Is Wealth Screening Worth the Money?

Posted by on Jul 15, 2014 in Donor Cultivation, Featured, Membership, Plans and Budgets | Comments Off on Is Wealth Screening Worth the Money?

Is Wealth Screening Worth the Money?

“How much should I ask for?”

This common question assumes that somehow a number can be known for each particular donor, like one’s weight or cholesterol.

Here’s the truth: there is no magic number above which someone will say no. And there is no magic number below which they will say yes.

These numbers can’t be researched, discovered, tested for, learned, or otherwise “known.” What you ask for depends on how much you need, how well you know the donor, how much s/he trusts you, how they see themselves as donors, and how they see themselves supporting what you’re doing.

“OK, but what about one of those wealth screens? Can’t they help us figure out what people can afford?”

Unfortunately, for most of us, and especially most of us small nonprofits – the answer is NO. I know that’s sacrilege, like not liking peanut butter or something. And there are many fine people engaged in prospect research who would tell you otherwise. (Don’t ask a barber whether you need a haircut.)

But I still say NO.

Put it this way, BEFORE you pay for Wealth Screening, do your homework about how much you really need to raise. Will it make a difference to you whether one of your prospects can give $10,000,000 but not $50,000,000? Or whether the screen ranks one of your donors an 8 instead of a 7?

BEFORE you pay for Wealth Screening, have your board screen your membership list. (See my primer on Donor Screening here.) Use the results to prioritize the top 10 percent of your donors. Do you know them all? Does your board know them all? This method may not be as exhaustively accurate as an electronic screen, but it has the advantages of being far less expensive, and screening engages your board in fundraising.

BEFORE you pay for Wealth Screening, think in terms of orders of magnitude. Nearly everyone could afford $1,000 if they really wanted to, and probably half your list could afford $10,000 if they could spread the payments out over three to five years. (To some extent, you can take risks here. When was the last time you were truly surprised by how little someone had?) Using board screening alone, you should be able to separate those who could give $100,000 from those who probably could not.

So then we get to the $1,000,000 donors. Having a million dollar prospect, or more accurately having five of them, will be pretty important to a $5,000,000-10,000,000 capital campaign. So next time you set out to raise that kind of money, Wealth Screening might be relevant.

BEFORE you pay for Wealth Screening, ask yourself whether you are prepared to use the information. How? Are you prepared to “cold call” the donors identified by the screen? Build relationships with them? Discover their specific interests? Ask them for money? Do you have a plan?

I’m not saying that wealth screening is worthless. Absolutely not. Among the interesting things I‘ve learned from wealth screens are how many properties the prospect owns (and where), which boards (both corporate and non-profit) s/he sits on, and even that one donor’s favorite meal was pork chops.

But even with this kind of information, you have to ask yourself whether you are prepared to use it. (I wasn’t!) Is this just interesting to know? Or will it make a difference somehow in the ways you build relationships with donors? Is it relevant? Or just nosy?

The one piece of information that is clearly relevant is how much s/he might have given to other organizations. But even then, you will want to temper your response and enthusiasm. If one of your $50 donors recently gave $10,000 to the symphony, that might reflect the magnitude of their potential, but it doesn’t tell you squat about how they feel about you.

Finally, and maybe most importantly, BEFORE you pay for Wealth Screening, ask yourself this question:

Is this just a delay tactic? Am I really interested in Wealth Screening because I’m afraid to go out and meet donors?

-da

Photo credit: Family at Mills Lake, Walt Kaesler.