[00:00:00] Speaker A: Foreign.
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.
Hey, everyone, this is Andrew Olson with the Rainmaker Fundraising Podcast. I'm here today with Gabe Cooper and Carly Berna from Virtuous. Gabe and Carly, welcome to the show.
[00:00:24] Speaker B: Thanks for having us.
Yeah.
[00:00:27] Speaker A: So Gabe is the CEO at Virtuous. Carly is the vice president of marketing, and did I read correctly, fundraiser in residence. In residence. Yes. I'm losing the term. That's such a cool title.
Before we jump into the core of what we're talking about, I just want to point out for our listeners. So Virtuous is a technology company, and one of the things that I love about the work that they do and how they do it is what most tech that's forced on the nonprofit sector is done so by tech people who only know technology. But one of the things I love about the Virtuous team is people like Carly who have actually lived in the seat and done the work. And so it makes all the difference in how that technology is designed and applied. And for the listeners who maybe haven't met the Virtuous team yet, that is a clear distinction that I think you should pay attention to.
We're here today to talk about your 2025 Nonprofit Benchmarking Report, which is freshly out in the marketplace.
Let's start with this.
How long have you been running this benchmark report and why did you initially create it?
[00:01:37] Speaker B: Carly, you went on with that one.
[00:01:39] Speaker C: Yeah. So this is actually only the second year.
I started at Virtuous last year, and I went to Gabe and was like, hey, I've actually been reading other CRMs benchmark reports, but because Virtuous doesn't have one. And I was a Virtuous customer and he was like, yeah, I've thought about that. I have like a 3/4 of a benchmark report written. So from there, we started it last year and really it was just so that we could speak to our own customers and the industry about what we're seeing with Virtuous customers and the methodology that Virtuous brings. So this is only the second year, but we've gotten really great feedback from the benchmarks that we're providing.
[00:02:15] Speaker A: Awesome.
Talk to me about this.
So what are in your minds, the metrics that matter most? I mean, there's so many different variables that an organization can measure. What have you found and what do you see in the study are the things that matter The Most to actually driving revenue growth.
[00:02:37] Speaker B: Yeah, it sort of depends on where you're at as a nonprofit. I mean, I think every nonprofit probably has different gaps within their KPIs and their fundamentals fundraising program.
For us, we sort of chose seven KPIs that fit together in a way that you could sort of look at all of them holistically, and they paint one clear picture. And so, you know, there's obvious ones like donor retention and average gift size and new donor acquisition. Right. The things that you would expect. But then there's ones that are maybe not so obvious to fundraisers, like portfolio balance, like how dependent on you are. Are you on major donors versus mid level versus small donors? And how does your balance stack up against nonprofits like you? Right. Or one of the metrics that we added this year that I know Carly is really excited about is like days between first and second gift. So pretty niche and, you know, kind of, kind of not typically in these benchmark reports, but a metric that if you sort of get it right and optimize for it, you can have see this really huge compounding effect.
[00:03:49] Speaker A: So I want to talk about that last one for a second.
You said days between first and second gift, Right? Now, I think for a lot of nonprofits, they measure that in years. Right. Not days.
Talk about some of the things you all have learned with your customers and some of the automations and different things that you bring to the table that helps help close that gap so that it's not just, hey, we get one gift a year from these donors, but we actually can meaningfully change that metric.
[00:04:19] Speaker B: Yeah. And Carly can speak to this too. And so.
But I think at the highest level, when somebody gives you a second gift, it really signals commitment, loyalty. Right. And so often a first gift can be a tip or a test gift or a getting to know you gift, but you really don't know that the person's going to stick around. It's that magic moment when they give the second gift that becomes most meaningful and most indicative of loyalty over time. So we know that gift is really important.
We know that depending on the numbers you look at, 76% of the time, somebody will give a first gift and then never give a second gift to the nonprofit. And so that's where you see the biggest drop off. And so then it becomes a question is, what's the right amount of days for my donor file? If you see the average time between first and second gift is 365 days, it probably means you're really major donor Dependent, because those are the people that give at the end of the year, every year. Right. And so it could be a pointer toward another issue to solve. But I think optimizing for that really means if it's a smaller donor, how are you quickly welcoming them, expressing gratitude and explaining your impact in a way that makes them sort of motivated to keep moving forward. Forward. Right. And so sometimes that's about converting a small donor to a recurring donor right after that first gift. Not always, but that's usually the, you know, the most tried and true way is like if somebody's given gift one or even gift two small amounts, how can we get them converted to monthly as quickly as possible?
