Conducting Major Donor Prospect Research

One important source of funding often overlooked by charities, but potentially of great value now, is that of major donors or high net worth individuals. But how do you go about identifying who might make a large gift to your organisation?

Prospect research identifies and profiles individuals who have the opportunity, motivation and resources to make a significant contribution to your charity. As such, it is the foundation of any major donor fundraising strategy.

In order to gather the information you will need to cultivate major gifts, three main prospect research tasks need to be addressed:

Building a donor pool

Qualifying lists of prospects

Profiling your prospects

In relation to major donor fundraising, the reason for researching prospects is to increase the chance that:

The right person

Asks the right person

At the right time

For the right amount

For the right purpose

Start with your own Supporters

So where to look for them? The first place you should look is in your own back garden. What do you know about your current supporters and which of them can you move up the donor ladder to become a major donor? Wealth screening is a cost-effective way of identifying potential major donor prospects. But do remember that the results from a wealth screening will only reflect the data you chose to have screened, so consider only screening supporters who have been active over the last three years or only those with up-to-date contact information.

It is rare for any charity to have an endless supply of major donor prospects already on their database. Therefore, once you have exhausted your existing support base, there will be a need to identify new, cold prospects.

Remember that it is inefficient to research individuals in great depth as a first step. Initial identification of prospect pools should therefore collect just enough information to establish that an individual has sufficient wealth to be considered a major donor and has a good reason to support your work.

A Recent Example

When research is well planned, it makes a huge impact on a campaign. An example of this was a regional disability charity running a large capital appeal. Although it had relationships with a number of major donors, there was a need to identify more to meet its target. A list of 50 potential prospects, that met a well-defined brief, was researched and compiled. Over a period of 2 years, 5 of these prospects went on to make a major gift, including one donation of £100,000. So when you get it right, major donor research and solicitation can have a very good return on investment.

Prospect Research & GDPR

One concern in this field is understanding what can and cannot be done with personal data. It is quite normal to use legitimate interest as the basis for undertaking prospect research. If this is the case, a Legitimate Interest Assessment must be carried out to balance the interests of the charity in conducting the research against the privacy rights of the individual. It is also important to remember that consent will be needed if any of the research includes sensitive data such as a person’s religion, ethnicity etc. Again, it is essential to inform individuals that their data will be used in this way through your privacy notice. Of course, new prospects will not have had the opportunity to have seen your privacy notice prior to you conducting research on them. The current guidelines from the Information Commissioner’s Office (ICO) state that you should contact them within 30 days and when you do, you should offer them the option to opt out of further contact and research.

One thing that is certain is that information becomes out-of-date very quickly. With this in mind, make sure you undertake or commission prospect research in manageable quantities. This means you will not get overwhelmed with data. It is also a good idea to use your research findings immediately.

Due Diligence

The due diligence landscape has developed beyond recognition since the Woolf Inquiry (concerning LSE’s link to Libya) reported in October 2011. Every organisation should now have a clear ethical policy on accepting gifts. For example, would your organisation accept gift from a company that manufacture arms or sell tobacco etc? Due diligence checks should be made before very potential gift is received and any concerns should be passed to the trustees or relevant committee. Due diligence should obviously be carried out on individuals and companies but also on trusts. For example, the Sackler Trust has donated millions to medical science, healthcare, education and the arts in the UK but in 2019 announced it had suspended all new giving (with some charities returning grants) as members of the Sackler family were accused of helping to fuel the US opioid drug crisis through their company Purdue Pharma. So avoid reputational damage by checking the sources of wealth before you accept a major gift.

Further Information

If you would like to discuss your options or need to commission research to identify potential major donors, do contact us for a free initial chat on 01903 723519 or email us on info@wgconsulting.co.uk