Certified Fund Raising Executive (CFRE) Practice Test

What is the process of collecting and analyzing information on potential charitable supporters called?

1. Donor outreach

2. Community engagement

3. Prospect research

4. Fundraising analysis

The correct answer is: Prospect research

The process of collecting and analyzing information on potential charitable supporters is known as prospect research. This practice involves delving into various data sources to gather insights about individuals, foundations, or corporations that may have the interest and capacity to support a charitable organization. By understanding the backgrounds, philanthropic interests, giving history, and financial capabilities of these potential supporters, organizations can tailor their fundraising strategies more effectively. Prospect research is crucial for identifying not just potential donors but also their motivations for giving, which helps fundraisers create personalized approaches that resonate with each individual or entity. This data-driven approach maximizes fundraising success by ensuring that resources are allocated optimally and outreach efforts are well-targeted. While donor outreach and community engagement are important aspects of fundraising, they do not specifically refer to the analytical process of gathering information about potential supporters. Fundraising analysis similarly pertains to evaluating past campaigns and their effectiveness rather than the preliminary research necessary for identifying new prospects. Thus, prospect research stands out as the distinct process focused on developing a robust understanding of potential donors.