USING DEMOGRAPHICS FOR PROSPECTING

Wealth demographics can be a great prospecting tool, especially if you don't have a lot of prospect data and/or don't have the budget to use a wealth screening service. When used in conjunction with your own data, zip demographics can help you unearth new major, planned and annual gift prospects and target direct mail.

In addition to finding information about wealthy zip codes and affluent areas on the Web, you can do your own demographic prospecting. The U.S. government has released wealth demographics data from the year 2000 census, making it available through geographic area reports. The method of retrieving reports is more complex than that of the last census. Why, you may ask, is it worth my time and effort to work through the reporting complexities? Year 2000 census data is much more in-depth than in previous years and is broken down into census tracts and blocks instead of entire zip codes, yielding more targeted wealth reports.

A great place to start your wealth demographics research is USC’s rich zip site. It’s the most up-to-date rich zip site on the Web. In addition to the many prospect research Web sites that link to this site, other professional sites have linked to it. It includes an explanation of the methodology used to compile the list. Click on a state in USC's map of the U.S. to find wealthy zips (unfortunately, not all states have wealthy zips) along with town names:

http://www.usc.edu/dept/source/zipcode/index.htm

or go to the full list of zips, which gives only the state and zip code, at

http://www.usc.edu/dept/source/zipcode/zipusa.htm

The Right Site, Easy Analytic Software's Web site, has a list of its top100 cities based on average household income at:

http://www.easidemographics.com/samples/City_Rank_AvgHHInc.phtml

Forbes also provides a wealthy zip list:

http://www.forbes.com/2006/04/17/06zip_most-expensive-zip-codes_land.html

There are other affluent zip lists on the Web.  None of the wealthy zip code or city lists is all-inclusive -- and may not fit your own criteria of wealth.

You can do further digging to home in on wealth in your area. There are several ways to do this.  If you want some socio-demographic detail about a zip, try Claritas Express free zip code look-up service, You Are Where You Live:

http://www.claritas.com/claritas/Default.jsp?ti=3&ci=1&pn=freeinfo#lookup

The free report is a very condensed version of the full-service lifestyle segmentation or cluster reports Claritas offers. Some non-profit organizations may recognize the name of Claritas' product Prizm, which is used to provide one type of report on this page, from prospect screenings. PRIZM categorizes 62 clusters across 15 social groups. The other report is produced by MicroVision 50, which characterizes lifestyles into 48 segments across 9 social groups. I recommend running both reports for a zip code because they provide slightly different overviews. The clusters and segments are still based on 1990 data, but can help you qualify the zip code as a good prospecting area for major, planned or high level annual gifts.

To discover what you consider wealthy areas in your community, based on your own criteria, you can do your own research using year 2000 U.S. Census data. Not only will this give you the most up-to-date data, it enables you to zoom in on small census tracts and even smaller blocks instead of broad zip codes or whole cities.

Start your research at the U.S. Census Bureau's American FactFinder site, located at

http://www.claritas.com/claritas/Default.jsp?ti=3&ci=1&pn=freeinfo#lookup

using its decennial data.  Before you start setting up reports, there are a few things you should know about using the program. It will time out after 20 minutes of inactivity, so finish up before you go off for a meeting. Sometimes the program automatically starts inserting geographic or table choices for you. If this happens, close your browser then try again. If this doesn't fix the problem, clear your cache, delete your temporary Internet files and close and reopen your browser. That should do it. If you are unsure where prospects may reside in your state, there are some quick map-based data displays you can use to show geographic distribution by age, income, home value and education level. This type of data is provided in two data sets, 2000 Summary File 1 (census geographic detail) and 2000 Summary File 3 (social, economic and housing data). Click on File 1 or 3 on the main Census page, then click on Thematic Maps under Select From the Following Options on the right side of the screen. Use the default selection method of list and default geographic type of state. Highlight a state and click Next, then highlight a theme and click Show Map. Helpful themes include:

2000 Summary File 1:
TM P017 Median Age: 2000
TM P020 Percent of Persons 65 and Over: 2000

2000 Summary File 3:
TM P042 Percentage of Persons 25 Years or Older with Bachelor's Degree or Higher: 2000
TM P062 Percentage of Households with Income of $100K or More in 1999
TM P063 Median Household Income in 1999 (any household)
TM H026 Percentage of Specified Owner Occupied Housing Units Valued at $300K or more:2000
TM H027 Median Value of Specified Owner Occupied Housing Units

If you have a project based on ethnic heritage or race, there are Thematic Maps which will display the population percentages in an area for such groups in both Files 1 and 3 (2000 Summary File 2,which contains race and ethnic origin data, does not present its data in map format).

