How do we measure prospect research ROI?
COVID-19 has hit charities hard, no doubt about it. We know Executive Directors are assessing their resources meticulously, carefully assigning resources where they can be most effective. A survival mindset has crept in.
Perhaps what’s needed now is an investment mindset. An investment in prospect research to focus major gift officers on key prospects and realize a significant return on investment.
Smart fundraisers know you need to spend your time pursuing donor prospects who are most likely to support your mission. But how do you know where to start? That’s where the return on investment in prospect research is unmatched.
Consider this example.
To enhance the efficiency of their fundraisers, a charity asks for 40 qualified prospects. Our research team identifies and qualifies prospects, based on pre-established criteria such as geographic location, documented interest in the mission, previous gifts at specific levels, evidence of significant wealth. If a charity invests on average $100 per name*, the charity invests $4,000 for this list.
As the major gift officer, you begin to reach out to this list of 40 prospects. Some return your call, some do not. Some agree to a meeting. About one-third of the list looks promising, or 15 prospects. So your boss decides to invest in comprehensive profiles on these 15 to help you develop a deep understanding of the prospect’s financial capacities, interests, motivations and influences. In these profiles, we look at family and business relationships, charitable giving, wealth and asset management, biographical data, Board and volunteer affiliations, educational background, awards and more. You learn a substantial amount about these 15 prospects and, because you are fabulous at your job, you are able to leverage this information to form deeper connections that lead to solicitation and gifts.
An investment in 15 profiles is, on average, $6,000. Your charity has now invested $10,000 in the process. Sounds like a lot, but what can you expect as a return on this investment?
Industry standards for major gift officers indicate a 4:1 ratio should apply to converting qualified prospects into donors. From 40 qualified prospects, a savvy fundraiser should be able to close 10 gifts.
If your organization considers a major gift $10,000 or above, that’s at least $100,000 in revenue (10 x $10,000). Less your investment of $10,000 in research and profiles leaves a net of $90,000, (not including staff time) or nine times return on your investment.
- Investment $10,000
- Prospect research (40) $4,000
- Comprehensive profiles (15) $6,000
- Revenue $100,000
- Major gift = $10,000
- 4:1 on qualified prospects
- 10 x $10,000
- Return on investment $90,000
Does it cost money to make money? Yes.
Is it worth it? Every penny. More than nine times worth it.
Call us today at 1-877-2GLOBAL. We’ll get you the information you need to concentrate on the highest value prospects.
*prices subject to change without notice