WHAT IS WEALTH SCREENING?
To start, wealth screening and prospect research are not the same thing, despite popular misconceptions surrounding the topics. Wealth screening is a critical component of the larger whole that is prospect research.
The definition of wealth screening is exactly as one might expect.
As a subset of prospect research, wealth screenings look at top indicators of wealth like real estate ownership, business affiliations, and stocks holdings in public companies. These screenings use data to unveil an accurate estimate of a potential donor’s wealth. The process helps fundraisers locate major gift prospects hidden among the crowd.
A well-rounded understanding of a prospect’s financial situation can reveal that person’s:
- capacity to give
- likelihood to give
- relationships with other potential prospects
- and more
With the insight that wealth screening provides, nonprofits are better equipped to accurately segment their donors for targeted communications and design their ask strategies around the ideal gift amount for each screened prospect.
WHY DO YOU USE WEALTH SCREENINGS FOR FUNDRAISING?
Well, I already started to answer this question when defining wealth screening, but the query warrants its own section.
This question could also be phrased, “How does wealth screening benefit nonprofits?”
For a minute, let’s liken the process of wealth screening to shopping for new clothes. Stay with me.
In this scenario, the donors are the store owners, the clothes are the donations, and the shoppers are the fundraisers.
You’re a shopper looking for a new button down and slacks. You know that Pants, Pants, Pants sells the slacks you want and that Blouses and Button Downs has plenty of your favorite shirts for sale.
However, before haplessly heading to the mall, you do a quick bit of internet sleuthing and realize that We Have Everything does in fact have everything, including the two clothing items you need.
Now that you know, you drive straight to that store, get your two items and get out before the kitchen utensils in the bargain bin begin calling your name.
Before wealth screening, you’d be going to each store individually. After wealth screening you’d not only know to go to We Have Everything, but you’d have a map directing you to the correct department and a salesperson waiting with your clothes already wrapped up.
Wealth screening ensures that your fundraisers are prepared with the best information possible to get the most from your generous donors.
As a fundraiser you know your fundraising goal, you know you want the shirt and slacks. What you do not know, or rather, what is harder to know, is what prospects have the most high-quality potential. You don’t know which stores to focus your limited time and resources on. Wealth screening to the rescue.
Wealth screening won’t answer all of your questions, but it will answer one. And the question it answers is a driving factor behind charitable giving.
How much can a given prospect realistically donate?
The screening will expose a collection of valuable data, and, most centrally, will enable your fundraisers to:
- identify prospects for planned and major giving
- establish realistic fundraising goals
- know when to ask prospects and how much to ask for
You’ll need prospect screening to determine the all-around value of a prospect, but wealth screening gives you wealth data and the significance of that data cannot be overlooked.
WHAT DATA SHOULD YOU HAVE IN A WEALTH SCREENING?
If you are considering this process, you are probably wondering what wealth screening data there is. You understand the benefits and the need, but you want to see what information gets your organization from point A to point B, from having a prospect list to knowing how to solicit donations from those on that list.
There are seven main data focuses for wealth screening:
- previous charitable donations to your nonprofit
- donations to other nonprofits
- political giving
- nonprofit involvement
- real estate ownership
- business affiliations
- stock ownership
Let’s briefly discuss those seven data types individually.
(1) Previous Charitable Donations to Your Nonprofit
The strongest indicator of future giving is past giving. That is common sense. This is a crucial and easy-to-track data point to keep for all donors.
(2) Donations to Other Nonprofits
Past giving to nonprofits other than yours is also an incredibly valuable predictor and a close second behind data type one.
(3) Political Giving
Political gifts, traceable through FEC.gov, provide a window into a donor’s wealth and inclinations to give.
(4) Nonprofit Involvement
Nonprofit involvement demonstrates that the prospect has a vested interest in philanthropy and understands the process better than your average donor.
(5) Real Estate Ownership
Real estate ownership is a great indicator of wealth, as well as philanthropic propensity in general. It is also mostly publicly available, which always helps.
(6) Business Affiliations
Business affiliations are a two-fold indicator. They can say a lot about an individual’s own wealth and giving capacity, as well clue your fundraisers in on whom the prospect can provide introductions for.
(7) Stock Ownership
Available through the SEC, this information is another major wealth indicator. Just be careful and remember that you’re only seeing ownership of public companies and there’s a great big world of private companies.
Sometimes nonprofits will mix and match which data types they focus on, depending on screening need. But these all are at their predictive best when reviewed together.
HOW DO WEALTH SCREENING SERVICES COMPARE?
