[00:00:03] Speaker A: Welcome to the Rainmaker fundraising podcast, where we bring you tips and insights to help you raise more money for your organization and lead more effectively. I'm your host, Andrew Olson.
[00:00:13] Speaker B: Hey, everybody. Welcome to the show. This is Andrew Olson. I'm here with Dave Raley. Dave is a great friend.
He's the founder of Imago Consulting, the co founder and host of the Purpose and Profit podcast on along with Carly Berna. Dave's a veteran of the fundraising space. He's a prolific speaker in the industry. I think I've seen him on stage at like a dozen conferences in the last year. And my personal belief is that Dave is the number one leading voice in our sector on sustainer giving and how charities can embrace the subscription fundraising model. So I am thrilled to have you here, Dave. Welcome to the show.
[00:00:50] Speaker C: Thank you, sir. Man, you and I have known each other for a long time, and I just. I love it that we get to geek out on all this fundraising, nonprofit leadership stuff.
[00:01:01] Speaker B: Yeah, you know, I was thinking back about this before we jumped on. Like, we've. We've known each other for almost 20 years now. And our past first cross, when you were at Masterworks, I was back at Russ Reed. We were both, you know, slogging through agency work. And you've been an agency guy for a long time. But a couple years ago, you made the leap to launch Imago and kind of do something completely different. What motivated that?
[00:01:26] Speaker C: Ooh, all right. I like the twist questions. Early on, for me, you know, I never. I loved actually working in the, you know, direct response fundraising agency. Honestly, not to go too far in the back. The backstory, but I wanted to do, like, stuff with the Internet and marketing. Like, those were the two things that I was interested in as a young man. And I just threw a whole series of candidly God circumstances, found out that there was like an actual industry of marketing organizations that worked for nonprofits and actually did social cause work. And I just, like, I thought that was a volunteer job, Andrew. And I was like, wait, you can. Wait, hold on. You mean I can get paid?
Like. Like I could have a career helping nonprofits, like using like business and marketing and. And then the Internet, which back in. Back in our day was a new idea and so loved the agency world. Was there for almost 19 years and did a lot of different jobs, but really started things. So seven, seven different jobs, started a lot of departments or helped build different groups. You know, between digital and helped with our media team, analytics, experience, design, brand strategy, innovation, and just I believe that we're all on this journey of understanding, like, who we were made to be. And then, like, what is the best thing at that moment in time with the intersection of where we've been placed? And so for me, it was just a few years ago that it was like, you know what? I love to help leaders connect dots. Like, I love to help them see, not around the corner. I'm more of a wave metaphor guy. But, like, what are the ways that are famine? What is something we need to maybe pay attention to that might actually be transforming the way we do things and the way we operate? And I just, as, you know, running an agency, you spend. I spent maybe 4% of my time doing that and 96% of my time helping to run an organization and do really admirable work. And so I said, what would it look like to create a firm where it's much more advisory in nature? I can spend half my time writing, researching, speaking, helping leaders connect the dots, and then half my time with a very select, specific set of clients. Then I can apply those lessons to. So far, so good.
[00:03:43] Speaker B: That's awesome. And so you launched the firm, was it, two years ago?
[00:03:46] Speaker C: Yep, Just.
Just a little over two years ago.
[00:03:49] Speaker B: Okay, awesome. And I know we've. We've gotten the chance to collaborate on a couple of shared clients, which has been really exciting. And one of the things that. That you seem to really have sort of gravitated to is, and which I want to spend most of the rest of our time talking about today is this subscription economy and how that applies or could apply in the nonprofit sector to sustainer fundraising programs.
[00:04:12] Speaker C: And you.
[00:04:12] Speaker B: You've recently written a book that's not out yet, but it's on the way.
Tell me two things. One, why did you write the book? And two, well, three things. Why'd you write the book? What's it called, and what's your goal with it?
[00:04:25] Speaker C: Ooh, okay. So why did I write the book? I want to say I'm a glutton for punishment. And I say this too, as I know you have written a. A few books. And yes, they are a lot of work, but no, it's just because of that, you know, what I mentioned before, where I am just passionate about helping leaders understand, particularly when things are changing. Like, you know, recurring giving, by the way, not new. The earliest form of recurring giving in human history that I could find, and I did a couple years of research on this, dates back several thousand years. And it's the ancient Jewish people. If you go back to the Old Testament in The Bible and you look at the laws and the, and the, the traditions around first fruits and you know, bringing. So the, you know, if you're an agriculture, whatever, you would bring your first fruits, literally the, the first 10% of your, your crop and you would bring it to the temple, which had obviously faith and religious overtones, but it was also then used to feed the widows and orphans. Andrew.
So it's like recurring giving has been around for a while. I won't drag you through the rest of the history, but I do, I do have a brief chapter in the book, I promise for those of you that are not history buffs, but I do, I bring us through the history of rec. Recurring giving.
[00:05:33] Speaker B: You're not going to get us a video series on that history.
[00:05:36] Speaker C: There may be a history, there may be a video series at some point, but, but the reality is over the last 10 years, recurring giving has become completely transformed. And that's a dramatic statement.
