Wealth Screening for Nonprofits: How to Use it for Effective Fundraising
Identifying potential donors capable of making substantial contributions to your nonprofit is pivotal. This article delves into how wealth screening can help. By utilizing wealth screening tools land comprehensive donor management systems, nonprofits can access valuable data on donors’ charitable giving history and other financial indicators. This comprehensive analysis aids nonprofits in tailoring communication, designing targeted fundraising strategies, and identifying prospective major donors and sponsors.
According to the 80/20 rule, or the Pareto principle, 80% of a nonprofit’s revenue comes from the top 20% of donors. If that’s the case, major donor stewardship must become a priority for your nonprofit. We’ve compiled a detailed guide on how wealth screening can benefit your organization and included various aspects of fundraising, donor management, and event sponsorships.
After reading this article, you should better understand how to leverage wealth screening tools to optimize your fundraising strategies, prioritize efforts, and foster meaningfuldonor relationships.
Wealth Screening for Nonprofits Defined
The wealth screening process helps nonprofits assess and identify potential donors with thecapacity to give significant contributions. Wealth screening tools analyze publicly available information to evaluate individual and company funding capacity and philanthropic history.
Nonprofits can use wealth screening software to prioritize and focus prospect research and target individuals with the capacity to give more. Philanthropic giving history also helps to tailor communication with these donors and gauge their interest.
The following types of wealth screening data can give you a fuller understanding of potential major donors and sponsors.
Assets
Asset holdings on properties, investments, stocks, and bonds are excellent financial details. Many higher-income donors don’t solely rely on income and salary, so these financial details give you a better idea of a donor’s wealth.
Any fun assets like yachts, planes, expensive cars, or art collections may also give you ideas for donations or short-term loans for auctions and raffles. After all, access to vacation homes and planes can make for ideal live auction or raffle prizes!
Real estate
Real estate ownership may include residential and commercial property and land ownership. This data helps provide a better idea of the donor’s income and gives nonprofits valuable details on their location. If you have a donor with access to a piece of undeveloped land, it may also be an opportunity for your organization to build an additional location.
Charitable giving
Many donations from individuals and companies are public information. This data indicates a donor’s willingness and ability to give, as well as their giving preferences.
Corporate affiliations
Employer and ownership information can provide nonprofits with an excellent foundation to build relationships with donors and connect with potential sponsors. Accessing employer information on your donors can also help you educate them on their employer’s matching gift programs.
Spending patterns
Spending habits, lifestyle indicators, and purchasing behavior can reflect donors’ ability to make larger donations. These details can also give you an insight into the type of items to solicit for live and silent auctions or raffles.
Social influence
Donors with significant social influence have broader networks and resources. Nonprofits that develop strong relationships with these donors may gain access to new donors, sponsorships, and other partnerships through their social circle. These donors can also be excellent tools for advocacy and awareness campaigns.
A donor with significant social influence can raise awareness of your cause, speak at your events, and help you solicit new donors with online peer-to-peer and crowdfunding campaigns.
Why Does My Nonprofit Need Wealth Screening?
Wealth screening can provide several benefits for nonprofits, from donor targeting to resource allocation.
Identifying potential donors
Wealth screening helps withprospect research and allows nonprofits to analyze donors’ financial capacity and interest in similar charitable programs. It also assists in designing fundraising strategies and campaigns that meet these donors’ needs and helps personalize donor communications.
Maximizing fundraising efforts
Fundraising is primarily about building long-term relationships. Wealth screening gives you the tools to focus on building relationships with donors with higher giving potential. It also allows you to form targeted approaches and optimize your fundraising efforts.
Wealth screening helps nonprofits form moves management plans for major donors that all team members can follow. These plans can enhance and tailor your fundraising team’s stewardship efforts, help retain donors, and encourage ongoing support.
Top Wealth Screening Tools
Wealth screening software for nonprofits and the public can help organizations research current and potential donors. Nonprofits can also use these wealth screening tools to increase the effectiveness of theirdonor database.
Here are a few of the top tools we recommend when conducting your own wealth screening.
DonorSearch
DonorSearch is a leading online platform for donor prospect research and data. As a family-run company, they pride themselves on offering efficient and nimble technology. DonorSearch provides philanthropic, capacity, and affinity indicators to help nonprofits find the right donors.
Philanthropic indicators – previous donations to yours and other similar nonprofits
Capacity indicators – real estate ownership, SEC transactions, business affiliations, political giving
Affinity indicators – interest in your cause, nonprofit involvement, personal information
DonorSearch provides marketing lists of potential donors that users can search, filter, and segment.
NPOInfo
Double the Donation has jumped further into wealth screening withNPOInfo. Nonprofits, schools, healthcare facilities, and associations can receive access to employer, email, phone, date of birth, and address information to help fill in any gaps in their donor database.
By providing up-to-date information, NPOInfo can help nonprofits effectively communicate with lapsed donors, schools can connect with alums, and hospitals can ensure patient information stays secure.
