Certified Fund Raising Executive (CFRE) Practice Test

What component is essential for a successful prospect research strategy?

1. Personal connections to board members

2. Online database subscriptions

3. Clear coding of professional practice

4. A focus solely on major donors

The correct answer is: Clear coding of professional practice

A successful prospect research strategy relies heavily on the clear coding of professional practice. This component is crucial because it enables fundraisers to systematically categorize and analyze data pertaining to potential donors. By implementing clear coding, organizations can effectively track and organize information about prospects, including their professional backgrounds, philanthropic interests, and giving capacity. This structured approach allows for a more focused outreach, ensuring that communication with prospects is relevant and tailored to their specific interests and motivations. On the other hand, while personal connections to board members can be beneficial, they do not guarantee a comprehensive understanding of prospects' motivations or their capacity to give. Online database subscriptions can provide valuable information, but without proper organization and analysis through clear coding, that data may not be effectively leveraged. A focus solely on major donors limits the scope of research, as it may cause organizations to miss opportunities with smaller donors or potential supporters who could contribute significantly in other ways. Therefore, clear coding of professional practice stands out as an essential element in building a robust and effective prospect research strategy.