[PODCAST] What's Old Is New Again In Fundraising

Randy Hawthorne and I have a lot in common. We both run a blog, a conference and a webinar series for fundraisers, and we both opened up co-working spaces for nonprofits. What I lack is his fashion sense, a print magazine, and a podcast – like his excellent Hubcast from the Nonprofit Hub.

Randy recently took a break from interviewing the top minds in the sector, like Vu Le, Kishshana Palmer, Sandy Rees, Beth Kanter and Dan Pallotta to talk to yours truly. We commiserated about what trends we are seeing in our work curating thought-leadership.

You can listen to the full episode here.

Be sure to check out more episodes of the Hubcast here.

Full Transcript:

Randy:Welcome to the What’s Next podcast, a podcast that faces the future of the nonprofit industry head-on. Each episode, we’ll invite a guest in the show to have a discussion surrounding the changing nonprofit landscape and what that means for nonprofit professionals like you.

This week, we are joined by my friend Steven Shattuck. He is the Chief Engagement Officer at Bloomerang, where he provides educational nonprofit content like a machine. And he is also a top nonprofit thought leader, speaker, and writer. So let’s jump right on in.

I have with me my good friend Steven Shattuck, probably one of the oldest friends in the industry, even thought you’re not old.

Steven:Oh, is that true? That’s so sweet.

Randy:We’ve been around a while and have seen a lot of things in the nonprofit industry. And Steven, as I was mentioning when you agreed to do this, I was saying all of these industries are changing at quick pace, and the nonprofit sector is coming around on how they’re changing. And so I wanted to talk to you today because you are in and around technology quite a bit. I wanted to talk to you a little bit about how are you seeing right now how technology is affecting the industry? Then we’ll get into how you think it might affect it in the future. So how is it affecting it?

Steven:Well, we’re finally getting access to things that perhaps we were priced out of previously, which is good. We’re also getting access to tools that just were not available for lots of other reasons. We can do A/B testing on emails now and we can optimize website forms and we can see who’s looking at our Facebook posts.

We have all of these great things finally that I think a lot of people thought well, no, we’re a nonprofit and those are things that for-profits do and businesses do. We don’t have access to those cool things. Which I think is good, as long as we don’t let those things distract us from what we have always known has worked.

You and I were talking before you hit the record button and you said what’s old is new again. I think that is really true and really [important 00:02:22] to keep in mind as we sort of embrace this technological renaissance that the sector is going through right now.

Randy:Yes. So tell me a little bit about — I have some ideas in mind. We just recently had our Give Back Day, and one of the things that we did was we sent out another thank-you note, a handwritten thank-you note right before to say, “Hey, thanks. Remember, you gave to us last year.” Are those the kinds of things that you’re talking about as old? What are you seeing around that area?

Steven:Well, I got that note — and thank you, by the way. That note really stood out to me because I am not used to getting things like that, a nice handwritten note, maybe a nice voicemail that is just a thank you, apropos of nothing. But what I do get a ton of is emails and online ads and all these things. And it’s not a bad thing for fundraisers to get excited about those things and maybe dip their toes into the water of those things, not have the expense of maintaining all those things that we know work really well, like writing a handwritten note to someone to say think you for their gift.

Because we’re not the only people that are embracing technology. Think of your everyday consumer. All they’re used to is emails and ads and text messages and things like that. So to get something you could hold in your hand and that a person had to hold a pen and write something and think out a nice thing to say really stands out.

And perhaps those things can be more powerful than they were when that was the only way to send a piece of communication. And I think that the nonprofits who embrace those things, a multi-channel approach — I know it’s kind of a buzzword, but really taking a multi-channel approach with those sort of old-school, offline, analogue-type donor communications, that is really going to stand out amongst all the other junk that people are inundated with, all day long.

Randy:Yeah, I think one of the things that we get caught up with and you probably deal with that quite a bit is this whole notion that people come to you because you have the technology silver bullet, right?

Steven:Right.

Randy:What do you see around that as people are asking you questions about solving issues using technology?

Steven:It’s good and bad. I get excited when potential customers and current customers are curious about things like AI and machine learning and automation and optimizing things through testing. Those things are really good. I don’t think they can ever replace a one-on-one conversation with a potential donor, but they may get you that conversation. They may show you, hey, these are the people that you maybe should be inviting out for coffee or having in for a tour. This is a donor, every year for 10 years, and you haven’t ever asked them to leave you a gift in their will. Or maybe they don’t know about your capital campaign.