[00:05:57] Speaker A: Carly, anything that you would add to that?
[00:06:00] Speaker C: Yeah, so we actually saw 121 days on average between our first and second gift days. We also, if you download the report, you can see like our top quartile of virtuous customers, which I think is really helpful just to see the difference in numbers between like the average and the. The top. So the top was 107 days. So you can see there is a shorter piece there. But I do think it's a great benchmark to kind of think about. Like we often think about first to second gift conversion, like what percentage. But really if you can shorten the time, like you're increasing your donor retention, you know, all sorts of getting more revenue quickly. So that one metric between the days between is easily solvable also by a new donor welcome series. So if you don't have one of those, that would be highly important to look at.
[00:06:46] Speaker A: So on that as a follow up, how many organizations that you interact with do you find just simply don't have any kind of new donor welcome series in place when they first come to you?
[00:06:59] Speaker C: Yeah, I'll let you answer that, Gabe.
[00:07:04] Speaker B: You know, more than I would like. It's funny, we run ran a study with Nextafter a couple years ago where we gave 100 gifts to 100 different nonprofits, like made up fake people, fake P.O. box and then just gave gifts. And we recorded everything that happened on every channel. Right. And so, and what we found is these were a mix of organizations, but primarily a little bit larger.
The majority did something.
Right. But the problem was often the something didn't happen. You could maybe get a confirmation email, but then the next communication maybe happens days later, very disconnected from your original gift.
The thing that really surprised me was the lack of multichannel communication.
So you wouldn't believe the number of, of organizations that, you know, if you give via mail for example, you write your email address and they never send you an email, or you give online, you put your address in and that you never get a piece of mail or even put your phone number in. You never get a text message. Like, they get the information, then the. The stream of communication back out. If they do have a welcome series is maybe one or two touch points max and single channel focused. Right. So that was like the biggest gap. We saw that.
[00:08:27] Speaker A: Yeah, that makes a lot of sense, and it tracks with a lot of what we see in the marketplace as well.
So I'm interested in the fact it looks like in the study you all saw that retention slightly increased year over year.
Now, that's sort of. It's one of those things where you can say, okay, that's good news, except it probably didn't move enough to really make a difference for most organizations. Is that correct?
[00:08:52] Speaker C: Yeah, I mean, most of the metrics on the retention side stayed pretty flat. The biggest movers were not like donor retention or first to second gift.
[00:09:03] Speaker B: Yeah.
[00:09:04] Speaker A: So what's concerning to me about that, and I'm sure you guys share this perspective, but it feels like giving is becoming the thing that only the wealthy are doing right now. Right. That so much of the revenue in organizations is consolidated, at least in the data that I look at, and the clients that we serve, you know, sometimes it's like 95% of the revenue is coming from 3% of the donor base. Right.
And that's a big challenge for all of us if we actually want the philanthropic sector to continue to exist as we move forward in this world.
Are you seeing anything different?
And whether or not you are, what are some other thoughts that you all have and some things that you're doing with your clients to help move the needle in that area?
[00:09:54] Speaker B: Yeah, you're absolutely right. I mean, this is so much of like what Nathan Chappelle laid out in his book Generosity Crisis, like the sort of decline of the everyday donor.
Looking at stats recently, depending on the numbers you look at, you could make a case that as many as 28% of households since 2008 have opted out of giving, meaning there's 28% less households that used to give, now give in the US which is horribly concerning, and it doesn't come through in the headline number. Right. So you see giving as a whole increase in the US but it's primarily like major donors stepping up and then the fallout of everyday givers. There's sort of, you know, you can explain maybe some of it through increasing sort of income Inequality in the US Maybe between the haves and have nots, but once you really drill into it, it's because people are distracted by a bajillion personalized messages every day. Their Insta feed is distracting, their email inboxes are full. Like they want to make an impact in the world, but it's just really hard to sort of cut through the noise at the same time time people are generally less trustful of institutions. Right. Sometimes it's easier just to give to your buddy on GoFundMe than it is to give to a nonprofit just because you. There's not the transparency that you want. And so we're seeing that organizations that are really able to cut through that to really like increase everyday givers, instead of seeing them fall apart or like they're doing a couple of things. They're. Number one, they're being way more personal, like I'm being way more personal to cut through all of the noise.
