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Wealth Screening and How it Can Help
46 Plays8 months ago
in this episode Tom shares his thoughts on the ways wealth screenings can be helpful to your fundraising efforts.
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Transcript
Introduction to Fundraising Podcast
00:00:05
Speaker
Welcome to the Abundant Vision Fundraising Podcast. Whether you are a seasoned professional or a first-time fundraiser, we have the advice you need to take your next step toward major gift mastery. I'm your host, Tom Dauber, president of Abundant Vision Philanthropic Consulting. It is early morning here on Eastern Standard Time.
Early Thoughts on Fundraising Data
00:00:32
Speaker
Woke up in the morning just thinking a little bit about fundraising, thinking about data, thinking about how we understand what's what in our CRMs.
Understanding Wealth Screening
00:00:44
Speaker
and um Decided that I wanted to do a series on wealth screening. Now, if you haven't listened to it, I do have a great series, an interview series with my colleague Regina Ahasen, who is a fundraising consultant who specializes in research. Now, great stuff, really good stuff to think about there, but I wanted to just address it directly. So what is wealth screening? Today, we're going to talk about how it helps. Next few weeks, we'll talk about how it doesn't
00:01:20
Speaker
and things that you can do yourself, even if you can't afford a fundraising wealth screening package. But just for the basics here, if you're not familiar with how wealth screening works in the nonprofit world, wealth screening can mostly see public data. So we're talking real estate values or other such things. Like if somebody is on the board of directors for a publicly held company,
00:01:50
Speaker
the certain disclosures that need to be made. But for the most part, real estate is going to play a big role in that. So if your house is worth a million dollars, which anybody can look up on Zillow, frankly, that's going to be reflected in your major gift capacity score that's predicted by iWave or any number of other software packages out there.
Benefits of Wealth Screening
00:02:18
Speaker
What are the ways that this can help you? Because I know some organizations that are just fundamentally opposed to wealth screening, maybe they think it feels icky. Heck, and my understanding is that in some countries it's not even legal to do that sort of thing, but in the United States it is. And so the question is, is How does it help you? Well, first off, wealth screening can tip you off as to when someone you don't know well with great potential just made a gift. I'll give you an example of this. There was a time in the not so distant past when a gift came in at an organization I was with. um Wasn't a big gift, 100 bucks, something like that.
00:03:07
Speaker
But the wealth screening that we did showed that the person had like, you know, seven figure capacity. This was someone with great potential. Well, what do you do then? Do you ignore the person? Do you treat them like just any other donor because it's just a small gift? Well, no, you don't. This is when you go out of your way to make a great first impression.
00:03:31
Speaker
Like in this particular case, this was this person's first gift they'd never given before. They'd had affiliation with the organization for other reasons, maybe as a volunteer, I suppose. And they decided to give to us. And so we immediately jumped into action, made sure there was a thank you sent directly to them, very personalized, you know, some outreach from a development officer.
00:03:57
Speaker
We want that person to know we appreciate them. Now we want all our donors, you know, at every organization to know that they're appreciated. That's so important, right? But when you see someone with what appears to be even greater potential, you want to go out of your way to make sure ah that you're doing all the things that you need to do to communicate the impact of the gift and your organization's appreciation.
00:04:24
Speaker
Another way that wealth screenings can be helpful is to provide guidance on who is in your prospect portfolio. Now this is key. Um, a lot of development officers in major gift programs,
00:04:44
Speaker
you know, big development shops, they're going to have a group of people assigned to them. And that will be what we call in the profession, the prospect portfolio. Well, who should be in that prospect portfolio is a subject of one of my previous podcasts. So you can listen to that if you want more information there. But the best way to make sure that you've got the right set of people in your prospect portfolio is to do some wealth screening. So again, a lot of these wealth screening programs, they'll not only help you understand, does this person really have the capacity to be a major gift prospect in your system, but they'll also evaluate their affinity. Now that can be a little trickier. Affinity is going to vary from place to place, the ways that you'd look at it from a giving history standpoint, which is something that
00:05:41
Speaker
they'd be able to see if you're sharing that information from your system, you'd look for things like how many years have they given? Are they regular donors? I mean, that obviously tells you something about affinity.
00:05:55
Speaker
But, but you're also looking at things. And again, I think I covered this in that other podcast pretty clearly, you know, how engaged are they even outside of giving? You know, you want to know, do they love your organization? You don't want to have people in your prospect portfolio that don't have the wealth capacity to be a major gift prospect.
00:06:18
Speaker
and well screening is really be helpful to make sure that you're on target with those
Wealth Screening for Staffing and Planning
00:06:22
Speaker
people. Number three, well screening can give you guidance on what your staffing levels should look like. Now, think about this.
00:06:33
Speaker
If the average development officer can really only manage effectively 60 to 80 relationships, which I would say is the case, you start getting to 100 or higher, you're not really managing those relationships. It almost forces you to be transactional in your approach, right? Because you're just running from person to person asking for money.
00:06:54
Speaker
And that's not what we want. That doesn't honor the donor. we We want to build relationships with people. We want to get to know them. We want to understand why they're giving. We want to be engaged with them. And you can't do that with 100, 150, 200 people. So if you're looking at your donor information. Like if you evaluate everyone in your database and and you see that you've got 800 people that all have legit. Tom Dobber here for Abundant Vision Philanthropic Consulting. Fundraising can be hard work and it can be hard to mentally get into the place you need to be in order to see new opportunities. Everyone struggles with it. We are like the fish in the fishbowl who just can't see the water they're swimming in. That's when having outside expertise comes in handy.
