Many nonprofits depend on wealth ratings to supply new leads and prospects for their major gifts fundraising program. Gift officers scour wealth report data from whatever sources have convinced their organization they have the best and most accurate data. Then, they use the results to add potential donors to caseloads and begin making outreach.
But there’s a problem with all this. And just about any gift officer already knows what it is.
Most wealth ratings data is directional, but not actionable.
In fact, a study from a few years ago called Advancement Leaders Speak conducted an anonymous survey of major and planned giving officers, and asked them about their experiences with wealth ratings and major giving.
Here’s what gift officers had to say about wealth ratings – and this includes wealth screening, propensity ratings, RFM, and various other types of wealth ratings. They’re all more or less the same in terms of quality and reliability, because they’re pulling from the same sets of available data.
Statistics on the Quality of Wealth Ratings Data
Here are a few of the most striking findings from the study.
- 86% of gift officers use wealth ratings. 27% said they worked.
Specifically, 27% of study participants said wealth ratings were either quite effective or very effective “for focusing on the right prospects.”
This is shocking. Nearly everyone is using wealth ratings data. But hardly any of the very same people say it’s helping them find good leads for major giving.
This begs the obvious question:
Why do they keep using wealth ratings data if it doesn’t work? The answer is likely because they don’t know of any better alternatives, and figure this is the best they can do, flawed though it is.
- Only 19% said wealth ratings helped know how much to ask
The specific language from the study says that 19% of gift officers found wealth ratings data quite effective or very effective “in helping to determine ask amounts.”
This is even worse than the stats on finding leads. Less than one in five gift officers say wealth ratings data helps them know how much money to ask for – assuming they land a meeting at all.
How can this be?
It’s because wealth ratings data is often inaccurate, and the amounts it suggests gift officers can ask for tend to be way off from what is possible for that donor. Sometimes, they could have asked for much more. Other times, far less. The reason is simple – wealth ratings data is often outdated, and it doesn’t accurately reflect the donor’s current financial situation.
There must be a better way to discover a supporter’s current financial status.
- Only 30% said propensity ratings were useful
The study found that 30% of gift officers said propensity ratings were quite or very effective “in predicting the likelihood for a prospective donor to make a major or planned gift.”
Yet again, less than one third of donors the data suggested were able to make a major gift were actually able and willing to do so. This means gift officers are striking out two out of three times. This is the norm.
- Just 37% said newly assigned prospects were actually qualified
Qualification is a key step in major gifts fundraising. But if you’re relying on wealth ratings data, the study found that the vast majority of prospects added to caseloads were not qualified – even though the data said they should be.
Clearly – wealth ratings data isn’t helping as much as everyone would like.
And what’s the fallout from relying on such unreliable and inaccurate data? The study summarized it this way:
Gift officers reported “significant frustration with the time spent setting up and completing qualification visits that did not ultimately lead to gifts” because nearly two-thirds of identified prospects were not pre-qualified for outreach.
In other words, they’re wasting tons of time on leads that were never going to give major gifts.
How Poor Quality Data Is Hurting Fundraising
By relying on bad data, here’s what’s happening for gift officers.
Struggling to land meetings
When over half your prospects either can’t give or don’t want to give, you end up sitting there with a lot of silent phones and empty inboxes. People don’t answer, don’t call back, and don’t reply. They’re ignoring the gift officer.
This means the gift officer is expending inordinate amounts of resources and time pursuing leads that were never going to give. They can’t even get in the room to make the pitch, let alone nurture and develop the relationship.
Wasting time with unqualified donors
The time lost chasing unqualified donors will never come back, and it will not pay off later. It’s gone forever. It’s like an expense for the major giving program, and it’s costing you piles of money. Why?
Because the most efficient major giving programs maximize the use of the gift officer’s time and the organization’s resources. If over half the time is lost chasing bad leads and unqualified donors, that’s not just costing the organization money – it’s wasting the money that other donors have given.
Getting used to failure
Cynicism and burnout are real. The turnover problem among gift officers is an epidemic, and the poor data is one reason why. When nearly every day is filled up with rejections, hangups, non-replies, and failed commitments, gift officers start to lose motivation.
