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Nonprofits are coming around to the notion of prospect research is to fundraising what the research and development (R&D) department is to a for-profit corporation, according to Tony Glowacki, CEO at Bethesda, Md.-based WealthEngine.com

Corporations continue to invest in R&D, even in a downturn, because once the economy rebounds they could be left flatfooted without a new product to put in the marketplace. “So instead of being behind the curve from a revenue standpoint, they’re behind in both revenue and product development,” Glowacki said.

As prospect research services are made more available, more nonprofits are starting to use them, Glowacki said. “That value proposition is taking a stronger hold in the market,” he said. It’s important to look at prospect research regardless of whether stock or real estate markets are down.

Akron, Ohio-based InfoCision Management Corp. uses nearly 200 demographic and psychographic fields in targeting potential donors. “We’ll do data overlays, specific model builds, profiles of nonprofits’ clients donor databases, to drive response rate or average gifts through telephone calls,” said Jeff Birkner, senior marketing strategist in the Business Intelligence Group.

To understand what people might look like from a demographic standpoint, Birkner said they look at other indicators of wealth, beyond real estate and stocks, including car, boat or ATV ownership and things of that nature. “Some different types of profiles for any given campaign can give a better overall picture of what they’re interests are, what folks look like,” he said, and tie it to a specific nonprofit’s needs. “Business intelligence allows you to be smarter, help model segments and tailor your message to each segment,” Birkner said.

Organizations that haven’t looked at it in the past are now more active, realizing they should monitor information and its impact on donors on an ongoing basis, he said.

Glowacki offered several suggestions if your organization is starting to delve into prospect research:

Ensure your nonprofit has the resources to use the information that it has spent so much time, effort and money to research. “The last thing you want to do is go out and not use it,” Glowacki said.
Know your donors, all of them. Do a comprehensive review of donors through a screening service to get a picture of not only top-tier donors but also middle- and lower-tier donors. What’s your potential? Do you have in your annual appeal the capability to increase donations just by asking for more? Are you targeting people who have the capability to make a major gift or are you just going back to the same people? “You really want to take a look at your whole capability, from an annual appeal, planned gift to major gift, and get a sense of where you’re performing in those areas,” he said.
Focus. Don’t try to do everything. “If you’ve got the capability to do major gifts, with more potential prospects after this, pick 50 and begin that cultivation process,” Glowacki said. But don’t research 500 prospects and try to get all of them. Use a more manageable approach that can offer some instant feedback about how successful you’re going to be.

“Organizations that have success right off the bat, that just builds confidence,” he said. “Target you’re right prospects, focus on the right prospects, and you start to have success and that starts to build your enthusiasm,” Glowacki said.

While someone might get more attention for selling their company for hundreds of millions of dollars, Glowacki goes back to the “millionaire next door” as a nonprofit’s best prospect. “We all get enamored with that [attention], but wealth in this country is more spread out,” he said.

This article is from NPT Instant Fundraising, a publication of The NonProfit Times.