Data Freshness is the New Normal
This is part of Windfall Data's “Top 5 Nonprofit Data & Machine Learning Trends for 2021” post. To see the full list of trends, visit their website.
As with 2020, this remains a top trend for 2021, supported by our own customer usage data. For many, 2020 felt like a tectonic shift in society happened every couple of weeks. If you were wealth screening your database in January 2020, the world looked completely different in April 2020. As the economy started to recover though, November 2020 looked significantly different from April 2020. Why is that?
There certainly was a shock to the system as the US economy locked down quickly in mid-March and April. During the same time period, we began to see the wealth gap increase:
Percentage of Total US Wealth Held by High Net Worth Individuals (Windfall)
13.3% more affluent ($1MM+ net worth) households
17.7% increase in total wealth held by high net worth households
67% of total US wealth held by high net worth households
When Windfall was founded in 2016, many nonprofits told us that screening every 3 years was the norm and that they only selected a handful of records to screen. Looking at just the past year, this now seems like a crazy statement given the extreme volatility and fluid nature of people, wealth, and philanthropic capacity.
Windfall wanted to understand how our customers have adapted to this new world. We looked at a cohort of our customers, accounts that were with us in Q3 2019 and active throughout 2020, and measured if they screened with us (updated their data) in a given quarter. We’ve highlighted a few key trends/insights:
Percentage of Accounts that Screened with Windfall by Quarter
Windfall saw and upward shift in screening cadence prior to the pandemic hitting in 2020
There was a spike in Q1 ’20 (mostly in March)
Screening cadence declined slightly from its peak in Q1 2020, but the change in behavior seems permanent: ~88% of accounts synced with us in Q2 2020
Without fresh data, our customers could be blind to someone who had a wealth creation event 90 days later that may have had the potential for a massive donation. They will certainly be years behind in their efforts to identify wealthy millennial constituents who, only months ago, appeared to have no capacity for gift giving and have no gift history. A recent survey conducted by Fidelity Charitable showed millennials give more than twice as much of their money and time to charitable causes as Baby Boomers and Gen X. Data decay, or working off of stale data, has always been a real problem, but in 2021 working off of data from three years ago, or even one year ago will be like trying to use a phonebook for the wrong city.
Windfall updates its data each week and makes our updates available to all customers no matter the size of the contract. We believe that this is incredibly important not only for helping identify the right prospects and donors, but has downstream implications for:
As we look to an unknown recovery or relapse in 2021 and beyond, the organizations that gravitate towards data freshness will be more successful than their counterparts.
Request a Demo of Windfall to learn how your organization can utilize precise net worth estimates to better identify, segment, and engage with your best prospects.