Prospect research: the value of estimating wealth & how to go about it
Melanie May | 11 August 2021 | News
We talk to the University of Cambridge’s Tony Duggan about estimating wealth and gift capacity with prospect research.
1. What’s a brief introduction to yourself and your work in this area?
Converting transferable skills from former roles as a Policy Analyst for a FTSE 100 company and as a Commercial Researcher, my skill-spike is in detecting, sifting and highlighting prospects by interest and capacity for assignment to fundraisers at the major gift level.
2. Why do we estimate wealth and gift capacity?
Wealth estimation is one of the most immediately obvious ways to assess what level of financial support could be available from your prospect pool. It is a practical and immediate way of ranking prospects for prioritised attention by fundraisers.
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3. What’s a good indication of someone’s gift capacity?
If all you have are postcodes attached to your prospect list, you may be interested in the news that the vast majority of prospects I’ve seen who are capable of a £1m gift in the UK will be living in a property worth £2.3m upwards. I use that as a ‘sense-check’ when estimating potential wealth and capacity to give, and we train researchers to look for that indicator. A residential property valued in the low millions added to a senior city role as investment banker (if you have such employment details) are the first signals to our team that there is a potential £1m ask available, ultimately.
4. What do we base this on?
Where we do not have detailed information on someone’s annual remuneration we can make reasonable inferences from socio-demographic information such as the most value asset most people will ever purchase. We cannot estimate wealth on one factor alone but professional occupation attached to a postcode can give you the greatest immediate clues as to possible wealth and capacity.
5. Where can I find this kind of information?
If you have a postcode you can simply slot the postcode and as much of the address you have into an open property valuation and sales website such as ‘Zoopla’ and it will give you a current estimate of the property value and quite often the sales history of the property.
6. Am I allowed to do this – is it legal and compliant?
Yes. Property values in an area and sales history are not confidential or personal information. Anyone can do this for any address on the property register in the UK without risk of falling foul of Data Protection legislation. Issues arise where information is recorded and whether it is then shared with a third party, which is where problems in terms of reasonable protection from intrusion arise.
7. How can I check this information is accurate?
It is possible at a basic level to draw inferences well known to the sales, insurance, marketing and personal finance sectors about a person’s spending power back to their ability to support that spending power. House prices are a primary indicator of wealth and socio-economic status in the UK. There are thousands of people working in the City of London for example who are paid in excess of £1m every year and their property purchases are earning at a level sufficient to support a multi-million purchase.
8. What’s the next step once I’ve got this information?
If you have a name and a postcode for an individual the next critical step is to find out what they do. From there any reasonable researcher should be able to detect based on socio-economic factors (property value), possibly age as a factor as the wealthiest earners will be in their 50s, children having left the nest, where there are signs of a ‘C Suite’ career (CEO, Director, Partner, Managing Director, Founder Partner, General Partner, Investor) then you have the ability to separate out the 3-5% of your pool who are most likely to be your major gift and principal gift pool.
You can now assign fundraisers to the most appropriate end of your prospect pool for their projects. Finally, interests. If you have any interests recorded in that 3-5% of your pool showing major gift potential then you have all you need to alert a fundraiser to a prospect with the capacity and interest, ahead of a qualification conversation between fundraiser and prospect, and it is only in that first conversation that the experienced fundraiser can estimate the level of propensity to support expressed by the prospect as a result of that qualifying conversation.
9. What if I’m looking for corporate donors rather than individuals? Do the same principles apply?
Corporate donors are radically different from individual donors depending how they are structured. At a Plc you will be dealing with a Committee and an established process which can be painstaking and is subject to occasional stutters as personnel move around. With a corporate donor where philanthropic spend is decided by a founding family the family interests and what they wish to support via their business is critical, in the same way it is important to know the strategic fundraising disbursement plan of a Trust or Foundation.
All corporate donors bigger than a Small to Medium Sized Enterprise (SME) will have UHNW (ultra high net worth) or HNW (high net worth) capacity. They will by their nature spread their philanthropic spending around a number of spending pillars and unless you have a very committed champion within that company you will be unlikely to get any donation outside of their strategy.
Corporates arguably are more like Trusts and Foundations than they are individual prospect. The one magic bullet that surmounts all challenges for Corporate and Trust and Foundations is having that senior person within the organisation who is the champion for your cause. All roads lead via any organisational vehicle back to an influential decision-maker or small group of decision makers within that vehicle.
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.