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How to Identify Prospects in a Small Shop

June 19, 2015

Prospect_research_HiResWhen it comes to identifying prospects, many otherwise intelligent people enter the world of the Sugar Plum Fairy. They figure that all they have to do is research individuals with a high net worth, determine an appropriate six-figure "ask," find out where these individuals live, and then track them down and request a gift. The Sugar Plum Fairy part is that these individuals will be delighted to have been stalked in this way and will make the gift. 

In fact, effective prospect research has to start with people to whom you have access: your own friends and family, your board members and their networks, your organization's current donors, and your donors' friends and family members. Many famous people might, in fact, be interested in your organization. But getting your message in front of them requires a messenger: someone you know has to know them. 

So, we start with who we know. Then we must determine: of the people we know, who gives money to charitable causes? In a typical year, about 70 percent of the adult population will make a donation to a nonprofit organization, so there's a better-than-average chance that the people we have access to are givers. That said, there is no point in asking someone for money who never gives. Once you've eliminated the people who never give, you have a list of prospects to research. And if you hang out with high-net-worth individuals who also happen to be generous donors, then you'll want to do more research on them and maybe eventually ask them if they'd be interested in supporting your organization.

When thinking about prospect research, keep the following in mind:

1. Wealth has little relationship to generosity. Many wealthy people give very generously, and many more give relatively little compared to their resources and capacity to give. The same can be said for most middle class, working class, and poor people. Don't confuse having with an ability or willingness to give.

2. You are not the first person to think of asking high-net-worth individuals for money. These people are offered endless opportunities to give and support a good cause, and like most people they are more likely to give to an organization where they know someone than to an organization where they don't.

3. A person's ability to give changes over time. People advance in their careers or inherit money from a long-lost relative or realize a nice return on a savvy investment. Someone who starts out as a $35 donor may, five years from now, be in a position to be your biggest donor. But that person will never be your biggest donor if you don't respect the gift, however modest, he or she gives today. The same is true for your biggest donors: markets crash, houses lose value, Ponzi schemes trap the unwitting -- just a few of the many reasons why a major donor may stop giving.

By definition, prospect research involves a significant degree of networking, and working your networks is what will lead you to more donors -- and to donors who can make large gifts.

Headshot_kim_kleinWant to learn more? Join me in my upcoming Foundation Center-hosted webinar, Prospect Research for Small Development Shops, July 1, 2:00-3:00 p.m. ET/11:00 a.m.- 12:00 p.m. PT.

Hope to see you there!

Kim Klein, an internationally known speaker recognized for her ability to deliver information in a practical and humorous way, has more than thirty-five years of fundraising experience as a volunteer, staff, and board member. She is the author of five books, including Reliable Fundraising in Unreliable Times and Fundraising for Social Change, and is a lecturer at the School of Social Welfare at the University of California, Berkeley.

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