Everyone may have a different name for the first stage of the funding process – what we call lead identification – but most of us have the same issue with this essential step in the fundraising pipeline: It’s a chore.
We know research is critical, yet it can feel less critical than other stages of the process. There’s no relationship-building aspect and there isn’t the action of ‘the ask’. It’s merely a list of names or organizations on paper.
Much like flossing, it’s a necessary task that most of us don’t enjoy.
Why efficient lead identification is vital
The research stage is essential to ensure fundraisers have sufficient prospects to drive the rest of the process. Effective research helps us build enough relationships and make enough asks to secure enough funding commitments in the final stage.
In our previous post, we discussed how working backwards through the fundraising pipeline can help us plan our targets and ensure we have enough initial prospects to eventually meet our fundraising goals. This strategy can also help to guarantee that fundraisers don’t spend too much time coming up with more names than necessary.
All fundraisers understand that the better their research is—i.e, the better they match funding prospects with their programs and a history of giving to organizations like them—the more likely those initial prospects will eventually say yes.
In fact, better research in this first step can mean more money for less effort.
For example: If 10% of initial prospects typically make it all the way through the pipeline and result in a successful ask, increasing that number through better prospect research, even by only a few percentage points, can generate significantly more funding for the same effort.
The four components of a successful Lead Identification Strategy
There are four clear requirements for successful lead identification, starting with what fundraisers are looking for, all the way through to the order in which you approach them.
Clear criteria: Fundraisers must start with a clear list of criteria for funders. This can include basics such as where those funders are based geographically, and what causes they typically support. This is especially important on teams, where consistency is key.
Clear sources: Knowing where to go to identify leads can cut down on time spent in this stage and increase the quality of prospects. A service such as Fundtracker can guide you straight to the kind of quality prospects you need, and save you from running countless (and often fruitless) Google searches to find leads.
Effective segmentation: Even if all leads meet the same criteria, there can still be a large amount of variation between them. These differences require tailored strategies, messages and approaches for the ask, follow-up, and relationship.
Effective prioritization: Working through a list of prospects alphabetically might sound practical, but it’s a good way to waste time on less likely funders. Instead, prioritize your outreach list by those who you believe are the best candidates. Keep the “80/20” rule in mind - 80% of your funding might come from just 20% of your funders.
At Fundtracker, we understand that lead identification is often a major pain point for fundraisers. Our data-driven funder research service is designed specifically to make this step painless, quick, and easy.
We also like to give out free advice! For help setting up your own lead identification and research strategy, book a free consultation with the team at Ajah Fundtracker.