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 leaves 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

19 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:

    Greg,
    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.

  7. Diane Remin says:

    A provocative headline, Greg… with “might” providing some protection. My clients have raised millions and millions of dollars using wealth screenings—but they are taught data does need to be verified to be certain it applies to their Susan Smith. So no, you can’t just push a button and “voila”—there is everything you need to know about a donor. But especially when you see even some of a donor’s charitable giving, and you don’t always, screenings can be very helpful in learning which $50 and $100 donors have financial capacity and tend to be philanthropic—and what their giving “sweet spots” are. To whom should you reach out? How much should you ask for? And by the way, if you blindly use the ask amounts that some screening services provide—which are heavily asset-driven and assume a strong relationship and a 5-year capital campaign, you will get laughed out of the room. Wealth screenings are tools. Human intervention, validation, and calibration is required.

    • Greg Warner says:

      Well said Diane.
      And yes, I used “might” because there are no absolutes. I just think folks should think twice before doing wealth screening just because that’s what they think they should do. A solid strategy for using the data is essential.

  8. Agree with Nicole – seems a step too far to say that wealth screening your donors might be foolish. Wearing a seatbelt might be foolish if you don’t know why it’s there, how to use it, and that it statistically speaking offers more help than hindrance. Then there’s the issue of a seatbelt actually resulting in taking a life because is prevented a quick escape from the vehicle, such as those submerged under water. Misapplication of certain drugs and medical interventions might be foolish if it isn’t understood why and how they’re used for a particular ailment. I think a better headline would have been “failing to apply practical and constructive use of your wealth screening data might be foolish” if you really want to retain that word, foolish. Just because I possess the data doesn’t make it any more foolish than having a planned giving website is foolish …unless I’m finding ways to drive people to the website in search of information, using it as a tool to self-inform and educate, it’s just a useless tool. If PG shops are waiting for their constituents to blindly find their way to their online website information, that is certainly a foolish use of precious resources. Like anything, knowing how to use and apply the tools in our toolbox are critical to making progress. So, yeah, if you’re a woodworking shop and you don’t know how to use a jointer planer, drill press, and a bandsaw, much less know that they’re extremely capable tools in a skilled craftsman’s hands, then you’d better find a new profession.

    • Greg Warner says:

      Excellent points David. I agree. You and I are actually aligned.

      My dad always told me, “A hammer is just a tool but some people build with them while others just break stuff.”

  9. 7 Additional Thoughts on your Post:
    1) Wealth screenings are not to blame – it’s the people who use them incorrectly that are at issue.
    2) Wealth screenings are to identify assets listed in public records – period – nothing more.
    3) “Prospect screenings”, on the other hand, lend themselves to other-than-asset-data and thus to better understanding a household’s business and personal interests, network connections, and circles of influence. Prospect screenings assist in exploring avenues of philanthropic interest with prospects, as well as pledge fulfillment options. Prospect screenings aid in relationship-building. Can we please use the correct term(s) when we speak of such processes?
    4) Wealth screenings do not raise money.
    5) Organizations invest in so-called wealth screenings (really they are prospect screenings) but do not invest in learning to interpret or apply results.
    6) Wealth screenings are best applied as a part of a larger use – it is but ONE component to identify potential capacity (note I did not say “capacity” I said “potential capacity).
    7) Wealth screenings are best used as one-of-many paths to identify major/principal/planned gift prospects. Data is plentiful through other more predictive donor identification methods which usually identify more prospects for activity through easier-to-interpret paths. Wealth screenings should be used sparingly and on few individuals. They should not be the first method of application (nor the last, nor the only).

  10. Todd says:

    Wealth screening is a tool to help focus staff time and effort by identifying a place to start prospecting when a database can have tens of thousands of records. It is just one additional data point in all the quantitative information we have about our donors. Qualifying the information through discovery and cultivation – actually getting to KNOW your donors – is the exact job of a gift officer and what they have been hired to do.

    Too many people and organizations overlook this important part of the process and just end up frustrated with the results (or lack thereof) when they assume those with the most “capacity” in their database are automatically their best prospects.

  11. Greg, your headlines are always provocative. Intentionally so, and I like that approach as it generates the excellent responses already received on this topic.

    The role of researchers in this process should not be dismissed. Ideally, the process of interpreting wealth screening data should rest with a researcher and not gift officers. The more gift officers interpret, the less they cultivate relationships.

    I fully support the comments made by my colleague and friend, Katherine Swank. Too frequently prospect screenings are still labeled “wealth screenings” when a far more sophisticated approach is utilized. IMHO, which is supported by demonstrable data, donor and prospect modeling encompasses affinity and estimated capacity and traditionally provides data on 95% or more of the database (far more than wealth screening provides). The next step is using wealth screening on the identified best prospects, but it is best if a researcher(s) is available to direct that process. Organizations with multiple gift officers and no researcher would be best served by using the next available gift officer position to hire a researcher. (see above)

    Please stay safe everyone!

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