Five Proven Strategies for Successful Wealth Screenings
Get the greatest ROI from your screenings by following these simple steps.
October 24, 2019
Whether you are embarking on a major capital campaign or simply want to understand the real capacity of your constituents, chances are your team has considered purchasing a wealth screening of your database. While wealth screenings can be a great tool for highlighting major gift prospects and creating donation goals, these often unwieldy piles of data can be a major headache at best—and a major waste of money at worst—if you aren’t prepared to put the results to use.
Wealth screenings analyze your prospect pool and assign individuals a major gift rating based upon a number of factors, including real estate, political gifts, and SEC holdings. They can certainly help you close the biggest gifts possible, but only if the research you receive is accurate and implemented. Given the fallibility of most major screening companies, and the fact that many development teams are not trained to work the data, these can be some big ifs.
With over twenty years of working with every screening company on the market and developing our own wealth screening system, CPR has been able to minimize the risk of this service so you can make the most of your precious budget and time. To get the greatest ROI from a screening you plan to run (or one that may be currently gathering dust on your desk), implement these five surefire strategies for success:
Before sending off your files to any wealth screening provider, it’s essential that you consider up front how many records your team can reasonably review and analyze once the screening is complete. If you have 100,000 donors in your database, that may mean only screening a segment of the most active donors, or the biggest givers, or champions in a certain market. Making a decision about who to screen means being clear about your projected outcomes. What constituency do you actually need to know more about? Clear goals will help you refine your data, and in return you will receive results that are actually workable.
Once you know what subsection of your database you want to send in for screening, take the time to assure your data is accurate. A mis-spelled name or out-of-date address can throw off results. If you are not certain of the accuracy of your database, we suggest cleaning up your records before sending them off to be screened. CPR specializes in “scrubbing” records and making sure you have the most accurate contact and business information available for your constituents.
Recently, two leading non-profits approached CPR with concerns after using a Wealth Engine screening in preparation for a campaign:
- One client found that Wealth Engine had overstated its campaign potential by $100 million. That’s right: $100 million.
- A second client found that Wealth Engine had overstated its campaign potential by $20 million. Ouch.
When organizations receive what amounts to bad data from a screening vendor, then the entire foundation of their capital campaign is put at risk. Factors that lead to this kind of worst-case scenario include common names in your database. Even when you provide addresses up front, an automated screening service can’t always decipher between Daniel Smith in San Diego and Daniel Smith in Boston, and will tend to conflate their political giving and SEC holdings. Wealth Engine may tell you that your Dan Smith can make a million dollar gift when he’s actually a retired teacher on a fixed income. Further, automated screenings don’t reveal family wealth. So, you may have a young prospect who lives in a small home and doesn’t own stock, BUT her parents happen to be billionaires. You risk casting aside someone with six-figure giving capacity because the screening lacked nuance and assigned her a low rating. It requires an extra human touch to truly analyze screening results and make sure that prospects aren’t rated too high or too low. For that leading non-profit with the $100 million gap, CPR re-ran their screening, validated the research, and helped them realistically get their campaign back on track.
One of the biggest gaps in screening services is real estate. Those that are strictly automated miss large swaths of residential real estate (one of the primary indicators of wealth) and even when they do assess real estate correctly they don’t factor in mortgages. You wind up receiving a “gross” valuation of real estate and not a “net” valuation, which can artificially inflate, deflate, or entirely mist-state a wealth rating. As a result, you are left with an incomplete picture of your prospects’ ability to give. According to DonorSearch, “an individual that owns $2+ million worth of real estate is 17 times more likely to give philanthropically than the average person.” So, understanding real estate can be a powerful tool in figuring out your ask. Yet, one well-known vendor recently ran a screening for a CPR client that included 2,000 New York City records—and missed $4 billion of real estate in the file.
Without a clear picture of real estate, your team could be missing out on millions of dollars of gift potential. If your nonprofit has constituents in the NYC area, it is imperative to know that 80% of real estate in the city is owned in cooperative shares, and unpacking these assets is labor intensive. CPR offers the only screening tool on the market that includes a full analysis of NYC real estate. That can make a difference in any campaign, given that more than 35% of the U.S. wealth is located here, in CPR’s home market.
While a wealth screening can provide you with a baseline understanding of a donor’s capacity and can help you build your gift pyramid for an upcoming campaign, it won’t do much to prove how passionate a donor is about your cause. It’s a great first step, but if you work for an environmental organization that wants to know whether a prospect likes to hike or a children’s health nonprofit interested in a prospect’s family background, you’ll need to do a deeper dive. With next level research you will be able find those sample gifts that prove inclination or family history tidbits that help you forge deeper connections with your prospects. CPR suggests scaling prospect research so you get just the right level of data, when you need it. The closer you are to closing a major gift, the more detailed data you’ll need.
Before investing in a wealth screening, make sure that you have a trusted prospect research firm on hand to clean up and confirm data, and a dedicated team member to code and upload all relevant information to your database. The wealth ratings that screenings provide are only valuable if they are used to analyze gift potential and upgrade donors. Screenings—especially big screenings—can be overwhelming if team members aren’t given the necessary time to understand the findings.
Here’s the bottom line: if you don’t have time to review your results, then no screening is worth the investment. That said, it is also possible to spend too much time with a screening. No amount of interesting data should be used as a way to put off actually calling donors. CPR can help you strategize how to turn numbers on a page into actionable data for your donor meetings.