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Donor due diligence, Prospect research:

How automation can scale fundraising in 2024

Template Blog covers (12)

Tom Dredge, Nonprofit Lead  •  January 18 2023

Prospect research is still happening earlier in the fundraising process, with due diligence left to the final stages. The challenge with this? It keeps prospects stuck in the pipeline. Especially since donor conversations can span weeks or even months. 

On the other hand, donations can be offered in just minutes. One organisation had met a major donor who was ready to make a gift on the same day. But they faced a dilemma: accept the gift now and face potential reputational risks, or wait for due diligence and risk losing the donation. They waited. 

Separating prospect research and due diligence into fragmented stages only leads to prolonged fundraising cycles. Both prospect research and due diligence require significant resources, which nonprofit organisations often lack. The resources they do have could be easily wasted on an unsuitable prospect (and be put towards better opportunities instead).

Build the pipeline proactively, or reactively?

The prospect research team is the engine of the fundraising pipeline. But it’s a challenge when the majority of their work involves responding to reactive requests. From speaking with organisations every day, there’s often frustration between teams when a profile can take days or even weeks. This is usually because there’s already a backlog of reactive requests.

It not only asks how prospect researchers can proactively build the pipeline, but how they can scale their efforts.

This is made even more complicated when faced with high-profile individuals. It’s easy to get lost down rabbit holes, not knowing which page to stop on or when you’ve got enough information. Then, you have low-profile subjects who don’t have an online presence at all. You could put hours into searching, sometimes for something that just isn’t available.

Automation enables fundraising to scale 

Automation made possible by AI is solving many of these problems. Upfront due diligence, otherwise called Initial Due Diligence (IDD), allows fundraisers to say ‘no’ earlier in the process if there are risks involved. It also prevents them from bringing in 2 or 3 different teams for no reason.

Instead, prospect research and due diligence can be merged for a more streamlined and efficient approach to the fundraising process. This leads to greater…

Speed and efficiency

Automation significantly reduces the time taken to gather and process information about potential donors. What used to take days or weeks, leading to frustration between different teams can now be accomplished in a fraction of the time (usually minutes or even seconds).

AI handles the initial heavy lifting of researching and analysing prospect profiles, so prospect researchers can adopt a more strategic role and focus on applying judgment to information. The best part is they can complete requests quickly and get back to proactive work. 

Accuracy and depth of data

AI analyses extensive data, including news articles, company information, databases, and more, uncovering patterns and insights often overlooked by human researchers. This results in more accurate profiling of potential donors, enhancing your understanding of their giving capacity and inclination. AI also gives access to up-to-date information, unlike the risk of outdated or irrelevant databases that could misguide fundraising efforts.

Read more: What makes a fundraising tool a gamechanger for universities?

Scalability

With automation, the capacity to process and analyse data isn’t limited by human resource constraints. Organisations can grow their prospect research efforts without having to hire more staff, making it a cost-effective way to expand their donor base.

Collaboration

Using AI in prospect research helps break down barriers between teams. Faster turnaround times on research requests reduce inter-team frustration and waiting periods. This leads to a more collaborative and dynamic environment, where teams can better work together. 

Xapien saves hours on research 

Xapien automates the entire research process, significantly reducing the time spent on manual searches and analysis. It collects information from various sources like online media, news articles, corporate records, and more, providing a holistic view of a potential donor’s background. This ensures organisations can quickly and efficiently gather detailed insights about a prospect’s donor history, professional and personal background, and potential risks​​​​​​.

Enhanced accuracy and context 

Xapien can extract hard-to-spot context and connections from data, minimising false positives and ensuring accurate information. This helps organisations to make informed decisions based on real facts and related risks​​.

Streamlined due diligence processes

By generating comprehensive risk reports in minutes, Xapien streamlines the due diligence process for nonprofits. It can happen at any time, leading to faster decision-making and eliminating the risk of proceeding too far in the solicitation process without proper vetting​​​​.

Time savings

Research tasks that once took hours can now be done in minutes. This frees up valuable resources, allowing teams to focus more on proactive fundraising and engagement strategies rather than getting bogged down in lengthy research.

Improved donor engagement  

Armed with detailed information about prospects, frontline fundraisers can tailor their conversations for stronger donor relationships. It also helps identify new donor opportunities that might’ve been missed due to rushed or incomplete manual research.

Automate prospect profiles and due diligence reports 

Xapien isn’t just a tool for gathering and analysing data. Once it’s processed everything relevant to a subject from the indexed web, it compiles that data into a concise, summarised report. These reports provide a comprehensive overview of potential donors, including risk assessments, wealth estimates, assets, and associations. This feature saves significant time and effort that would otherwise be spent on manually compiling and summarising findings​.

Ready to improve the quality of your donor pipeline in 2024? Chat with our nonprofit team about your fundraising objectives and how AI can help you achieve them.

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