Outsourcing Prospect Research: A Primer

Posted By José Ramos
November 8, 2022

Any successful nonprofit knows that a strong research function is vital to the cultivation and solicitation process. Ideally, by the time a prospective donor is solicited, the organization has uncovered the full picture to determine the donor’s capacity and guide it to the ideal ask. “Leaving money on the table” isn’t just bad business, its anathema to fulfilling an organization’s mission.

The pandemic was a life changing event for the world, and as such, philanthropy also shifted. Compounded with a looming fear of a recession in 2023, nonprofits are looking for ways to cut costs while maintaining a vigorous and effective research function. As a result, development teams are feeling the strain of taking on more responsibility or risk losing their jobs.

Outsourcing the research function, once uncommon, has now become the norm for several reasons, including technological factors allowing for remote work and the increased appeal of just-in-time production. This has led to increased market confidence in handling tasks outside of an office space from vendors and suppliers anywhere in the world.

The advantages of outsourcing research are many, and include:

  • Cost-effectiveness: Outsourced vendors don’t have hidden costs like training or a learning curve that is a given for any new internal hire. In essence, they can hit the ground running at a fixed cost that allows for better planning.
  • Continuity of service: There’s no pause in services should a researcher request personal time off due to sickness or vacations.
  • Broad experience across multiple markets/sectors: Outsourced research firms often have broader cross-field expertise and can provide additional insight. For example, in one recent case, an outside vendor was able to draw on its experience to determine that a potential prospect’s private business was likely to be purchased, triggering a signal to suggest the client that a higher ask was possible, something that an internal researcher in training may not have the experience to deduce.
  • Speed: Vendors provide fast results because they provide a focused function, allowing an internal team to tackle other pressing needs like moves management. Most researchers at nonprofits do a myriad of tasks, and this helps to streamline the process.
  • Consistency: The market wide trend is for an in-house researcher to stay at a job for 14 months and then change positions. It takes time and effort for nonprofits to find and then train the appropriate replacement hire.

Outsourcing is a great tool for organizations that are in transition as well as for those that have established teams. We’ll be tackling the pros and cons of outsourcing in greater detail in future posts and welcome a conversation with anyone that wishes to learn more about our strategy and expertise.

Stay tuned.

Here is more in the series:

Outsourcing Prospect Research: Advantages Explained