wealth screening services can be a smart strategy for how to do prospect research if your nonprofit has these characteristics.

[Image text: Hire a wealth screening service if: you want to find prospects within your existing base of support; you need more data to support your in-house team's or consultant's research; you want to update your database with more current wealth marker data.]

Wealth screening services draw from a number of resources to provide you with a fuller picture of the giving capacity of your donors. These typically include wealth markers like:

  • Real estate ownership
  • Business background
  • SEC transactions
  • Other major gifts made to nonprofits

While wealth markers are an extremely important part of identifying new major donors, wealth screening should not be treated as an all-in-one prospect research strategy. Services that provide more data on specific elements of prospect research are not the same as a more comprehensive or customized approach. Be aware of the difference!

Other research services and effective prospect research consultants will draw from a wide range of tools and resources to give your team the bigger picture. These include wealth screening data, but the real point of comprehensive research is to determine not just a prospect's ability to give but also their likelihood to give. 

Of course, wealth screening services are incredibly valuable tools for nonprofits, particularly larger organizations that need data to guide their in-house prospect researchers. Wealth data is an important part of the bigger picture, but it's not nearly as useful to all nonprofits as a more comprehensive or customized approach. 

The last strategy for how to conduct prospect research involves taking a DIY approach.

Strategy 3: Hiring a prospect research consultant

Taking on a prospect research consultant to help guide the process is probably the most reliable and effective way to gather new insights. That's because their guidance will not only be tailored to your specific goals, but you'll also get a first-hand experience of how to do prospect research in the future as your organization grows. 

There's a wide range of donor prospecting consultation services out there, so this strategy works well for practically any nonprofit. It's a particularly wise choice if your nonprofit has more specific goals or constraints.

Hire a prospect research consultant if you need comprehensive results and aren't experienced in how to do prospect research.

[Image text: Hire a prospect research consultant if: your smaller nonprofit doesn't have the time or resources for in-house research; you need comprehensive and actionable results; you have more specific, complex, or niche goals that require a custom strategy.]

A flexible prospect research consultant or service will be able to offer your nonprofit a customized approach that balances your budget, deadlines, and prospecting goals. The most common services that these consultants provide for their nonprofit clients include:

  • Screening of current donor databases for high giving potential
  • Targeted support in planned giving, major gifts, or wealth screening
  • Comprehensive support around a particular campaign or event
  • Training and reviewing of any in-house prospect research processes
  • Full-time or structured monthly support to replace in-house research

A consultant's entire job is understanding the ins and outs of how to do prospect research. If taking on some professional help sounds like the right idea for your nonprofit, make sure to study up on how to hire one. We've written a whole guide on the subject to help you ensure all your top concerns and considerations are met.

A good prospect research consultant should act as a true partner for the process. Avoid those who seem to take a one-size-fits-all approach to their work! Whether you need support in a specific aspect of prospect research or more comprehensive guidance, a consultant or prospect research team can be an invaluable resource for your nonprofit. 

Next steps to consider as your team learns how to do prospect research

Next Steps for your team

Whether you've partnered with an expert guide, used a service like wealth screening to supplement your data, or conducted your own DIY prospect research, you've uncovered some new prospecting insights. Narrow down your findings into a shortlist of the most promising prospective major donors. Now what?

There are a few basic steps to getting started actually putting your research results into action. Follow this basic process:

  1. Prepare a strategy. Look back to the goals that motivated your prospect research in the first place. Why are you looking for new major donors? How much support do you need to raise? How will your research contribute along the way?
  2. Clean up your data. Make sure all the valuable insights you found during the research process don't get lost in the shuffle! Organize the most important points for each prospect, including contact information, previous giving statistics, and existing relationship notes.
  3. Develop a solicitation plan. As you move into developing a relationship with your prospect, your solicitation plan will act as a guide to keep you on track. Think about travel, communication, and time constraints.
  4. Review the research. Confirm your findings whenever possible to avoid wasting any time, and make sure your records are up-to-date. Identify the most important information that helped you identify prospects and other points that prove particularly useful.
  5. Get started developing new relationships. Reach out to your prospects to initiate a conversation, then be patient. Securing a major gift can take quite a while as you build a rapport and mutual trust. Follow a few prospect development best practices, and keep detailed notes of interactions.

A prospect research and fundraising consultant can give you invaluable insights and guidance on all these steps. From generating intuitive insights on a prospect's interests to organizing your research data in smarter ways, investing in the help of a guide for part (if not all) of the process is generally the smartest move your nonprofit can make.

Identifying new major donors is a central part of expanding your nonprofit's fundraising capacity and the key to unlocking your potential! Whether your new prospects come from within or outside your existing base of support, understanding both their ability and their motivations to make major gifts is essential.

Major donor research and development can be tricky for younger nonprofits to get right early on, but practice makes perfect! Continue preparing your team for your next prospecting push with a few additional resources: