When researching a prospective donor for an initial gift, or possibly an upgraded gift, many nonprofits stop and question, “Is it worth investing in electronic prospect research screening? Is it the path to the pot of gold? Or, is it too general to be helpful to your nonprofit (i.e. does it matter if they gave their medical school or a local women’s shelter if you are a religious organization?)”
Here are the Pros and Cons of Electronic Prospect Research Screening
- Research is super fun for data geeks and sociologists alike. That’s because good donor research output will give you a snapshot of publicly available data that includes:
- Previous giving history- how much have they given to others
- Political giving –a strong indicator of their philanthropic mindset
- Real estate estimates (they own how many houses????)
- Business data (they are the CEO of what public company?)
- SEC information including shares and market values of public transactions
- Boards they may sit on
- Previous giving history can help you adjust your expectations. Rarely, do donors jump from $1,000 to $100,000.
- It can help you understand where passions lie. If they have donated to a local Food Insecurity Initiative, a local hospital and a local private K-12 school, they are probably like to give locally to organizations that build relationships or where they already have connections.
- Understanding their political giving will help you deepen the picture of who they are and what they value. Do they donate to more Republican or Democrat causes? Town-focused, State-wide or National? Small amounts to individuals or large amounts to PACs?
- All that data can be a rabbit hole that sucks hours of your day. And that’s just for one interesting person. Sometimes too much data is just too much.
- Anecdotal information is not included. Anyone being considered for a major gift would, ideally, already be associated with your nonprofit. That means someone should know their connection point, recent conversations, and how they feel about your organization.
- It is just data and doesn’t let you know if it is a personal gift. If they gave to a children’s hospital because they helped a family member, or they donate to the women’s shelter because their sister is on the board, that is a very different type of gift than general support because they think it is a good cause.
- Common names skew results. Someone must go through each prospect and realize if it is the right Larry Smith or David Weinstein. One can probably give $1,000,000 and the other $1,000. That is a very different ask.
- Just because they have the capacity and have given to your nonprofit, that doesn’t mean they want to give more. Of course, your job is to convince them otherwise, but be patient. 10 years of $50 gifts are still valuable to your nonprofit. And consecutive years of giving demonstrate loyalty the might lead to a bequest or other planned gift.
Is it worth investing in Electronic Prospect Research Screening?
In my opinion, yes. It will save you hours on Google getting basic information and some services (like DonorSearch) provide you with an impressive amount of detail about your prospects. But, like so many things in life, paying someone else to do the screening is in actuality buying you time to other aspects of fundraising and development. Prospect research is not the end-all, be-all solution we would like it to be. But, it is an important step towards knowing your donors.