That's, which is why I wrote a book about it because it's, that's not a pr, you know, buzz, you know, headline.
The truth is that it, particularly North America, the way that donors think about, engage on a recurring automated basis has changed and it's been in light of what we've talked about, the subscription economy, which first transformed consumer behavior and is now and has been, I would argue for the last definitely five years, probably more like eight to 10. But definitely the last five years has started to gain steam and you look at charities that are seeing significant growth. So we'll come back to that. But so I wrote the book because I wanted, I saw something that was changing. I looked at the entire canon of nonprofit literature and I couldn't believe it. There were, I think I could find three books in history that have been written about recurring fundraising and most of them were written more than 10 years ago, before all of these transformations and transitions. And so I was like, okay, I guess I know what I need to do here. So two years, about 450 hours of research and writing, another 400 hours that I'm putting in, you know, in actually helping get this thing into the world. And voila. A book.
You wanted to know the name of the book. We should probably mention that at some point you want to dive in that.
So the name of the book is the Rise of Sustainable Giving. And I think by the time we air this, it will be available at least for pre order.
So do you have, you're into a.
[00:07:21] Speaker B: Pre order copy or anything? Right now?
[00:07:23] Speaker C: I have a preorder copy slain here.
So it's called the Rise of Sustainable Giving. And subhead is how the subscription economy is transforming recurring giving and what nonprofits can do to benefit.
So it is.
I mean, you know, you've. You've had that experience. It was literally this week that I picked up the first, like, open the box and saw the first physical copy of this labor of Love. And it was such a cool moment.
[00:07:52] Speaker B: That. That is such a cool moment. It's. I don't know about you, but I. When I did that, I got this one feeling of like, I'm so excited. And then another that was sort of like, I feel like I've been in a series of car accidents for the last two years and I can finally, like, take the seatbelt off.
[00:08:08] Speaker C: Right.
[00:08:09] Speaker B: It's finally done. So I don't know. I don't know if that resonates or not, but.
[00:08:12] Speaker C: Yeah. The best metaphor I've had yet is running a marathon. And it's like, you go from a 5k because I write. I mean, I write a weekly column, talked about that, the Wave Report. I, you know, write articles, I write strategies. I, you know, I write. I write words all the time, but to write 56,000 of them and to edit them seven times and, you know, all the things is just the equivalent of like, the first part of the marathon. Super fun. The middle part of the marathon is like, why am I doing this? This is so painful. And then right at the end, you're like, oh, this is awesome. I should do another one of these. Right? So I'm in that part right now, which is the, like, now, now it's like another starting line. It's like, now it's telling the world about it. Helping apps, nonprofit leaders. Just see it.
[00:08:58] Speaker B: I will tell you, you lost me at the marathon metaphor. Do I. Do I look like a marathon? Safe. Come on.
I generally get the sense, though.
[00:09:07] Speaker C: Yeah.
[00:09:08] Speaker B: So, but let's talk about some sustainers for a minute because, you know, I cut my teeth in this industry on one of the. The first Sustainer program I ever worked on was the Father Flanagan's Boys Home Sustainer program.
[00:09:22] Speaker C: Right.
[00:09:23] Speaker B: Which doesn't go by that name anymore.
[00:09:25] Speaker C: Right.
[00:09:25] Speaker B: It's just Boys Town now. But this tells you how long ago I was working on this. And I worked on what they called their mobile program, which was their monthly billing statement.
They had, at the time, thousands of check writing, monthly givers, where you had to send a statement out once a month to remind somebody to write their monthly check. And if they didn't There was a whole series of additional follow ups that you had to send to chase that commitment essentially.
[00:09:52] Speaker C: Right.
[00:09:53] Speaker B: That is, I think a lot of nonprofits are still in that environment where they've got people writing checks and they're sending out sort of a monthly statement trying to catch those, maybe getting 40 to 50% of those people to fulfill.
[00:10:06] Speaker C: Right.
[00:10:07] Speaker B: And then you've got some more sophisticated folks who are doing more digital and more ACH type. But talk to us about how the subscription based economy and what you're seeing in the most effective sustainer programs looks different from those experiences that a lot of our listeners are probably used to.
[00:10:27] Speaker C: Yeah, well, and honestly that's the reason I start. Start with recurring giving is not new because one, it does date back thousands of years. But two, every fundraiser, if you've been in the industry for any length of time, you're like, yeah, I know, basically no recurring giving. Like we've got it. They wouldn't say it this way, but we've got a checkbox on our website. We receive checks in the mail. You know, I first program Andrew, by the way, 20 years ago, the first client I worked on was organization called Union Rescue Mission. You know, I'm in Los Angeles, wonderful organization.
I grew up in Southern California, so it was very special to me to get to actually serve. I had volunteered on Skid Row and San Julian street in a grown up. But to like literally get to serve them again for professional, like who doesn't.
[00:11:09] Speaker B: Love to work with Andy Bales? So I mean that's.
[00:11:10] Speaker C: Yeah, that's true. That was, this was before Andy. That's how old I am, Andrew.