So I think this technology can be really good at identifying maybe prospects or people who might stop giving because they’re sending certain signals. But I think the danger lies in relying on the technology to also solve that problem and do it for you. You have to maintain that personal touch. So I think the danger is where we want these programs and these tools to kind of do the work for us.

They’re great for telling us what we should do to a certain point. I mean, we don’t want to be replaced by robots, necessarily. But at the end of the day, you’re probably still going to have to pick up the phone, go meet with someone, and do a good job at that meeting. There are all kinds of [age-old problems with 00:06:33] communications and those interactions. But you need eventually to get out from behind your desk or at least pick up your phone, and I don’t think technology will ever completely replace those things — at least I hope it won’t.

Randy:Yeah, I think what I’ve kind of seen with all of this advance in technology is it actually, you’ve got all this great information but I think how it overwhelms the nonprofit sector is we still don’t have the resources to be able to really dig in and analyze it. What’s kind of frustrating is as you’re telling me this, I’m thinking to myself, man, we’re usually a little bit slow to get access to some of this cool stuff. So that means that we’re on the second gen of some of this stuff or the third gen, even. We should be better at it, right?

Steven:Yeah. I’ve always thought that nonprofits have an unfair advantage compared to for-profits in a lot of ways because we can unlock people’s sort of philanthropic anger a lot of times. We have a mission that we can get people excited for. But there is usually this sort of, maybe kind of a scarcity mentality that now finally is going away because we have access to these things. But I think the other issue we have is — and you touched on it a little, Randy — is maybe not having the training or the bandwidth to actually make use of them.

So I think it just comes down to prioritization, right? We sink a lot of time into fundraising events, perhaps, is something that I tend to look towards as, and maybe the ROI isn’t there, but hey, we’ve always done this golf tournament and we’ve always done this 5K every year and what would happen if we ditched it? And not being afraid of ditching those things so that we can prioritize maybe a little bit of data analysis and writing handwritten notes.

It always strikes me when someone says, “Gee, Steven, I know all the research shows us that we should be doing these very personal touch activities, but we’ve got a gala to plan in October.” And I say, “Well, why do you have to do that gala if you know that it’s not going to work as much for you as these other things?”

But it’s hard. We are an under-staffed sector and underpaid a lot of times. And there’s all this information out there. There are so many blogs and webinars and people like us telling people what they’re doing wrong and what they should be doing that it can be really overwhelming. But if you can carve some time out of your schedule to maybe write a couple notes, make a couple phone calls, then you’ll see some return on investment on those activities.

Randy:Yeah, I think we do get caught up on what has always been. And that’s kind of the point of this podcast, is not to point out things that we’re doing wrong, but to just start having a conversation around how are we going to adapt? Because I think the things that I read, and I know you read a heck of a lot more than I do, that the donors are changing the way they want to give and the way they’re giving, and I think there’s a little fatigue around that. So we need to be innovative and creative about how we’re going to engage.

Steven:I think we get caught up in channels and mechanisms of giving, that we don’t spend as much time on well, why are people giving? And why have people given, past tense? I think sometimes we suffer from a kind of failure of curiosity. If I was the director of development at a nonprofit and I was sitting down at my donor database, looking at all of our donors, I think one of the first things I would do is I would look at first-time donors, people who’d only given one gift, and I would try to find out why they gave.

Because I think knowing the answer to that question will kind of illuminate your path of what you should be communicating to these people going forward. You don’t need to guess or wonder is this email newsletter article going to work better, [what 00:10:48] kind of event we should have. If we took the time to find out simply hey, why did you give, you may find out things like, “Well, I had a grandparent who died of Alzheimer’s,” versus “Well, I went to a second cousin’s funeral and they happened to choose the Alzheimer’s Association as giving the gifts to in memory.” Those are two very different types of donors, right?

But if you look at them on the screen of your donor management system, they both gave $50 and they both gave their first gift. It’s really tempting to treat those donors in the same way, even though they are very different, even though they have the same kind of top-level characteristics — they’re first-time donors and they gave $500 and they gave through a check — and we get kind of caught up on those things but not necessarily why they gave that gift.

