How to Identify Donor Prospects Within Your Nonprofit Database

Sean Barrett • May 30, 2022

If you search “best nonprofit technology tools” on Google, you will get a laundry list of online giving, marketing, peer-to-peer fundraising solutions, etc. But, how do you decide where to start when evaluating the tools needed to run your organization? You can start by looking at the backbone of every nonprofit: data.

Want to see what hidden wealth potential is hiding within your database?

Windfall connects to your CRM to provide you with the most accurate net worth data on affluent households. Use this FREE Wealth Analytics tool to identify ideal donor prospects within your nonprofit database

1. Invest in a Nonprofit CRM

The first step in driving value from your data is to ensure that it is well structured and easily accessible. This requires an investment in a nonprofit CRM (Customer Relationship Management) solution that fits your organization’s size and needs. 

Data collection should be at the core of your nonprofit operations. Leveraging a CRM that makes it easy to collect and manage first-party data is a critical first component. 

First-party data is the information that you collect directly from your constituents. This includes first name, last name, address, email, etc. Without clean first-party data, nonprofits will struggle immensely to manage their constituents properly. 

Once you have collected the information you need, ensure that the data is easily accessible and actionable. With a good CRM, you should be able to create insightful reports about your contacts. These reports should help you learn about donors’ giving behavior, preferred fundraising channels, and campaign interests, amongst other helpful information. 

Having a CRM gives you visibility across your entire organization and helps you to clearly understand what is happening daily. In a 2020 study, it was found that “31% of [nonprofits that] used a CRM for donor relationship management exceeded their fundraising goals vs. 23% who met or fell short of goals.” 

Leveraging a CRM enables changemakers to advance their missions and provides opportunities to further prioritize, segment, and engage donors, prospects, and supporters.

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Use this buyer’s guide to learn the best practices for researching nonprofit CRMs and fundraising tools. You will also get access to a FREE Evaluation checklist that can simplify your decision-making process.

2. Choose the Right Wealth Screening Tool

To fully maximize your nonprofit’s first-party data and act on the insights you’ve gathered from the reports in your CRM, you need a third-party data provider. Third-party data refers to the information you receive from external sources that provide additional, valuable insights and information to complement your first-party data

If your nonprofit is looking to attract new donors and improve its relationship with existing ones, you will benefit from third-party data. An example of a third-party data provider is a wealth screening tool or wealth data provider. Wealth data providers help you to screen and analyze your contacts’ wealth and demography. 

The right wealth screening tool will help your organization better identify, segment, and engage with your existing contacts to drive more donations. When evaluating a third-party wealth data provider, there are three main areas to consider: how the data is modeled, the accuracy of the data, and the vendor’s pricing structure

a. How the Data is Modeled

The first focal area should be how the third-party data provider models their data around Net Worth and other wealth triggers. Donor data can vary significantly amongst vendors; one of the most common ways to present wealth is with scores or ranges of net worth ($1 – $10MM). 

The wealth and demographic data presented for donors and prospects are most commonly based on the neighborhood (or ZIP + 4) that they live in. While this can provide decent indicators of wealth and likelihood to give, it doesn’t really assist with figuring out the correct gift ask. To understand how much a donor can give, having far more granular data than this is necessary. 

Each donor is different, and while they may be next-door neighbors, they can live completely different lifestyles. Hence, being able to model net worth at the specific household level is critical. Doing so eliminates scores or ranges of net worth and instead provides insights into precise net worth dollar estimation amounts for each donor. 

Also, by going down to the household level, the additional demographic data is specific to the household and not generalized across five to ten different households. With the data modeled at the household level, nonprofits can be much more specific and targeted in a potential gift ask. While it is essential to have a granular view of your donors, the accuracy of the data should not be sacrificed to do so. 

b. The accuracy of the data

While several vendors can provide donor data modeled at the household level, the accuracy of the data varies as well. Most third-party data vendors are data aggregators, meaning they buy data from several different companies that source the data, such as credit bureaus (TransUnion, Equifax, etc.). 

While this is a common practice, it proposes a problem regarding accuracy. Because most vendors buy their data, this can cause the data they have on hand and present to you to be stale and out of date. Most providers only refresh their data every year, with the possibility of data being refreshed every three years. 

Additionally, since they are not sourcing the data themselves, these vendors tend to subscribe to a concept called “fuzzy matching.” This is the practice of attributing gifts, attributes, household members, etc., to a contact with a low level of confidence. Most third-party data providers must do this as they receive unclean data from their providers. This makes it hard for them to determine if the house, gift, etc., should be attributed to a specific contact. 

A good third-party data provider must source the data themselves rather than buy from other providers. Their refresh rate should be consistent, with weekly refreshes being ideal and monthly being a bare minimum. If they return data with a low confidence score, this is a clear indicator they will provide fuzzy matches, yielding lower levels of accuracy. This will then require your organization to do manual validation of the data to ensure it is being assigned to the correct constituent, which could be a waste of more time and money.

c. Vendor’s pricing structure

Lastly, when evaluating a third-party data vendor, understanding their pricing structure is a final critical component. Vendors charge for their services in several ways, with the most common being on a per record or per screen basis. While this has been the traditional way to charge for wealth data, it can quickly become expensive and lead to nonprofits cherry-picking donor prospects they want to know more about or believe have high wealth. 

This means there could be hundreds or potentially thousands of constituents that go unnoticed that could be the perfect fit to donate to your cause. To drive the maximum value from your third-party data vendor, look for a vendor that charges a flat fee or subscription for unlimited screenings against unlimited records. This will allow you to screen all your donors as many times as you want so that you can find the “hidden gems” within your database

Nonprofits are uniquely positioned to better engage, understand and manage their donors than ever before. With vast amounts of data made available to nonprofits in today’s world, leveraging technology to capture and maximize its potential is more critical than ever. By doing so, nonprofits can inspire the hearts and minds of people to make meaningful change and create a better world for all. 

Want to see what hidden wealth potential is hiding within your database?

Windfall connects to your CRM to provide you with the most accurate net worth data on affluent households. Use this FREE Wealth Analytics tool to identify ideal donor prospects within your nonprofit database

About the author:

Sean Barrett, Manager of Business Development and Partnerships at Windfall

Currently living in Austin, TX, Sean is the Manager of Business Development and Partnerships at Windfall. Originally getting his start in the technology industry at a company called Cloudera, he has worked for cloud technology and data solution providers for over 8 years.

Luckily, he has been able to pair his love for technology with another very important aspect of his life, social impact. He and his family have been involved in working with and supporting nonprofits for over 15 years. He’s blessed to be able to tie together both his professional and personal lives to drive meaningful impact for Nonprofits nationwide and help advance their missions!