Wealth and Philanthropic Screening: Using Donor Wealth Screening to Build a Successful Nonprofit

Having powerful benefactors behind you is key to building a successful nonprofit organizations. Nonprofit programs and projects need adequate funding to make an impact in their community, and being able to secure this funding from wealthy philanthropists is something all charities and NPOs need to do.

But how do you know which supporters and donors to focus your outreach efforts on? Some donors may be generous but may not have the spending power to offer major charitable contributions. Other donors may have a lot of money but may be more interested in supporting causes outside of your nonprofit's mission.

Smart NPOs know that furthering their charitable causes means identifying high-net-worth donors who not only have the money for large contributions but are also passionate about supporting causes related to that nonprofit's mission. Once you pinpoint these philanthropists, it's much easier to know which people you need to build strong relationships with.

Wealth screening provide a way to identify these potential donors. By processing and analyzing publicly available information, you can determine the best prospective philanthropists for your specific nonprofit.   

That said, properly leveraging wealth screening tools takes some finesse. Your nonprofit needs to consider privacy and other ethical concerns during donor profiling. And when you do find potential supporters, it's important to approach each contributor professionally to cultivate long-lasting relationships. This article will delve into how to properly use screening tools to benefit both your nonprofit and your donors.

The Importance of Wealth Screening Tools for Online Businesses

Wealth screening platforms help target high-value donors by analyzing public information that reveals their net worth, philanthropic tendencies, and preferred charitable causes. These details might include things like property records, SEC filings, and news articles. In addition, corporate databases and nonprofit customer relationship management (CRM) databases may hold valuable details about these donors' past philanthropic activities.

Once you obtain this data, computer algorithms help process and analyze the details by assigning scores on affluence indicators and philanthropic activities. You can then target donors who score high not only in net worth but also in donating to charitable causes similar to yours. 

Of course, all this relies on using digital products like AI-powered donor management software to make sense of the large amounts of data you need to sift through. Thus, it makes sense to invest in online fundraising platforms that can provide the extra edge in identifying high-value donors.

Beyond basic assessment, digital tools also help NPOs reach out to their target audiences more efficiently. For instance, donor management software can help personalize messaging for prospective donors, using details about their preferences and passion projects to create more persuasive contribution requests. Digital platforms also make building websites and social media posts easier, allowing you to reach out to a vast online audience without having to strain your existing resources.   

In the following sections, we'll take a closer look at how to take advantage of screening tools and fundraising software when developing a better strategy for identifying your most valuable donors.  

Key Strategies for Effective Philanthropic and Wealth Screening

Despite the advances made in philanthropic and wealth assessment, it's still possible to make mistakes with this technology and incorrectly profile your prospective donors. This can be a costly error as you'll not only waste money on expensive profiling tools but also lose valuable time going after the wrong donors.

To prevent this from happening, keep the following strategies in mind:

Use accurate data

One of the most common ways to generate an inaccurate profile of a potential donor is to feed your algorithm inaccurate data. The best AI algorithms won't be able to deliver accurate results if you unintentionally generate a bias by providing less than reputable information.

So, conduct regular "data cleanses" of your databases by removing and/or updating your information. This can include everything from incorrect contact details to duplicate entries to notable behavioral or changes in personal finances. A supporter whose net worth suddenly went down dramatically or who's now focused on supporting gun rights might not be the best prospect to support your climate change charity.

Have your people take a close look at each prospect's giving history. Someone who made a large gift to your organization two years ago might seem like a good person to approach now. But did that supporter continue making generous contributions every year? Sometimes, a person's contributions might be the result of a one-time bonus or a small inheritance, and may be made for both tax purposes as well as generosity. Determining if a contributor still has the means and the desire to support your organization -- and eliminating "flash in the pan" donors from your list -- can save you valuable time and money.  

Balance quantitative and qualitative data

Quantitative data is numerical-based and focuses on measurable items like age and income. Things like stock market holdings and estimated net worth are considered quantitative data and are usually easily acquired from public data sources. While they might provide you with an understanding of a donor's resources, they won't necessarily indicate if that contributor is willing to donate to your organization.

By contrast, qualitative data is more descriptive and focuses on opinions and feelings. Observed philanthropic activities and insights gleaned from in-depth interviews provide this data and can help you determine if a prospective funder is passionate (or even interested) in supporting your organization. You'll also be able to reference that information in your dealings with a supporter to show why they should help your nonprofit.  

Bottom line: it's important to have both quantitative and qualitative data when assessing your supporters so you know which donors are your best funders.

