Prospect Research

Making The Sell

January 22, 2018 | Michael Taylor

What does “donor research” and “wealth-screening” mean to you?

This three-part series examines the latest in donor research in three critical areas:

1. The value of screening your entire donor database;
2. Tips on what’s new about wealth screening so that you can “sell” it; and
3. The value of relationship science to connect with donors.

Part I may be read here.

Part II: Making the Sell

Modern wealth-screening focuses more on philanthropy, what a donor actually is giving to charity, not just fixed assets.

In the past, wealth-screening overly relied on fixed assets, such as real estate, when calculating a donor’s capacity to give, and that over-reliance caused many users to lose faith in the results of the screen. What we’re really looking for in a wealth screen is which donors share your values and are inclined to give, based on the hard evidence of their past giving to your charity or other nonprofits like yours. Relying heavily on real-estate valuation is especially problematic in expensive metropolitan areas such as New York City and Los Angeles. Therefore, pie-in-the-sky screen results caused many nonprofit executives to doubt the credibility of wealth-screening.

To counteract that impression, here are a few talking points you can use to “sell” the need for wealth-screening and go on record about why it’s a good investment:

  • Modern wealth-screening utilizes 25+ different data points exclusive of real-estate assets to determine a donor’s capacity to give! Examples of such data points include the number of homes the donor owns, the donor’s holdings in a public company, and premium credit cards possessed (an indication of reliability and discretionary income), just to name a few. Working with a variety of data points enables you to learn more about your donor’s behavior relating to money matters, and, if this person is inclined to give, at what level.
  • The latest wealth-screening methods focus on what donors are doing with their checkbooks more than the worth of their fixed assets. Having a multi-million-dollar home does not make the property owner charitable. A classic example is a contrast between Bill Gates (founder of Microsoft) and Steve Jobs (the founder of Apple). While both men are (or were) billionaires who reframed the IT world, Bill Gates established a foundation supporting hundreds of philanthropic interests throughout the world. In contrast, Steve Jobs has no public record of charitable giving. In today’s wealth screens, past giving weighs much more than assets, and current giving is the most telling aspect of the capacity to give again.
  • The raw results of a wealth screen are just that, raw results—numbers in a file. Just as you rely on an accountant to review all your accounts to produce a financial analysis, tax exposure, and projections, it’s just as important to interpret the data from your wealth screen. This is where fundraising counsel comes in. The work of fundraising council is to close the gap between a donor’s capacity to give and the giving, the moment when an actual gift is made to your organization! Fundraising counsel must define the right giving range, create the steps needed to cultivate the donor, and directly solicit the donor.
  • Finally, wealth-screening is more than just finding out what a donor can give. Wealth-screening also tells you about other resources a donor might bring. For example, do you want to expand your board? Wealth-screening can identify contacts within your database that have significant board experience. Or perhaps you want to build-up your corporate support? Wealth-screening can identify which donors have corporate experience and may be able to make significant connections for you. Do you want to expand private foundation funding? Wealth- screening can let you know which of your donors sit on the boards of grant-making institutions (private and family foundations).

Michael welcomes your feedback about your experiences with wealth screening. May we hear from you on our blog?

Laurence A. Pagnoni

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