GivingDNA
GivingDNA allows nonprofits to delve deeper into their current donor database to see who may have the potential to give more. The information provided by this tool can help nonprofits identify donors at risk of lapsing, understand their preferred communication channels, and uncover donors’ reasons for giving.
SEC.gov
TheU.S. Securities and Exchange Commission (SEC) gives the public comprehensive access to its Electronic Data Gathering, Analysis, and Retrieval system (EDGAR). With this tool, nonprofits can view public corporation reports as far back as 1994/1995 on the following information:
Company filings – Annual reports (Form 10-K) and quarterly reports (Form 10-Q), current reports (Form 8-K), proxy statements, and registration statements
Financial statements by publicly traded companies – Balance sheets, income statements, cash flow
Insider trading filings – Reports by directors, officers, and shareholders on their trades of company stocks
Securities registration statements – Registration of new securities
Mutual fund filings – Annual and semi-annual reports
Enforcement actions – Litigation and administrative actions and proceedings
Investor education materials – Resources to inform investors about securities laws, investment strategies, and risk
FEC.gov
The Federal Election Commission (FEC)provides various types of political fundraising data for authorized candidate committees, political party committees, Political Action Committees (PACs), corporations, and labor organizations. Nonprofits can use this information to better understand donors’ political affiliation, giving ability, demographic data, and relationships.
Donorbox Donor Management
It’s best to start with your own donor database when wealth screening. Nonprofits can use Donorbox’s Donor Management system to collect donor information, record notes, tag communication channels, store vital anniversaries, and filter reports based on date range, location, donation amounts, etc. A comprehensive database allows nonprofits to form solid donor relationships and personalize communications.
Watch this webinar recording to learn more about donor management and tracking growth:
How to Use Wealth Screening Data for Effective Fundraising
Using wealth screening data for effective fundraising requires a strategic approach.
Targeted appeals
Financial data, personal connection, and spending patterns can provide a well-rounded view of all donors’ interests and financial capacity. This information also helps nonprofits develop fundraising strategies for individual donors, including program interests and specific ask amounts. The last thing you want to do is ask for too much or too little! Segmenting donors based on these elements can help you send targeted appeals and increase your chance of receiving gifts.
Nonprofits often use wealth screening to find and solicit major orchallenge gifts. Tools like DonorSearch and GivingDNA help organizations find major donor prospects externally and within their own database.
Wealth screening also helps nonprofits prioritize when to solicit donations frommajor donors. Nonprofits can use specific program development, giving days, and events to build relationships with these donors and create targeted appeals.
Planned giving
Many of your donors are missing out on crucial financial information that can help them and your organization.Planned giving encompasses donations made during the donor’s lifetime or after. This type of giving requires strategic plans and arrangements that leave a lasting impact.
Different forms of planned giving include:
Bequests
Charitable trusts
Life insurance gifts
Retirement account beneficiaries
Real estate or property
Donors can support the causes they care about with planned giving and receive tax donations and income streams or other financial benefits during their lifetime. Nonprofits that receive these gifts benefit from a predictable income stream and the ability to plan for future projects.
Capital campaign support
Capital campaigns are focused fundraising efforts aimed at raising substantial amounts within a designated timeframe. They can mark the beginning or continuation of a deeper donor relationship. Wealth screening can help identify prospects and begin meaningful conversations with current and potential donors.
These big campaigns also make it possible for nonprofits to provide unique donor benefits, including access to exclusive events, leadership discussions, and behind-the-scenes experiences. Major donors appreciate this type of involvement and one-on-one cultivation.
Event and program sponsorships
Wealth screening information on public corporations can help nonprofits tailorsponsorship packages. By identifying internal programs that interest the sponsor and highlighting the benefits they would receive, you’ll have a greater chance of gaining their support.
Nonprofits can also use wealth screening results to segment potential sponsors based on giving capacity and alignment with an event’s focus. From here, you can determine which companies are potential title sponsors with prominent brand placement and exclusive speaking opportunities, and make sure to offer them the sponsorship level that will best fit their interest and ability to support.
Prioritize resources
Wealth screening can give insight into donors’ capacity to give and enable nonprofits’ prioritization and strategic decision-making. Focusing on donors who have the financial ability to give more and an interest in your organization’s mission will help save you time and effort.
Segmenting donors and developing effective fundraising strategies for each donor type can help nonprofits choose which donors to solicit immediately for an event or program and where to continue relationship-building activities.
Conclusion
Wealth screening can help nonprofits navigate the complex fundraising terrain by providing insights crucial for donor prospecting, resource optimization, and effective communication. Nonprofits delving into this realm can use wealth screening tools to foster relationships with major donors and enhance fundraising efforts.
Donorbox provides a comprehensive donor management system that nonprofits can use to collect donor information, record notes, tag effective communication channels, and filter reports based on date range, location, donation amounts, and more.Visit our website to learn why more than 80,000 organizations worldwide have chosen Donorbox to strengthen donor relationships and fulfill their missions.
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Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.
Kristine Ensor
