Step 1: Pinpoint Your Ideal Funders

Alright, let's talk about finding the money.

This is the step that most founders are desperate to get to, but they almost always do it wrong. They start with the question, "Who has money?" and end up with a long list of random wealthy people, generic foundations, and local businesses they have no connection to. They spend months "spraying and praying," sending out letters and emails that go unanswered, leading to rejection, frustration, and burnout.

Let me be crystal clear: That is not a strategy. That is a waste of your precious time.

The secret to successful fundraising isn't about finding people with money. It's about finding the right people whose problems you solve, whose values you share, and whose lives are made better because your organization exists.

This step is about shifting your entire mindset. We are going to stop asking, "Who has money?" and start asking, "Who benefits most from our work?" This is how you move from begging for scraps to confidently inviting partners to invest in a shared vision. Don't skip this. This is where you build the targeted, high-potential prospect list that will become the foundation of all your fundraising success.

 
 

1. Reframe Your Mindset

Before diving into tactics, you must shift how you think about fundraising. Most founders start by asking, “Who has money?” This leads to a scattershot approach—spraying generic appeals to wealthy individuals, foundations, or businesses with no connection to your mission. This is not a strategy; it’s a recipe for wasted time and disappointment.

Instead, ask: “Who benefits most from our work?” Your ideal funders are those whose problems you solve, whose values align with yours, or whose lives are improved because your organization exists. These are the individuals, businesses, and foundations who see your nonprofit as a partner in achieving shared goals, not just a charity asking for handouts. This mindset shift transforms fundraising from begging to inviting others to invest in a shared vision.

Why This Matters

By focusing on alignment and mutual benefit, you:

• Build authentic relationships with funders who are naturally inclined to support you.
• Save time by targeting prospects with a high likelihood of giving.
• Create a sustainable funding pipeline that grows stronger over time.

Action Step:

Take 10 minutes to reflect on your nonprofit’s mission. Write down one sentence that summarizes the core impact of your work. For example: “We provide after-school arts programs to empower at-risk youth.” Keep this sentence in mind as you work through the steps below—it will guide you in identifying who benefits from your impact. 
 

2. Identify Your Beneficiaries (The First Circle)

Your ideal funders are often those who directly or indirectly benefit from your nonprofit’s work. These are not just the people you serve but also the secondary and tertiary beneficiaries whose lives are made easier, safer, or more prosperous because of your mission. By mapping out these beneficiaries, you create a clear picture of who has a vested interest in your success.

Why This Matters

Beneficiaries have a built-in reason to support your work. For example, a nonprofit reducing homelessness doesn’t just help unhoused individuals—it benefits local businesses, real estate agents, and city governments by creating safer, more vibrant communities. Identifying these beneficiaries helps you target funders who see your work as a solution to their challenges or goals.

How to Do It

Brainstorm Beneficiaries: Grab a whiteboard or notebook. At the top, write: “My organization’s work makes life better, easier, or more prosperous for…” List everyone who benefits from your mission, including:

• Direct Beneficiaries: The people or communities you serve (e.g., students in an education program).
• Indirect Beneficiaries: Those who benefit secondarily (e.g., parents of students who gain peace of mind).
• Tertiary Beneficiaries: Broader stakeholders like businesses, government agencies, or other nonprofits impacted by your work.

Think Broadly: Don’t limit yourself to the obvious. Consider industries, professions, or community groups that benefit indirectly. For example, for a food bank serving low-income families, indirect beneficiaries include local schools (healthier kids learn better) and employers (more productive employees).
Refine Your List: Group similar beneficiaries together (e.g., “local businesses” or “healthcare providers”). Prioritize those with the strongest connection to your mission or the greatest potential to give.

Example:

Suppose your mission is to provide job training for formerly incarcerated individuals. In that case, your beneficiaries include the program participants, the employers who hire them, their families who gain financial stability, local businesses that see increased economic activity, and the city government, which sees reduced recidivism costs. Your work creates a powerful ripple effect of value.

