Compiling, organizing, and understanding your donor’s wealth data is one of the best ways to carefully create a strategy that appeals to the right people and maximizes your nonprofit’s chances of success.
Simply put, in order to further your nonprofit’s cause and work toward accomplishing its goals, you have to raise funds. To do this as efficiently as possible, though, your team needs to fully understand your donor network’s ability to give. That’s where wealth data comes in. To get started, you ask yourself these important questions:
- What is wealth data?
- What are common wealth indicators?
- How do you conduct wealth screening?
- Why is wealth data valuable?
What is wealth data?Wealth data is a term that is often thrown around in the fundraising space but is rarely nailed down with a concrete definition. Here’s how we think of wealth data:
Wealth data refers to specific, publicly-accessible data points your nonprofit can analyze to reveal a donor’s financial potential to give.
While it is possible to construct a fundraising strategy without wealth data, you will be able to make much more informed decisions that are more likely to yield positive results when your organization has a firm grasp of its donor population’s wealth data.
What are common wealth indicators?Of course, when you are compiling data on your donors, there is no limit on how much data you can collect—but there is a limit on how much you should collect. While there are innumerable factors that point to a donor’s capacity and willingness to give charitably, some factors, known as wealth indicators, are far more valuable and should, therefore, be your priority.
Remember, when you collect too many metrics, it becomes easy for your team to get buried under unnecessary data that can obscure valuable insights. When you are compiling your data, focus first on the most valuable wealth indicators.
- Real estate investment. The amount of money an individual has invested in real estate can indicate their potential net worth while also signaling that they value opportunities to use their money. There is a strong correlation between increased real estate investment and charitable giving that cannot be ignored. Individuals who own more than $2 million in real estate are 17 times more likely to donate charitably; these individuals around 25% of total monetary donations!
- Business affiliation. Understanding an individual’s business affiliations will not only hint at their net worth, and therefore their giving potential, but also provide insights into their professional connections that you might leverage for new prospective donors. Of course, you don’t have access to an individual’s bank account balances or a breakdown of their income and portfolios, so looking at their level of seniority and activity within prominent businesses will help your organization approximate their giving potential.
- Stock ownership. Online portals, such as the one provided by the Securities and Exchange Commission, can provide excellent insights into the giving potential of donors and prospective donors who own public stock. Your nonprofit team should look for individuals who own more than 5% of shares in a public corporation or are an officer or director of a company. This level of investment and status will indicate a significant net worth and giving capacity.
While wealth indicators are absolutely vital to know and understand, they are by no means the only indicator of a donor’s giving capacity. Not all of the wealthy wish to part with their wealth so it’s therefore important to look at philanthropic markers in addition to wealth indicators. These include:
- Past giving. Look at a person’s RFM score to understand a person’s previous involvement in philanthropy. This score helps establish a foundation on which to structure your donation strategy as it focuses on the recency of a person’s last donation, the frequency with which they typically give, and the average monetary value of their donations.
- Relationship to your cause. The best possible indicator of an individual’s capacity and willingness to give to your organization is their relationship to your cause. If they have a great personal stake in the cause your organization supports, they will be much more likely to give significantly.
How do you conduct wealth screening?Wealth screening, a way for you to assess and analyze the potential giving capacity of your donors, is best accomplished with the help of powerful technology.
There is no reason for your fundraising team to find the task of wealth screening donors to be daunting or tedious. With the right tools, wealth screening is an easy and efficient process that does not have to be a stumbling block for your team. A wealth screening database will greatly lessen any potential burden that wealth data may place on your team’s shoulders.
However, you may be unfamiliar with the world of wealth screening software so this section will tell you the two most important things: what to look for and then how you should conduct your screening once you’ve picked the right tools.
What features should I look for in a wealth screening database?A wealth screening database takes information that is publically available and organizes, categorizes, and analysis it for you. It can help you comb through what would have been an unmanageable collection of data in your donor database with ease.
