Why Prospecting is the Game-Changer Your Fundraising Needs

Why prospect?

It’s a question that comes up often. And the answer is always the same: Why not?

Prospecting is one of the most effective ways to supercharge your fundraising efforts. If there’s one thing you can do this year to make a significant impact, it’s this: Prospect.

But don’t just take my word for it. John Davis, one of the sharpest fundraisers I know, has done incredible work by adding tens of thousands of active supporters to the Leadership Institute’s donor rolls. His success is a testament to the long-term benefits of prospecting.

So, why prospect? Let’s let John explain.

The Importance of a Diagnostic:

John suggests that the most impactful action a fundraiser can take is to run a “personality test” on their program. This diagnostic tool evaluates how your organization is doing, what’s working, and what isn’t. From there, you can build a custom plan to expand what’s working and fix what’s not.

At the Leadership Institute, we use something called the Donor Performance Table (DPT). It’s a two-page tool that Morton Blackwell invented, and it’s been a game-changer for us. The DPT is like a health checkup for your organization, helping you figure out where to focus your time and resources.

Understanding the Donor Performance Table:

The DPT is divided into two main sections:

1. Count of Donors Per Giving Year:
   • This table shows how many donors start giving in a particular year and how many of them continue to give in subsequent years. It’s fascinating to see the progression and longevity of donor relationships. For example, we had 60 donors start giving in 1982, and amazingly, four of them are still giving as of last year.
2. Donor Performance by Dollars:
   • The second page of the DPT tracks the actual dollars given. It lists the initial prospect donations and the subsequent donations in each calendar year. This helps us see the financial impact of our prospecting efforts over time.

Why Prospecting is Essential:

The power of direct marketing lies in years of stable, sustained giving, supported by major and planned gifts in later years. This is how $17,000 in prospect income in 1982 turns into over $3.5 million in total giving over the years. Or how an investment in 2,895 donors in 1995 generates nearly $24 million in revenue since then.

Your DPT results aren’t just numbers—they’re a powerful tool for making the case for prospecting investment to your organization’s leadership. It’s hard to argue with data that shows how a modest investment today can lead to massive returns down the road.

Creating and Interpreting Your Own DPT:

If your organization isn’t already tracking this, now is the time to start. Creating a DPT isn’t as complicated as it might seem. If you have a record of gifts made to your organization, you can build a DPT. And if you need help, we’re here for you.

Once you’ve created your table, here’s how to interpret the results:

• Solid, Consistent Giving:
  • If your DPT shows that your donors give consistently year after year, your direct marketing program is healthy. Your focus should be on how to scale up your prospecting efforts.
• High Donor Attrition:
  • If your DPT shows a high rate of donor attrition—where revenue drops each year—this is a sign that something’s wrong with your marketing strategy. It might be an issue with donor acquisition or cultivation. This is a red flag that needs immediate attention.
• No Prospecting Data:
  • If you don’t have any numbers because you’re not doing any prospecting, take a copy of the Leadership Institute’s Donor Performance Table to your boss. The future of your organization could depend on starting a program like this.

Improving Your Prospecting Program:

If your numbers are solid, the next step is to scale up. If your numbers show weaknesses, it’s time to re-evaluate your approach. Write down everything that might be causing problems, prioritize them, and start testing solutions. As soon as you find what works, focus on scaling it up.

Every organization will have its unique challenges and solutions, but starting with a solid analysis like the DPT gives you a data-driven understanding of where to focus your efforts. It’s the foundation you need to test, learn, and grow.

Final Thoughts:

Prospecting might seem like a daunting task, but the long-term benefits make it more than worth the effort. It’s about building a sustainable future for your organization—one that’s backed by data and proven results.

Fire away with your challenges, and let’s keep this conversation going.