Most of this content is derived from the AFP’s Review Course for the CFRE, summarized and repackaged by me in the context of the Test Content Outline.
So without further ado…
Current and Prospective Donor Research
Prospecting is the systematic acquisition and recording of data about donor and prospects, and forms the basis for establishing, maintaining, and expanding long-term gift relationships with the ultimate goal of converting donors into major gift donors. It includes the functions of donor research and cultivation (or the 3 Is - identifying, interviewing, involving). You move an individual from prospect to qualified prospect through research.
There are several different components to a comprehensive fundraising program, all of which require different elements of current and prospective donor research:
- Annual Fund: Annual fund is the primary means by which an organization acquires new donors. The goal of annual fund is to renew donors support annually and cultivate donors to higher giving levels through greater engagement. It is from this pool where one can identify and involve new leaders and identify major gift prospects. The demographic profile of your current donors is a good indicator of the profile you will find successful in a prospect list, so proper analysis of annual fund donors can help you identify more prospects. It generally takes 3 to 5 years of work to build a broad base of predictable annual dollars.
- Capital/Major Gifts: A capital campaign is an intensive organized fundraising effort to secure philanthropic gifts for specific capital needs or major projects executed within a specific time (usually over one or more years). These campaigns and asks require careful planning and review of donors before beginning, and makes more use of personal solicitation focused on major gifts from a select group of pre-qualified individuals. These campaigns and asks generally require the engagement of volunteers in the fundraising process, and can help build volunteer leadership. These efforts allow donors to become familiar with specific needs of your organization and encourages donors to”think big” about the impact they can have. Major gifts require similar amounts of prospect research and volunteer involvement, but unlike a capital campaign they are not as time-restricted. (There are more differences between Capital and Major gifts, but for the purpose of this section and the CFRE test as a whole, they’re treated as ostensibly the same thing.)
- Planned/Legacy Giving: Planned giving is the “integration of sound personal, financial and estate planning concepts for the individual donor’s plan for lifetime or testamentary giving” Every donor has a capacity to make a bequest or other planned gift, opening this conversation invites donors to enter into a long-term relationship with an organization and encourages the donor to think about gifts of assets as well as income. Planned giving usually involves transferring assets. This is a difficult decision for a donor to make, therefore it is important for the planned giving officer to use a repertoire of activities to keep donors educated about giving opportunities, and help them access information that can allow donors to structure a gift in the most beneficial way to meet their current, and future, needs and goals.
- Corporate/Foundation/Government Giving: Funding can come from a variety of entities that are not individuals including corporations, foundations, religious organizations, federations and clubs. The same basic steps that one undertakes to build an individual donor relationship translates to institutional giving. Inquire about their interests, approach them to build a relationship, identify their motivations and possible mission connections, finally ask them to become involved in your organization based on mutual needs and goals.
A. Develop a prospect list by identifying individuals and groups who have the capacity and propensity to give in order to qualify candidates for further research and cultivation efforts
7 Steps for Constituency Development
- Identify fundable projects.
- Match prospect to projects.
- Conduct research using online systems, volunteer input and examine previous interactions with the organization.
- Create a system for cumulative research so you can track donors info over time.
- Organize prospect info in database or some sort of donor data management system.
- Handle all donor info ethically and confidentially.
- Involve prospects.
B. Analyse the prospect list using characteristics such as interest, values, giving history, and relationship to the organisation in order to select potential donors for particular projects.
Identifying Target Constituencies
- Rank audience groups based on linkage, ability and interest.
- Those with the highest potential will have the strongest ties, have given on a regular basis, and have the greatest potential to give again.
To organize research activities the organization should define ahead of time:
- What staff will participate
- What types of information are needed.
- Identify sources of information, such as records, public information and peers.
- Design a research system, such and tools (worksheets, profiles etc.)
- Identify policies and practices to manage information.
When researching prospects there are numerous sources of info:
- Personal contacts (surveys, conversations)
- Participation records (who came to what event, have they given in the past)
- Public information (social directories, annual reports of other orgs, SEC data)
- Peers/board connections
C. Implement and utilise a data management system that stores information about prospects to enable retrieval and analysis.
- A donor records profile should include all information available on a donor or contribution.
- The information maintained in a data management system should enable tracking of sources of donors, and who is the contact person responsible for converting that prospect to a donor.
- It is crucial to make sure all donor records are accurate, and remain confidential.
- Ideally a data management system will enable the tracking of in-depth information that will facilitate the rating and tactics for potentially upgrading donors engagement.
- A donor has a right to access any and all information recorded about them, nothing in a donors record should be more than you would be comfortable with a donor finding.
It it crucial to have a donor tracking system and gift processing systems in order to:
- Ensure a donor is thanked properly
- Know the amount of a gift and and be able to recognize that individual.
- Report, review, and evaluate development efforts
- Notify the donor and provide documentation for tax purposes
D. Rate prospects in categories of giving potential in order to prioritize and plan solicitations.
- Check each prospects financial data and giving patterns before deciding the highest realistic amount for a donation request.
- Check each prospect’s affiliations before deciding the appropriate volunteer to assign as solicitor
- Plan communications and special events around particular areas of interest to selected prospects, use responses to qualify donors for next steps.
- Design involvement opportunities to use the talents of your best prospects to deepen their engagement with the organization.
Once a gift is made retain donors through stewardship:
- Thank donors promptly
- Monitor gifts
- Keep the donor involved in the organization
- If you have a system that will track reporting, recognize gifts with a personal touch
E. Present the list of current and prospective donors and relevant information to organizational leaders in order to establish consensus for action.
- It is important that all interactions involving donor data remain confidential and respectful.
- This process is primarily used for larger gifts, such as qualifying major donors or large Planned or Capital gifts.
- When conducting prospect screening for Capital or Major Gifts, volunteers (board and peer affinity groups) as a group rank prospects and divide them into proposed giving levels (e.g $100k vs. $10k) based on research and their personal knowledge about the donor. This information can be used to determine the sequence for cultivation and solicitation when soliciting funding for specific projects.
- Any research or tactics determined in these conversations should be recorded in a data management system, and used with respect to confidentiality during further planning meetings.