Prospect Research Guide for Nonprofits

Fundraising is a vital part of nonprofit work, but let’s face it: it can sometimes feel overwhelming. Without a solid plan, your team might spend endless hours chasing leads that don’t pan out.

Have you ever wondered if there’s a smarter way to focus your time and energy? That’s where prospect research steps in — a focused method to help you pinpoint and truly understand potential donors.

In this guide, we’ll break down the essentials of prospect research, giving you a straightforward framework to make your donor search more efficient. The goal? To have every moment your team spends on fundraising feel worth it, with results you can see and build on.

What Is Prospect Research?

At its core, prospect research is about finding the right people to support your nonprofit. It’s like putting together a puzzle. You’re looking for clues about a potential donor’s ability to give, their passion for your mission and their history of giving to causes like yours. By piecing these together, you can figure out who’s most likely to contribute and focus your energy there.

In real terms, this might look like:

• Analyzing your donor database to spot trends or uncover standout supporters.
• Using online tools to learn about things like real estate ownership or business ties.
• Checking out social media or attending events to discover mutual connections.

When done well, nonprofit prospect research gives your team the tools to create personalized campaigns and nurture stronger donor relationships. Think of it as switching from casting a wide net to casting a line with purpose. You know who you’re reaching and why, making every effort count.

Why Prospect Research is Important for Nonprofits

Let’s be honest: nonprofits often run on tight budgets and limited staff. So, how do you make the most of every resource? Prospect research steps in to help you focus on opportunities with the highest payoff so your team’s efforts feel purposeful and productive.

Identify the Right Donors

Finding donors who both care about your cause and have the ability to give can feel like guesswork. Prospect research eliminates this by pinpointing individuals, corporations and foundations that match your mission and have the resources to contribute.

For instance, imagine a healthcare nonprofit looking for supporters. Prospect research might uncover individuals who’ve donated to similar medical causes, helping the nonprofit craft appeals that feel deeply personal and relevant.

Build Stronger Connections

What drives someone to give? Understanding a prospect’s interests, past donations or even personal values allows you to create authentic and tailored communication. When donors see that you “get” them, it builds trust, and that trust is what turns a one-time gift into a long-term relationship.

Optimize Fundraising Campaigns

Every campaign is a major investment of time and resources, and you want it to pay off. By zeroing in on your most promising prospects, you’re not just crossing your fingers; you’re working strategically. Whether planning a gala or launching a capital campaign, focusing on the right people sets you up for success.

Secure Recurring Donations

Recurring donors are the backbone of sustainable funding. Nonprofit prospect research helps you find those individuals or organizations who are more likely to commit to monthly or yearly contributions, giving your nonprofit a reliable stream of support.

Win Corporate and Foundation Support

Major gifts from corporations or grants from foundations can transform your work. With research, you can uncover what these entities care about, who they’ve supported in the past and how your mission aligns with their goals. That insight gives you a powerful advantage when making your case.

By prioritizing what matters most, prospect research helps nonprofits make connections that lead to real, lasting impact.

How Will You Conduct Prospect Research?

How you tackle prospect research will depend on your nonprofit’s size, goals and available resources. Some organizations keep the work in-house, while others bring in outside experts. It’s all about finding the balance that fits your needs. Here’s a look at your options:

In-House Prospect Research

Handling research internally can be a practical choice for smaller nonprofits or those on tight budgets. Think of in-house prospect research as the do-it-yourself or DIY option. Your team uses the tools and data you already have to identify potential donors.

Benefits:

• You’re in complete control of the process.
• It’s budget-friendly, especially for smaller teams.
• Your staff’s familiarity with existing donors gives you a head start.

Challenges:

• It can be time-consuming and may pull staff away from other priorities.
• Access to specialized tools or databases might be limited.

Prospect Research Consultants

If your team doesn’t have the bandwidth or expertise for in-depth research, hiring a consultant could be the way to go. These professionals bring specialized skills to the table and can focus on finding donors that align with your mission.

Benefits:

• They bring expertise in analyzing donor behavior and trends.
• Consultants often have access to advanced tools and resources.
• Your team saves time, allowing them to focus on other tasks.

