Major donors are crucial for your organization’s success—according to 360MatchPro, donations over $1,000 account for 85% of the average nonprofit’s revenue. However, finding supporters who are willing and able to make major monetary contributions can be a challenge for any nonprofit.
To find the best prospects and use your team’s time effectively, take a data-informed approach by conducting prospect research. This process involves taking an in-depth look at your donor data to find those most likely to make a major gift. Specifically, prospect research searches for individuals who have each of these three types of markers:
- Capacity (Wealth)
- Affinity (Warmth)
- Propensity (Habit)
As you dive into prospect research, focus on potential major donors that your organization already has some kind of connection with. Whether they’ve donated smaller amounts, attended events, or they’re friends with one of your board members, starting from a place of connection will save you time and increase your chances of success. Now, let’s explore each of these key markers in more detail.
1. Capacity (Wealth)
Start by looking for capacity, or wealth, markers. Capacity markers are data points that indicate a prospect may have the financial means to give a major gift.
Formerly, nonprofits would only use financial capacity to determine if donors were good prospects for major giving. Thorough prospect research now takes more than wealth into consideration, including the affinity and propensity markers which we’ll discuss below. However, it’s still important that all of your prospects have some capacity markers so you know you’re appealing to those who have the means to give the sizable gift your organization needs.
Before you begin looking for wealth makers, take time to establish your nonprofit’s major gift threshold. Major gifts are different for every nonprofit, depending on factors like average donation size and fundraising goals. To find out what size gift your nonprofit should consider a major donation, identify the range of the largest individual gifts you received in the past year. If the range is $7,000 – $10,000, for example, you could set your major gift threshold at $8,500.
Once you’ve established your threshold, look for the following indicators that prospects could have a high enough capacity to give a gift of that size:
- Real estate ownership
- Business ownership
- Stock holdings
- High-income careers
While you may have supporters’ career information in your donor database, you’ll likely have to use additional resources like wealth screening tools to find more accurate data on individuals’ financial capacity.
2. Affinity (Warmth)
Along with financial capacity, prospects also need to have sufficient warmth for your cause to be willing to give a major gift. Affinity markers indicate that a prospect has a personal investment in your cause, that your work aligns with their values, and that they may be interested in making a major contribution to further your mission.
Donorly’s prospect research guide explains that affinity markers include:
- Donation and engagement history with your nonprofit. If a prospect has already donated to your cause, volunteered, or attended your nonprofit’s events, it’s safe to assume that they have a personal interest in your mission.
- Involvement with similar organizations. Any engagement with or donations to nonprofits with similar missions demonstrates cause alignment, even if they haven’t donated to your organization before.
- Political affiliations that align with your nonprofit. Donors who are active in politics are more likely to take an interest in your charitable work, especially if they support political groups whose beliefs align with yours.
- Personal or professional connections to other supporters. Any connection to your nonprofit can indicate an interest in your mission, including having strong relationships with existing major donors or board members.
Your nonprofit’s donor database will be a valuable resource for finding these indicators. Look through the data you’ve collected about your supporters to uncover their previous donations, involvement history, and any relationships you’ve documented. Then, explore other nonprofits’ and political campaigns’ donor lists to find additional affinity markers.
3. Propensity (Habit)
Even if your prospect has the means to give a major gift and a personal interest in your cause, they may not be in the habit of donating to nonprofits. To make sure they are, look for data that demonstrates that your prospect has a history of charitable activity, known as propensity markers.
Data that indicates a habit of charitable giving includes:
- Past donations to your nonprofit
- Frequent donations to other organizations
- Board service
- Consistent fundraising event attendance
To gather this information, you can use the same resources you used to find affinity markers. Start with your own donor database, then look at other nonprofits’ websites and annual reports to find their donor lists and board members. 43% of wealthy donors give to at least five different nonprofits, so it’s likely that you’ll find a good prospect’s name on several different donor lists.
How to Get Started with Prospect Research
Although prospect research can feel overwhelming for beginners, there are plenty of resources you can use to make the process easier!
Start with the information already in your database, then turn to Google to do more initial research on individual prospects. Beyond a standard Google search, you can use these free resources to find more data on prospective major donors:
- Government filings: There are a variety of public government filings that can give you information on prospects’ donations to other nonprofits, political contributions, and nonprofit board service. Search for FEC individual contributions, other nonprofits’ Form 990s, and SEC filings for business information.
- Property records: Use real estate search tools like Zillow to find a property’s purchase history and estimated current value. This information helps you determine a prospect’s financial capacity to give.
- LinkedIn: Go to LinkedIn and other social media sites to find prospects’ employment information and any listed volunteer activities. If a prospect is active on LinkedIn, they may also post about causes and political groups they’re interested in.
These free resources are great places to start, but for best results, consider working with a nonprofit consultant. They’ll have more robust prospect research tools at their disposal and the expertise to use them. This will save your team time and give you access to more accurate information about your prospects, faster.
If you want to learn more before diving in, read up on prospect research best practices. Or, learn the latest strategies for prospect research and major donor fundraising by attending free educational webinars, panels, and conferences for nonprofits.
Once you’ve identified several prospects with all of these markers, you can begin the major donor cultivation process to start developing relationships. Be sure to craft a thorough cultivation strategy and give yourself enough time to strengthen these relationships before making any asks. And once you’ve received your donations, don’t forget to prioritize donor recognition.