Not all wealth screening databases were created equally! While some databases have just enough tools to get you started, others, like DonorSearch, possess powerful top-of-the-line features that will nudge your organization closer to success.
Look for a wealth screening database with:
- Comprehensive database access. o ensure you have the most accurate and actionable data possible, screen your donors with the world’s largest philanthropic database. Don’t start the wealth screening process at a disadvantage by working with a limited pool of data.
- Manual verification. Running names through a database for automated wealth screening, while extremely beneficial for your organization, has its limitations, too. The database and screening tools you use should also offer a service in which you can have your top prospects manually screened to ensure maximum data accuracy.
- Proprietary matching logic. Data reports alone are not enough to ensure your organization’s success. Your wealth screening tool should also provide your team with actionable results that point them in the correct direction for donor cultivation and fundraising strategies.
- Integration capabilities. Don’t complicate the wealth screening process for your team by using a database that does not integrate with your existing data systems. Choose a robust platform that will allow you to import and export data easily between your systems. Ideally, your wealth screening database will integrate with your CRM platform.
- Reporting tools. Your database should give you clear and well-organized data reports that clearly detail the wealth and philanthropic indicators that you have chosen to screen for.
- Customer service. More than likely, you don’t have a tech expert on your nonprofit team. The database you choose should come equipped with a support team that will help your organization overcome any obstacle at no extra cost!
What are the best practices for screening wealth data?Like any endeavor, wealth screening relies on a set of best practices to reach its maximum efficiency and effectiveness. These best practices include:
- Donor segmentation. Screen donors in segments to yield more targeted results as well as speed up the processing time. These segments can include first-time donors, recurring donors, lapsed donors, event attendees, and volunteers. This will help reveal trends in your donor population.
- Prioritizing the right indicators. You should have some understanding of your donor network and can adjust the indicators you screen for accordingly. Just make sure you don’t neglect the indicators mentioned above as they are the most likely to provide the best direction for your team.
- Regularly cleaning your data. If you want the results of your wealth screening to be more accurate, you need to clean your data to make sure it is as up-to-date as possible.
Why is wealth data valuable?Gone are the days of guesswork in fundraising. You will never have to speculate about your donor’s capacity or willingness to give to your organization.
As you may well know, nearly 88% of an average nonprofit’s total donations are contributed by a mere 12% of its donor population. This is astounding and points to the importance of soliciting major gifts. However, it can be incredibly difficult, if not impossible, to identify and steward donors for major gifts without a basic understanding of their wealth and giving capacity.
Don’t let your nonprofit miss an opportunity to take advantage of a major donor. If you only ask for a modest-sized gift, you are unlikely to receive a major gift, even if the donor is capable of giving one. Demonstrate the need of your organization and the resourcefulness of your team by making an ask that is appropriate for the individual donor, based on the wealth data.
Not only is wealth data invaluable for your major gift strategy, but it is instrumental in prospect research as well.
How are wealth data and prospect research related?Prospect research is one of the best ways to utilize your wealth data to maximize the gain for your organization. The financial analysis conducted as a part of wealth screening is a major component of prospect research.
Prospect research combines wealth screening with philanthropic analysis and trend assessments to provide your nonprofit with actionable insights regarding your donor network.
When you conduct prospect research, you are looking at all of the factors together, instead of as disparate, isolated data points. This means you can more accurately identify trends and opportunities that would not be identifiable if not viewed as part of a complete donor management strategy.
Proper utilization of wealth data has the potential to revolutionize how your organization operates and manages its fundraising strategy. Screening your wealth data doesn’t need to be yet another tedious task that your team must endure. With a powerful wealth screening database, you will never have to worry about your wealth data again!
Additional Resources on Wealth DataFundraising Analytics: How to Maximize Your Data. Learn how wealth data can help your organization plan its fundraising strategy with this guide!
Donor Analytics Guide: 5 Answers to Your Top Questions. Want to know more about what wealth data you should collect? Check out this donor analytics guide!
Wealth Screening: The Definitive Guide. Explore the wealth screening process in-depth with this comprehensive guide to wealth screening!