And number two, they're connecting them with impact. And so rather than just this generic thank you, your gift makes a difference. It's like, no thank you, here's a video of that thing that you helped accomplish in that world. In the world. And they're quickly expressing gratitude, like kind of overdoing it on multiple channels. Like what you're doing is really making a difference here and we're really grateful. So it's the personalization gratefulness and closing the loop on impact. If you can do those three things, there's no reason that you should see this continuous decline of everyday givers. And the best orgs that we work with are doing that. They see that number increase year over year.
[00:12:12] Speaker A: So let me pick at this a little bit. That personalization piece, right? That means in order to do that well, that an organization has to be capturing a lot more data. They have to be cataloging it effectively so that they can actually query on it and use it to drive strategy and execution. Right.
What are you seeing? Because for most of the organizations that, that we interact with, whether they, they are clients of ours or not, that's a really heavy lift for a lot of organizations. Right. So what's making that easier for the folks that are doing it well, or how are they thinking about it differently to make it more effective?
[00:12:52] Speaker B: Yeah, I think, Carly, I'd love to hear your take on this as well. But we see a couple of things.
One is like kind of basic things. You need your marketing tools connected to your CRM. So the reason I say that is because somebody's digital footprint, like did they visit your website? What emails are they opening and clicking on? Like, that stuff needs to be connected to the rest of your data. If you have data in a bunch of silos, you're just never going to get there. Right. Um, the other one's just basic. My buddy T. Clay Buckham bangs this drum all the time. But you need decent data hygiene. Like if you have five versions of the same Andrew Olson in your database, you're never going to have confidence.
[00:13:35] Speaker A: Yeah.
[00:13:36] Speaker B: In actually reaching out in a personal way.
Right. And then the other one is like using third party data directly connected to your own data. So that by that I mean demographic data, wealth data.
Can you have third party data to supplement your first party data to give you a 360 view? The problem though is like, so even if I get a really clear view of my donor, I need to be able to take action on it at scale. So let's say I have a database of really clean with a full set of data, but I only have two people on my fundraising team doing outbound donors. They can only send about 12 emails a day and make four phone calls. Like, just not going to get there. Right. It just.
So it's. You have to have like, like a way like automation on top of it. And then in the world we're moving into, it's AI plus automation. Right. Like how can AI help you compose the perfect text message email faster?
And then how. Then do I use automation to automate some of the touch points and then so I can really focus on the most personal ones for that, like phone call or postcard.
So. Carly, I'm, I'm sorry, that was a, that was long, meandering answer, but I'm sure you have thoughts there too.
[00:14:58] Speaker C: Yeah, I mean, I think it does come back to the, the data. Gabe, you kind of just explained the responsive maturity model in like a couple of minutes there. But it really starts with like the foundation of having clean data. Because if you don't have clean data, like the personalization, the behavioral insights, the automation, all of that is, you know, it's going to say like, dear Bob when it comes to Andrew, and he's going to feel like this is super impersonal. And I think it comes back to like, who's responsible in your nonprofit for that? Because that seems like such a small thing, like making sure there's no duplicates or that you're like checking the health of the address or the emails. But like when you realize like that's really the foundation of everything else that's you know, I feel like those are the non profits that are really fundraising the best.
[00:15:45] Speaker A: At Dickerson Baker, we're committed to helping you discover a better way to fundraise. From activating first time major gifts, to helping you recruit the best talent in the market. From building your direct mail program, to launching and completing a successful capital campaign, from designing a best in class digital fundraising campaign, to developing your institutional fundraising strategy, Dickerson Baker is here to help you level up your fundraising and mission impact.
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[email protected] or contact me via LinkedIn. Let's talk a little bit more about AI for a second. Kind of go down that rabbit trail. You all have, just kind of put a stake in the ground, right?
You've hired Nathan, who in the sector is probably, if not the one of the leading voices on this issue.
And so I'm led to believe that you see a big play here for organizations. Talk a little bit more about the vision around that.
