In 1993, as a new employee at a wealth screening company, I was invited to visit an Ivy League university to discuss a possible project.  I walked into the office of the director of research, a highly intelligent and efficient professional with a great deal of credibility both internally and in the industry, and sat down to discuss what they had done to date and their current needs.  Almost immediately, I noticed a stack of binders almost five feet tall in one corner of the office.  These were the results of the last screening, the director explained, already gathering dust after just a few short months.

Later, I came to realize both in my own work and in talking with other vendors that screening results often languished.  One of the analogies was that purchasing a screening, which then averaged $25,000, and not using it was akin to purchasing a BMW and leaving it parked in the garage.

Today, the cost of a BMW has risen but the cost of most screenings has fallen dramatically.  Screenings have also increased in quality in a way that would be the envy of any automobile manufacturer.  But still screening results can languish, although they are now in the dust free environment of electronic deliverables rather than binders and no longer embarrassingly visible to office visitors.

Why do so many of these screening results go unutilized?  It’s not a lack of value.  In fact, if every organization had the benefit of a screening and made full use of it I am convinced that far more money would be raised.  These are inexpensive instruments that bring tremendous focus and insight to development activity.  Used well, screenings can make fundraisers far more efficient, sensitive and effective.  They can often contribute facts that give fundraisers the confidence to ask for more money.

So if the problem isn’t the screening services, what is the impediment to implementation?  There are any number of reasons, both good and bad, ranging from mistiming the need for results to inadequate planning for review and distribution of data and from a change in staff between the time of contracting and delivery to inability to get development officers to visit with new leads.  In short, it is often a matter of poor planning and communications.

Through the years of watching good screening results sit idle, I began my own back of the envelope list of steps organizations could take prior to conducting a screening which might help to make the process more successful.  So, here is my checklist for the top six things an organization should consider when embarking on a screening:

1)      Define what constitutes a “prospect” for your organization

• For example, you may be looking primarily for stock market insiders, private business owners, women with deceased spouses over the age of 70, or some other combination of characteristics.
• If you’re not sure, you can look at your most successful donor relationships as a guide, determining what they have in common, keeping in mind that this is in part a reflection of where your organization has focused its past relationship building and solicitation.
• Make sure this process involves every part of the development team so that everyone is buying into the concept of a screening early on.

2)      Investigate what type of information is most motivational to your team

• Sometimes what people say they want is actually somewhat different from what they really need.  Since the ultimate measure of a successful screening is new prospects identified, cultivated, solicited and contributing, the information you receive and share with the team must be understandable and motivational.
• Show team members the type of information that is available from screening companies and see how they react, letting that weigh on your decision-making process rather than forcing people to join committees to author requests for proposals or site through multiple sales meetings.

3)      Determine what information you currently have on file

• Look at your file to find out what you need to update and what you need to fill in, using your determinations and investigations as the measure of what you might have at the end of the screening process.
• This is also important as you begin thinking about how to prepare a file for a vendor to screen and how to integrate any new information you acquire through the screening process.

4)      Decide how many prospects you need

• Screening customers often wonder how few names they can screen, often to save costs.  Instead, customers should determine how many prospects they can effectively manage for the project at hand and run a file of the warmest prospects to arrive at that number.  The cost is always small in comparison to the potential reward.  It also increases the likelihood of a successful screening by neither inundating the organization with information it cannot use nor only providing information on previously identified prospects.

5)      Talk to the screening companies

• Tell each company what you are looking for and ask if they can provide it.
• The screening companies can help you to determine the size and type of file you need to run in order to come up with the number and type of prospects you desire.
• If necessary, run test files to see deliverables, check on integration and examine online updating capability.

6)      Begin writing your implementation plan

• Implementation plans for screening are rarer than original copies of the Magna Carta.  Write one!  It need not be long and take forever to draft.  Rather, it can simply and briefly lay out the goals of the project, assign responsibilities (e.g. data review, data integration, prospect management, etc.), and so on.
• Ideally, this plan should be approved by the head of the development shop, shared with the team and ready for action upon receipt of the screening results.