The default map display is by county. You can also see the much smaller census tracts by changing to that view option. To zoom in on the map, select the option Recenter and Zoom In and then click on the area you want to see. Repeat the zoom until the level of detail is what you want (once you change the zoom and the region, it stays there when you change the display to another view, like census tract). By changing to the Identify option and clicking a county on the map, you can see the county name, or if you are on the census tract view, the census tract number and county name. At both levels, this function also gives you the specific percent and population base numbers for the data set you chose.

For the remainder of your research, select 2000 Summary File 3, which offers a wide range of interesting reports, from the main Census page. This data set contains detailed population and housing data. One thing you need to know -- a household is can be one person or multiple persons living in the same housing unit, while a family is a household with children under 18 living in the same housing unit.

In File 3, there are many ways to set up queries, so I will detail the ones I have found to be most useful. For simplicity's sake, the reports listed below are the ones I recommend. When you are setting up a query, you will be asked which table(s) you want to use. Many queries allow you to select multiple tables, but you cannot select quick and detailed tables in the same query.

Quick Tables (shows values and percentages of totals)
DP2 (Profile of Selected Social Characteristics: 2000): offers a nice demographic overview of an area; educational levels, marital status and population over age 65 are probably of the most interest to prospect researchers.
DP3 (Profile of Selected Economic Characteristics: 2000): includes such useful information as occupational levels, industries, class of workers and 1999 household and family income.
DP4 (Profile of Selected Housing Characteristics: 2000): gives you an idea if an area is old and established or newly developed, a brief home values table and a table showing how much income goes to selected housing costs . . . the higher this percentage the more debt a family is likely to have.
QT-H14 (Value, Mortgage Status, and Selected Conditions: 2000): provides a home values table with a finer breakdown of value ranges than DP4.

Detailed Tables (shows values only, but with more detail)
P8 (Sex by Age): when used in conjunction with P87 (Poverty Status for 1999 by Age), this is a good table for determining if an area is appropriate for planned gift prospecting.
P13 (Household Type by Age of Householder): look for areas lots of with family (have kids) and non-family (no kids) households in the 45 plus age ranges. Disposable income is generally higher in these age ranges.
P56 (Median Household Income in 1999 Dollars by Age of Householder) is another nice table for seeing which age groups have the highest income. Again, higher income in the 45 plus group is a good sign.
P65 (Retirement Income in 1999 for Households) tells you how many households in an area have retirement income. The higher the number, the more potential for planned giving . . . but be sure to look at the other charts to see if that age bracket is where the wealth is distributed.
P52 (Household Income in 1999): includes all households, not just those with children under 18.You want a chart with high populations in the $100K plus categories.
P53 (Median Household Income in 1999): the median is the mid-point in the income range, so the higher this is for an area, the better.
P56 (Median Household Income in 1999 Dollars by Age of Householder): is another helpful chart for planned giving, as well as determining if there are enough households in major gift appropriate age ranges.
P76 (Family Income in 1999); family income is generally higher than household income because people with children are usually in their peak earning years. Like household income, look for bigger groups in the $100K plus categories.
P77 (Median Family Income in 1999): again, the higher the better.
H74 (Value for all owner occupied housing units): When used in conjunction with age and income distribution tables, this can a good indicator of wealth. There will be some areas where income is very high and housing costs are comparatively low and other areas where income is lower but there is a larger distribution of expensive homes. These are the areas for which you should do reports down to the census block level to narrow your geographic focus.

There is an option to Enter a Table Number, but you can only do one at a time and I found this method to be a cumbersome and time consuming.

When you are evaluating table data, keep a few things in mind. It is most helpful to use income tables in conjunction with home values tables because both values are wealth indicators. In general, for higher level annual fund purposes, look for high concentrations of households with income over $200K and/or homes valued at over $400K. For major gift purposes, look for areas with large populations with income over $500K and/or home values over $1M. If you are planned gift prospecting, you also want to look at the tables that give an indication of the number of people 65 and older (QT-P34; P89; P159A-H) who are living in poverty in an area since a high home value does not necessarily mean high retirement income or planned giving ability.

A really nice feature of the program is that you can print or download your table reports into Excel or a comma delimited database or into comma or tab delimited or rich text format presentations. Just click on Print/Download in the menu bar and follow the instructions. You can also save your geographic and table selections (but not the data) by clicking on Save Query on the Show Tables page. You can reload the selection later by clicking on Load Query. When you save a query, use easy to remember file names. The program always uses the same generic default save name, which gives you no clue about query content and also will overwrite a previously saved query. Whether you save a query or download a file, the resulting tables always will be organized by table number first, then geographic area if there is more than one. If you chose multiple geographic areas, there also may be more than one page of tables. The number of tables will be noted at the top and bottom of the tables page and you can just click on Next to see more tables.

