As a nonprofit and fundraising professional, you already know the value that comes with understanding your donors. Putting in extra effort to get to know your donors can lead to increased donations and successful fundraising events. The more you connect and get to know your supporters, the better you can communicate and engage with them.
A popular method for understanding your donors is prospect research. Using your existing donor database and a prospect research tool, you can better evaluate each donor’s giving affinity (how likely they are to give) as well as their giving capacity (how much they’re able to give).
In this guide, you’ll be learning about a subset of prospect research called wealth screening. Using specific wealth screening methods, your nonprofit can more accurately determine a donor’s giving capacity by reviewing the potential donor’s wealth.
Conducting wealth screening narrows down your highest impact donors and helps you maximize your fundraising strategy and raise more money. Read on to gain a better understanding of how your nonprofit can take advantage of wealth screening with the following common questions:
- What is wealth screening?
- How can you increase fundraising with wealth screening?
- What are some wealth screening best practices?
Whether you’ve conducted wealth screening before, or this whole concept is new to you, it’s always a good idea to go over the basics and ensure you have a solid knowledge base before going forward. Ready to learn about how wealth screening can benefit your cause? Let’s get started!
1. What is wealth screening?
Wealth screening is a prospect research method that involves evaluating each of your donor’s wealth. The main reason people use wealth screening is to find out a donor’s giving capacity. A giving capacity reflects how much a donor might possibly donate to your cause based on their wealth estimate.
Once you’ve determined your donors’ giving capacities, your wealth screening and prospect research tool can help identify those who have the potential to make a large financial impact on your nonprofit. The bigger a donor’s wealth estimate (and thus their giving capacity), the more likely they’ll make a bigger gift to your cause.
But how exactly does wealth screening do all this? When it comes down to it, the process is simple. Screen the data in your existing donor management software for specific metrics and indicators in each of your donors. Here are a few data points to look at when wealth screening:
- Wealth markers. To get a good estimate on a donor’s wealth, take a look at their real estate ownership, stock ownership, and business affiliations. Understanding what each of your donors owns and how they use their existing money more accurately determines how much of an impact that an individual could make if they made a gift.
- Philanthropic indicators. In the fundraising world, there are certain indicators that can help you determine how likely someone is to involve themselves in charity. Though this isn’t the first thing people think of when wealth screening, these data points are almost just as important. Use metrics like past giving, political giving, and other nonprofit involvement can help. It is these philanthropic indicators that can help you figure out whether this donor might even want to donate in the first place.
Most organizations look into a wealth screening and prospect research tool to automate this process and make it easier. This way, your donors are screened through a philanthropic and wealth database with access to various giving information and official state and federal datasets to supplement your research.
Wealth screening isn’t necessary for every fundraising effort, but it can help you identify high impact donors that you might otherwise overlook. Once your wealth screening process narrows down this list, you can begin developing your fundraising strategy and focusing more on those donors.
Wealth screening can bring many benefits and positive changes to your nonprofit. If you’re curious for more information, check out Double the Donation’s guide to wealth screening.
2. How can you increase fundraising with wealth screening?
You don’t necessarily have to come up with new engagement and donor acquisition strategies to reach your fundraising goal. Once you’ve completed the wealth screening process, you now have a better, more comprehensive look at your donors. Leverage this information to improve your engagement and donor acquisition strategies with a more guided approach.
Focus common fundraising efforts, like acquiring major gifts and promoting company matching gift programs, on your high impact donors, maximizing the influence and support in your current donor pool.
Wealth Screening and Major Gifts
Most nonprofits use wealth screening methods and tools when they want to increase their major gift revenue. Major gifts are the largest donations a nonprofit will receive and are proportional to the size of the nonprofit itself.
By analyzing your donor’s wealth data and philanthropic tendencies, you can get a better sense about who has the means to make a major gift.
Major gifts aren’t donations that happen often, which is why it’s important to determine which of your donors has the potential for a large gift. When your fundraising team takes the time to steward those potential major donors, it can tremendously boost your fundraising efforts more than asking your general pool of supporters for help.
Focus your marketing strategy on these prospects, because major donors don’t just contribute to any charity they come across. It makes sense to begin developing these relationships early. This way you can build a foundation for future engagement and consistent support, turning these prospective major donors into life long givers.
Wealth Screening and Matching Gifts
Corporate matching gift programs, though not as commonly known, are another way that nonprofits and other charitable organizations can increase their fundraising. Matching gift programs and other corporate philanthropy efforts are an underutilized source of revenue.
According to one study on matching gifts, 1 in 3 donors said they’d give a larger gift if they knew their donation was going to be matched. Additionally, an estimated $4-7 billion in matching gift funds goes unnoticed each year. This is because donors likely don’t even know that they exist.
Corporate matching gift programs are when an employer matches a gift made by one of its employees to a charitable organization. Most of these programs have company-specific rules and guidelines that determine if the employee’s donation is eligible for a match. These can range from the type of charity they’re donating to or a max/min gift amount. These gift matches are an easy way for a donor to double, or even triple, their contribution without any additional effort on their part!
Wealth screening is a useful tool because it can screen your donors’ employers and other business affiliations. This way, you can identify those who are matching gift eligible. Many nonprofits will also look into a matching gift database that can integrate with their wealth screening tool, automating the process of figuring out which donors are eligible and which aren’t.
Incorporating wealth screening into your fundraising efforts and strategies can only help. It enables your team to target which donors are more likely to respond favorably, while also giving you additional helpful information on them.
It’s not just major gifts and matching gifts either. Wealth screening and prospect research can help you determine if your donors contribute to donor-advised funds (DAFs), another way you can increase your fundraising. Learn more about DAFs in this DonorSearch flash class webinar.
3. What are some wealth screening best practices?
Wealth screening gives you a clue into which of your donors have the highest likelihood of giving to you and make a genuine impact on your mission. Learn who to target your fundraising efforts on in order to build meaningful relationships and foster growing support.
As you leverage wealth screening and other prospect research into your fundraising tactics, consider the best way to engage your high impact donors to maximize success. You don’t want to risk a relationship by not being 100% in your efforts.
Below is a list of best practices to keep in mind as you continue:
- Clean up your donor database. It’s imperative that your donor management system is accurate and reliable, otherwise, your wealth screening and prospect research data won’t be much use. Using one that can integrate with your other fundraising tools is a good idea, ensuring you have centralized data throughout your processes.
- Segment your donor communications. While engaging with high impact donors, make sure to send them specifically targeted content. For example, when communicating with matching gift eligible donors, send them specific matching gift fundraising letters.
- Invest in a robust prospect research tool. It’s possible to conduct prospect research on your donors without access to databases or other research tools, however, it makes it much harder and time-consuming. Invest in a capable prospect research tool with wealth screening capabilities for optimal success.
Wealth screening is useful, but can easily go to waste with lack of care. It’s always a good idea to keep in mind engagement best practices and improve communications, especially when engaging with major donors and other high impact prospects.
Understanding your donors is key to the growth of your nonprofit and meaningful action towards your mission. Using wealth screening and prospect research in general, you can successfully create realistic fundraising goals and have the tools and information needed to get there.
Sarah Tedesco – Guest Author
Sarah Tedesco is the Executive Vice President of DonorSearch, a prospect research and wealth screening company that focuses on proven philanthropy. Sarah is responsible for managing the production and customer support department concerning client contract fulfillment, increasing retention rate and customer satisfaction. She collaborates with other team members on a variety of issues including sales, marketing and product development ideas.