Hopefully, these six items will make clear the goals, roles and responsibilities that will make for a successful project and not be a hindrance to undertaking the screening.  The idea is to add clarity, not time.  In fact, if done in a straightforward and direct manner, it could accelerate the process of reviewing your screening options and, most importantly, putting the screening results to effective use immediately upon delivery.

So what should organizations steer clear of as they explore screening services?  There are a number of practices which are big “no-no’s” but unfortunately very commonplace in the fundraising world.  Here’s my list of things to avoid:

A)     Ignoring the Vendors:  Shunning salespeople is entirely counterproductive.  Don’t send them an email asking for costs and no phone call.  After you’ve done some of your internal exploratory work, just bite the bullet and call them up.  You’ll learn things you didn’t know and won’t learn from colleagues in the field.  Besides, if a vendor is either unresponsive or attempts to oversell, that is a legitimate consideration in your procurement process.

B)      Sending out RFPs:  The fact is that screenings are usually too inexpensive to warrant such a time-consuming process.  Some of the best screening companies may not even bother to respond to an RFP because the cost of compiling the response is so high.

C)      Dog and Pony Shows:  Inviting all the vendors in for sales presentations just shows you haven’t done your homework.  While screening companies will do their honest best to listen to your needs and give you recommendations based on their suite of services, inviting all the companies to visit just means you’re kicking all the tires because you don’t yet know what kind of car you want to drive.  Again, as with RFPs, some companies may simply decline the invitation.

Many of these comments assume that you may conduct a screening which appends factual data, especially wealth and ownership data, to your file.  There are, however, other screening services which either create a custom model on your file or provide results which are predictive in nature.  These types of services can be very useful but they cannot replace the value of knowing something factual about specific individuals or their relative financial capacity.  In fact, having a strong supply of factual data on your constituents can make modeling more powerful.

Screening has always been a powerful instrument for development.  The increase in available factual data and the decrease in cost over the last few years make the barrier to using a screening service very low indeed.  Combined with the uncertainties of the impact of the financial crisis on our donors, there has probably been no better or more important time to run a screening.  All the more reason to hold ourselves and our organizations to some strong standards as we decide how best to get started.

Hope Consulting recently released the “Money for Good” report, a robust research study making a case for the ridiculous:  Demographics are irrelevant to fundraising.

Surveying individuals in 4,000 high income ($80,000+) households, with an intentional oversampling of individuals in households earning over $300,000, the authors endeavored to determine how nonprofits could more effectively obtain donations from individuals by understanding their true motivations.

“Money for Good” concludes its section on “increasing major donations from individuals” with five key findings and seven recommendations to nonprofits seeking to increase their fundraising capability.

The key findings begin with the conclusion that there is an additional $45 billion market opportunity for philanthropy.   This they say is “limited in part by high levels of loyalty in charitable giving,” making a perhaps obvious and related point that donors are “generally satisfied with nonprofits,” although they are also frustrated at being “solicited too often.”

The authors also highlight their finding, perhaps unsurprising but in sharp contrast to much of the discussion in donor advisory circles and among watchdog groups, that “few donors do research before they give…and those that do look to the nonprofit itself to provide simple information about efficiency and effectiveness.”

Unfortunately, the authors also draw two additional conclusions which are very difficult to support .

First, in an echo of the old “Seven Faces of Philanthropy” book, the authors conclude that “there are six discrete segments of donors with primary reasons for giving.”  These “behavioral” pools are broken down as follows:

• Repayer:  “I give to my alma mater”
• Casual Giver:  “I donated $1,000 so I could host a table at the event”
• High Impact:  “I give to the nonprofits that I feel are generating the greatest social good”
• Faith Based:  “We only give to organizations that fit with our religious beliefs”
• See the Difference:  “I think it’s important to support local charities”
• Personal Ties:  “I only give when I am familiar with the people who run an organization”

While pouring donors of various backgrounds into behavioral buckets is very compelling in a report of this type, it is difficult if not impossible to apply these simplifications to the fundraising process given that there is no credible research methodology for identifying prospects who fit into these categories or for screening donors on that basis.

In sharp contrast, I do believe that many people would identify themselves as having an affinity to an ethnic group, nationality, gender, age group, profession, political orientation or similar demographic characteristic.  But this, it turns out, is exactly what Hope Consulting soundly refutes as being important to understanding donors and their motivations.

