Prospect Research: 4 Key Questions to Make It Right

Prospect Research: 4 Key Questions to Make It Right

prospect research 4 key questions to make it right

prospect research 4 key questions to make it right - coverThis article was first published in the December 2015 edition of Fundraising New Zealand Magazine

In this article, Wayne McKenzie, senior fundraising consultant in New Zealand with extensive experience in prospect research, shows how prospect research is more than just checking who is on the Rich List.

 

Finding new donors is a never-ending task in fundraising. You will have to replace donors every year as you lose them through death, distraction or simply deciding to discontinue support. Life’s like that. People move on, and we have to find new friends, new things, new ways.

 

My daughter wanted help to buy a car. She said she didn’t know exactly what she wanted.

When we looked at what was on offer, I soon discovered she had very definite ideas of what she wanted and didn’t want. When I pointed to a particular vehicle she said, “No, I don’t want a white car”. As we progressed a few more things on her undeclared wish list emerged: not a station wagon, not a sports car, not 2 doors (she was a nanny and would often have 2-3 kids on board), mid-size, about 2 litres, economical, automatic, stereo… It wasn’t long before I had a pretty good idea of what she wanted. And I also noticed that most of that wish list was just that, a wish list, a personal preference, quite subjective and not related to any particular purpose.

For the uninitiated and uninformed, their approach to fundraising can be similar. When they hear someone wins the Lotto, they make begging requests to help fund their local project, without any knowledge of the winner’s interests or philanthropic leanings. And each year when the NBR Rich List is published, many people search it to find a new wealthy person who can become their benefactor and organisation’s saviour. Most often these approaches lead to disappointment. They haven’t prepared well, and prospect research is a task and expense they consider should be avoided if possible.

 

Let’s consider the car purchase again. There are a variety of options to consider and will help ensure you get it right. One model may be more expensive than another at the time of purchase, but it could be a better value in the end if you consider the reliability, the performance, the cost to run, the comfort or the depreciation over time.

 

Fundraising has often been described as the right person asking the right prospect for the right gift for the right cause at the right time in the right way. Will your best guess or your wish list be right for each of these? To ensure you get it right, you may need to do some prospect research. Research will provide not only the answer to those six rights, but will provide the following benefits as well:

– It will help you to plan and establish priorities

– It will provide you with relevant information on donors for better decisions

– It will enable you to focus on the best prospects and the best way to ask

– It will help you to document and track relationships

 

If you’re not fully convinced, just think for a moment. If you were going to a meeting with your CEO to ask a donor for a $50,000 gift, and your CEO asked you “What do I need to know about this person?” – what information would you want to pass on? That question alone should be enough to convince any fundraiser of the value of prospect research.

 

Here are 4 things you need to know to conduct better research:

  •  1. Know what you are looking for

  • 2. Know how and where to look

  • 3. Know your own organisation

  • 4. Know privacy and ethical issues

 

1. What do I really need or want to know?

The answer is – it all depends. There are different answers depending on who you are researching and what you want the information for.

– Do you want to seek funds from wealthy and philanthropic individuals, Trusts and Foundations, Corporates, Government agencies, or statutory authorities? Each of these requires you to seek in different places for different kinds of information to help you in your ask.

– Do you want merely a list of named prospects, or do you want top-line information, or detailed profiles on each?

– What information will you gather on each prospect? You need to know more than the fact that they have loads of money. Do you know what to look for that will be helpful?

 

The following table lists the kinds of information you will want to discover for different types of prospects.

prospect research 4 key questions to make it right 1
You may find it helpful to develop two templates:
– one that works with your database for uploading when you find the info,
– another for downloading the vital bits when you go to visit a prospect or share with your CEO.

 

Remember prospect research is the act of gathering, analysing – interpreting, and presenting information that helps you to get a gift. Therefore, the information you seek will align with fundraising principles and practices. You will search for information that helps to show you the Linkage, Interest and Ability (LIA) of a prospect and their donor history:

 

prospect research 4 key questions to make it right 2

 

The next step is to interpret that information. Look for overlapping information: this will indicate your best prospects. Rating and ranking prospects will help you prioritise where and how to spend your time with your best prospects.

 

You may also want to keep a profile of your top ten prospects on your desk, or with you at all times. Keeping them front of mind will keep them prioritised and more likely to motivate you to action.

 

2. Where and how can I find who and what I need?

You can do a lot of research from your desk, but some other things will require a bit more action on your part.

