While it’s important for nonprofits to keep existing donors in their fold, it’s equally important for them to continue looking for new prospects that can become loyal donors down the line. But what is a prospect? And how do you find these new potential donors?
Let’s look at the prospecting definition:
Essentially, prospecting is donor or prospect research. It is a process whereby nonprofit organizations identify potential donors. These could be people or organizations that have already contributed to your nonprofit. Or, they can be those who have never had a single touchpoint with your NPO.
Prospecting donors helps nonprofits to focus their approach when trying to secure capital campaign contributions and major gifts.
In simple terms, a prospect is a potential donor.
According to Entrepreneur.com, there are five types of donors: prospects, individuals, major donors, corporates, and foundations.
When deciding on where to put most of your prospecting activities, consider that of the $358 billion that Americans gave to charity in 2014, a whopping 81% came from individual donors, including wealthy donors who make large donations. Only 14% came from foundations and a mere 5 % came from corporations.
Here are the five types of prospects you can consider when doing prospecting research:
These are people or organizations that have not yet made a donation but are potentially good candidates for donating to your organization.
They are valuable contacts and should be added to your potential donor database so that you can include them in mailings and appeals and stay top of mind.
Even if they don’t become donors straight away, there is always the possibility that they would do so at a later stage when they have the cash to spend or develop an interest in your cause.
Individual donors are people who will respond to a membership appeal, attend an event, or donate to a special campaign on an ad-hoc basis. Normally, they will not become major donors. But, collectively, a large number of individual donors can keep a nonprofit going.
Typically, they’d respond to a social media or direct mail appeal or donate while attending an event. It is important to keep them in your database and contact them regularly to maintain a connection.
Major donors can take a long time to research and find. They require persistent cultivation and management once they’re on board.
A sincere, personalized approach is a vital tactic used to retain major donors. This includes building relationships with them and keeping them apprised of how their donations are being used and the overall status of your nonprofit.
Major donors would normally donate large amounts of money, either annually or when you launch a special campaign.
Corporate donors are key prospects and should be targeted as part of a nonprofit’s development plan. Unlike individual and major donors who may donate for philanthropic reasons, they often request recognition for their donations. They do this so that they can turn it into a marketing opportunity.
When researching corporate donors, ensure their culture, vision and mission align with those of your nonprofit. This will increase your chances of securing them as a life-long donor.
Also, time your approaches to coincide with their fiscal year when they will be allocating budgets.
You don’t always have to approach the company with a cold call for cash either. Many large organizations have matching gift programs where they match gifts their employees donate to eligible organizations.
Private foundations are also known as charitable trusts or nonprofits. They are created with endowments funded by an individual or family, a corporation, or a community.
Nonprofits should keep tabs on when foundations open grant proposals (most do this twice a year). During this time, you can appeal for funding. If the foundation’s message mirrors that of your nonprofit, contact them directly for funding.
Getting to know a prospect is an important step before you approach them. This entails evaluating their interest, readiness to be approached, demographics, and giving capacity.
Key factors to look for include past giving, affiliations, wealth markers, and their penchant for philanthropy.
This is the process whereby nonprofit fundraisers identify the prospective donors that are most likely to donate to your organization.
The key to prospect research is collecting data, analyzing it, and creating actionable insights.
Here are some data collection pointers:
Prospect management and donor development are as important as research.
BiddingOwl’s auction management software helps you manage all your donors, items, and solicitors by keeping track of your fundraising efforts.
Now that you know what a prospect is and how to build a database of prospective donors, it’s time to get cracking with your fundraising efforts.
With BiddingOwl’s charity auction website, it’s as easy as quickly creating a website and uploading your data. Then, with just a few clicks, bring people together and start raising money for your nonprofit!