Donor due diligence:

The top prospect research tools to streamline donor due diligence


More universities and nonprofits are starting to integrate due diligence into their prospect research.

From specialised consultancies that dig into the potential and risks of prospects to software solutions that can speed up and improve in-house screening, there’s a multitude of options to support fundraising.

This blog will run through some of the best tools for enhancing donor due diligence in development and alumni relations departments and at nonprofits, and explore their benefits and limitations.

Why do universities need prospect research tools?

Universities carry out reputational, ethical and financial assessments on hundreds of prospects every year to ensure they align with the values of the institution, its students and its academics.

That number is growing. UK and Irish universities saw their donations almost triple between 2009 and 2019 to £1.3 billion per annum. After a drop during the pandemic, new funds secured by 95 higher education institutions in the UK and Ireland was £1.14 billion in the fiscal year ending 31 July 2021, according to the CASE-Ross Support of Education report 2022. This was an average increase of 5% from the year before.

University donor research teams have more on their plate than ever, even before the heightened concern and scrutiny over ESG issues that come from students and staff today is taken into account.

One example of this is a vote by faculty and senior staff at the University of Cambridge on whether to continue accepting funding from coal, oil and gas companies. If the motion, the first of its kind, does pass, every prospect will have to be checked even more rigorously for any links to such companies.

Even though the number of fundraising and alumni relations staff increased by between 5% and 7% last year, the growing amount of online information they need to read and analyse, and the high levels of examination directed towards donations today from the media and within institutions, make prospect research tools a vital investment.

Why do charities need prospect research tools?

Charities too, are under far more scrutiny today over the sources of their funds. Furthermore, there are so many non-profits out there, that those still relying on in-house, manual research will fall behind those using prospect research tools.

The nonprofits using these tools will be able to identify high-impact donors within and beyond an organisation’s current donor pool, reach out to them with precise and targeted requests, and process donors far more quickly.

The top prospect research tools for universities and charities

1. Prospecting For Gold

Pro: Thorough
Con: Human researchers are slow

Prospecting For Gold carries out manual research for charities, with a focus on wealth screening and regulatory compliance for charities. It also offers training.

The reports their manual research team produces can be very thorough, but it is difficult to scale this research on multiple prospects in a cost- and time-effective way. Turnaround times are much slower than automated research tools.

2. Wealth-X

Pro: Immediate results
Con: Not comprehensive

Wealth-X’s database offers a variety of intelligence on organisations hoping to minimise reputational risk. In addition, it can help you to avoid non-compliance and regulatory penalties. Their database can generate information on many very high-net-worth and ultra-high-net-worth individuals very quickly.

However, not every prospect you need to research will be on the database.

They can also provide in-depth research due diligence reports pulled together by a team of manual researchers.

However, again, manual research is costly and can take days. When prospect research teams are under pressure to make a decision or update a stakeholder quickly, this can be a drawback.

3. DDIQ (Exiger)

Pro: Thorough
Con: Focused on corporate risks

DDIQ, a technology company owned by financial risk consultancy Exiger, combines this dual expertise to help companies manage risk and regulatory compliance. They provide profiles of prospects or make boots-on-the-ground inquiries in hard-to-access emerging markets and languages.

However, they specialise in corporate risk management, making their services less tailored to the needs and resources of nonprofits and universities.

4. iWave

Pro: Highlights wealth and inclination to give
Con: Overlooks risks

iWave is a fundraising and nonprofit software solution that helps fundraisers determine a prospective donor’s capacity and inclination to give. Its platform can provide access to wealth and philanthropic records and profiles, which generate insights into a prospect’s career history, personal interests, board affiliations, and philanthropic history.

However, it does not offer information about a prospect’s risk profile, so further due diligence will be needed.

5. Factary

Pro: Thorough
Con: Slow

Factary is an independent research agency and consultancy specialising in database screening, profiling, publications and research for the non-profit sectors. It offers insights into the background, current involvements and capacity of your prospects and is available at a variety of different levels of detail.

However, once again, relying on manual research can lead to delays.

6. Xapien

Pro: Comprehensive and fast
Con: We can’t think of one yet!

Xapien is a unique prospect research tool that reads and understands, just like a human would, but far more quickly. Not only can it inform the due diligence process from legal or regulatory standpoints, but it can provide numerous avenues for winning over major donors and forming productive, long-term relationships – all within minutes.

Get the whole picture in minutes

Xapien delivers fully automated background reports on any individual or company in under 10 minutes, so fundraisers can spend more time strategising the next steps. There’s no need to edit or amend them before sharing them with relevant stakeholders. You can see at a glance the industries in which your subject operates, be that healthcare, pharmaceuticals or minerals and mining.

The results transform prospect research, empowering teams to focus on higher-value and higher-potential prospects. Rather than replacing human researchers, it supercharges their ability to deliver more value to the organisation. This creates more proactive pipeline building and empowers fundraisers to focus on approaching more, higher-value and higher-potential prospects.

How it works

Xapien’s AI scours the length and breadth of the internet, reading and analysing millions of results, from websites, the media, company information and more, to deliver a concise, meaningful report that highlights risks, wealth estimates, assets, and associates. Information in 133 languages and counting is compiled, translated into English and scanned for risk.

Xapien doesn’t just present articles for researchers to read. It reads them and identifies assets, associates, wealth, business roles, descriptions, quotes and affiliations, saving hours of reading time.

Enter conversations informed and develop deep relationships

Using Xapien as a first step in the prospecting cycle enables you to enter every conversation with an informed understanding of your prospect’s background and propensity to give. Equipped with key insights, from a donor’s history to their institutional, professional, and personal background, fundraising teams can focus on building relationships, rather than filling in the gaps in their knowledge.

How it works

Xapien’s natural language processing and machine learning algorithms identify not just the information in any piece of text, but how it interrelates to the rest of the internet. It finds content from across the globe, published in over 100 languages. All content is translated into English and scanned for risk.

This enables it to create a unique, high-definition picture of your subject and the people, companies, events and concepts that relate to them. It ties together oblique references to the subject and the topics relating to them, saving researchers hours of scrolling through search results and websites.

Make connections

Xapien helps you discover new prospects through their links or proximity to existing donors.

How it works

A Xapien search reveals all close associates. Corporate records as well as open-source data are analysed to extract family members, business partners and overlapping directors.

Natural Language Processing algorithms join facts to people and companies, identifying how they participate in events, where those events took place and other people or companies involved in them. Information and details within news articles can provide valuable context to help identify obscure corporate records or social profiles via shared associates or contact details.

Peace of mind

Fundraising teams can start building a relationship with the prospect right away, without worrying that due diligence will unearth a problematic piece of information after a few days of research.

Equally, development and alumni relations departments using Xapien can assure prospects that they know everything they need to know about other donors.

How it works

Xapien identifies each mention of your subject within an article and examines the words linguistically associated with that mention. It can understand what each word means, flagging genuine risks that relate to your subject, directly and indirectly.

No donor overlooked

Without Xapien, prospects might be passed over if a quick Google search reveals something about them that would make them unsuitable. Xapien can put that information into context, so no prospect is unnecessarily passed over.

How it works

A Xapien search was run on a prospect who offered to make a five-figure donation to the University of Cambridge. The report revealed that they worked for a firm that had invested in fossil fuels. This could have led to the proposed donation being rejected, or hours spent looking into it. However, the Xapien report showed the company had now closed that investment branch. The donation was accepted without delay.

Want to see Xapien’s powerful tools in action? Just fill out the form below for a tailored demo.

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