Challenges:

• It’s a more expensive option than doing it in-house.
• Once their job is done, you’ll need a plan to keep the momentum going.

Prospect Screening Companies

Prospective screening companies can provide a data-driven approach for larger nonprofits or those with ambitious fundraising goals. These firms use advanced algorithms to analyze donor data and create detailed profiles.

Benefits:

• Their tools offer highly accurate, data-backed insights.
• This approach works well for large donor pools or major campaigns.
• It’s efficient, with results delivered quickly.

Challenges:

• The cost may be too high for smaller organizations.
• You’ll need skilled staff to interpret and act on the data they provide.

Ultimately, the best approach will depend on your nonprofit’s unique needs. Whether you go in-house or bring in outside help, aligning your prospect research strategy with your organization’s resources and fundraising goals is key.

The Prospect Research Process

Once you’ve chosen how to conduct your research, it’s time for the prospect research process to begin. Here’s a breakdown of the steps to help you identify, analyze and connect with the right prospects for your nonprofit.

Determine the Ideal Prospect

The first step is to define precisely who you’re looking for. What does the “perfect donor” look like for your organization? To answer this, focus on three key factors: capacity, affinity and propensity.

Capacity

Capacity measures a prospect’s ability to give financially. Key indicators include:

• Real estate ownership.
• Stock portfolios or investment assets.
• Leadership roles, such as being a business owner or executive.

By gauging capacity, you can focus your outreach on those with the financial means to support your mission.

Affinity

Affinity gauges how closely a prospect’s interests align with your cause. People with strong affinity often have:

• Prior involvement with your organization, like volunteering or attending events.
• A personal connection to your mission.
• A history of donating to similar causes.

For example, someone frequently volunteering at animal shelters might be an excellent candidate for an animal welfare nonprofit.

Propensity

Propensity is all about likelihood — the chance a prospect will give to your organization. It’s often influenced by:

• Their history of philanthropic activity, such as supporting other charities.
• Current interactions with your nonprofit, like attending events or subscribing to updates.
• Roles they play in philanthropic communities, such as sitting on foundation boards.

Research and Identify Prospects

With a clear profile of your ideal donor, it’s time to start identifying those who meet your criteria.

Analyze Your Donor Database

Your existing donor database is a goldmine of potential leads. Look for:

• High-value donors who make substantial contributions.
• Loyal donors with a track record of consistent giving.
• Lapsed donors who might respond to a well-timed re-engagement campaign.

A deep dive into your database can reveal untapped opportunities and hidden gems.

Social Media

Social media platforms, especially LinkedIn, can offer a wealth of information about potential donors. Look for:

• Professional affiliations or networks.
• Shared connections who might facilitate introductions.
• Evidence of past charitable giving or causes they publicly support.

This is especially useful when researching corporate donors or exploring mutual connections within professional networks.

Utilize Existing Donors

Your current supporters can be your best allies when finding new prospects. Encourage them to introduce you to people in their network, share your mission with colleagues or friends with similar values and host small gatherings to connect potential donors with your team.

Referrals often lead to the strongest and most meaningful donor relationships, making your existing community an invaluable resource.

Analyze and Segment Prospects

Once you’ve identified your ideal donors, the next step is to categorize them. Segmentation allows you to personalize your outreach and strengthen connections with different donor types. Fundraising isn’t one-size-fits-all. Tailored approaches deliver far better results.

Individual Donors

Individual donors make up the majority of contributions for many nonprofits, and they vary significantly in their giving patterns. By understanding these differences, you can design more effective donor journeys. Here are some common types of individual donors:

One-Time Donors

These donors give once, often responding to a specific appeal. While they aren’t regular supporters yet, they hold potential for future engagement.

• Send a personal thank-you promptly.
• Share updates showing their impact.
• Offer easy ways to stay involved, like signing up for your newsletter.

Recurring Donors

Recurring donors provide steady financial support and are critical to reliable funding.

• Highlight the ongoing impact of their gifts.
• Offer perks like exclusive updates or event invitations.
• Encourage increases in giving by illustrating how their support scales impact.

Annual Givers

Annual donors typically contribute during major campaigns or holidays.

