Prospects (prospective donors) are the lifeblood of any nonprofit. Without them, there is no steady stream of financial aid that you need to keep your mission going.
And while finding prospects through research is one of the hardest parts of running a nonprofit, managing them is right up there if you want to keep them.
What does prospect management mean? And what do you need when it comes to resources, research, and planning? We take you through the steps to cultivate meaningful relationships with new donors and show you how to engage existing prospects to maximize donor retention, engagement, and funding.
Prospect research and management go hand-in-hand, but they are different when it comes to how you do it.
Prospect or donor research is the process nonprofits engage in to discover and identify potential donors. Potential donors are the individuals, communities, foundations, and corporations that are most likely give money to your organization.
While doing prospect research, nonprofit research officers will check prospective donors using different criteria and data points. The first thing they’ll look at is whether they have enough money to spend on causes, charities, and nonprofits. These are wealth indicators.
Secondly, they will see if their philanthropic outlook aligns with your nonprofit’s vision and mission. In other words, how likely are they to form an emotional connection with the cause you are trying to support. These are philanthropic indicators.
Prospect management is a lot like customer relationship management. It is a strategy that organizations use to manage their interactions with customers and potential customers. While it is widely used in the business world, it works exactly the same for nonprofits and charities.
A prospect management strategy includes knowing that donors’ motivation, needs - and what they can bring to your nonprofit - vary greatly.
Not all prospects are alike. Some may be from large foundations or businesses and government agencies. Then there are individual philanthropists who may be your major donors. Lastly, your small individual donors who together can make a huge difference in reaching your fundraising goals.
Effective prospect management will consider these differences. It will determine what level and type of action and the number of resources you’ll need to best cultivate and manage each type of donor.
An important part of donor management is donor cultivation. Donor cultivation is the process of motivating major donors to make repeat gifts and encouraging small donors to increase how much they give.
Cultivating donors is even more important than having a large donor pool. It’s important to spend more time looking after prospects who relate to your cause and are more likely to donate. Doing this increases the value of your prospect database.
Developing and implementing effective systems and practices build strong relationships with each and every donor. It also helps a nonprofit to achieve its goals.
The most important benefits of prospect management are:
Your nonprofit's funding model and priorities will determine how you manage your donors. However, there are some tried and trusted ways to optimize prospect management to best achieve your funding goals.
We mentioned how you cannot use a general approach when building relationships with your donors. Each type of donor needs a different strategy and level of engagement. This depends on the type of donor they are, how much they can donate, and what they expect to get out of giving money to your cause.
Use data-driven donor tools to learn more about your donor community and segment them into groups.
Your nonprofit’s mission statement and values must be clearly defined. This ensures you are in line with the wants and needs of your prospects. Equally important is defining what you are going to do with the funds raised.
Once you are clear on these two goals, you are in a stronger position to convince prospective donors to give to your organization.
Large foundations and corporate donors normally prefer official communication via email. They also prefer fundraising events as a way to get involved with and stay up to date on your program’s activities.
Younger generations and smaller individual donors are more open to more informal engagement. This could be a chance to volunteer or receive acknowledgment via group text messages and on social media platforms.
Statistics show the retention rate for new donors is 29%, and for repeat donors, it is 60%.
Reasons why donors may drop out include:
Donor management software can help you identify donors who abandon your cause as well as those who actively support it and guide your prospect management planning.
To increase retention, keep your campaign and annual reports up to date and send them out regularly. Also publicly thank donors and socially share how they impacted your cause.
It is important to know if your donors are happy with how you are running your fundraising campaigns. One way is to track clicks on links in newsletters and on social media. This will tell you exactly how many prospects reacted to a fundraising appeal or another call to action.
Ask for feedback in all your communications to keep the channels open. You can also use social media platforms’ built-in analytics to measure engagement. Be sure to keep an eye on how people are perceiving your campaign and always respond to feedback, whether positive or negative.
When you invest time and resources in prospect management, the benefits to your donors as well as your cause are clear.
Start to cultivate relationships with your prospective donors and consistently engage with existing prospects right now. This way, you are set to maximize their retention and interest. The end result is you increase funding and achieve your unique nonprofit goals.
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