But she did a dust up.
I did get to work with Andy Bales. But the reason I bring that up is because I literally, I was a project manager. So guess what? My job was printing out those monthly fulfillment letters 36 to 90 day lapsed. Like we actually gave little. Like we printed out a picture of a representative child every month and I got stuffed all those, you know, so I cut my teeth on this. And this is why I started with that because over the last 10 years that has been really been transforming. And so let me just give you a couple examples of how subscription giving is changing. So number one, historically my estimate is three quarters of all nonprofits have really been left out of the ability to build strong, growing, resilient recurring giving program Andrew, you would have worked with. And you and I have both worked off and on with different organizations like Compassion International or World Vision or Zev the Children or public Television. Public Radio. There are really three categories of recurring giving programs historically. First, one to one, that is the donor and the beneficiary are somehow paired up. So it's like I give and this sponsored child receives, or maybe a missionary receives support. And that's really historically been the gold standard, you know, in recurring giving, because it's high retention, it's high emotion. It's like, I'm giving and I know who's receiving. But, Andrew, there's a problem, and that is the vast majority of charities are not built. They don't have the program design, the infrastructure or the offers, so to speak, to do what is called a one to one program. Okay, so that leaves the second category, which is membership. Think of your local zoo or aquarium or medium or public television or public radio. There's a lot of nonprofits that exist to educate and provide content and they can provide a direct benefit to donors. So I would call, I call those membership style recurring giving programs. And that's wonderful if you can do that. If part of your ethos, your purpose as an organization is to educate or to provide goods or services to your donors, more power to you. That's awesome. But again, there's a problem. The vast majority of charities don't have the donor as the beneficiary. The beneficiary is overseas or it's, you know, it's not close to home, like a union rescue mission. And so the reality is that 75% of charities have been in this third category, which has just basically been left behind. It's the everybody else category. It's the we've got a checkbox on the website. We've got a check writing program. We might have a cool name for our program. It's the Friends of the Ministry program. Or it's the, you know, partner, you know, charitypartners.com or whatever. I'm not knocking that, by the way. That's the name of your program. I'm not knocking that. I'm just saying historically there hasn't really been any there there.
[00:14:15] Speaker B: If you Google Partners in Hope, which is what one of the large medical charity uses, you'll find like a thousand of them across.
[00:14:21] Speaker C: I was gonna say, like, yeah, that could be a good strategy. If you're a no name charity. You're like, huh, the Partners of Hope give to us. But the, one of the lessons and I, one of the things I go through in the book is six different shifts from the subscription economy that we can directly. And so one of those shifts is you actually have to have an ongoing value proposition. It's not good enough. And this is what we do in fundraising, by the way. Having done 20 years of single gift fundraising is we say what's a really good offer? Which is awesome. And then how do we like acquire people and then how do we get them to give again? Right. Yep. The reality is getting somebody to make the initial commitment of an ongoing, typically monthly gift and to stay around for the long term is actually a different ball game altogether. And so the mistake that I see nonprofit leaders make is they say, what's our best single gift offer?
So you think about like in rescue ministry or in, in social services, it's like meals and shelter or something like that. That's often not the best offer for an ongoing value proposition.
[00:15:24] Speaker A: Let's take a quick break from today's conversation and talk about your leadership. Do you ever feel stuck or like you just don't know whether you're leading well or not? I know that's something that I've felt at times during my 25 year career leading people in teams. And many of the leaders that I've coached and advised over the years have also felt that way. That's exactly why I created the 90 Day Leaders Journey email course. This course is jam packed with value to help you become a more effective and competent leader and to give you the confidence to step into any leadership opportunity. The course is broken into three key aspects of leadership, which are your leadership character, your leadership culture, and your leadership competence. Over the course of 90 days, you'll receive one email every day. Each email is brief, point and focused on a single specific topic to help you level up your leadership game. This is the same exact leadership training that I deliver personally to the leaders that I coach and mentor every day in business and nonprofits all across North America. Only instead of paying thousands of dollars or even tens of thousands of dollars, you can get access to this content at a significantly reduced cost. You can access this Game Changing Leadership email course
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[00:16:38] Speaker B: So you mean that Bed and Bread club that we created at Russ Reed 20 years ago isn't the best thing?
[00:16:44] Speaker C: It it was 20 years ago. It was probably okay, but that's what's changed. And so, so I go through a number of different lessons but and then I'll give you, I'll give you one other, and this one you'll not be surprised by. But I think is when you look at subscriptions, the only subscriptions that actually succeed in today's subscription economy are the ones that retain their Subscribers like that feels like such an obvious statement, but costs so much to get somebody to give, you know, to sign up for that Spotify subscription for, you know, 12.99amonth that the only reason it works is because of long term value.
