Want more targeted fundraising? Use more lead research
Data is an essential tool for any business and for fundraising, which means finding leads. Some nonprofits may not be familiar with this area of fundraising. So I invited my colleague, Jen Filla, president of Aspire Research, to demystify the world of lead research so that any nonprofit can understand and use it.
The for-profit sector has benefited from market research since the 1920s. Yet small and emerging businesses still struggle to use data to generate revenue and make decisions.
The non-profit sector has mirrored this same trend. Large institutions such as universities and hospital systems have had lead research teams for decades and they are now divided into sub-specialties, such as lead research, analysis and management. But small nonprofits are struggling to take the leap in harnessing data and information to raise more funds.
What is prospect research?
Lead research supports all of the activities organizations do to move potential donors from identified to solicited to managed, using internal data, publicly available information, and the highest ethical standards. For many organizations, potential researchers are the first to create and promote data practices that protect donor privacy.
Why has lead research become more accessible to small nonprofits?
Small nonprofits have benefited from nonprofit market research software that has become more affordable and best practices that have become widespread. In addition, the professionalization of lead research has occurred alongside rapid advances in information technology. All nonprofits now have more opportunities to learn the latest practices.
How is the privacy of donors protected?
Donor information is protected by applicable laws, but also by an organization’s privacy, data, and fundraising policies. Ideally, these policies include all information collected about an organization’s donors – even external publicly available information collected by researchers.
Is prospect research ethical?
Yes. Lead search professionals follow the ethical guidelines of various associations, but compared to the common practices of for-profit companies, such as Facebook, Google, or even your local pharmacy, we are a very cautious profession. For example, Facebook collects huge amounts of data about you on the Internet, even when you are not logged in. When they find information that a donor has posted publicly on Facebook, a lead researcher will ask a question. First, is it relevant to the objective of the research? Second, is it likely that you want it to be public? We keep rigorous ethical standards!
Why would a nonprofit choose to use lead research?
Typically, an organization first seeks to prospect for research when there is new and substantial pressure to raise more funds. This could be before launching a campaign for a building or simply to fund a growing mission. Whatever the reason, when current practices are not sufficient, research can lead to larger donations.
How can lead research help a nonprofit raise more money?
The first steps in the research might be to (1) identify donors who give below their potential, (2) identify donors who show strong alignment with the organization, or (3) prioritize the list of donors to contact personally for a gift. All of these efforts help development staff to focus on the right people at the right time.
What is a typical first step?
To identify and prioritize potential donors, a nonprofit typically purchases a Potential Wealth Filter, which has fallen in price since its inception in the late 1990s. A selection takes a file of donors and matches names and contact details directly to public information databases containing information on real estate, public donations, etc.
By matching the indicators of wealth and giving directly to the person, the filter algorithms can then calculate the size of the gift a person might be able to give. When this information is combined with patterns of passing history to the organization, a large group of donors can be segmented into smaller, more manageable groups for personalized outreach and research.
What staff does the search for prospects?
Often in organizations without dedicated research staff, the first person who takes on lead research responsibilities is the database administrator or development assistant. This is the person who knows how to pull reports from the database and get the screening scores from the database. And it’s often the same person who does some initial research on the donor before the development director makes the phone call. Once a dedicated major gifts program is established, many organizations hire a trained lead-researcher to support the effort.
Can it be used by non-profit organizations without dedicated fundraising?
While lead research is now a profession with association, best practices, and ethical guidelines, anyone who interacts with donors or donor data can conduct lead research. When you ask a donor where they like to give and why, or what type of work they do, you are doing a lead research.
How can I determine if my organization is ready?
The first step is to assess your current fundraising performance. If you need to get better at requesting and handling gifts, finding leads probably won’t help you much. But if you have a good relationship with donors and are ready to increase your donations, or if you want to prioritize existing donors for personalized outreach, finding leads can have a significant positive impact.
What is the cost of implementation?
You can start using lead research best practices with $ 0. Really! Sort your list of donors by total lifetime donation and start by calling the largest and most generous donors. Find their company bio or LinkedIn profile, just like you would any business meeting. Call and visit. Or you can spend between $ 750 and $ 2,000 with a research consultant to help you prioritize and identify opportunities. Or you can spend $ 5,000 or more for your own screening.
What free resources are available to learn more?
There are so many free resources! You can find a full collection of resources curated by my company at www.protopage.com/prospectresearch.
Jennifer Filla is President of Aspire Research Group LLC, a fundraising consultancy. She can be reached at [email protected] Notes on Nonprofits is produced by Alyce Lee Stansbury, CFRE, President of Stansbury Consulting. Send your questions and comments to [email protected] For more on Jen, join us at noon on July 13 for Notes on Nonprofits Live!
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