So having a little bit of curiosity about your donors I think can eliminate a lot of kind of the guesswork and the frustration of what we should be doing. But we don’t see a lot of that. I can’t remember the last time I was [inaudible 00:11:57] a question, and I give a lot of gifts, too. And I kind of like to do a little bit of secret shopping, as you know, Randy, but that question is even rarer than getting a handwritten note or a thank-you phone call. So be curious about your donors. I think that can really help you decide what the right course of action to take and how to kind of slice up your time.

Randy:Yeah. I’ve had some surprise gifts in the recent months, where I just have a good conversation with someone and we connect on something, and all of a sudden within the next couple of days, there’s a donation sitting, waiting for us. And I’m like, wow, that was, I didn’t make an ask, just told them what we were up to, made some personal connections. And that’s old school, and I don’t know that that will go away anytime soon. People just . . .

Steven:I don’t think it’ll ever go away. And [inaudible 00:12:55] birthday present in the mail from someone you never heard of, I think you would probably reach out to that person and say, “Hey, how do you know me? How did you know it’s my birthday? Why did you send me a present?” But we don’t have that same kind of curiosity for our donors.

And it’s odd, but it makes a lot of sense, what you said, that when you do those things that are not asking for money, they tend to generate donations. And I don’t want to be misunderstood. I think that we don’t ask for money enough and that’s probably an issue for a whole other podcast, but there are a lot of things you can do to communicate to a donor that aren’t asking for money that will generate donations because you did them.

Randy:Yeah, true. So you did mention AI, and it kind of got you excited. Do you . . .

Steven:Oh, yeah.

Randy: . . . do you have any idea what that’s going to do to the sector, at all? Do you have any thoughts around that?

Steven:What I hope it does is it helps people be better fundraisers, honestly. Because we have a lot of data. The average nonprofit that has maybe 1,000 donors in their list or their Excel or their donor [inaudible 00:13:57] . . . a lot to parse through as just one person going through 1,000 records, looking at the entire history of all those people, researching them, looking them up on LinkedIn and Google and doing cross-ref research type things. That’s a big job.

But if we can get the tools, technology, software, robots, whatever that can maybe parse that data and say, “Here’s a donor that I think should be asked for a bequest. Here’s a donor that you should try to get a monthly gift from because they’re giving these types of signals and a monthly gift ask makes the most sense. Here’s a donor that you could ask for a $5,000 gift because they have the capacity. We know that they have been giving large donations to other nonprofits like ours. They have not been giving that much to us, but there is that capacity there.”

I think those things, those tools exist. We have tools like that in Bloomerang. There are other really cool tools. There’s a tool called Gravyty, with a Y, I think it is, that’s doing really interesting things in AI and machine learning that can help fundraisers prioritize their activities, their fundraising efforts, their day-to-day, their 9-to-5 work.

What I’m worried is people will rely on those robots to take the action that they have uncovered through all that AI data analysis. What I’m afraid of is as we embrace more technology, we become less likely to pick up the phone, get out of the office, make donor visits. You know as much as I do, Randy, how enticing a Netflix night in is versus going out and seeing friends. I don’t want the same thing to happen to fundraisers, where they’re just getting all of this information from their computer and they’re just firing off emails or creating website ads or things like that. We’ve got to maintain the personal touch, even among all these really powerful data [inaudible 00:16:04].

Randy:Yeah, I think you would stand out, as we were talking before, I think about the amount of mail I get now than when I was a young professional, and now it’s special, especially when it’s handwritten, like a hand-addressed thing. Or it doesn’t even have to be that. If I get something in the mail, there’s a good chance I’m going to open it unless it looks obviously like junk mail. But if it’s from an organization I know, it’s going to be that way.

And I think you were saying the good of what AI can bring to that, to our sector, to be able to help make sure that we don’t over-mail, like we’re mailing to the right people and we’re talking to the right people and we’re having little fundraisers with the right people at someone’s personal house or whatever it is, as we get to know our donors better.

I wonder, though, as I’m talking about that, but as we get to know our donors better, that means that their buying habits, just like in anything else that they buy, the more we know our people, the better chances are we’re going to resonate with them.

Steven:Absolutely.

Randy:But yeah, you’re right, I . . .

Steven:[Inaudible 00:17:20].