And so you have to have a plan for retention and you have to have that ongoing value proposition. And subscriptions know this now. Some subscriptions don't by the way, some, probably our listeners have thought about a few like churn and burn type of subscriptions. They tricked me in and then I took 90 days to figure out how to cancel those go out of business because they ultimately those, those economic models don't work. The average, depending on which study you look at, the average donor's long term value when they become recurring is conservatively between 5 and 7x that of what a single gift owner would be. And it, hey, in the first year, right? Like it's, it's not a, I used to think, oh, long term value means you get the payout like you know, 20 years from now. No, like long term value means now like they start giving now in the next 12 months. I had a client yesterday that just started, they don't even really have a full program yet. And I asked him, hey, how, how'd that initial? We did some, you know, some kind of tactical fundraising stuff around recurring giving. And they said, oh man, we're a little disappointed. We got 18, you know, recurring donors. And I was like, did some quick math. I was like that's $25,000 in value you did in a one week campaign and you don't even have a program yet. Like that's pretty good. Like, you know, everyone sort of thinks it's, you know, the overnight success sort of a thing. And it's like that is actually an absolute success for where that organization is relative. I have another client that just got, you know, 380 in their campaign. But again you have to start from where you are.
[00:19:03] Speaker B: So let's pause on that for a second because yeah, this, this is something I think a lot of leaders and, and not just CEOs but like finance leaders struggle with too on this.
[00:19:11] Speaker C: Right.
[00:19:12] Speaker B: Because I always tell people that they need to think about sustainer conversion, like acquisition.
[00:19:18] Speaker C: Right.
[00:19:19] Speaker B: Like at the point of conversion you may not be net positive if you've had to build all of the assets to lift up a program in this year.
[00:19:28] Speaker C: Right.
[00:19:29] Speaker B: But that long term revenue over however long a sustainer sticks around is what's going to pay off. Are you saying that in the programs that you're running even when you account for all of that upfront, like programmatic building that in year one, like first, first full 12 month cycle, they're still seeing net positive returns.
[00:19:50] Speaker C: Yeah, absolutely. And candidly. So I'll answer it more broadly and then I'll answer more specifically for clients that I work with. But so more broadly it, it is, yeah, long term value, I think, just tricks people for whatever reason, it's like human psychology into thinking, oh yeah, okay, well, awesome. But I can't afford to wait five years. It's like you're not waiting five years. If they convert now, what is the next 12 months of value? So that's like the broad picture. Specifically, I don't candidly work with any client where I don't think I can provide a minimum 2 to 1 in that short term window and 10 to 1 long term, most of the time it's a much bigger spread. But it obviously depends on the scale and complexity of the organization. Yeah, be 40 to 1. I'm not saying it's a 10 to 1, but that's the power of not just the future giving, but the present giving.
[00:20:37] Speaker B: Okay, so you, you just said you don't work with clients where you don't think you can get that. What makes an organization ready or ideal for a Sustainer program versus one that might not be?
[00:20:49] Speaker C: Well, couple things. Number one, it's how much a priority it is, candidly. Because one of the things I most appreciated about the best, you know, chief development officers and executive directors I've ever worked with is they don't bite off more than they can chew.
There's, there's like an element of like aggressive. Like, you know, we're going to take the leap of faith. Like there's definitely bold decision making, but it cannot be one of your 10 priorities. Like if recurring giving is like, yeah, yeah, yeah, we should totally do recurring giving. Buy the book, do some stuff. Like there's a lot you can do. But until it's a top three priority for your organization, that's again, working with me and with our team. It's like it needs to be a priority. Now does that mean the CEO has to like spend all day on it? No, like we work with the team. It's, you know, all those sorts of things. So number one, it's a, it's a priority and that they believe that, you know, that there is the potential there.
And then really it's just a question of are they willing to do what needs to be done.
You're, you're Making me think about this. It's. It's like they need to be willing to do what needs to be done. And I don't like when I come in, I. One of the things we do is we'll do a deep dive assessment.
Go figure. Right? And we look, do the analytics, we do qualitative, we actually do a secret donor study. We do all the things, but very like narrowly focused on what is the, the recurring giving experience look like. What are you doing to acquire new recurring donors? What are you doing to convert recurring donors? What are you doing to upgrade? You know, there's we, we have 10 different areas we look at and then there's usually, you know, 30 to 50 insights, key core like recommendations that come out of that. But Andrew, that is one overwhelming like. And so really what we do is we say here's the three things you need to do next and here's the top 10. Like. And then depending on the situation, then I'll often then work in an advisory capacity. We'll work with them, with, with their agency. You know, you and I have worked some together on some of those. We'll work with, with their providers, with their internal team to then actually implement those things. Because that's the fun thing, Andrew. I just give people my advice now. Like we, I have to tell people that turns out the devil is in the details and you have to implement, which I have so much respect for and have done a lot.
And so it is about like making sure that, you know, things are implemented. But it's, it's really in helping them to first discern what are those most highest leverage things that we can do.
[00:23:22] Speaker B: Yeah, I'll, I'll say just because we have worked together on a couple client programs specifically around Sustainer. Given what I. One of the things I really appreciate, appreciate about how you approach it is it's not this sort of ethereal, conceptual, you know, vaporware. It's very clearly do these things right. And don't do these things that aren't going to move the needle for you. And in what I've seen of the work that you've done, it's all been like, you can look at a document and say, yes, we could absolutely execute on those if we make them a priority.