The ability to see a map of a geographic area is another helpful feature. When you highlight a geographic area, like a census tract or block, and click the Map It button, another browser opens with an area map. The detail is not great, but it gives you enough to locate area boundaries and, sometimes, main streets on a local road map or road atlas. After you work through the query setup and get the tables you want, you can use your Back button to return to the screen with the Map It option. You can only use Map It on one geographic area at a time.

The reports below are set up with Geo Within Geo as the selection method. You can use address level instead of Geo Within Geo. It takes less time to set up, but covers only the place, tract and block in which the address is located. Just enter a known address, then highlight place, census tract or block level as your Geographic Area and click Add and Next, then Add Tables as described in the directions below.

For a quick census report about a city, choose Quick Tables on the right side of the screen under Select From the Following Options. On the next screen, chose Geo Within Geo for your Selection Method, select Places for your Geographic Type and choose a State . . . each time you make a selection for one of these options, the screen will reload. Then select one or more Geographic Areas by highlighting them one at a time and clicking the Add button to put them in the selection table. Click on the Next button to move to the Select Tables screen. Highlight DP2 and click Add, then repeat this process for DP3, DP4 and QT-H14. If you want to see a map of the area you chose, click on Map It and another browser window will open with a map in it. After you open your map, return to the original browser window and click on Show Table to see your report. The tables selected in this example combine to give you an age, education, occupation, income and home value overview for the area selected.

You can get the same reports for census tracts. Census tracts are smaller than most cities and zip code areas, allowing you to focus your research geographically (for a specific definition click on the Glossary link found at the top of most pages). Start by choosing Quick Tables and Geo Within Geo again. Instead of Places, chose Show Me All Census Tracts Within a Place, then select your State and Place (this is usually a city). Under Select One or More Geographic Areas, choose All Census Tracks and click the Add button. Then click the Next button. Add the tables you want and click on Show Table. Once you review your data and find the track numbers for the most promising track(s), use the Back button to return to the Select Geography page, then highlight a tract number and use the Map It button to see where a tract is within a larger geographical area.

You can get more focused and detailed reports for census tracts too. Instead of selecting Quick Tables, click on Detailed Tables. Select Geo Within Geo, then Show Me All Census Tracts Within a Place. Choose a State and Place. Highlight All Census Tracts, click Add followed by Next. Highlight and click Add for each of the following tables: P13, P52, P53, P56, P76, P77 and H84 and any other tables you think are helpful. These tables show the types of households in an area, income and median income and distribution of home values. If you are doing planned gift prospecting, Add tables P8, P65 and P87 to see the number, retirement income and poverty status of people ages 65 and up.

Jot down the tract numbers for the census tracts in which you are most interested, based on family type distribution and high income levels and/or home values. You will also need to know the county in which each tract is located in order to further narrow the geographic areas you want to target by doing block level research. Once again, choose Detailed Tables and Geo Within Geo. This time, choose Show Me All Block Groups Within Census Tract. Choose the State, County and Census Tract Number. Highlight All Block Groups and click Add. Add the same tables you used for your census tract reports above and click Show Table. After you determine the block group(s) in which you are interested, jot down the identifier(s). Then use the Back button to return to the Select Geographies screen (if your session expires, you will have to start over). Highlight a block and click Map It to see where the block is located.

You can use the census reports in conjunction with the home price range search at Domania

http://www.domania.com/homepricecheck/byprice.jsp

to further hone your data. Enter the city and state and price and year ranges and get a list of properties with addresses.  I generally start with $500,000 to 5,000,000 and go three years back. Sometimes this returns too much data, in which case, I narrow the price range. The search returns a list of properties in the selected price range, giving the address, sale amount and date of sale. You can use this to help pinpoint the streets where the wealthy reside within census tracts or blocks identified in your census reports. Or you can do this in reverse. Choose addresses from the Excite report to do address searches in the census data. One thing to be aware of -- I've found some of the Excite listings are actually commercial properties or multi-unit residences.

If you are able, use the data from your wealthy area research to formulate queries in your own database. Pull matches from your database for street names with wealth indicators or by zip code. I like to generate a report that includes name, spouse name, home address, job title and company, lifetime household giving and total household giving for each of the last five years. If I can get it, I also like to see a if the person or spouse has attended an event, had a contact report entered in the last two years or is or was on one of the organization's committees. If the five-year giving totals indicate giving has a significant pattern of increase that moves a prospect up on my priority list for research and/or contact. If job title and company indicate possible wealth generating employment, the prospect gets priority rating. Flags indicating current and past contact or involvement also may warrant a priority flag, depending on the type, quality and outcome of contact.

After you have tried some of the reports I've described, take some time to explore the rest of the Census' American Fact Finder site. You may find other features, geographic criteria or tables that are helpful to you. If you are a proposal writer, there's also lots of demographic data that can be helpful in making your case.

Chris Mildner

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