The most important thing to consider when comparing wealth screening services is what data they examine.
Successful and accurate prospect research does not start and end with wealth screening.
Prospect research and wealth screening are not interchangeable terms. Wealth screening is a valuable feature of prospect research.
Prospect research is used to investigate possible and existing donors. The research looks into wealth indicators, philanthropic motivators, personal backgrounds, and giving histories to best determine a prospect’s giving capacity and affinity towards a particular nonprofit or fundraising organization.
As you can see, wealth indicators are just one part of the process.
This semantic difference doesn’t stop wealth screening from being used as a blanket term covering the examination of more than just your standard wealth markers. It is up to the nonprofit seeking out the screening service to determine if the wealth screening stops at financial indicators or goes beyond to cover the other valuable data points.
Prospect research is a holistic process that necessitates a diverse approach. Besides financial markers, wealth screening services need to be compared on the basis of their philanthropic inclinations.
You can bring a horse to water, but you cannot make it drink. You can ask wealthy people for donations, but you cannot make them give. Money does not a charitable person make. You’ll definitely need to perform a screening for wealth markers, especially when looking for major and planned giving prospects, but you’ll also need to look into philanthropic factors.
Find a wealth screening service that takes all the various factors into account when ranking your prospect and donor pools and you’ll be in great shape.
Luckily, there are plenty of prospect research tools out there to help you with your wealth screening needs.
WHAT WEALTH SCREENING TOOLS DO YOU RECOMMEND?
Are you convinced? Ready to begin wealth screening? Well, you’ll need some resources and tools to help you out.
Some wealth screening tools are free, while others range in cost. Decisions on what to use will come down to the size of the list you need to screen, your staff resources, and your financial situation.
You can use one, multiple, or all of the tools detailed below. Find the combination that works for your wealth screening needs.
We’re officially tooting our own horn here, but it is a worthy horn! DonorSearch screens your donor list against 30 unique databases and then ranks donors accordingly. We know the importance of past charitable giving and begin our screenings with philanthropy.
Outside of screening services, there are certainly tools to help your organization implement some wealth screening of its own.
Here are four other free options if you want to learn more about a prospect’s wealth indicators:
Simply enter a prospect’s address into Zillow’s search field and learn the value of the property. It is a quick and easy indicator of wealth. And the great news is that real estate is more than a wealth indicator. For example, people that own $2+ million in real estate are 17 times more likely to make a charitable contribution than your average prospect.
SEC.gov has a searchable database to investigate a prospect’s stock holdings. Remember the private versus public company caveat though!
FEC.gov has a similar sounding name to the option below, but with very different search results. With relative ease you’ll be able to uncover the political giving history of your prospects. Their gift amounts can teach you how much they are capable of giving and just the act of contributing demonstrates a propensity to give in general.
(5) Foundation Center
The Foundation Center is free for some things and subscription based for others. It contains a comprehensive grant database. In many ways it is a virtual library, but it also even has non-virtual locations in select US cities.
With the help of a screening company, sites like these, plus many others, will be used as comparison points. Your donor pool will be wealth screened up, down, and all around.
Screening services can be used alone or in conjunction with the help of in-house prospect researchers or outside consultants.
WHAT ARE THE WEALTH SCREENING BEST PRACTICES?
Wealth screening best practices are going to vary considerably depending on if you perform the screening yourself, get consultants involved, or hire a screening company.
Regardless of which method you choose to pursue, there will be some overlapping best practices that all organizations attempting a wealth screening (or, prospect research for that matter) should adhere to.
- Clean your database: The better your original data, the better your results. Don’t start your screening on shaky ground.
- Screen in segments: You can perform a bulk screening, and sometimes that is recommended. However, segmented research will yield more targeted results.
- Prioritize philanthropic markers ahead of wealth markers: This has already been mentioned multiple times at this point, but I just wanted to write it once more for the sake of reiteration.
- Verify your wealth screening results: Make sure the new data that is driving your fundraising strategy is accurate.
As far as the verification of wealth screening results goes, keep two things in mind:
- If you’re using a screening company, sending data out instead of just having researchers work from donor names will produce much more accurate results.
- No one knows your donors as well as you do. No screening company’s data is absolutely 100% perfect. Your nonprofit will need to retain ownership of the results and take the initiative to check anything that seems inaccurate. Although no screening is infallible, the help of the outside resource will drastically speed up and improve the process, freeing up your staff to perform other duties in the interim.
Accurate wealth screening can take your fundraising to the next level. Your donor solicitation will be more targeted and more powerful. You’ll be able to make asks that match what the donors are capable and willing to give.