[00:23:53] Speaker C: Right.
[00:23:53] Speaker B: Which I think a lot of times people fall into this trap of like, well, this sounds really flashy. It sounds like it could be the next ice bucket challenge. We could have all sorts of things going on and then it's, it's so heady and so conceptual that they Sit around the table and go, but how do we do it for next month?
[00:24:10] Speaker C: Right? Yep. You know, people, I have a talk, I give on the four myths of innovation that nonprofit leaders tend to believe that can hold them back. And one of the myths of innovation, Andrew, is this idea is that innovation is about ideas. And you know, I, again, I think it's just a human psychology thing. It's like the brilliant idea, the breakthrough insight, the, you know, that's innovation. The reality is innovation is about activation and about execution. It's about actually getting things into market. It is about ideas, but it requires all three. And I use a tool, it's called working genius. But that I actually, as a part of our assessment, we look at the whole team and their wiring because some people are more just pure ideators. Like, don't ask me to how this is going to work. Like, I just want to come up with a brilliant idea.
And we need people like that, but we also need people that are going to think through judiciously, like, well, is that the right idea? Is that even a good idea? And then also, how are we going to do that?
Which is why I love what I get to do now, because I realize we need that whole ecosystem. Like, we need that. And then depending on the client, right. It's the. They have their own. The nonprofit has their own internal resources and then they often have partners. And it's like, beautiful. We need all that.
[00:25:25] Speaker B: Yeah. We go through a very similar process with major gift teams when we're looking to implement transformation in organizations around major gifts. Same kind of personality assessments, working style assessments. And it's fascinating to me to see how people line up in an organization. And when you're able to get that kind of alignment that really lets the organization just go and make change, it's really exciting. I want to hone in on something that I get this question all the time.
And it is in my Sustainer program, where should I cap my program?
Should I let a major donor be a monthly donor or should I exclude them? And I think where that comes from, is this concept correct or not? I'm not sure. But it's this fear that, like, well, if I let a major donor become a monthly giver, they'll never give beyond and they'll only end up giving me like 50 bucks a month when I know they have capacity to do a lot more. React to that for me.
[00:26:21] Speaker C: Thank you. By the way, I love, I love these questions. I had, I literally had this question last week.
You're like, okay, well, good. Well, this is like a real, real exercise here. So a couple things. Number one, your recurring donors are your most generous donors.
And what I mean by that is concretely what I see is the average recurring giving donor gives a minimum of 25% on top of whatever the annualized gift amount is. And so very concretely, if I look at a program and they're doing a decent job, they're sort of like average to maybe slightly above average. What I expect to see is if they bring a million dollars a year in recurring giving, they're going to bring in a $250,000 a year of additional single gifts from the same donors. Okay, so number one, the best respondents actually to a lot of your single gift stuff. Yes. Is your recurring donors. Because it's just like, you know, you think about. And I don't. I'm not a political fundraiser, but you think about, like, candidates to say, would you give me five bucks? I'm like, I'm pretty sure you're asking for the five bucks because you want my vote or you want me to go tell a neighbor. Like, it's not about the recurring or the, you know, the small dollar amount. It's about the, the vote. So number one, your recurring donors, at whatever level, are going to be likely the most responsive to individual single gift asks, including, I would assume, and you know this better than I, your major, your major donors. And then number two, and I'd love you, by the way, to respond to that, whether you agree or disagree, I'd love to hear it. But number two is, and I had this very concretely, I had another client a few weeks ago, ran a campaign, and they say, hey, you know how to go overall? Good? Exceeded expectations. Awesome.
They said, oh, yeah. And we also had a donor give $5,000. I was like, yeah, that's awesome. A month. I was like, oh, wait, wait, like mom on their, on their credit card. Because you and I both know them. You're like, really? You're getting a lot of airline points.
But, but yeah, and this was a, this was a conversion campaign. And so I'm, I don't know for sure, but I'm pretty sure it would have been an existing donor that was like, yep, I'm in for 5,000amonth.
Now, Andrew, if I'm, if that donor is capable of giving $5,000 a month on their credit card, I am going to talk to them. Maybe at year end, I'm going to go for stem. Like, and I'm going to say, how about the million dollar gift that you're clearly capable of. Because for whatever reason, you know, $5,000 a month is like, you know, is $5,000 a month to one donor is, you know, can be equivalent to $50 a month for another donor. It's like a rear capacity. And so that's one of the things I think we're seeing. I'd love to actually geek out with you on more data on it, but over the last 10 years I hear more and more of that, which is like the monthly or the recurring gift is much more about a, an indication of identity, of belonging, of passion for the cause. It's not the. This is all I'm ever going to give.
[00:29:18] Speaker B: Yeah, I would agree. I always talk about it as an indicator of loyalty.
[00:29:22] Speaker C: Right.
[00:29:23] Speaker B: And, and we know that major donors tend to be your most loyal donors. I have seen demonstrably in a number of. Of organizations, donor data that a large percentage of major donors come out of having once been a lower dollar monthly sustainer.
[00:29:41] Speaker C: Right.