Randy:Yeah, wow. Because our donors are becoming increasingly savvy.

Steven:That’s also true. That’s really true. And shrewd. I think you could go steps further and say they really kind of squint their eyes at — and I’m not a big overhead guy. I think you know that. I think that that’s a really bad way to measure a charity’s effectiveness. But I do think that donors are valid in wanting to know hey, what are the uses of my gift? What are the projects that you’re funding? What are the success stories? And communicating those things, I think, is really important.

Hey, this is . . . and [charity: water 00:18:01], I know it’s kind of annoying how good they are at these kinds of things, but they send you updates. “This is the exact well that your donation went towards. This is the progress of it.” Or “I know we just, we [dumped 00:18:13] a foundation, look at these happy people, they don’t have to walk 10 miles for dirty water anymore.” Donors love those kinds of stories, and I don’t know that we do a good job of communicating those types of things enough to people, either.

Randy:Yeah, and I think one of the things that I want to get across with this whole overhead thing is don’t give the easy answer when a funder asks how much is going to the cause and how much is going to the overhead because absolutely 100% of it is going to the cause because I couldn’t sit here and talk to you and tell you these stories if I didn’t exist and my marketing department didn’t exist, and all of these things that we need to survive as humans.

Steven:Right.

Randy:But to be able to get better about telling the story when someone asks, well, these are the things that are happening because of your gift. It just drives me nuts when we try to go to the easy answer and it drives me nuts when I hear people giving a percentage of what goes to what. And it’s, like, ah, just tell . . .

Steven:Yeah, a pie chart.

Randy:Ah, tell good stories, please.

Steven:I think the technology can help by identifying which story is right for which donor right now, right?

Randy:Right.

Steven:Rather than, it’s really easy to fire up your email software and shoot a newsletter to your entire list. There’s nothing that stops anyone from doing that, but we wonder why the open rates are only 1% and 2%. It’s because we didn’t take the time to maybe build several different audiences — more than several, as many audiences as we can — and send a story that is tailor-made, if not for one person, then maybe a very small group of people. So I’m excited what technology can bring to the segmentation and personalization arena when it comes to communicating impact to current donors, for sure.

Randy:Right. We talk about segmentation. We’ve been talking about it for a long time in the sector. And it’s hard. Personalization is not easy, and that’s not just slapping the name on the top of the thing. It’s like you, what you were talking about. We’ve got 15 different stories that we can tell. Which one that best fits this particular donor and which picture matches this donor’s lifestyle.

You’re right, there are so many cool things as we talk about it, and the technology is there, but our capacity is not yet. And so I don’t know. It’ll be interesting to see how buying habits interplay with donation habits. I don’t know. I was thinking to myself we’ve gotten a lot of younger donors with this project that we’re working on, which has been really cool. But one of the promises that I have been trying to make to them is that we are trying to get to mainly earned income. That your gift will get us to a point where we’ll be earning income on the gift so that we can do things and not bother you with that.

So I don’t know if that’s the major resonation. I’ve asked them why they’re giving and they just say, “It’s something different. I like what I’m hearing.” So I’m going to put it on that. I don’t know.

Steven:Yeah. I think donors want to see sustainability. They want an investment. It’s not very dissimilar from investing in a for-profit where you want to see something come out of it and you want to know that that organization is going to be around in a few years. So anything that you can do to prove to a donor that you are sustainable and that not only is the gift going to have impact, but that it’s going to multiply in some ways, either literally multiply in terms of growing or creating some sort of capacity that will help the organization later on, I think those kinds of things are going to get really important to these maybe younger, savvier donors that are a little bit more selective with their dollars because they don’t have a lot of dollars to be spreading around.

They’ve got bills, they’ve got student loans, the wages kind of stink. So they don’t have the capacity that the older generation does. But don’t forget about the older generation there either, because that’s where the [inaudible 00:22:50] now. I’m not saying don’t look down the road too far, but just make sure you don’t miss what’s right in front of you, either.

Randy:Right. There’s, like you were saying before, there’s so much opportunity around planned giving and making sure that . . . and people are so scared of that. It’s not that scary. You just put a paragraph on every freaking thing that you send out that says, “Hey, think about us when you’re doing your planned giving.”