[00:16:37] Speaker B: Yeah, that's a good question. I. For me, AI should be used in a few different ways or can be used in a few different ways to dramatically accelerate fundraising. I think what some nonprofits realize and some haven't quite realized it yet, is the world fundamentally changed overnight. Like the nature of work, the nature of what's possible. And we're entering a very different world where truly precision, personalized, one to one fundraising is possible with much smaller teams. It's just the world we're moving into. Right? And so what that means functionally is AI has the ability to predict donor behavior better than ever before. So I should be able to know with a high degree of accuracy, based on a whole different set of data, through machine learning and even more traditional AI, what each donor is most likely to do and when the right time to reach out to them is. And then it should accelerate that outreach. So it should be able to help me compose that perfect email, mail piece, text message, even call script for phone calls, like exponentially faster.
I know Carly and I have talked about this a lot, but one of the most practical things here is think your mid level donor program. Like it's really hard to do a mid level donor program well, because if you're asking for three to $10,000 gifts, like that mid level person has to manage such a huge portfolio.
But what if you knew like with a high degree of accuracy, which of those people is most likely to give? And then what if you could use AI to generate emails and text messages three times faster? So now instead of a 300 person portfolio, one person can manage a thousand person portfolio. Right. Like that's absolutely game changing. And so then the third pillar there is like agentic AI. I think people have probably not quite wrapped their mind around yet that AI can do so much of the job that fundraisers used to do. It can do it for them. It doesn't mean that, hey, we need robots to replace humans at non profits. It simply means we want to free up nonprofit pros to do what they do best, which is like human relationship and higher level thinking. Right. And, but I think all three of those changes are coming really fast and certainly core to what we're doing in our product.
[00:18:59] Speaker A: Yeah, yeah, no, that, that makes a lot of sense. I'm glad to hear sort of the vision around that. And I think you're exactly right. I think this, this entire industry is going to be upended, not in a negative way. I think there's a lot of positive opportunity around this. And it's, I think it's, it's incumbent upon people like us and forward thinking organizational leaders to say, how do we harness this to get the most value out of it? You know, let's talk a little bit about what trends you saw related to average gift because for the last couple of years, you know, we've been measuring giving at Dickerson Baker for five to seven years now and looking at how mid level and major donors are giving and had been seeing a lot of increases year over year. When I look at your benchmark data, there is an increase year over year, but it's like sub 5%. Right. What are you seeing in that? What, what should we take away from that?
That trend point?
[00:19:59] Speaker C: Yeah. Actually I'm going to interview you on your own podcast, Andrew, because one of the metrics that I would love to get your input on is the portfolio balance, which is related to this. And just a few minutes ago when you were talking about how first to second gift is so different when all of your donors are major donors. Like the portfolio balance is really important to a nonprofit. And what I mean by that is how many donors give to or how many donors are general donors under a thousand, mid level and major.
And we saw a difference between the size of organization. So if you're smaller, you rely on more major donors. If you're bigger, you're relying on less. But I know you're kind of like the major donor guy. So I'm curious what you thought when you saw, you know, what we were seeing in the portfolio balance. And the thing that Gabe and I were most excited about was that there was more movement to mid level, which we love talking about that and less to major, which could be economic conditions, et cetera. But I'm just curious what you think because you work a lot in that specific area.
[00:21:03] Speaker A: Yeah, there's a couple of things that I think about that. So first, for the last three years we've surveyed mid level and major donors to like 2,000 different organizations. Right. To understand their giving priorities, how, how they were feeling about the economy, how that was gonna shape their giving.
And year over year we saw the same consistent response which was, yes, the economy's rough. Yes.
Whether it's a tariff related issue or just general economic malaise or whatever, there was a negative impact to people's finances. But most major donors said I'm still doing really well. And so because of that I'm going to give as much or more than I gave last year. In fact, going into 2025 when we asked that question, it was like 86% of major donors said that they were going to do this.
And then the election happened and then the first few months of the year that were really sort of economically unstable. I wouldn't say they were negative because things were know, balanced out fairly quickly, but there was instability. And what we tend to see is instability pushes people to the sidelines, particularly at the mid level and major gift level. So I, I fully expect a lot of market correction on that and I, I expect to see more, more giving at the higher end.
What I was interested in, in, in, in your data and you nailed it, that like that move to mid level I think is really important. Right. So when we look at most organizations, mid level is where the majority of revenue growth can come from today. Right.