[00:29:41] Speaker B: So I, I think our, our data probably aligns. I, we, we should talk outside of this podcast about some additional research we could collaborate on on that topic.
[00:29:50] Speaker C: Oh, can I say one more thing?
[00:29:51] Speaker B: Yep.
[00:29:52] Speaker C: Because there was an implied and. And you didn't imply it, but when people asked me that question, including this most recent time I was asked that question, it was kind of like, when should they stop being a sustainer? When should they start being a major gift owner? Meaning, like, let's stop one. It's like, it's like there's some weird, you know, hard wall between you're a sustainer and then you're a major gift owner. So like, I don't know, let's say you send a quarterly newsletter to your sustainers, affirming them for their sustaining giving. Oh, well, but now they're in the major donor team. We wouldn't want to send them that. Like, it's kind of the implied thing. I get that.
[00:30:28] Speaker B: Literally, it's not implied.
[00:30:29] Speaker C: I get that question all the time. Okay. So I wanted to address that head on. And I, I, obviously I'm, I'm not really a black and white guy in that way, like. But the reality is if they're a loyal recurring friend of the organization, then you treat them like a loyal recurring friend of the organization. Don't let your internal silos dictate the treatment. One other. You and I love war stories. One other client years ago that I worked on that we, we did that sort of general to major donor sort of conversion analysis. And we learned a couple things. Number one, that the moment a general donor upgraded into mid or major donor level because of, by the way, appeals that they were receiving, they would get pulled out of appeals. You say you probably see that all the time and it's like, you mean the thing that caused them to, you know, identify with and care about the organization and then start to give at that level. That's the thing you stopped. And then the second thing we actually found in that organization sense is the other direction didn't happen. So once they were quote unquote now flagged as a middle or a major donor, that was a one way street.
If they stopped giving or like fell off or whatever rep didn't, you know, didn't really do a good job with their portfolio. They never made it back into universe into treatment. I was like, oh man.
[00:31:48] Speaker B: So don't have worked probably over a dozen donor audiences where that exact thing happened. And it is the fastest way to lose a million dollars or more in a year.
[00:31:58] Speaker C: Right? Yeah.
[00:31:58] Speaker B: So I want to go back to it for a second to this particular piece because one nuance in that conversation and I got this question from a client six weeks ago was, well, wait a minute, you're telling me to keep them in this and then also to treat them, you know, like a major donor, but my sustainer audience gets 26 touches from us a year and our major donors get 35. Are you telling me you want these people to get 71 or whatever?
[00:32:26] Speaker C: The math is on that.
[00:32:27] Speaker B: And so my, my perspective on this is always like, well no, there should be a third lane, which is I.
The box on both.
And so I'm not just going to get, you know, pounded with all this stuff, but let's have a thoughtful conversation and craft an entirely new experience for this audience.
[00:32:44] Speaker C: Absolutely.
Yep. No, and any.
And you, you were. And I do too. You know, the, some of the more sophisticated organizations, it's like, yeah, it's a quite robust strategy on both sides, which is great. Like. And yeah, you absolutely find that third lane. You know, maybe you're. I'm spitballing here, but maybe your recurring donor's under a certain threshold. They get this treatment which does include asks and upgrades. But some of those asks and upgrades on the major donor tracker are either replaced or supplanted or buried or whatever. Right. Yeah, that must be thought about this.
[00:33:18] Speaker B: So let's go the other way because one of the other things that just drives me nuts in, in our sector are these.
I think they're more gimmicky than premium items in the mail front end premiums at least.
And it's, it's the, the message of if you become a sustainer today, we will never send you anything in the future. We, we just, we will shut off all communication.
[00:33:42] Speaker C: Yes.
[00:33:43] Speaker B: And, and, and true things. I, I, I feel two things on that. First, I think it's disingenuous because there's always like a well, but in order to get us to never talk to you again, you have to check the box that's in three point font on the back of the reply device and only if we process it on a Wednesday will we adhere to it kind of thing. But the other thing is you've just said that these people are like the most loyal, the most committed, the most into you. So why would we even want to make that commitment to say we'll never talk to you again? Like what, what's your perspective on this and what have you seen in the data on programs that use that approach?
[00:34:17] Speaker A: Have you read My Amazon Number One Best Selling Book, 101 Biggest Mistakes Nonprofits make and how you can avoid them yet? It's the book that I wrote with expertise from over 20 nonprofit leaders and their 300 years of combined experience. You can download it for free today. Just visit andrew olson.net and go to the free Resources tab on my site.
[00:34:36] Speaker C: Yeah, so caveat. This is definitely, I don't have a lot of hard data on this, so this is definitely.
No, no, I did again just spend the last several years researching this overall topic. So I have, I have some informed opinions and that is the, and actually somebody said this to me at a conference recently. I was speaking on this topic and they said, oh yeah, set it and forget it. Right? Like, like as, like a positive thing. Like as a benefit, you know, to the recurring giving poem. And that's an example of why I wrote this book because that might have been a good idea 20 years ago where it was like, you know, if you can get them on ach, like if you can get them on eft, whatever you want to call it, then don't talk to them because they'll stay forever. You know, I'll give you one counterpoint. And this is another lesson from the subscription economy, by the way. Some fun facts on subscriptions. 95.8%. And that is not a made up statistic because it sounds like 1.95.8% of US adults have at least one subscription.