00:07:52
Speaker
For 25 years, I've been helping nonprofits analyze the challenges, discover new ways forward, and develop clear plans that lead to greater fundraising Major gift wealth capacity.
00:08:22
Speaker
Well, one development officer is never going to be able to get to all those people. You know, it takes a lot of time, not just to qualify people, but also to manage those relationships. And so if you have 800 people that need to be qualified and let's say 50% of those folks are actually going to end up in prospect management. Again, one development officer can't do that.
00:08:49
Speaker
And so that allows you to go to your board as the chief development officer and make the case for additional staffing, because really what you're doing, if you're not going to have enough development officers to manage those 400 people, you're leaving money on the table. <unk>re You're walking past an opportunity where you could make money for 25 cents on the dollar.
00:09:15
Speaker
you don't wanna do that. Most business people are gonna get that. So having some hard and fast data about it though, that's the sort of thing that a board needs to make that type of budgetary decision or an executive director. Maybe it's not your board, maybe it's your executive director making that decision. And the other thing too,
00:09:36
Speaker
is that having that data allows you to make projections about what could be. What I what i mean is this is, again, we've got this fictional 400 people. you know if If I know that those 400 people, let's say their average rating for a gift is $25,000, right? Well, so right there, that's 10 million worth of giving potential. Let's be realistic though, because we're not going to get 10 million out of all of them. So let's divide that by two. Well, then we got 5 million, right? So then you get your executive director about
00:10:16
Speaker
What would it look like if we had an additional $5 million into this organization? We've got reason to believe we've got the type of people that could support that, but if we if we want that $5 million, we need ah funding to do that.
00:10:32
Speaker
you're going to want to have some understanding of what it costs to raise a dollar at your organization. But a good benchmark across the industry, my understanding is it's around 20, 25 cents. So let's say, let's say it's 25 cents, right? If you had that many people sitting out there, 400 people with the potential to raise five million. The first thing I would be looking to do is to be adding major gift staff.
00:10:59
Speaker
So we could begin qualifying, cultivating, and soliciting those people. And keep in mind, you're not going to get that five million all in one year. That's that's going to come in over time, probably over a five-year period. So realistically, ah you're looking at a million per year if these are all five-year pledges. And that's an important thing to keep in mind when wealth screening is communicating to you like this person has a million dollar or a hundred thousand dollar wealth capacity. Generally speaking, that's a five year number. So the million, so the five million, it's a million dollars a year. So that's a quarter million a year. That starts to look a little bit more realistic for an organization talking about bringing on
00:11:43
Speaker
to development officers. So if you're thinking each one of them, maybe you're paying them 100,000 piece plus benefits, then you're at around 130 per. So that's that's 260. So, yeah, well, screening helps you understand your organization's true fundraising potential.
Strategic Uses of Wealth Screening
00:12:01
Speaker
Another thing that is useful with wealth screening is it can give you some sense what size of gift range to be testing with a potential donor. There's many people out there that you would never want to ask for a seven figure gift. It just wouldn't be appropriate. they're not They don't have the type of capacity, right? And while it's fine to test any number you want, if you can begin to narrow down on what their true range is, I mean,
00:12:37
Speaker
even before you have that conversation, that can be helpful to the conversation. Now, again, we're going to talk more about how it is that well screening doesn't always get you the results you're looking for. It's not the gospel. It's not the one true thing that you can always rely on because there's always information that well screening can't get to.
00:13:05
Speaker
but to the extent that it is reflecting something about reality, it can be helpful in guiding your conversation. You wouldn't want to go to someone who has five figure capacity and let's test eight figures with them, right? That's, that's generally just not going to be very helpful. So you won't be wasting time. Another thing,
00:13:29
Speaker
that that I've found wealth screening to be helpful for. Also is segmenting for mailings, event invites, ah those sorts of things. you know If I'm throwing a gala, not that I recommend galas, but if I'm throwing an event where I want to be very selective with who I invite. I want to get the most bang for my buck and invite the people that have the greatest potential to move the needle in fundraising for me. You know, I can use those wealth ratings to begin to segment event invites in all those sorts of things. Whereas otherwise, I may just be starting from scratch with just my personal knowledge of those individuals who are giving history.
00:14:18
Speaker
second can This can also be helpful as we're thinking about portfolio assignments. Many of you may have prospect portfolios that are just too large.
00:14:30
Speaker
And you're trying to figure out, well, how do I divvy this up? How do I call the herd here? How do I get my numbers lower ah so that I have a more reasonable number of people to manage? Well, one good way to do that is to get in there and start taking a hard look the at the wealth screening information. And it might be the means that you take a certain percentage of those people and give them to someone else, maybe who's working at a different level than you.
00:14:57
Speaker
Anyway, there's lots of different to consider wealth screening for your organization.
Conclusion and Upcoming Content
00:15:03
Speaker
And we'll be talking more about not just wealth screening ah in terms of the professional aspect, but in the next three episodes. So next episode is going to be how wealth screening can't help you. The episode after that, we're going to be talking about what questions you can ask when you're actually having a qualification meeting with a donor that's been identified through wealth screening, then in my fourth episode from here, we're gonna answer the question, what should I do if I can't afford wealth screening, but I still wanna try and do some sort of data analysis of my donor base? So we're gonna look at those three things over the next three weeks. We'll go along with this episode.
00:15:53
Speaker
Well, that's all the time we have today, but I hope you'll join me next week to learn about the ways wealth be sure to subscribe and give the Abundant Vision fundraising podcast a five-star rating on your podcast provider. Thanks for joining me, Tom Dauber, on the long, long journey to major gift mastery on the Abundant Vision fundraising podcast.