So the more that we see that both growing organically and also the more we see people leaning into building those programs, I think that's, that's a win everywhere. What I am surprised by is that this data didn't see as much of an increase in major giving as I expected it to. Right.
So that could be, could be for a couple of reasons. Right. It could be the data set. You know, it just, I don't know enough about all of your customers to know sort of where they fall in that continuum or it could be, and we did see a little bit of this at the end of 2024. It could be that we've reached a tipping point on the amount of additional giving that major donors are willing to do right now. Right. I've talked to some organizations who say, yeah, my donors gave generously for the last three, four, five years, they're just worn out. Right. So we could be experiencing some of that. I, I'm actually optimistic about the growth in mid level because the more that that happens, the, the greater the participation rate is. Right. And as you both know, some of those mid level donors will eventually become major donors. Not all of them and maybe not even a large percentage of them, but enough of them to make a meaningful improvement in the numbers over time. Right. And particularly inside an individual organization. I think this issue of portfolio balance is really interesting. So actually I was on a panel at the Responsive Nonprofit Summit where we talked a little bit about this. And, and I think it's one of the really critical things is how, how much can we move more people into relationship, whether that's at a major gift level or a mid level. Right. It's less important to me how many zeros are on their check. It's more important to me if they're connected relationally because then what we'll see is the amount of generosity increase. Right. The percentage of giving. And so whether that's a mid level $1,000 donor or a million dollar donor, obviously you know, at some point the dollar scale. Right. But the, the more that we can increase the percentage of generosity, I think the better it's going to be for everyone. And so I kind of tend to think about it that way.
And then from like a pure numbers perspective, once you get to like 50% of your donor base being major donors, I start to have some concern because there's, there's just so much revenue saturation. Right. You lose one key donor, particularly if you're a smaller organization, you lose one key donor relationship and it could cause a radical swing in your budget from year to year. Right now a lot of organizations we talk to will say, oh, that's why we don't do this. That's not the goal. Right.
Keep doing that. But build out those other programs, build out the Sustainer program, build out the strong annual fund, build out the, the mid level and grow everything.
Right. But, but the more that your organization is reliant on a handful of key relationships, the more risk your revenue has.
[00:25:48] Speaker C: Yeah, yeah, I totally agree with that. And we were really excited to see that movement to mid level. And it, you know, like Gabe was saying before, like marketing, automation and AI can really help you scale a mid level program. And that's kind of the donors that are overlooked the most. I feel like we focus a lot on general and a lot on major, but we're not quite sure what to do with mid. But like you said, that's where the revenue growth can really come from.
[00:26:11] Speaker A: Yeah, I mean, I, I, you, you know, people jokingly talk about, like, it's the, the redheaded stepchild. Right. It's the middle child syndrome. And it, it really is the way it works. Right. Because you qualify them out of a major donor portfolio, but you don't really have somewhere else to put them back into. It's a meaningful engagement program. Right. You know, Gabe, I was laughing when you were talking about the portfolio size. I met a woman last week who has 7,000 mid level prospects in her portfolio. I'm like, that's going to take you five years just to make one meaningful contact with each of them. Like, that's where automation and AI, I think, can really be groundbreaking to these organizations that have these massive, you know, prospect audiences because they're not going to go hire seven more staff members right now. They, they haven't proven the model yet. Right. But if they can use automation and technology to drive efficiency there, they can actually raise a whole lot more money.
[00:27:04] Speaker B: Yeah, 100%.
[00:27:06] Speaker C: Yeah.
[00:27:07] Speaker B: You know, one of the things that you. Oh, go ahead, Carly.
[00:27:09] Speaker C: Go ahead, Kip.
[00:27:11] Speaker B: One of the things that you mentioned in there, Andrew, that is a, a stat that we include in our benchmark report.
And I know Carly likes this one as well. I've convinced her that it's super important. But it's like that it's donor expansion. And so it looks at your, Traditionally we just say, hey, of your donors who gave last year, how many of them gave this year? Like the old liver and side button kind of stuff, Right?