The average American. You want to guess how many subscriptions the average American has, Andrew? 30. That's a good guess. But 12. So the average American has 12 subscriptions.
42% of Americans have forgotten that they were subscribed to something that they were no longer using. By the way, my hand is in the air. Is your hand at Amen? Yeah, yeah, we actually had one come.
[00:36:02] Speaker B: Through yesterday in our account. I was like, huh, didn't know about that.
[00:36:05] Speaker C: Right. So it's still going on. Andrew. I literally just wrote a book on this and a couple weeks ago. Oh, I didn't know about that one. The reason I bring this up is because there now are entire applications, subscriptions that you can subscribe to to monitor your subscriptions that tell you what subscriptions you have, which is just a wild, you know, moment of inception or something.
[00:36:28] Speaker B: Capital dick ingenuity is what.
[00:36:29] Speaker C: Yeah, I rock it. Rocket. Rocket Money, I think is the main one. And the reason I bring it up is because guess what shows up in its report on your quote unquote subscriptions.
[00:36:39] Speaker B: Do charitable.
[00:36:40] Speaker C: Charitable contributions, buddy. You did not know that?
[00:36:43] Speaker B: I wouldn't have expected that.
[00:36:45] Speaker C: I had another one. Just while we're riffing on this subscription of subscriptions. I had Rocket Money sent me a really ominous email the other day and I said, you have a very large subscription payment coming up. Are you sure you want to continue that? And I was like, what did I sign up for? And I opened it up and it was my kid's tuition payment.
And I was like, well, I guess that is a subscription to Biz a monthly.
[00:37:15] Speaker B: At that point.
[00:37:17] Speaker C: So I say this, you cannot set it and forget it. You cannot go dark. Not only is that terrible stewardship, right? If the reason they sign up for the recurring giving is at least some implied passion for the cause. Now you don't need to say we're going to be best friends and I'm going to call you every week and we're going to, you know, you're going to come to all these events like you can maybe do it too much, but 90% of the time the mistake is on the other end, which is like, we promise we won't bug you, you know, and it's like they literally just raised their hand and said they are the most passionate about your cause.
Don't be weird about it, but let's, let's like actually treat them like the insider they are.
[00:37:54] Speaker B: Yeah, that makes total sense. So while we're on the topic of subscriptions, what is your prediction around? I forget what the technical or legal term is, but this whole idea of a one click terminal schedule.
[00:38:07] Speaker C: Yeah, well, hopefully. Well, first of all, it'll take A while to become a consumer standard. Like, obviously there's a federal conversation on. And for those that may be not clear about what we're talking about, there is and I think good conversation happening about basically shady companies that like get you into a subscription but then they make it impossible to cancel. And there are some nonprofits that also make that difficult. But there may be some federal or even other level type of legislation or rulings that say that no, you actually have to have a one click cancellation, just like in your email supposedly. You should be able to unsubscribe from any email, Andrew. Yep, that hasn't prevented my inbox from getting filled up, by the way. Mine either. But so I think it's, it's a years out kind of situation. But it's, it's again indicative of the overall, like, oh, you mean you should actually provide value? Like, I don't care that I get 90 emails a month from Amazon. Like now do I love every email? No. But I'm not bugged by that because I'm like, oh, cool, I'm glad to know that package got delivered. Or oh, there's a sale on that thing that I bought three months ago ago. Like, that's relevant to me.
Like, doesn't bother me, but I do care when you scrape my email address off of whatever website and send me incessant, seemingly personal emails saying, I just wanted to make sure you saw this, Dave. That's different. Right? You can send me three of those emails. And I'm like, there's no unsubscribe button. So this is a violation of can spam and this is not relevant. And I didn't, you know, I didn't ask for this. Right. So it is just an indicative of the world that we're moving into or that we, we are in actually, where people expect to be treated well and they expect to receive things that are, you know, helpful to them.
[00:39:53] Speaker B: Yeah, totally.
[00:39:54] Speaker C: Thank you.
[00:39:54] Speaker B: All right, I think we have time for one more question before I let you go today. And that is other than buying your book, which I think everybody should go buy your book, but other than buying your book, what are the two or three things that a charity that wants to build a Sustainer program do right now to get prepared to launch?
[00:40:14] Speaker C: Well, ooh, okay, so three words. Benchmark, evaluate and design.
So benchmark is the first step. You cannot, you cannot figure out where you're going until you understand where you are today.
So I have two questions for you to consider. Number one, how many and number two, how much how many recurring donors do we have today that have actually given a recurring gift recently? And then how much are they giving? And I in terms of dollars? And I like to express that in two ways. Annual recurring revenue and monthly recurring revenue.
There are in the subscription world, the mrr, monthly recurring revenue, and ARR.
