Prospect Research Best Practices

Every grant writer knows that they are expected to bring in new funders. So where do you start?

Foundations are like individual donors – they have passions, are well-educated, can be moody and have opinions. They want to know they are making a difference. Fundamentally, the most important thing to remember about foundations is that they want to make the world a better place. Their goal is to invest money in projects that they believe will have an impact.

One of the most important parts of the grant writing process of fundraising is identifying which prospects are a good fit for the organization. Each grantmaker – whether a private (family) or public (government) – have their own focus areas that inform their approach to making grants.

The thought of prospect research may sound daunting. But it is an essential skill for identifying high-impact funders that have the potential to give to your mission. You can get to know donors and funders in your current donor pool and in the larger community.

Writing a grant is time-consuming. Prospect research is a time investment but it will definitely pay off. And it should be something you schedule into your regular grant writing routine. Plus you’ll save time not sending applications to funders that don’t align for your mission.

It is a technique to get to know your donors and funders better. Some call it Private Investigation work. It is key to unlocking valuable donor data. And with that data, your non-profit can create a strategic, well-informed strategy to cultivate, solicit and steward potential funders.

At its most basic grant prospect research essentially consists of two major practices: researching the foundation’s grant cycle, focus areas, and giving histories, as well as managing your own grant applications for each foundation.

Best Prospect Research Tools

Identify a pool of foundations that might consider your proposal. One of the first steps to analyzing whether a foundation is a good fit or not is to research their website or Guidestar. You have to simply match your nonprofits goals, mission, and activities with certain foundations. And the way to do this is through extensive prospect research.

Here are some of the best prospect research tools (both free and for a fee)

The Foundation Directory Online is a subscription database that provides information on foundations nationwide and their grantmaking. It is an excellent tool for identifying prospects.
Foundation Search is a subscription database that offers extensive information on foundations nationwide.
Google Alerts can be a good source of information on prospects in your local community and nationwide. Foundations are often referenced in news articles or list of donors to other organizations.
The Chronicle of Philanthropy offers extensive news information and news on foundations and individual donors, including information on upcoming grant opportunities and recent grants.
Guidestar is a free resource to access a foundation’s tax return (Form 990).
Other similar non-profit funders to see who is funding in your local community or region. You can sometimes get this information online by looking up their website and accessing their annual report or list of supporters. Or if you attend an event, pick up their program and look at their donor recognition walls and plaques.

Through the fee-based subscriptions, you will be able to tailor your searches to find a strong list of prospective funders. You can read through their contact information, deadlines, 990’s, grant guidelines, board information, and see whether they have a website so you can learn more. It’s important to read thoroughly and carefully through all the information to see if it is a good fit.

Build A Prospect List

Once you have identified a list of foundations that might support your mission, it’s time to sort out the ones that look like good targets by building a prospect list. In general, the most important things you look for are:

Has the foundation made grants to organizations that are similar to yours and in your geographic area?
Does the foundation’s mission, focus area, and goals align with my organization’s mission, programs and goals?
Does your organization have contacts with board or staff members at the foundation?
Have I done enough research that leads me to believe that this foundation will be a good fit for us?

If you can answer yes to one or more of these questions, then it’s worth putting the foundation on your prospect list. Your list will evolve over time. And as you do more research and connect with the foundation, you may learn they really aren’t a good fit (and that’s okay!) and some that looked to be questionable turn out to be promising (and that’s a good thing!).

Prospect Research is an essential skill for identifying high-impact funders that have the potential to give to your mission. Click To Tweet

Research Your Top Prospects

Software is only one part of identifying and researching grant prospects. Each process requires a different approach. It requires a certain amount of strategy and thoughtfulness, which no software can provide you. The software can help you find the donors, but your job is to do the hard work of researching your top prospects and getting to know everything you can about them.

Now that you have a solid prospect list qualify each foundation and place them into categories P1 (Priority One), P2 (Priority 2) and P3 (Priority 3). You can also qualify them by how closely they match your organization or by grant deadlines. The top prospects need to be whittled down into the best matches by doing some in-depth research into the foundation’s guidelines or visit their website.

Carefully read their website word-for-word. This is a great place to learn what a funder wants you to know about their focus areas, capacity, and deadlines.
Follow their social media accounts to see where they are actively involved in your community.
Review form 990s to discover more about their financial information.
Consult the program officer to help you make the best application possible.

To put your best foot forward with a potential funder, the information you need is out there. The more information you can gather, the better you will be able to place a compelling request before them.

Always keep your eyes open and remember your grant research never ends!