A WealthEngine White Paper
Understanding Return on Investment (ROI) is critical to anonproft organization’s long term strategic planning—regardless o their size, age, mission or the constituents theyserve. With today’s tight economy and the increased pressureon nonprofts to improve every acet o their undraisingoperation in terms o productivity, eciency and value,organizations must be cognizant o the relationship betweentheir investment in undraising and the return on thatinvestment. Having a command o ROI-related metrics helpsto inorm decision-making in strategic planning, budgeting,stang and other key operational areas.Prospect research is an important element in the undraisingoperation o nonprofts o all sizes and types, providingthe oundation or successul identifcation, cultivation,solicitation, and stewardship strategies. Prospect research,when perormed eectively and supported by a developmentoce that implements targeted undraising programs, enablesorganizations to raise more money in the long run.As development oces, board members, donors andvolunteers all look to have greater transparency into thecosts and outcomes o undraising, measuring the return oninvestment or each individual undraising activity is critical.Moreover, when actoring in prospect research, it serves as akey indicator or assessing the impact the unction can haveon the overall eectiveness o the organization’s undraisingeorts. This inormation is especially important to boardmembers, Chie Financial Ocers (CFOs) and others whohave a say in how the undraising budget is set. It also allowsthe nonproft to potentially increase their prospect researchbudget by providing the proo positive that prospect researchis an investment that yields positive results. Thereore, it hasnever been more important or the development oce tounderstand the impact prospect research has on its undraisingROI and its cost to raise a dollar (CRD).This white paper will explore various actors to considerwhen measuring the ROI o undraising or the nonproftorganization, and specifcally the ROI when systematicallydeploying prospect research. As part o the discussion o ROIand the benefts and costs o prospect research in lowering thecost o a dollar raised, we present three WealthEngine clientcase studies that demonstrate the use o prospect research andits ROI in the context o various undraising campaigns.Measuring ROI can help nonprofts justiy their prospectresearch and development investments. And perhapseven more importantly, it can help maximize theeciency o these eorts by providing the benchmark or understanding the overall cost o raising money.