Prospect Research 101: Improve Your Donor Communications
When it comes to crafting an effective fundraising strategy, understanding your donors is key. The donor data in your nonprofit’s CRM is a starting point, but prospect research can help you fill in and interpret your data.
Prospect research can help your organization learn more about your donors so that you can reach them most effectively. In a general sense, prospect research is about fleshing out donor profiles by finding important personal or professional data.
In a targeted approach, prospect research compares your donors and prospects to a range of databases in order to understand two key facts about them:
- Their openness to contributing
- Their financial flexibility to do so
Those two pieces of the fundraising puzzle can inform a multitude of your fundraising decisions, including how you communicate with donors.
Using the right donor data as your guide, you can truly make the most of your donor communications and raise more funds for your cause.
Specifically, we’re going to cover the top five ways to use prospect research to enhance your donor communications:
- Fill in personal details
- Study RFM scores
- Uncover vital wealth and philanthropic indicators
- Understand preferred communication channels
- Update contact information
When it comes to crafting an effective fundraising strategy, understanding your donors is key.
Let’s break down each in more detail!
1. FILL IN PERSONAL DETAILS
Your communications will be stopped before they even start if you don’t have complete and accurate personal details on your donors and prospects.
What do we mean by personal details?
Personal details include:
- Preferred name. We all know that one Michael who always goes by Mike and that other Michael who only goes by Michael. Don’t start your communications off on a sour note by using a name that your prospect doesn’t respond to. Also, make sure you’re up-to-date with any donors who might have gotten married and changed their names.
- Spousal data. Imagine you’re hosting a fundraising event. Do you think you’d be more likely to get an RSVP from a donor whose invitation said “Mrs. Johnson and guest” or “Mrs. and Mr. Johnson?” You certainly don’t want a donor’s spouse to feel left out! It might sound minor, but an eye for detail for with these seemingly minute points can go a long way.
- Date of birth. Beyond giving you the opportunity to wish your donors a happy birthday when their big day rolls around, knowing their birthday tells you a far more predictive number: their age. You don’t want to pigeonhole any of your donors, but if, for instance, you know that a prospect is in his early twenties, there’s a good chance he’s going to prefer email to direct mail.
- Hobbies and interests. Before your fundraisers make an ask, they first build a rapport with their prospects. Knowing a donor’s hobbies and interests can help your fundraisers break the ice. Plus, their interests can sometimes help fundraisers identify which programs a donor is most likely to support.
This information is important not just for appeals, but for your event fundraising strategy as well. Knowing your donors’ hobbies, for example, can help you select charity auction items that will receive more bids. Likewise, spousal information and preferred names will be necessary for creating the invitations.
Since these data fields can affect every aspect of your outreach, it’s important that you fill in these fields if you haven’t already.
Prospect research can help you find missing personal details so that you can communicate with your donors as the real people that they are.
Specifically, you can research your prospect’s public profiles, such as their social media or LinkedIn pages, or you can perform a prospect screening to gather the information that you need.
The point is that this foundational research can help you reach your donors more effectively.
The bottom line: The better you know your prospects, the better chance you have of collecting donations from them. Personal details have to be a factor in that knowledge.
2. STUDY RFM SCORES
You’re not going to be able to send communications to every donor every time you want to. You need to budget your time and resources so that your most promising donors receive your strongest appeals.
Prospect research can help with prioritization across the board, but it can be particularly helpful when it comes to major gifts.
The next time you’re sending out major giving communications, take your research into account.
The best way to do so is to study your donors’ RFM scores.
RFM score stands for:
- Recency of last gift: When was the last time the donor contributed?
- Frequency of giving: How often does the donor usually contribute?
- Monetary contribution: How much did the donor give last time? How much does the donor typically give?
A donor with the right RFM score can be the perfect candidate for major giving.
Leverage that information for times when you need it, like when you’re looking for donors during your capital campaign’s quiet phase or for your planned giving program.
Donors with high RFM scores may require personal event invitations or handwritten fundraising letters, for example. The key is to engage your donors with meaningful communications so that you can increase their giving levels.
The bottom line: Setting out to reach everyone at all times is an uphill battle that you’re likely to lose. Instead, plan strategically and segment your donors according to their RFM score.
3. UNCOVER VITAL WEALTH AND PHILANTHROPIC INDICATORS
Perhaps what prospect research is most known for is its ability to assist in finding out your donors’ wealth and philanthropic indicators.
Both of the following lists can be a lot more extensive, but this selection should give you a good understanding of the kind of data points a prospect screening will reveal.
