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[ASK AN EXPERT] Is An Investment In Wealth Screening Useful Before A Capital Campaign?

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Our Ask An Expert series features real questions answered by Claire Axelrad, J.D., CFRE, our very own Fundraising Coach, also known as Charity Clairity.

Today’s question comes from a nonprofit employee who wants advice on whether or not it’s useful to invest in wealth screening before a capital campaign.   

Dear Charity Clairity,

We’re considering a capital campaign, and I’m wondering if I should invest in wealth screening. Is it worth it?

— Need to Build a Campaign Portfolio

Dear Need to Build a Campaign Portfolio,

You’re wise to consider all the tools at your disposal, and I’ll get to wealth screening in a minute.

First, I’d like to suggest you build a portfolio first. To do so, apply predictive modeling, wealth screening, or wealth appending, as necessary, as tools to narrow down your portfolio and perhaps develop target ask amounts. 

If you have no idea who you might approach for capital gifts, and/or no history of major gift fundraising, you’ll be hard-pressed to make good use of purchased wealth modeling and research tools. 

Let’s take a moment to define our terms:

  • Wealth screening: This looks at top indicators of wealth like real estate ownership, business affiliations, and stock holdings in public companies to unveil an estimate of a potential donor’s wealth. Wealth screening tools may also look at past charitable and political giving available in public databases.
  • Predictive modeling: Rather than buying the ability to take a deep dive into specific research for all your prospects, you can buy a scoring system that lets you know the major annual gift, capital campaign gift, and/or planned gift likelihood of folks in your database. If you have a lot of high scorers (or relatively few), that tells you a lot.
  • Wealth appending: Wealth appending enables you to secure deep dive research on a selected portfolio of already-identified major donor prospects and import this information into your donor database. There are other useful ways to use wealth appending tools to improve donor lifetime value. [See here.]

The most important major gift fundraising strategy, by far, is getting to know your donors. To the extent any of these tools can help you with that, they are worth your consideration. Just keep in mind that these tools can have a fair amount of outdated and misleading information. I often tell folks to take them with a shaker of salt. 

Here are some common pitfalls:

  • Wealthy people are good at hiding their wealth, so you’ll miss them if you rely solely on the purchased tools.
  • A high score may reflect the fact that a donor owns an expensive home. However, they may be cash poor and, therefore, not at all a good prospect for campaign purposes.
  • A high wealth score says nothing about a donor’s interests or philanthropic inclinations.

I’m not saying these tools have no value; just don’t rely on them in lieu of primary research. If you only have ten prospects, for example, you can find out a fair amount about these folks simply using search engines. Of course, if you have 500 prospects, you may want a more cost-effective research method.

Remember, we’re talking fundamentally about a screening tool. It’s basically an automated, aggregated way to find out what fundraisers have traditionally unearthed via in-person, confidential screening sessions—after a portfolio has already been built (at least in preliminary form). 

I would still recommend holding these sessions to vet the information you’ve received via the purchased product, assess interest in your cause, narrow down your list, and begin to tier prospects according to realistic ask amounts. By purchasing a tool, you’re essentially adding a step to the process. Granted, you may unearth some gems you’d otherwise not have brought into the screening meeting, so it’s still something to consider. Just know how you’ll use the information you glean.

Whatever you do, don’t delay your process while you wait to complete all your research. “I can’t ask Joe yet because we don’t have all the data” is a cop out. This is just a way for folks who are afraid to ask to put off the inevitable.

Some guidelines:

  1. Don’t purchase wealth screening tools if your plan is to use them to reach out to people merely because they have money. That’s a poor way to build a campaign portfolio, and it will result in lots of dead ends and wasted time. If you have a large donor file, it may be useful as a tool to begin segmenting your list.
  2. Do purchase predictive modeling tools if your plan is to enhance what you already know and you need it to persuade a reluctant executive director, board of directors, or other potential major donors. This could be effective for you if you need to make a go/no go decision. It’s a way to demonstrate—with data—your readiness, or lack thereof, to embark on a campaign.

    I would, however, recommend doing this only when you are fairly certain the outcome will support the direction you want to take. For example, I’ve used this with boards who were afraid they were the only people who’d give to a campaign. I knew we had many more prospects within our database, so the wealth screening tool showed them we had a lot of unmined potential. This gave them needed confidence to move forward without fearing they’d be on the hook for the full amount of the campaign goal.
  3. Consider purchasing wealth appending tools, once you have a list of qualified donor prospects you’ve actively identified by reaching out to see if they have an interest in what you do and an inclination to enthusiastically engage with you.  

One simple qualification tool is a donor discovery survey to help you learn why the donor cares, what other causes they support, how passionate they are about what you do, and whether they’d be interested in being more engaged. 

There are companies that can help you with this, including potentially your own CRM provider. Here’s a list of discovery questions if you want to create your own survey. There are also other preliminary donor cultivation “moves you can engage to qualify your prospects.

Once you have a qualified portfolio, this may be the time when a wealth appending tool can be helpful to learn more about each individual’s true capacity.. Still, you have to take this research with many grains of salt as the truly wealthy hide their assets. So, don’t use this to rule folks out—especially with those who’ve indicated a strong interest in building a relationship with you! 

When all is said and done, what you learn directly is more important than what you learn indirectly. What people say and do is more meaningful than what others say about them, especially if it’s secondary research. Still, that research can be a real confidence builder and can help you shape your best asks.

I hope this helps you build your campaign portfolio!

— Charity Clairity

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