They expect to fail.
The psychological effects of constant failure will inevitably lead to decreased performance. They’ll expect prospects to not call back or respond. They’ll expect to find out this donor doesn’t actually have nearly as much money as the wealth report said they do.
So, when donors are actually qualified, the gift officer’s mental sharpness won’t be quite as strong. When failure is the norm, success becomes even harder to attain.
Feeling like goals are impossible to meet
Fundraising goals – whether monthly, annual, or project-based – feel a lot harder to meet when you keep failing to find good donors. This can turn into a self-fulfilling cycle of failure where they don’t meet the goal, lose hope in meeting the next one, struggle to stay motivated, and then do in fact fail to meet the next goal.
As this cycle continues, disengagement and leaving the job are sure to follow.
Bad data cripples major gifts fundraising.
A Better Alternative to Wealth Ratings Data
So far, this has been pretty doom and gloom, and we apologize for that. But it’s the natural outcome of relying on poor quality data, and we wanted to make it clear how severe the problem is.
The good news is, there is a better way.
The even better news is, this better way isn’t just better at finding and qualifying more major giving prospects. It’s also less costly and takes less work than what you’re doing now. It’s win-win-win.
Here’s a better way to find and qualify new major donors.
Get prospects to self-qualify
When potential major donors voluntarily prequalify themselves as having the wealth capacity, interest, and optimal timing to make a big gift, that makes it much easier to reach out to them with confidence.
By building trust by communicating with prospects on their terms and timing, and by delivering value to them without asking for money, eventually your donors will pre-qualify themselves.
Customize your communication
You can use this self-qualification to drive pre-qualification without any work or time from a gift officer. You can do all this with automated surveys and customized email communication follow-up.
With surveys they choose to participate in, prospects will share information they are comfortable sharing, and will also respond to your offers and communication at a level they’re comfortable with. By interacting with each donor in a personalized manner, automated software can manage all this without you having to do anything.
Record response data
At MarketSmart, we call this data ‘digital body language.’
Prospects who click, reply, fill out surveys, and share information are engaging with your content in ways that can be recorded. The most actively engaged prospects are the ones to watch, and effective software will watch them as it continues to communicate with them – all while your gift officers are busy talking with actual prospects and donors who have already been pre-qualified.
So they’re not wasting time on bad leads and dead-end prospects. But potential prospects are being engaged through automated personalized communication so they feel heard, valued, and understood.
Make your software tell you when a prospect is ready for outreach
When a prospect’s engagement levels reach a certain point, the software can pre-qualify them as being ready for outreach.
It is only at this point that a gift officer needs to make contact and attempt to start an actual human relationship and begin to build trust and work toward a first meeting. The best indicator for when this has happened is when the prospect gives specific permission for someone to reach out to them.
The ongoing communication and surveys MarketSmart’s system sends out will ask prospects this question. Whenever a prospect gives that permission, your gift officers can then contact them, knowing this person said they want to hear from you.
Can you imagine how many fewer hangups and how much less ghosting this approach produces?
You will no longer be frustrated with a 66% failure rate, which is what relying on wealth ratings produces. Your gift officers will not be suffering burnout, because the majority of their calls will be answered – by people who were hoping they would call.
The results are nothing less than transformative. Everyone wins when you conduct major gifts fundraising with this approach. It will transform your entire methodology, and you will raise far more revenue, and with less work and lower cost.
Working with MarketSmart is, in many ways, like hiring a part-time gift officer who does the work of dozens of actual gift officers. And it’s doing the work none of them like to do – engage with prospects you know little about.
Want to see more?
Watch this video showing how MarketSmart works
Related Resources:
- 6 Reasons Why Donor Surveys Work at Engaging Wealthy Supporters and Prospects
- The Secret to Raising More Money: Focus on Impact, Not Just Strategies
- Building Major Gifts Caseloads – Why Traditional Methods Fail to Accurately Qualify Donors
- Why Nonprofit Fundraising Gift Officers Quit Their Jobs