“Demographics don’t matter,” the authors write, “HNW [High Net Worth] donors behave similarly to others.”

If the authors mean to suggest simply that wealthy people and people of modest means make philanthropic decisions in much the same manner, they have no way of knowing this is true without conducting a similar study of individuals in households earning under $80,000 annually.

If they mean that other demographic characteristics are not meaningful, they would have to be far more transparent about the demographic characteristics of their survey pool to be persuasive.

Even if the pool of respondents was sufficiently diverse to draw these conclusions, however, the contention that “demographics don’t matter” would only be credible if the surveys were designed specifically to elicit details on demographic self-definition and its influence on philanthropy, much in the same way that the survey has in fact done by including “faith” among the behavioral markers.  In a sense, people who recognize faith as an important characteristic in their giving are saying that they are defined in part by their relationship to their religion.  Might not “boomers” or “women” or “Latinos” or “musicians” or “democrats” or “environmental donors,” all cohorts defined in large part by their members, also say that their giving is influenced by their own unique self-described cultural identity?

For that matter, even if we were to accept these new behavioral group labels in fundraising, how can we know that they are not just derivative of the more important markers of our donors’ identities, the demographic cohorts to which these individuals truly belong and with which they associate themselves?

But don’t take my word for it.  Just ask your major donor which of these new labels best fits them.  It’s hard to imagine any choosing “casual giver” as their description of choice!

In pursuing the hypothesis that behavioral characteristics are the best measure of commonalities among donors, the authors wisely ignore these types of objections and instead focus on how to implement the labels they have designed.  They provide good practical ideas on tagging and tracking donors, starting with donors surveys and behaviorally segmented marketing.  It should be noted that these same techniques can be used to identify other perhaps more concrete demographic markers as well.

“Money for Good” is right to bring greater discipline to our effort to understand donors.  Where they are wrong is to invent yet another set of terms of art that we might use but our donors would not.  How donors define themselves is far more important than how we define them.  And that is precisely why knowing the demographics of our constituency is so critical.

The World Wealth Report, Cap Gemini and Merrill Lynch’s annual review of the state of the world’s richest people, is now out.  The seventeenth edition of this document provides a mountain of evidence that the environment for philanthropy has changed and that globalization is perhaps its most important feature.

What were some of the key shifts over the last year?

• The world’s population of High Net Worth Individuals (HNWIs), or people with more than $1 million in investable assets, grew 17.1% in 2009 to 10 million people
• Ultra-HNWIs, or individuals with over $30 million in investable assets, saw wealth rebound 21.5% in 2009
• While North America remains the single largest home to HNWIs, with 3.1 million individuals and 31% of the global HNWI population, Asia-Pacific’s HNWI population reached 3 million in 2009, matching that of Europe for the first time
• Asia-Pacific wealth rose 30.9% to $9.7 trillion, surpassing the $9.5 trillion in wealth held by Europe’s HNWIs
• Philanthropy was up around the world in 2009—except in North America

The report also suggests that philanthropic giving is expected to grow across nearly all regions by 2010 (with the possible exception of North America) and that the trends toward transnational giving and inter vivos transfers are also expanding as legal barriers fall, donors focus more on philanthropy and the desire to see the impact of giving during one’s lifetime becomes more important to donors.

So what are we doing about all this?

Not nearly enough.

Clearly, we have been living though a very difficult economic climate generally and philanthropy has been hurt dramatically.  Our fundraising activity has been adversely impacted both practically and psychologically.  But the wealthy, both in America and around the world, have experienced a dramatic reversal.  And they are trying to find responsible recipients for their charitable investments.  Are we there for them?

Since the cost of raising major gifts globally can actually be quite modest—one leading California university calculated the cost of international fundraising at just three cents on the dollar—there is no reason for organizations with an existing international constituency, a global programmatic reach or even just Facebook and Twitter accounts to ignore this market any longer.

We are like people panning for gold downstream as someone uphill yells, “there’s gold in this mine, bring your pick axes and have at it!”  We continue to do what we know because it works, not thinking that a potentially larger opportunity is just a short trip and a little work away.  True, more gold is currently coming from the panning, but that’s in part because few of us are digging.

It’s time to go where the gold is.