Invest in smart profiling tools

Wealth profiling tools can save you money by processing publicly available details on donor activities and then analyzing the data to provide you with a list of your best supporters. However, to make sure these details are useful to you, take a close look at what the software tools actually provide.

Can these tools help you collect valuable qualitative data on prospective donors through automated communication and then add these details to your database? Can it identify the causes donors are most passionate about supporting based on past giving history, interviews, and personal values? Can it pull in quantitative data from reputable sources like SEC filings and government agencies? And does it allow your team to customize screenings based on things like donation size or geographic location?

All these features and benefits will play a big role in the how accurate your profiles are, and how quickly and easily you can identify the best philanthropists for supporting your organization. 

Leveraging Screening Technology

AI and automation can streamline the screening process for online fundraising, saving you time and generating more accurate lists of donors to prioritize in your fundraising efforts. To properly use these digital tools, however, you'll need to know how to leverage the data provided to your advantage.

For instance, once you learn each donor's capacity and giving tendencies, you'll want to create targeted appeals for each individual philanthropist. Knowing how each prospect's net worth and generosity level keeps you from asking for too much (or too little) and increases your chances of receiving a good contribution.

Understanding giving behavior also helps you know what type of donation to ask for. For instance, some philanthropists are known for offering challenge gifts or being event sponsors. Others prefer giving generously through planned giving. All of this can benefit your nonprofit -- but knowing what kind of donation you're going after will affect how you approach each potential funder (and structure your fundraisers) to increase the likelihood of a donation.

Finally, wealth screening can help you target certain days or time frames to ask for contributions. Some philanthropists tend to give generously during certain giving days like Giving Tuesday or holidays like Christmas. Studying their giving history lets you know when you can catch a potential contributor when they're at their most generous and capable of offering a large financial contribution.

How Screening Donors Benefits Nonprofit Organizations

Donor stewardship is the cornerstone of building a successful and sustainable nonprofit. It's not enough to simply collect large one-time contributions -- you need to build strong relationships with major donors to make sure they continually support your programs and help you make an impact on your community.

Wealth screening can help with donor stewardship by revealing how donors prefer being approached and recognized for their philanthropic efforts. For instance, if the data in a prospect's giving history indicates they prefer face-to-face meetings and invites to exclusive events, you can arrange for them to be given a position of honor at your next fundraiser where they can learn more about your mission and -- if they prefer -- be publicly recognized by your support network.

By contrast, if you identify donors who prefer to be kept anonymous, you can respect their wishes while still offering private, personalized thank you messages that recognize their contribution while also providing assurances that their identity will be kept confidential. If you know the donor feels particularly passionate about your mission and making a difference in the community, you can provide updates on your organization's projects and how their specific support helped bring about many of the positive changes.

Providing adequate support for donors is also important. If your wealth and prospect screening profiles identify a number of donors who are interested in contributing through planned giving, you can offer resources to help in this. For instance, informing donors that you have a formal planned giving program with access to lawyers and legal advisors for creating bequests, charitable lead trusts, and retained life estates can make donors more comfortable working with your organization. Learning that you have a legacy society for contributors can also provide additional incentive for participating in your program.

Ethical Considerations in Fundraising

Screening donors for wealth may provide your nonprofit with invaluable details on prospective donors, but it's important that this data be collected and used ethically. Donors need to be treated with respect during screening and should be made aware of what you're doing and for what purpose.

To begin, collect your wealth screening data from only public, reputable sources. Stay away from personal financial records and make sure to continually update your records to retain a realistic view of your supporters' financial health. Be careful not to create biases or gain an exaggerated view of a donor's ability to contribute to your organization.

Don't discriminate against donors. For instance, just because you're interested in gaining large donations doesn't mean you should limit yourself to donors with a high net worth. Standard donors may be willing and able to provide nonprofit's with substantial contributions through programs such as planned giving.

Safeguard the details that you do collect on your supporters with strong security software and privacy policies for your staff. Be transparent with your donors about the details you collect and let them know what it's being used for. If donors are uncomfortable with wealth screening, they should be given the opportunity to opt out.

When approaching donors, be respectful. Do not try to pressure or guilt donors into making a contribution based on what you know about their net-worth and giving history. Make reasonable requests based on their past philanthropic behavior, be forthcoming about what you need the funds for, and let them know how they'll be recognized. Focus on building strong, mutually beneficial relationships with your donors that will ideally last for a long time.

Conversely, be careful about targeting donors whose values and business practices do not align with your own ethics and beliefs. Just because a certain individual is willing and able to provide you with a substantial donation doesn't mean you should accept if you believe your nonprofit will suffer from your association.   

