Prospect research:
Nonprofits guide to effectively researching potential donors
Effective prospect research is a double win for organisations. It uncovers valuable insights into donors’ interests and connections and prevents the risk of accepting tainted funds. Keep reading to learn more about what makes an effective prospect research process, the risks of taking a surface-level approach, and the role of AI in optimising the process.
Reduce the risk of missing risks
In today’s hyper-connected world, information can be shared in seconds and just one donor scandal can destroy a reputation in minutes. While the media, board members, and employees are concerned about ‘bad’ associations, it’s the more subtle issues such as links to fossil fuels and tax havens that are institutional risks. The problem is these risks can be difficult to manually find. Often, researchers spend so much time on this that it leaves little time for analysis.
Build stronger donor relationships
On the flip side, prospect research uncovers opportunities. Considering a third of all charitable contributions come from the top 1% of earners, organisations must take a personalised approach.
Effective prospect research provides far more information than wealth markers or real estate ownership. It helps organisations identify donors based on cultural ties, passions or interests. Building strong donor relationships is much easier when you know exactly who they are and what they care about.
Boosting donor retention by just a few percentage points can also increase revenue from donations by 30-50%. In fact, it costs up to five times more to acquire new donors than to keep them. Effective prospect research can lead to major cost savings if it’s used to strength relationships with existing donors.
The obstacles to effective prospect research
Prospect research is clearly valuable, but it’s a drain on resources for some. It can take days to gather and analyse all publicly available information on prospects with a large digital footprint. Even low-risk, low-profile subjects can require a day’s worth of research—looking under all the rocks can be more time-consuming than dealing with larger, riskier profiles.
It’s prone to human error or bias
With so much information to sift through, it’s easy for human analysts to miss small data points or signs that point to suspicious activity. This can lead to missed opportunities and potential risks for the nonprofit. Bias is a risk too. What might be significant to one researcher may be overlooked by another.
It’s expensive
Some organisations employ external research consultants, but this is costly and isn’t viable for smaller organisations. It may also lead to questions about larger nonprofits’ use of resources.
It’s limiting
Human analysts often struggle with content in different languages. This is especially important for global charities needing to research international prospects. Meanwhile, different people and even organisations often have similar or the same names, leading to confusion and the need to spend even longer going down rabbit holes.
The impact of ineffective prospect research
Reputational risk
If a nonprofit fails to conduct proper research on a prospect, they risk associating with an individual or organisation with a negative reputation.
Legal and financial risks
If a nonprofit accepts a donation from a donor with links to suspicious or fraudulent financial activities, it risks legal and financial repercussions. This information can be difficult to find using search engines alone.
Missed opportunities
Without thorough prospect research, nonprofits risk overlooking potential donors who have the capacity and interest to support their mission.
Misspent resources
Thorough prospect research helps nonprofits avoid wasting valuable resources soliciting prospects who are not a good fit.
How Xapien transforms prospect research
Xapien saves nonprofits from spending hours on multiple search platforms, entering different search terms and sifting through the results. It also enables nonprofits to research every prospect in minutes, so they can proceed with confidence knowing everything is there.
Its AI-powered capabilities search the entire public internet, reading and analysing millions of results in over 130 languages, from websites, the media, company information and more. Within 10 minutes, it delivers a concise, sourced report that highlights all risks, wealth estimates, assets, associates and more.
Even better, anyone can use Xapien and benefit from all its ground-clearing, research capabilities.
Research takes minutes, not days
There are two clear benefits to using Xapien for prospect research: start building relationships almost immediately and research an even wider pool of prospects.
Take Cambridge University as an example. Its researchers used to spend up to two days researching prospects. If issues emerged during the background check, then those two days were spent on work that did not result in a donation. If issues were discovered after the relationship was built, dozens of people would have wasted significant amounts of time working on the donation.
Now, due diligence is part of prospect research. The two processes complement each other, rather than one limiting the other. This has created more fundraising opportunities and empowered fundraisers to focus on approaching more, higher-value and higher-potential prospects.
Research is more comprehensive
When analysts need to examine large volumes of data, they may miss small but critical details or signs of suspicious activity. Xapien uses advanced machine learning and natural language processing models to handle the complex tasks of resolving whether the ‘John Smith’ you are searching for is the same person mentioned in articles and structured commercial data, saving hours of research time and double checks.
Nuanced and hard-to-find information about prospects’ careers, achievements and personal or philanthropic objectives are available as soon as the background research report is run. This extra information means prospects who might previously have been overlooked are advanced more rapidly through the fundraising process.
Finally, these findings are compiled into a fully-sourced, summarised report that can be easily shared.
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Search engines are great but they are only the starting point. Finding, reading and condensing the full picture is slow, hard, and painstaking work. Xapien can help.