7 reasons why wealth screening your donor list might be an incredibly foolish activity.

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Greg Warner is CEO and Founder of MarketSmart, a revolutionary marketing software and services firm that helps nonprofits raise more for less. In 2012 Greg coined the phrase “Engagement Fundraising” to encapsulate his breakthrough fundraising formula for achieving extraordinary results. Using their own innovative strategies and technologies, MarketSmart helps fundraisers around the world zero in on the donors most ready to support their organizations and institutions with major and legacy gifts.

Before you send me angry responses to this headline, know these two things first:

  • What I’ve written is NOT coming just from me. I gathered this list after hearing what 5 different leaders in the sector told me. (Note: None of them wanted to be listed in this article. Maybe the headline had something to do with that.)
  • Also, I DO believe that wealth information is valuable. Of course it is! If you’ve been reading this blog for any amount of time, you know that my mission is to help nonprofits raise more money more efficiently. Wealth information helps them do that.

Having said that, here are 7 reasons why wealth screening might be a foolish activity:
1.  The data you get back is overwhelming. It buries and paralyzes fundraisers. It’s too much. Most of it goes unused. Wouldn’t it be great if you only paid for the data you used?
2. The information is confusing. You might end up with 17 “David Millers.” Which one is your donor? Do they really care about your mission?
3. The information doesn’t tell you why they care and what you should say to them when you call. Pretty much all you learn from wealth screening is that they have capacity. You won’t understand what’s in their heart, who inspired them to care about your cause, how they like to give (appreciated assets, real estate, cash?), if they have children, do they have a donor-advised fund or a family foundation, and so much more.
4. You might learn that they’re giving to your competition. So what!?! So that shows that they might care about a similar cause. Ok. But then you better hope that they are not being stewarded properly. If so, your value proposition better be much more worthy of support. Plus, just like stocks, past performance is not an indicator of future success.
5. The investment is costly. You don’t only pay for the screening. You also pay for the time you spend analyzing it, understanding it and sorting it (or for the consultant’s time you hire to help you do that). Time IS money.
6. Turnover makes it even worse. If a fundraiser gets hired and gets wealth screening done but leave after just a year, who’s working the list? Then 6 months later you hire someone new and what do they want? More wealth screening!
7. Most of the donors won’t be ‘ready’ for your outreach. Just because someone shows up on a wealth screening doesn’t mean they want you to call them. You still have to bridge the chasm between distrust and trust. Identifying a donor prospect can be helpful to direct you toward the right people, but getting them ‘ready’ to welcome and accept your outreach is a whole other story.

Related Posts:

>>What to do with wealth screened data that’s “sitting on the shelf” unused
>>7 steps to qualify your donors

9 responses to “7 reasons why wealth screening your donor list might be an incredibly foolish activity.”

  1. And you are not mentally ready to change your fundraising approach or create a sustainable major gift campaign.

  2. Mike CowarT says:

    I totally agree. One more comment-Finding wealth frequently leads to finding major debt. Secondly, wealth does not create desire to be philanthropic. I worked with several multi-millionaires this past year regarding planned giving. 70% came into our process with no philanthropic intent. I have a dear friend who has a net worth of +$70 million and does not give a dime to charity!

  3. Gloria says:

    Wow! Someone agrees with me! This was a great post. I’ve worked at several organizations, and wealth screening is what they beat MGOs with, and supervisors so often don’t understand why gifts don’t automatically flow in. Your post really resonated with my experience. Thank you, Greg!

  4. Nicole Malina says:

    I think these are good points, but my personal experience belies the message as I’ve had excellent results using wealth data.
    Plus, I feel like a lot of what you said is so general as to be applicable to many other faulty approaches to fundraising. Turnover makes any data management difficult, no donor is “ready” for an ask until you connect with them/build a relationship, and many different types of information management are costly. Wealth screening is just a tool to chisel down a large chunk of data–and if that’s the data you know you’re going to be working with anyway (ie your member base), it’s just one way to work more efficiently.

  5. Karen says:

    I agree with all of the statements made above but I agree with Nicole and have seen successes using screenings. Wealth screening is just one tool in the tool kit. It should not be used in singularity to determine your prospects but it sure can help. Yes the data is intense and you might get several people with the same name, but most data requires analyzing; yes you learn capacity but you also learn who and what else they are giving to. Certainly knowing their interests can help with getting the conversation started. Turnover is hard no matter what. Maybe it would be better to screen portions of the database at a time rather than all at once. This would help with the overwhelming information coming back and would also make it more manageable. Again just one tool in the toolkit

  6. Deborah Drucker says:

    I found #6 interesting, because if “fundraiser” refers to a gift officer, well, that’s the wrong person to be making decisions about wealth screening in the first place. Prospect Research should be driving the decisions regarding wealth screening and predictive modeling. #2’s reference to “17 David Millers” or “confusing” information is the kind of comment you would get from a fundraiser who should not be the person involved with the wealth screening. Researchers know how to figure out which David Miller is which and how to read information that is “confusing.” The most important use of wealth screening is to segment a database so you can build portfolios with the most potential. Screenings do not raise money. They return data which, when analyzed and combined with internal information, can lead to new prospects and useful information on existing donors. A wealth screening is useless if there isn’t anybody who knows how to validate and analyze the data. And it is also useless if fundraisers don’t try to engage the new prospects who turn up. You need to look at your organization and your constituent base to decide on your prospecting strategy, and whether wealth screening, predictive modeling, or a simple query by zip code is what you need to raise the most money from your constituency.

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