Conclusion

Incorporating wealth screening into your current digital fundraising strategies provides many advantages for your nonprofit. Aside from being able to find benefactors who can keep your programs running, AI-powered software, algorithms, and automation make the process of screening multiple philanthropists and donors much faster and potentially more accurate.

That said, to get accurate wealth screening profiles, you do need to feed your algorithms the right data. Source your data from only reputable sources. Offer a balance of quantitative and qualitative data to gain a clearer picture of a donor's financial means and desire to support mission's like yours. Avoid creating biases by using outdated or inaccurate data in your wealth processing. Taking steps to secure comprehensive and unbiased facts provides you with better funders who will be more likely to donate to your nonprofit.

Once you have a list of likely contributors, it's important to use that information ethically and responsibly. Approach donors in the way they most prefer and make reasonable requests based on their giving history. If donors prefer not to be wealth screened, provide ways for them to opt out. And be sure to provide donors with plenty of benefits -- from recognition to invites to special events -- that show how much you value them. The more you focus on building strong, mutually beneficial relationships with your benefactors, the more you can rely on them for long-lasting help.

PayBee provides many useful online tools that can be used for prospect research and collecting useful data on donors. Our software tools let you examine your supporters’ wealth capacity and affinity for supporting causes like yours. In addition, our online fundraising platform automatically collects data on donor activity during a gala, including how individual guests prefer to donate and what activities they interact most with. Coupled with financial tracking that provides records on donor generosity (based on the number of donations, bids, and pledges they made), and you'll have a better idea of which supporters can provide your organization with the most support.       

Interested in learning more? Sign up for a free demo of our fundraising platform. You'll get a better idea of how our software interacts with guests and collects information. You'll also be able to see your events from a guest's perspective -- even taking part in an online auction and fundraising games. Do you have specific questions? Our team of experts can answer them and help reveal if our platform is right for your needs. Many charities have already benefited from our technology, so sign up for a free demo and learn how you can attract more donors to your cause.

FAQ's

Wealth and philanthropist screening can be a complex process, particularly with the introduction of AI-powered software and algorithms. Here are some of the more common questions being asked about the technology. 

How accurate is wealth screening for predicting charitable giving?

Wealth screening can help identify donors and philanthropists with the ability to make major donations. However, the screening process is limited by the amount of data it has access to. In general, most NPOs can only use publicly available data like SEC records to help assess a donor's ability to give.

However, this does not necessarily measure a donor's desire to give to a cause. In order to understand this, you need more qualitative data about a donor's philanthropic interests and interest in your mission, which can be gained through personal conversations and records of past philanthropic actions.  

How can AI and automation improve the screening process?

AI-powered software and automation help speed up the screening process by processing and analyzing vast amounts of data and generating suggestions on which donors to focus your efforts on. However, this process depends greatly on how accurate and comprehensive your data is. Make sure to provide your algorithms with only data from reputable sources and complement any AI-powered efforts with your ability to approach and connect with donors personally to assess their willingness to contribute.

How does screening impact the targeting of a high-value donor?

Wealth screening can analyze a large pool of donors with high net worth and pinpoint the ones with the greatest capacity and desire to give to a nonprofit with your mission. Essentially, screening saves NPOs time and money by helping them only target the donors with the most potential to become long-time contributors.

In addition, screening provides nonprofits with specific details about good prospects, from the way they prefer to be contacted to their previous history of giving to causes like yours. This helps you create more personalized messaging and approach these donors in an ideal way, further increasing the chances that they'll respond positively and donate.

What are the key data sources for screening philanthropists?

Data sources for wealth screening include public nonprofit databases like GuideStar or philanthropy-focused platforms like DonorSearch that contain information on donor capacity and giving history. Government databases like the Federal Election Commission (FEC) offer information on donor political contributions, providing an idea of donor wealth and generosity. Meanwhile, the U.S. Securities and Exchange Commission (SEC) provides information on stock holdings, providing another indicator of wealth.

In addition to all this, your own donor management database can contain qualitative data on your donors' giving habits and interests based on past donations and conversations. All of this data help build a comprehensive picture of each supporter and a better assessment of your best prospects.

Can screening be integrated with existing fundraising platforms?

Yes. You can screen donors using data from your own donor management system as well as other public nonprofit databases. This enriches your existing profiles and helps create a more comprehensive view of your contributors’ capacity and generosity.

You can also use existing fundraising platforms such as PayBee to reach out to donors once your wealth screening process identifies qualified prospects. Your data can help you create more personalized messaging for each prospect and tailor a fundraising appeal that is more likely to result in a donation.