What is donor research and why do you need it?

Ok, not quite yet over to Erik yet. First of all, we want to make sure that you completely understand what donor research is and why you need it - just so that you have some context for the things Erik is going to explain to you.

So what is donor research exactly?

Donor research or prospect research refers to the process of finding information about possible donors out there. Today, there are more than 140,000 foundations in the US alone, giving funds to countless NGOs. Not every foundation gives in every country or every area. A very high number of foundations gives very localized only. This is the reason why it is crucial to collect information about potential donors and supporters before starting to write a proposal.

Before starting the fundraising process, try to find an answer to the following questions:

  • Which foundations fund in my country?
  • Which foundations fund in my thematic focus area?
  • How wealthy are they? How likely are they to give again?
  • Might they fund my organization?

Finding the answers to these questions is the process of donor research. As you can imagine, it is not always easy to find this information. Some donors are happy to share their strategy and are very accessible; others are not. The art of donor research is to find out anyways.

Jumping this stage in the fundraising cycle would cause significant problems further down the line, as only proposals sent to a good fit have any perspective of success. While there are some tools and tricks to help the process of donor research, it is essential to assign enough time and resources to this stage of the process, as it can be quite time-consuming. Excellent research will save time in the next stages and thus time invested in research is always time spent smartly.

Why do I need donor research?

Of course, your strategy could be to send out as many proposals as possible to as many potential donors as you can find – but the success rate of this would be very low to probably inexistent. Think of the process like a job application process: If you are a carpenter and apply to a position as a medical doctor, you will not get the job. Vice versa the same; if you are a medical doctor, you will not find employment as a carpenter. It is important to find the right match for your expertise and your skills.

This is the same with donors. If you put in the time and effort before you apply to find the perfect match for your organization, you will have much better chances of success than if you send the same proposal to several donors. Your proposal has to fulfill all the eligibility criteria of the donor, and your core values and mission need to align. Furthermore, the donor has to have the capacity to fund your project and the willingness to take on new grantees. Only the fact that a specific donor has funded projects in your country and area of work in the past does not mean necessarily, that they will do so again. All this information is crucial for you to decide where to apply.

At first, you might think your resources are better allocated if you only concentrate on the proposal writing itself to produce a quality document. This is a misconception though. If you find the perfect donor match, your chances of success will be much higher, and your resources will be spent much more economically.

And NOW over to Erik...

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