Steven:Yes. And it’s weird, I’ve never been asked that. And maybe [inaudible 00:23:19] people think that you should only be asking old people that or rich old people that. But man, I’ve got a seven-year-old and we put our first will together right when he was about to be born. And I think that if I had been asked, I probably would have put something in there. So don’t sleep on those things, either. It’s an easy ask.

Randy:It’s an easy ask. I remember as a young professional, I had one of those little add-on life insurance policies with my work. And it said where would you like this money to go, and at that time, I was, like, well, my parents are covered in my other will, and I’m a young professional. I’m single. And I’m, like, I’m doing a lot with this particular nonprofit organization. I’m going to name them. And to be honest, just this last couple of months ago, my parents were finalizing some stuff in their estate, and they’re, like, “Hey, Randy, we need you to put a giving vehicle in place on your end.” And so I’m not planning on going anywhere soon, I don’t hope, but, you know, that’s . . .

Steven:I hope not.

Randy:But now I have a giving mechanism in place so the transfer of wealth of my parents already has a place to go, just in case something were to happen to me before they were to go.

Steven:That’s a really good point, because you and I are pretty close in age. But we’re going to be caregivers for our parents.

Randy:Yeah.

Steven:This is something that everyone is talking about. It’s irrefutable. This is coming. But I had never made the connection that we would all [inaudible 00:25:00] the legal caretakers of those assets, which is also true. So even more reason to start thinking about these types of giving vehicles. It makes a lot of sense.

Randy:Yeah. So I’m really interested in this whole notion of transfer of wealth, and there’s going to be a lot of that happening. And you need to be in the conversation when that starts happening. So I don’t know.

Steven:Absolutely.

Randy:So here’s the big question.

Steven:Okay. I’m ready.

Randy:You’re in the sector 10 years from now. What does it look like to you? What do the donors look like? What kind of causes are we working on? What have we solved in the last 10 years?

Steven:[Inaudible 00:25:41].

Randy:Yeah, it’s a big one.

Steven:Well, hopefully we’re all still alive in 10 years. I guess we can place the bar right there to begin with. Everyone will be 10 years older, so the millennials will be 10 years older, the Gen Xers will be 10 years older. So whatever generation is behind the baby boomers and the goldens or the retired generation, whatever you want to say, hopefully there will be more capacity there because the Gen Xers will, I think if my arithmetic is correct, they will be empty-nesters or close to being empty-nesters. The boomers will be older. They’ll be closer to retirement. So hopefully you have — or they’ll be in retirement. Hopefully you have fostered things like planned giving and bequests from those people.

Causes? Wow, I think environmental causes will be more significant because we’re facing some — I mean, the environment in terms of the planet Earth. I think we’re facing some challenges there, for sure.

Donors will be even smarter. We talked about them being savvy now. They’re going to be even savvier and even more shrewd with the dollars that they’re giving. So it’s even more important that you build those personal connections because I don’t know that there will be as much expendable income. My generation, I’m 34, my generation will probably be caregivers for my parents’ generation by then. My generation has a lot of student debt and the wages aren’t in the same place that my parents’ generation was when they were my age. So I think there’s going to be fewer dollars out there.

So it’s even more important — it’s always important, of course — but it’s going to be even more important that you’re retaining the donors you already have [inaudible 00:27:38] connections because we’re not going to spread our dollars around to a lot of different nonprofits. We’re going to stick with the ones that we, of course, have a passion for, for the cause, at least. But we’re not going to be loyal to organizations. We’re going to be very loyal to causes but not necessarily loyal to organizations, like maybe our parents’ generation was.

So make sure you generate that loyalty and that relationship between the donor and your organization, because they’re going to go elsewhere. They’re going to find another social advocacy group that is more aligned and is more open to the types of communication that they want to receive. So don’t sleep on it.

Randy:Well, thank you so much, Steven. It’s always so good to kind of prognosticate . . .

Steven:Yeah.

Randy: . . . yeah, and figuring out what’s going on in our world. And no better person to do it with than Steven. And I appreciate your time. And until next time, thank you.

Steven:All right. Thanks for having me, Randy. You guys are awesome.

Randy:You bet. And that’s a wrap. Thanks so much to Steven for joining us for today’s conversation, and thanks to all of you for tuning in. I hope we’ve provided some insights that you can take back to your organization, or at least a little entertainment. Until next time, you’ll have to tune in to hear what’s next.