How Research Helps Nonprofits Build Better Donor Lists
While most organizations and their leaders value efficiency, maximizing time and dollars is a categorical imperative for nonprofits. Not only do these organizations often operate with razor thin budgets and incredibly lean staffing, they also must spend a large amount of time and resources building lists of potential donors and partners aligned to the mission, vision and values of the organization.
This can be a daunting task. Networking takes time and cold calling lacks efficiency. So how can nonprofits find quality leads and then the information needed to qualify and close leads that drive business development in a cost-efficient way? The process begins with the right research tools and direction, which can help to save valuable time and free up staff to focus on other important endeavors.
Research Trends in Charitable Giving
Like consumer habits, the behaviors of the donating public can evolve over time. The tried-and-true tactics of a seasoned nonprofit development professional may need to be adjusted based on this evolution. Strategic research can help to inform these adjustments. Often, predicting the trends of the future starts with understanding those of the past.
In 2018, for instance, nonprofits in the United States struggled to understand how tax reform would impact charitable giving. This isn’t the first time shifts in tax law have had the potential to impact charitable giving. In the 1970s, experts predicted more than a 25 percent drop in charitable giving if proposed tax deduction reform were passed. Savvy nonprofit leaders could consider and evaluate how nonprofits responded to trends in the past as a way to form a plan for the future. Having a tool that can pull this sort of historical information from public archives can make this research quick and efficient.
Trend analysis can also point to organizational donors as well, leading to the next topic…
Understand Organizational Alignment
Organizational donors like corporations, foundations and charitable trusts are often aligned to specific goals or program areas. Understanding the strategic philanthropic focus of organizations is a vital tool in the identification of potential donors and can greatly inform how requests for funding should be positioned.
This type of research is especially efficient. It allows you to collect information that can help build a list of potential donors whose goals align with your nonprofit’s mission. At the same time, it can help to filter out the organizations that aren’t the best strategic partner. In a world where proposals and grant applications take a tremendous amount of time, identifying which funding sources not to pursue can be extremely valuable.
Research will certainly help build prospect lists, but don’t spend all (or even most!) of your prospecting time chasing grants. In fact…
Identify Individuals and Networking Opportunities
Nearly80 percent of charitable donationscome from individual donors, either directly or through bequests. While it would be nice to only have to target a few large-dollar organizational donors, the reality is that operational funding requires regular small- and medium-sized donations from individuals in and around the community.
Building this list of individual potential donors requires a balance between casting a wide net and preventing your development resources from being spread too thin. Research can inform prospecting to strike that balance.
Start by identifying executives and high-level managers within major employers and researching available evidence that hints at their personal history of volunteerism or charitable giving. Many executive biographies, for instance, will briefly mention philanthropic activities. Research tools like Nexis with Dossier can help you avoid scouring hundreds of individual company websites and LinkedIn profiles, pulling all of the relevant information into a single, searchable platform.
Like any organization, nonprofits need to be keenly aware of their reputation. Avoiding high-dollar donations from individuals with certain criminal histories or major conflicts of interest is an important safeguard against reputational risk. Thorough research can help you to qualify and screen potential donors, making it easier to identify and avoid partners that could do more harm than good.
Research doesn’t have to be complicated or time consuming. With the right approach and tools, the best research can fit into daily operations and result in saved time and increased funding.
Take a look at other trends impacting nonprofits this year.