Annual recurring revenue are like lifeblood metrics that subscriptions follow. Because it's like, what's our mrr? What's our ARR? There are other metrics they follow too. Nonprofit leaders need to start using MRR and ARR.
The reason why I wrote a book. So just where are you at today? So how many. How much bonus material, by the way, if you can take. Get a long term value. Like, what is long term value? I have a chapter in the book defining it very explicitly. Like, here's how to calculate it. I recommend 60 months of. Of giving the whole another conversation. But just so that everybody has a common benchmark. If you don't know that, by the way, take your average recurring gift and multiply it by 40. And the reason I say that is because the average is all over the place. But, you know, I often see between 35 and 45 gifts is kind of like the common sort of.
Jarrett. Oh, there's a derivative time. Yeah.
And some organizations it's 45 or 55. So like. So 40 is a bit of a conservative number. But if it's a $30 average gift, you know, multiply that by 40 and you get a number which I can't do in my head, but I just did on my computer, and there's 1200.
So anyways, so that's that. So, so benchmark. And then the second word is evaluate, and that is understand. Do you even have a program like. And to actually go on that journey? Every client that we work with, we do a secret donor study.
So fun.
Everyone, by the way, results. And I've done this for decades. I've never done a secret donor study where I didn't. We didn't have multiple. What I call face palm moments. Andrews. You know, the face palm emoji. Like, oh my gosh, I cannot believe that is happening. Or that we didn't intend. Or I didn't know that was going on. Or more often than not, I can't believe that is not happening. Like, they didn't get the.
The welcome hey kid exam.
[00:42:49] Speaker B: Welcome.
[00:42:51] Speaker C: So evaluate your. Your current program and just be honest. You know, do you have one? Because nobody today doesn't have recurrent giving. They've got the checkbox. They've Got maybe didn't have a name, but do you really have an ongoing value proposition? Do you really have a program?
Are you not only acquiring and converting donors into your program, but upgrading them and asking them for additional gifts and retaining them and reactivating them? Right. And so just evaluate your program. And then the third word is design.
And that is I want people to realize this is a program or a product, whatever word you want to use. Like this is not just a variation of your single gift offer. This is not just, oh cool, we, we mo our best, you know, fundraising, you know, offer is meals. So let's just ask for meals a month, which was, by the way, the first program I worked on was a meal a day program.
And again 20 years ago, not bad. In the mid-2020s, not great.
And so, so yeah, if I were to say three things, Benchmark, where are you at today? How many, how much?
Evaluate. Do you have a program? And again, start from wherever you are. That's not meant to be. Like, I don't, I'm not trying to make anybody feel bad, but just understand where you are. And then design, like, think this isn't just tactics. Tactics are important. But what do we have? What is that ongoing value proposition?
[00:44:07] Speaker B: Awesome, thank you. So you've got a special giveaway for all of our listeners. So you've got a Sustainable Giving Growth blueprint, which is a seven step guide to help organizations grow their Sustainer program. Where can people get that?
[00:44:21] Speaker C: Easy. URL sustainablegiving.org that'll send you actually to the Imago website. But Imago is hard to spell, so we'll just, we'll just get you there. You can get access. That's where you can see links to preorder the book. You can also just preorder the book on Amazon and then depending on when you're listening to this, it might be out. So you can just buy the book. But yeah, so seven steps to Thriving Sustainer Program. Just free, free resource that I put together. You know, you do a lot of research, you come up with a lot of stuff. And so took some of the key lessons from the book, compressed that into a PDF, put that there and, and just, yeah, just I want to get the word out to as many nonprofit leaders as possible.
[00:44:59] Speaker B: Yeah, I mean, I think you absolutely should. And one of the cool things, Dave, and thank you for doing this. But for our listeners, DAV agreed that anybody who signs up to get that Sustainable Giving Growth blueprint, he'll also put their names in a hat or a bucket or some other way to draw. Maybe it's an electronic thing at this point. And he'll draw 10 names and send them send each of those 10 winners an autographed copy of the book. So I think definitely you should sign up for the blueprint. I am having seen some of this work myself, I can tell you right now it's packed with value and I can't wait to get my own copy of the the book as well. Dave, thank you so much for being here. Really appreciate you.
[00:45:36] Speaker C: Thank you sir. Thanks for just bringing these messages to the world. Love the love the show. Loved your books. So I'm glad to be joining the club.
[00:45:44] Speaker B: Awesome man. Come back anytime.
[00:45:47] Speaker A: Thank you so much for joining us for this episode of the Rainmaker fundraising podcast. I have two favors to ask before I let you go. First, if you enjoyed this episode, please rate us and review us on whatever podcast platform you use to listen to this show. It'll help us reach more people with the tips and insights that you find most valuable. My second favor is a little bit.
[00:46:06] Speaker B: Of a favor to ask, but also.
[00:46:07] Speaker A: A little bit of a gift to you. I write a daily substack newsletter called the Leadership Growth Newsletter. It's free to you and I write it to help people lead more effectively and in both life and at work. I'd love for you to click the link in the show notes and subscribe to that newsletter as well. Until next time, friends. I hope you make it a great day.