Action Step:

Spend 30 minutes brainstorming your beneficiary list. Aim for at least 10-15 groups, professions, or industries. Don’t judge your ideas—just write them down. This list is the raw material for your prospect list. 
 

3. Leverage Your Warm Network (The Second Circle)

Your warm network—people you, your board, or your supporters already know—is your most valuable asset for fundraising. Warm introductions are far more effective than cold outreach because they come with built-in trust. This step focuses on tapping into your existing relationships to identify potential funders who align with your beneficiary list.

Why This Matters

A warm introduction from a board member, volunteer, or supporter can open doors that cold emails never will. Your warm network is the low-hanging fruit of fundraising, allowing you to build relationships quickly and authentically.

How to Do It

Engage Your Board: Your board members likely have professional and personal networks that include individuals or businesses from your beneficiary list. Their relationships can unlock high-value connections.

Action: Open your Funder Research Blueprint. Inside, you will find the Relationship Mapping Matrix and a Sample Email Template to send to your board. Share your beneficiary list with them and explain that you’re looking for people they know who fit these profiles. Instruct them to use the list as a guide to fill out the matrix. This turns "I don't know anyone" into a focused, productive exercise.
Prospect as the Founder: As the founder, you’re the face of the organization. Your passion and vision can turn casual connections into committed supporters.

Action: Map your own relationships. Review your beneficiary list and identify where these groups gather. If “real estate agents” are on your list, find local real estate association meetings or Chamber of Commerce events. Attend these events with the goal of listening and building relationships, not asking for money. If you’re stretched for time, delegate this task to a skilled volunteer. Ask them to research and compile a list of the top 20 local businesses or leaders who fit your beneficiary profile.

Action Step:

Draft and send the board email with the beneficiary list and Relationship Mapping Matrix. Identify one local event related to your beneficiary list to attend this month, or delegate this research to a volunteer. 
 

4. Expand Through Accelerated Discovery (The Third Circle)

While your warm network is a strong starting point, sustainable fundraising requires reaching beyond your immediate connections. This step focuses on systematically identifying new prospects—individuals, businesses, and foundations—who have the affinity (care about your cause), propensity (history of giving to similar causes), and capacity (financial ability to give at the level you need).

Why This Matters

Accelerated discovery allows you to scale your fundraising efforts by finding high-potential prospects you don’t yet know. By combining data-driven research with strategic outreach, you can build a robust pipeline of funders who are likely to support your mission.

Strategy 1: Leverage Your Existing Supporter Base

Why it's important: Your current supporters—donors, volunteers, and advocates—are your strongest allies. They are already invested in your success and are your most credible messengers. Turning them into prospectors is the fastest way to expand your warm network.

Action: Use the email template in your Funder Research Blueprint to send a targeted message to your existing supporters. Do not ask them for money. Instead, share your benefactor list with them and ask, "Who do you know in your network who fits these profiles and might be interested in learning more about our work?" This simple act turns your supporters into an army of prospectors for you.

Strategy 2: Use Social Media for Prospecting

Why it's important: Social media is a powerful tool for finding people who care about your cause, even if you don't know them yet. It allows you to target people based on their interests and location, turning cold outreach into a warm invitation.

Action: Run a small, paid ad campaign ($50-$100 budget) on a platform like LinkedIn or Facebook. Target groups from your beneficiary list (e.g., “real estate agents in [city]”). The ad should offer something of value, like a free resource or a survey asking for feedback on the issue you address. Use this as a medium to collect their contact details for future relationship-building.

Strategy 3: Analyze Annual Reports of Similar Nonprofits

Why it's important: This is one of the most powerful and underutilized research strategies. It's like ethical competitor research. It provides you with a pre-qualified list of funders who have already proven they are willing to invest in your specific cause.

Action: Identify 5-10 other nonprofit organizations that have a similar mission to yours. Go to their websites and find their most recent annual report. In that report, look for their "List of Donors." This is a goldmine of individuals, foundations, and companies that have already demonstrated an affinity and propensity to give to your cause. Add them to your prospect list.