Get to know your own data

You should systematically record your data and have it readily accessible. Your data tells you about people and sources already within your universe. Who are they? How did they get there? What can you learn about them from their donor history, interactions, responses, notes etc.?

If you’re looking for major gift prospects within your own data, you may not see them readily. A donor giving a $1,000 gift once or twice a year indicates above average giving for direct mail appeals, but how do you know if they have the potential and willingness to give more? Consider arranging a Wealth Screening of your database. This process will search for matches between your database and the register of wealthy and philanthropic people. Following screening, you can have a variety of outputs on each one. These range from brief ‘Match Lists’ right up to full profiles of 5-8 pages.

 

Internet search engines, websites and databases

Be thankful you live in the digital age. Before computers and the Internet and Google, prospect research was a much harder and laborious task. But be careful about reliability of data. Not everything is true. If you are going to rely on information, ensure you can verify it with multiple witnesses.

Check the Charities website, Philanthropy NZ for trusts, Facebook for a person’s interests and hobbies, LinkedIn for a prospect’s professional relationships and history, Old Friends for school connections (while it’s still around), Companies office, NBR, Stock Exchange, Annual Reports, and White pages.

You can access subscription databases, such as Generosity NZ. If you cannot afford the cost of subscriptions, or you’re looking at international research, consider using those who specialise in it. It will be more effective and efficient.

So what kind of research do you need to do, and how do you go about it?

Firstly, recognise there is basic info to get you started, and there is in-depth knowledge to give you a fuller picture, which is important if you’re after big dollars.

The process of research has three stages: to identify, research, and profile. Each provides a level of information for a particular purpose. Become familiar with advanced search functions: Boolean logic (and, or, not), phrase searching, key words, truncation, and different name spellings.

prospect research 4 key questions to make it right 3

Learn more about advanced search functions in our article 6 Tips for Effective Prospect Research on Google.

 

Don’t forget active research

The best way to find out about donors is to talk to them, and one of the best ways to do that is to ask for their advice, either on their own or in a focus group. Conducting individual interviews is an important and valuable part of preparing for a capital campaign. Seeking opinions and advice from prospective key donors not only gives you valuable feedback for preparing your campaign, but is an important step in renewing and cultivating the relationship of those donors.

Another thing is to talk with your colleagues and Board members about prospects, and the prospect’s friends if you have access.

 

3. Is my organisation known and knowable?

To help find the best prospects to support your cause, you need to know your own organisation well – its vision, mission, goals, projects, values, and programs. Not just in a mundane way, but you need to passionately own that vision. It will help you focus on what you are looking for in donors, and also when you engage with them to ask.

And it will also help you to know your competition. Find out who is funding organisations and programs similar to yours?

But research works both ways. No one gives to an organisation or cause they know nothing about. So while you are finding out about the donor prospects, chances are they will want to know about your organisation, not just what you do but how and why, and how good you are at it. They won’t necessarily take your word for it. Major donors may not make a major gift online, but they will
most probably visit your website. What will they find? What impression will it leave with them? Make it easy for them.

If you are applying to Trusts, prepare for their questions and build a check list so you can anticipate them in future, and be ready for any curve ball they might throw at you.

 

4. What about privacy and ethical issues?

Before embarking on research, familiarise yourself with the major principles of the Privacy Legislation, and ensure you meet those in the way you conduct your research.

Check out the Donor Bill or Rights and also FINZ Codes of Practice, particularly:

Code of Ethics and Professional Conduct
Standard of Grants Fundraising Practice
Standard of Electronic Fundraising Practice
Code of Fundraisers Relationships with Donors

 

You will receive many benefits from conducting prospect research. But be sure to keep in mind your end goal: to raise more money so your organisation can do more to make the world a better place. It’s not just friend-raising, it’s fundraising. Don’t let this valuable information remain locked inside your database or left sitting on a shelf. Use it to build better relationships with your key donors and donor prospects, and guide you in asking for more and bigger gifts.

 

AskRIGHT Prospect Research Services can help you identify potential donors for your cause.

Contact us now on 1300 758 812 (Australia) / 0274 929 636 (New Zealand) or admin@AskRIGHT.com

 

Wayne McKenzie

Wayne McKenzie

Senior Fundraising Consultant at AskRIGHT
Wayne McKenzie is an esteemed and award winning fundraising professional with more than 25 year experience working with charities in New Zealand.

To find out how Wayne can help your organisation, contact w.mckenzie@AskRIGHT.com.
Wayne McKenzie