We’ve all been there. The gift officer needs a capacity rating “super quick” before meeting with someone. The electronic screening shows a low number, but the prospect’s occupation suggests there’s more. Sound familiar?
After years of calculating ratings, fielding anxious questions from researchers and fundraisers, and watching the gap between promise and reality, following are the top 5 capacity rating insights for research and prospect management.
1.No Matter What Rating You Choose – You Will be Wrong! (And That’s OK)
Surrender your anxiety! Capacity ratings can never be 100% accurate because too much of the information is private. Capacity ratings are directional, not definitive.
Your job is to provide the best assessment possible with available data. But if you want to feel anxious, get worried about under-rating the prospect not over-rating them. You want build your development officer’s confidence to ask boldly.
2. HNWIs Are Your Blind Spot
The wealthier the prospect, the more likely their wealth is hidden. Private equity, angel investments, Delaware LLCs, family offices – none of this shows up cleanly in databases. Machine-generated ratings consistently undervalue HNWIs because the data needed to identify “whales” isn’t available for algorithms to process.
Accept that spotting transformative wealth still requires human intelligence and industry knowledge.
3. Estimated Net Worth vs. Gift Capacity: Know When Each Matters
Gift capacity ratings provide an assessment of a stretch gift amount from the prospect and the approach to calculating depends on the prospect. At Aspire, if someone appears to be below $1M in estimated net worth, we use the old-fashioned general calculations based on visible assets.
But if they are $1M or above, we place them in a net worth tier based on quantitative and qualitative data points and then take a percentage (typically 5%) of estimated net worth to create the capacity range.
4. Data Isn’t the Strategy
Technology keeps promising instant major gift identification, but it’s not delivering for everyone, especially wealthy minorities such as women, people of color, and others. And we know that the best data is locked inside the donor’s head and heart.
As a researcher, you can go beyond gathering information and become the fundraising partner who translates pages of information into ways the development officer might take action with the prospect.
5. Inclusive Research Pays Off
Traditional approaches miss wealthy minorities. But identifying prospects by demographic characteristics such as ethnicity can be ineffective and uncomfortable.
Instead, research with inclusive assumptions. Question your own biases when two similar prospects get different ratings. Check if you’re undervaluing first-generation wealth creators or making assumptions about giving patterns.
Moving Forward
Capacity ratings aren’t perfect, but they probably are not going anywhere. As A.I. creeps into our tools and makes all of our scores and ratings even better, we might find them eventually replaced or perhaps renamed and improved. But for now, you can make them as useful as possible while managing expectations about their limitations.
We all struggle with the same capacity rating anxieties. The most successful researchers combine data analysis with relationship intelligence, inclusive practices, and clear communication about what they know and don’t know.
Engage gift officers in conversations about how you arrive at ratings. Some of your best collaborations will come from fundraisers who want to understand your methodology. Join professional forums, attend APRA sessions, and don’t be afraid to ask for input from colleagues. Capacity rating is as much art as science.
And of course, the Prospect Research Institute has lots of resources to help you with capacity ratings!
- Connect with other prospect research professionals tackling these same challenges in the FREE Forums at the Prospect Research Institute.
- Invest in your education and buy the Capacity Ratings book or the course.
- Check out the Institute’s Capacity Rating Section in our Free Library, which includes a capacity rating calculator download.
There was a cry for help on the PRSPCT-L list-serv: “I’m a new researcher and my boss wants me to provide net worth on a prospect. He says it was the previous practice to do this and I can get what I need to calculate it from Dun & Bradstreet.” What would your response be?