Strategy 4: Mass Research with Professional Tools

Why it's important: For organizations that are ready to scale their prospecting, professional tools are a game-changer. They allow you to move beyond who you know and systematically identify thousands of potential supporters who meet all three criteria: affinity, propensity, and capacity.
Action: In your Tool & Resource Guide, you will find a curated list of prospect research platforms.

Tools like iWave and DonorScope are wealth screening platforms that analyze vast amounts of public data. You can use them to search for individuals in your service area who have a history of giving to causes like yours, or you can upload your existing list of supporters to identify your hidden major gift prospects.
Tools like Clay are data automation platforms. Once you have a list of names, you can use a tool like this to find their contact information and social media profiles, allowing you to build a rich profile for your outreach.

Strategy 5: Grant Research

Why it's important: Finding the right foundations is a science, not a guessing game. A targeted approach saves you from wasting dozens of hours writing proposals to foundations that were never going to fund you in the first place.
Action: Use platforms like Foundation Directory Online or GrantStation. Do not search broadly. Use specific keywords related to your programs and the community you serve (e.g., "after-school arts program for at-risk youth in Buffalo"). This will give you a targeted list of grantors who are actively looking to fund work like yours. Read their guidelines carefully to ensure you are a perfect fit before you ever start writing.

Strategy 6: Researching Businesses and Corporate Sponsors

Why it's important: Finding the right business partners is about finding alignment between their business goals and your mission. A strategic partnership is far more valuable than a one-time sponsorship check.
Action:

Local: Start with your local Chamber of Commerce directory to identify businesses active in community initiatives.
State & National: Use LinkedIn Sales Navigator to find companies with corporate social responsibility (CSR) programs that match your mission. Look at the sponsors of other nonprofit events in your area to identify businesses already investing in your cause.

Action Step:
Choose one accelerated discovery strategy to start with (e.g., supporter email or analyzing annual reports). Dedicate 2 hours this week to execute it, aiming to add 10-20 new prospects to your list. 

5. Build Your Curated Prospect List

Now that you’ve identified potential funders, it’s time to organize this information into a strategic, actionable prospect list. This list is your roadmap for fundraising success, turning a collection of names into a prioritized database.

Why This Matters
A curated prospect list ensures you focus your efforts on the right people and organizations, maximizing your fundraising efficiency and impact. It’s the difference between random outreach and a targeted strategy that builds lasting relationships.

How to Build Your Prospect List

• Create a Spreadsheet: Use a tool like Google Sheets or Excel to create a master prospect list. Include the following columns: Name, Contact Information, Connection to Your Organization, Beneficiary Type, Why They’d Be Interested, Estimated Giving Capacity, Board/Supporter Connection, and Next Steps.
• Compile Your Data: Gather names and details from your board’s Relationship Mapping Matrix, supporter introductions, social media responses, annual reports, and all your other research. Aim for a mix of individuals (50%), businesses (30%), and foundations (20%) to diversify your funding sources.
• Enrich the Data: Use tools like LinkedIn to add missing contact details or background information. Research each prospect’s giving history or CSR priorities to tailor your outreach.
• Maintain and Update the List: Review your list monthly to update statuses (e.g., “met, interested” or “no response”). Add new prospects as you discover them.
   

Conclusion: From Scarcity to Abundance

By following this process, you’ve transformed your fundraising approach from guesswork to strategy. You’ve moved from asking, “Who has money?” to identifying, “Who benefits most from our work?” This shift unlocks a pipeline of funders who are naturally aligned with your mission and motivated to support it. Your curated prospect list is a living asset that will guide your fundraising efforts, helping you build authentic relationships and secure sustainable funding.

Your Next Steps

• Start Small: Begin with your beneficiary list. Spend 30 minutes today brainstorming who benefits from your work.
• Engage Your Network: Send the board email and attend one local event to build warm connections.
• Research Strategically: Choose one accelerated discovery strategy to add 10-20 prospects this month.
• Build Your List: Create your prospect list spreadsheet and commit to updating it weekly.

You don’t need to be perfect—you just need to start. Each step you take builds momentum toward a financially sustainable nonprofit. Your mission deserves it, and your ideal funders are out there waiting to partner with you.