Creating a Strong Prospect List

How many times have you been tasked with coming up with a new, golden egg of a prospect list that has limitless (UNRESTRICTED) dollars to add to your agency's ever increasing revenue needs? 

Moreover, it is critical to always be looking for new donors - to account for the growth of your programs, annual fund list attrition, or simply because you never want to take for granted that your current donors will always share your mission and priorities. Plus, new prospects will ensure you can answer that annoying sustainability question with confidence and conviction.
For me, fundamental bottom-up research is generally the most productive way to create that list. It's all about doing your homework. I start with searches on what foundations are funding agencies that serve similar populations. This can be done through reverse searches on foundation databases, through annual reports of similar agencies, or listings of new foundations in your community. 
Once you create a good starter list, it is time to go into more depth on each foundation.
Financial Review
Foundations are required to fill out IRS Form 990s which are available on Guidestar or ProPublica, not to mention many foundations have a website with previous donations listed. These forms give you a wealth of information, including total assets, revenue, and board of trustees, besides listing disbursements by a charitable organization. 
Gift History
Additionally, determine an average gift size by dividing the total disbursements by the number of donations given. It usually makes sense to remove capital or any outlier donations from your total when calculating because that will throw the average off and those larger gifts are not relevant to an average project or program donation.
Aligning Priorities
If a foundation has a website, this is an excellent source of information about the foundation's current giving priorities. Looking at who has been funded in the past will give you an even better understanding of what kinds of projects they are looking to fund, how your organization might fit within their funding interests, and if they tend to prefer funding education versus human services versus health and wellness (and on and on).
If you work for a children's theater, for example, and the foundation lists arts and culture as a funding priority but tends to fund smaller gifts in that area than education, it might make the most sense to apply on behalf of a youth theater education program rather than to underwrite a show.
Funding Trends
Finally, notice the trends in their funding. Has their endowment decreased or increased in the last few years? Do they seem to be going away from human services and more towards health programs? Is their average gift decreasing or increasing over time?  These trends can help you pinpoint the likelihood of your grant being funded and help you determine how to rank this foundation's chance of success to ensure your time is spent efficiently.
This is just the beginning! Once you determine a foundation fits well with your agency's programs or projects, it is on to determining if they accept unsolicited letters of interest, and even better, if they will meet with your agency's executive director. Always do your homework before you get to this point – it will save you so much time in the long run.
What tips do you have for putting together a good prospect list?
April Koske has over ten years of experience working for nonprofits in Omaha, Nebraska and is currently a grant writing consultant with Vic Gutman & Associates.



By: Fiona Matthew
On: 02/14/2017 16:43:35
Hi April,
What are "reverse searches on foundation databases" and how do I do them (for example in the online directory of the Foundation Center)? Thanks
By: April Koske
On: 02/17/2017 17:57:30
Hi Fiona, My firm has a subscription to Foundation Search, and I go into the option called "grant analyzer" and type in the name of a similar agency to the one I'm doing researching for. For instance, if I were looking for arts funders, I might search for the local symphony, the local community playhouse, local opera, etc. It's a good place to start. Another option is just to search arts funders in your state. I prefer to look at specific agencies to start with though. Hope that helps!

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