10 Reasons Nonprofit Donor Research is So Important
May 19, 2016 Lynette Garet Fundraising 0 Comment
Nonprofit donors: 10 reasons to do your research
Research is the foundation of your nonprofit’s donor development. While current donors and supporters bring new donors to your cause and successful relationship management builds loyalty, reliance solely on your existing donor database limits your fundraising efforts.
Investigation into donors’ resources and affiliations may seem callous and distasteful. However, the responsibility to keep existing donors, to bring in new ones and to meet your nonprofit’s fundraising goals requires information. Much of it is already available through donor databases, news stories, publications (Marquis’ Who’s Who in America) and online tools, such as DonorSearch.
Donor research fine-tunes your donor prospecting techniques by:
Identifying potential donors — Finding new donors is labor-intensive. Donor research will help identify those who are sympathetic to your mission and tell you where to find them.
Categorizing donor types — If you know whether potential donors are individuals or foundations, you can tailor your approach to them. If you already have a fundraising campaign in the works, you can winnow the pool for the most likely donors.
Quantifying donor giving capacity — A trustee or foundation often has charitable giving guidelines or restrictions on the recipient and/or the amount of the donation. An individual often has more freedom in making decisions.
Finding planned/deferred donors — Bequests, planned giving and deferred donations give donors substantial tax benefits and help your nonprofit make long range plans. Gift annuities, bequests and deferred charitable annuities can provide reasonable projections of your future income.
Spotting convertible donors — Research into your current donors’ charitable giving history can help identify annual donors who can become major donors. Annual giving is a fundraising staple, but it can be unpredictable. Major donors can provide more than immediate cash; they may provide reliable interest income.
Donor research supports better donor management by:
Filling gaps in donor data — The more you know about your donors’ charitable giving, the better you can customize your nonprofit’s campaigns and engage supporters in its mission.
Forecasting donation patterns — Charitable giving is often cyclical; knowing existing donor cycles will help predict future donations and help develop campaign timelines.
Building the donor network — In donor research and management, it’s not only what you know about your donors, but also who knows whom. Your nonprofit’s existing donors and supporters all have friends and family who may be persuaded to join your cause. They may also provide introductions and facilitate meetings with new donors.
Donor research saves time and money by:
Minimizing staff time and costs –It takes time to find and cultivate donors and to build their commitment to your nonprofit’s mission. Donor research increases fundraising success with the information to match campaign objectives to carefully selected donors. Research improves the return on your investment through focus on the right fit.
Optimizing ongoing opportunities — As you review ongoing fundraising for improved returns, solidly researched donor data makes it easier to adjust your outreach and to engage new and existing donors. Information about donors’ charitable interests, donation history and giving patterns can make a so-so fundraiser an outstanding one.
Whether prospecting new donors or segmenting existing donors, research into a donor’s interests, charitable giving history and, yes, financial capacity will clarify your donor selection criteria, refine your fundraising goals and improve your ultimate success.