• Begin outreach early with reminders of their past impact.
• Use compelling stories to create urgency for current needs.
• Suggest ways to deepen their support, such as joining a recurring giving program.

Read more: How to Create a Stronger Annual Appeal Letter

Major Donors

Major donors contribute significantly, often to special projects or campaigns and require a high-touch approach.

• Host one-on-one meetings to discuss your mission and future goals.
• Recognize them through naming opportunities or exclusive events.
• Keep them informed with detailed project updates to build trust and a sense of partnership.

Corporate Donors

Corporations support nonprofits through sponsorships, matching gifts or CSR (Corporate Social Responsibility) programs. To engage them:

• Show how partnering with you boosts their brand, employee engagement or visibility.
• Encourage employees to advocate for matching gifts or sponsorships.
• Align your proposals with their industry or CSR goals, emphasizing shared values.

Corporate partnerships can also lead to in-kind donations, employee volunteer initiatives and community support.

Foundations

Foundations provide grants for mission-driven initiatives, often requiring detailed applications and follow-up.

• Research their funding priorities to ensure alignment.
• Submit proposals highlighting measurable outcomes and potential impact.
• Maintain relationships by reporting on successes funded by their grants.

Foundations are especially valuable for long-term or large-scale projects.

By segmenting donors and tailoring your strategies, you can maximize engagement and strengthen relationships across every category.

Read more: How to Start Grant Writing (+ Templates)

Create Your Outreach Strategy

With your prospects segmented, the next step is to design an outreach plan that speaks directly to each group. Effective outreach blends personal touches, relatable storytelling and actionable steps that inspire donors to give.

4 Steps to Build Your Prospect Outreach Strategy

1. Personalize your messaging

Use the insights from your research to craft appeals that align with each donor’s interests and giving capacity. For example:

• Highlight the specific impact of their gift.
• Use their preferred communication channels- email, phone calls or in-person meetings.

2. Tell a story

Connect emotionally by sharing stories about the individuals, communities or causes your nonprofit supports. A compelling narrative makes donors feel like an integral part of your mission.

3. Focus on impact

Show how each gift — $50 or $50,000 — will create measurable results. Use photos, statistics and testimonials to bring your mission to life.

4. Provide clear next steps

Make it easy for donors to take action. Include links to online donation forms, reply cards for mail campaigns or instructions for setting up recurring gifts.

Read more: The Complete Guide to Nonprofit Email Marketing

Next Steps After Prospect Research

Identifying and segmenting donors is just the start. Next, it’s time to put your insights into action with targeted outreach and strategic fundraising campaigns.

The Fundraising Appeals Process

A fundraising appeal is your nonprofit’s chance to ask for support through email, mail or in person. The key is pairing a clear request with a compelling message that inspires donors to act.

Tips for effective appeals include:

• Make it personal: Address donors by name and highlight their connection to your work.
• Highlight urgency: Explain why their support is needed now, whether for an emergency or an upcoming milestone.
• Show the impact: Use real examples, like specific programs or beneficiaries, to illustrate the difference their donation will make.
• Include a clear call to action: Be direct about what you need, whether it’s a one-time gift, recurring donation or event sponsorship.

Additional Resources on Fundraising

For more detailed strategies, explore these blog posts:

• Donor Acquisition
• How to Ask for Donations
• Direct Mail Fundraising
• Lead Generation for Nonprofits
• Solicitation Emails

Building Long-Term Relationships

The goal of nonprofit prospect research and outreach isn’t just one-time donations; it’s building lasting connections. Here’s how to nurture those relationships:

• Thank donors promptly: Acknowledge every gift with a personal thank-you via letter, email or phone.
• Provide regular updates: Keep donors in the loop about how their contributions are being used and the progress you’re making.
• Engage beyond donations: Invite donors to events, give them opportunities to volunteer or offer behind-the-scenes insights to deepen their involvement.

By focusing on stewardship and ongoing communication, you can turn first-time donors into lifelong supporters who share in your mission.

Ready to make your nonprofit’s fundraising efforts more impactful? 

WildApricot‘s all-in-one membership management software simplifies donor tracking, communication and engagement. Take your prospect research to the next level with tools designed to save time and grow your impact. Try our 60-day free trial today!