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Elements of Successful Prospect Research

Resource Center - Foundation

(Oct. 27, 2009) In a new report, wealth research services firm WealthEngine offers advice on what makes up a successful prospect research program for a nonprofit, including proper planning, integration with your database and keeping data secure.

Specifically, the WealthEngine report Best Practices for Prospect Research in Higher Education Fundraising examines prospect research as it relates to fundraising in educational institutions.

Based on survey data from 61 organizations, the study provides insight into the inner workings of the research function within the advancement team.

"By tying quantitative fundraising performance metrics into the study, we are able to ensure that our report truly represents best practices and not just common practices," said Sally Boucher, the report's primary author. "Without exception, the findings of our study demonstrate that organizations investing in prospect research consistently achieve higher fundraising results."

Eight best practices related to prospect research in high-performing fundraising programs are listed below.

1. Build a Foundation for Success: Invest in the Research Function-High performing organizations, here called HPOs (17 colleges and universities in the study that raised the most funds per full-time student), are investing more funding in human resources and in research resources. They are staffing their research offices with two analysts for every one supported by the lower performing counterparts. HPOs are staffing development officers at a rate of three to one, compared to their lower performing peers. Likewise, HPOs are spending 115 percent more on research resources than other organizations. Appropriately staffed and resourced research offices are able to support a higher ratio of development officers to prospect researchers, anywhere from 4 development officers per prospect researchers for small organizations, up to 19 development officers per prospect researcher for large organizations.

2. Invest in Screening-Organizations that invest in wealth screenings are realizing a significant return on investment. Based on the averages from the survey data, provided by 48 of the responding organizations, 17 percent of wealth screened constituents are identified as new prospects. Nineteen percent are eventually visited by personnel, and 10 percent of those contacts eventually result in a closed major gift. This process results in a calculated return on investment of over 40,000 percent for most screening sizes.

3. Build a Comprehensive Data Collection Strategy- Over 65 percent of HPOs utilize a combination of proactive prospecting techniques including wealth screening, peer screening and predictive modeling. Wealth screening is used by 93 percent of all respondents, with peer screening and predictive modeling are used by just over 50 percent of organizations. By utilizing a combination of techniques, organizations can build comprehensive strategies that focus their fundraising efforts efficiently.

4. Effective Implementation Planning-Ninety-four percent of HPOs-compared to 75 percent of other organizations-employ an implementation plan to guide their strategic use of data in fundraising. Most plans include a validation strategy, an integration strategy, prospect management plans and data access strategies. Many also include a plan to leverage data across multiple fundraising programs. HPOs implement screening results in an average of 4.5 programs. Among the most frequently cited programs were major gifts (100 percent), planned giving (86 percent), and annual fund (73 percent). Implementation plans may also outline an ongoing strategy for screening constituent segments. One hundred percent of HPOs screen alumni, friends and donors on a regular basis, with 86 percent screening parents, 79 percent screening reunion classes, and 41 percent screening faculty and staff.

5. Balance Precision with Timeliness in the Validation Process-Ninety-four percent of HPOs establish a validation strategy that balances the need for accurate, precise ratings with the need to push new prospects to the front line in a timely, efficient way. Organizations should consider how long the validation process will take, which prospect records should be validated first, what types of data should be validated, what part (if any) the rest of the fundraising team will play in the assessment and qualification process, and whether existing communication forums will facilitate the needed "give and take" in moving prospects through the cultivation cycle.

6. Integrate Data to Improve Workflow and Access-Integration of screening and other research data into the organizational Donor Management System (DMS) is a key to enhancing data-driven workflows and data access. Sixty-one percent of survey respondents have integrated, or plan to integrate, their recent screening data into their DMS application. Benefits of integration include the improved access to global profiles of constituents, better prospect management and tracking functionality, increased ability to segment constituents, and a higher profile for the research function within the organization. Obstacles to data integration can often be overcome in the planning process.

7. Effective Prospect Management-Ninety-four percent of HPOs have a prospect management system in place and 65 percent indicate they engage in regular reporting procedures to measure their fundraising effectiveness. Eighty-eight percent conduct periodic prospect management meetings, most on a monthly basis. The effective use of these prospect management techniques ensures the entire fundraising team is focused towards the same goals and outcomes. The prospect management function also tracks and measures the effectiveness of purchased data, as well as research and fundraising programs.

8. Ethics and Data Security-As the use of data within fundraising organizations proliferates, more and more data is collected, stored, analyzed, transmitted, and reproduced in various forms. This creates a need for every organization to develop, communicate and implement a comprehensive data security policy that addresses privacy and ethical concerns as well as basic security. Eighty-two percent of HPOs reported having such a policy in place, compared to 67 percent of other respondents. It is essential that those without a policy begin the process of developing one without delay.

The WealthEngine report Best Practices for Prospect Research in Higher Education Fundraising provides an in-depth analysis of the survey data along with strategies for implementing the best practices, valuable worksheets and informative case studies highlighting high performing organizations.

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