Wealth-researching Tips

Major-gift givers tend to be a small number of highly capable people who have liquid wealth. The key for nonprofit organizations is to locate them and develop a long-term relationship with them.

Wealth research can help organizations do this.

“If we use only giving information as a guide, we inevitably will under-cultivate and underestimate the potential wealth and interest of our constituents,” says Jay Frost, chief strategy officer for data-mining firm WealthEngine, because people who have wealth don’t necessarily give in a way that suggests that wealth.

“By focusing exclusively on affinity or, in other words, seeing who has given before and then asking them to give more, we don’t necessarily cultivate relationships with people who are best positioned to give us more money,” he adds.

To do wealth research, ideally an organization would have a researcher either on staff or outsourced. The researcher should come up with a definition for what constitutes the organization’s core constituency and what constitutes the kind of people it is looking to involve, and then develop pipelines to find them.

One pipeline would be prospecting, where the organization is going out and looking for people who fit that definition. Another might be core research — a prospect-management approach — in which the researcher segments people who match a criterion for potential major donors, researches them, generates a profile and puts them in a list of names to be reviewed by staff on a regular basis.

“The focus will be on people who conform to a common definition that everybody understands and appreciates and respects, and then the information will support and give them confidence and they’ll go out and cultivate the relationship, and then eventually be able to invite those people to seriously invest in the organization,” Frost says.

External data also can help an organization hone in on major gifts. If your organization is interested, say, in focusing more on cultivating planned gifts and wants to reach out to individuals who are making plans for their estates, it would be good to know how old your constituents are. A data overlay can help reveal this information.

Screening is another tool organizations can use. Frost says half of a percent to 1 percent of a typical donor file is made up of insiders in the stock market. Screening allows organizations to find out who these individuals are. Once you find out who they are, cultivate them in a high-touch way.

“If we didn’t know who they were, we’d just be sending them the same mail as everybody else and we’d be inviting them to the same things as everybody else and talking to them the same way as everyone else. But their position’s really unique. They have extraordinary financial resources, and with that often comes less time,” Frost says. “And while they may not feel they’re more important than anyone else, they still are going to be people who are accustomed to a certain kind of interaction. Especially the people who are professional investors, who expect a certain kind of response from something they invest in.”

Frost says donors like this often are in small supply, but they’re highly important, highly capable and can end up making up between half and a third of your major-gift prospect pool in terms of capacity.

“Those touches are going to have to be very sensitive and knowledgeable. They’re going to have to have some sense about who these people are and get to know them so they can invest while they’re alive to support a campaign or activity,” Frost adds.

Jay Frost can be reached via www.wealthengine.com