Common indicators of wealth include:
- Real estate ownership
- Stock ownership
- Boat ownership
- Substantial political giving
Common markers of philanthropy include:
- Previous donations to your organization
- Previous donations to other organizations
- Involvement in nonprofit work
- Board membership
These indicators can help your organization find major giving candidates who are already in your donor database.
After all, a donor who gives to an online giving campaign that’s requesting $50 donations probably wouldn’t give a major gift, even if they have the potential to do so. These indicators can help nonprofits identify major gift candidates.
What does all this have to do with communications?
Like the RFM score, these indicators can be a valuable guide in determining how and when you communicate with your prospects and donors.
For example, there’s a massive difference between:
- Mailing one donor materials about planned giving
- Calling another donor to set up an appointment for a meeting about major gifts
- Sending an event invite through Facebook to your whole social network
- Emailing a link to your online donation form to your newsletter subscribers
Sure, there is bound to be overlap among the various groups, but you’ll want to try your best to appeal to donors through a medium and in a style that matches what they’re looking for from your organization.
For example, you might have spent a considerable amount of time perfecting your donation page, but that doesn’t mean that a quick email link is going to convince a very wealthy and philanthropic donor to give $5,000 to your organization.
Rather, if you send a major gift prospect an email to a donation page that gives them the options to donate $25, $50, $100, or their own custom amount, they’re likely to select a provided option. That’s a perfect strategy when you want a donor to jump up from $15 to $50, but it’s a missed opportunity when that donor could give $5,000.
Knowing which prospects have higher giving potential can help you send communications and appeals that can transition these prospects to higher giving levels.
The bottom line: Maximize your donors’ giving potential by researching their wealth and philanthropic data to send them targeted communications.
4. UNDERSTANDING PREFERRED COMMUNICATION CHANNELS
It’s crucial that your team stops to think: What communication channels do my donors prefer?
The options are numerous:
- Phone or mobile devices
- Direct mail
- Social media
- Text messages
Your donors’ preferred communication channels can show you how they want to engage with your organization. Meeting their preferences can help you reach your donors where they already are, ultimately leading to more donations.
After all, convenience matters to your donors. You nonprofit needs to meet them where they want to be met, so that you make the most efficient use of everyone’s time.
Using what you learn from your research, segment your donors by communication channel.
Your research can also reveal what communication channels yield the highest response rates from your donors. If you receive high engagement on your emails, then your organization may have success with a targeted online fundraising campaign or an email newsletter.
Likewise, your research can show you which communication channels are ineffective for your donors. If you find that subscriptions aren’t receiving high engagement from your donors, then you can potentially cut that channel and invest more resources into the communications that are more effective.
As such, knowing your donors’ preferences can help you use your resources wisely so that each communication is one that a donor will be glad to receive.
The bottom line: Be practical! Determine your donors’ preferred giving channels to send them the most effective communications.
5. UPDATE CONTACT INFORMATION
With fundraising surges like those that occur at the end of the year (or even those that come as a surprise), your organization may acquire a lot of donor data in a short period of time. It’s likely that some of this data may be inaccurate, and it’s easy to let it sit in your database while you focus on fundraising.
However, updating your donors’ contact information is vital to your organization’s success.
You can’t communicate with a donor whom you can’t contact.
Donors move, lose their phones, move again, change email addresses—it’s a fact of life.
Amid all of these changes, prospect research can help you keep up-to-date on your donors. A prospect screening is perhaps the easiest way to cover mass amounts of donor data, but you can research individual donors as well.
Either way, ensure that you know your donors’:
- Phone numbers
- Home addresses
- Email addresses
- Social media handles
In addition to sending your appeals to the right place, this information can be used to segment your donors by geographic region. That way, you can send relevant volunteering opportunities or event invitations to donors who can actually attend (for complete fundraising event information, this NeonCRM guide can get you started).
Keeping your contact information accurate is vital to maximizing your resources wisely. Clean your donor data at least once a year to ensure that everything is up-to-date.
The bottom line: Don’t waste resources sending communications to donors based on inaccurate contact information. Keep your info up-to-date so that you can always contact your donors.
Effective outreach can go a long way toward not only building relationships with new prospects, but nurturing the ties you already have with your current donors.
Let prospect research help inform your communications so that your strategy can continue to grow and develop.
For more information on prospect research, you can check out this DonorSearch guide.
ABOUT OUR GUEST AUTHOR:
Sarah Tedesco is the Executive Vice President of DonorSearch, a prospect research and wealth screening company that focuses on proven philanthropy. Sarah is responsible for managing the production and customer support department concerning client contract fulfillment, increasing retention rate and customer satisfaction. She collaborates with other team members on a variety of issues including sales, marketing, and product development ideas.
Sign up for our monthly newsletter to receive the latest tips from our consultants on fundraising best practices, optimizing your technology, and more.