TOOLS

Our office has been discussing net worth and giving capacity and struggling with the validity of various formulas for our prospect base. We have not reached any conclusions yet, but the Web sites below are the fruits of our research so far.

• Rating and Evaluating Prospects: Whom Do You Ask For How Much
• Rule of Thumb for Calculating Net Worth
• Gift Capacity Formulas
• Using Formulas to Estimate Giving Capacity
• Estimating Net Worth: One Organization's Search for Truth
• How Much is That Donor in Your Records?
• Further Estimates of Wealth in the United States Using the Estate Multiplier Technique
• Personal Wealth, 1998

RATING AND EVALUATING PROSPECTS: WHOM DO YOU ASK FOR HOW MUCH

Despite the title, Tony Poderis presents a more philosophical than concrete approach to that question. It is from his book, It's a Great Day to Fund-Raise!

http://www.raise-funds.com/498forum.html

RULE OF THUMB FOR CALCULATING NET WORTH

Last updated in 1997, this University of Vermont chart estimates net worth for you. According to research director Merilyn Burrington, the formula chart has been at UVM for at least 15 years and is used as a 'quick and dirty' rating estimator. It reportedly came to them from a consultant who had done fundraising at Yale, but no one at UVM knows if Yale was its true birthplace.

http://www.uvm.edu/~prospect/networth.htm

GIFT CAPACITY FORMULAS

Pam Spencer compiled a brief list of some formulas.

http://www.charitychannel.com/publish/templates/default.aspx?a=4085&template

USING FORMULAS TO ESTIMATE GIVING CAPACITY

Koreen Simon, Fund Development Consultant with Neerok Consulting, gives an easy to understand explanation of the many net worth and giving formulas researchers typically use.

http://www.neerokconsulting.netfirms.com/givingcapacity.htm

ESTIMATING NET WORTH: ONE ORGANIZATION'S SEARCH FOR TRUTH

In 1998, Angela Vaughan, senior development researcher at University of Virginia, published an article questioning some of the formulas typically used to estimate giving capacity based on real estate. The result is the 3 percent under $400,000 in home value rule that many of us use today.

http://www.usc.edu/dept/source/NetWorth2.htm

HOW MUCH IS THAT DONOR IN YOUR RECORDS?

Robert G. Millar's 1999 classic and seminal article on estimating net worth and giving capacity is a tremendous resource. I'd love to see him update it because in some areas home values have increased disproportionately to income in the last few years!

http://www.nycafp.org/handouts03/papowitz2.pdf

FURTHER ESTIMATES OF WEALTH IN THE UNITED STATES USING THE ESTATE MULTIPLIER TECHNIQUE

This is the place to go for those of you who want to read the math and science behind Rob's Millar's giving estimates. It also features a demographic analysis of asset distribution.

http://www.amstat.org/sections/srms/Proceedings/papers/1987_054.pdf

PERSONAL WEALTH, 1998

This is another explanation of the basis for Millar's formulas. Barry Johnson and Lisa Schreiber's take on wealth estimates. It's definitely for the mathematically inclined.

http://www.irs.gov/pub/irs-soi/98pwart.pdf

Chris Mildner

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