Like, yes, that's great. But I want to see movements in generosity. So of your donors who gave last year, did they give more or less than a hundred percent of what they gave, you know, last year? This year? Right. So I should see, if I look at a cohort of donors, I should see them giving more sacrificially. And what we've seen largely in our data and across the nonprofit space is that it kind of remains flat. Like, if you gave like 2,000 last year, probably going to give 2,000 this year at best. Right. But if you're really like deepening your relationship and becoming charity of choice, what you should see is at least covering the cost of inflation. You guys, like, at least, can we increase it by the cost of inflation? But really what you should see is your average gift go up, driven by expansion of historical donors year over year. And so I don't think nonprofits pay attention to that enough. They're just happy to have somebody back another year as opposed to, are we deepening the relationship and inspiring greater generosity?
[00:28:39] Speaker A: Yeah. You know, it's fascinating to me because that's one that we pay a ton of attention to in our business.
And I have the same conversation. Right. Like, if you're just doing what you did last year, you've lost 8%.
Right. Whether you have run the math or not, that's the reality.
And so you've got to at least do, you know, last year plus. Right.
But I first stumbled onto this, actually. I was in a meeting with Derek Baker, our CEO, back in like, 2008, and I was at another firm working with a lot of homeless shelters, a lot of rescue missions. And we were looking at this data and saying, well, wait a minute. This organization raised, generated an additional $800,000 year over year, but their total revenue is flat. What happened, like, they had $800,000 of new money come in, and it was their issue, which ended up being the issue across, you know, 20 or 30 organizations that we looked at, is that, you know, it's sort of that leaky bucket syndrome on the back end. They're not paying attention to the fact that they have revenue loss. They're keeping the donors. Donors are active, but they, you know, a cohort of downgrading gave $800,000 less year over year. Right. And so you got these poor fundraisers and CEOs going, we're killing ourselves to bring in all this new money.
And we're not moving the needle on our total revenue. How are we going to increase our mission impact if we're continuing to, like, struggle through this? And that's where. That's where the, you know, it's not just about retaining the bodies, but it really is about revenue retention and moving the needle on that so that you can actually expand the services and grow the impact. Right. I mean, that's where the key win is.
[00:30:21] Speaker B: Yeah. 100%.
[00:30:23] Speaker C: Yeah. And you asked earlier, Andrew, about average gift and what we were seeing. And we saw average gift in median gifts stay relative relatively flat. But we saw online average gift increase.
And that was really interesting because I feel like, you know, our donors are moving online, but there's a lot more technology and strategies we can use online to increase revenue, whether it's just changing the ask array according to what they normally ask instead of just keeping it standard, asking them to be recurring upselling to, you know, a project that you're doing or something like that. And so it was encouraging to See that? And I also think it's a great benchmark for nonprofits to say, like, how is my giving page? Like, you don't just stand it up and then leave it alone, but what can I do to improve it? And that can be a big revenue driver too, just with small changes.
[00:31:13] Speaker A: Absolutely. I think the more that organizations can lean into that, the better. I think that the challenge there, as you guys know, is there's a lot of fundraising in quotes, technology that works against you in that respect. Right. I mean, I look at donation platforms all the time and it's like, wow, you have designed this to make it so difficult to actually complete a transaction that someone has to really, really want to give.
To stick around on this page to actually find how you complete the stinking gift.
And, and then once they do complete it, you know, nine times out of ten, the, the follow up, right. The, the appreciation is something akin to thank you for your purchase.
Right.
Would you like to see about these other products that you could purchase? Like that's, that's so tone deaf.
It's a, I think it's a real problem in the sector. And what, what are you, what are you all seeing in that space? What doing?
[00:32:16] Speaker B: What are you.
[00:32:16] Speaker A: I mean, I know you have your own donation platform and I'm sure you're doing, testing around that what's working and not working right now.
[00:32:27] Speaker B: Yeah, like the things you said are basic. Right. It's like make it really, really easy. Take all the friction out of it.
When they're on the giving page, they often haven't decided how much they decided that they're going to give, but not how much. That can be a little bit fluid. And so like right there at the donation form, reaffirming the impact they're making in the world with like a short story or quote. Using trust signals to make them know that their credit card is safe. Right. There's all these little things that you should do and just take the friction out. Only make, make the data entry feel like very small bite sized chunks. You know, we're, we're rolling out functionality right now with Stripe that allows you to have that like the experience you have on like shop.com or Shopify, where if you've been there before, it's just going to ask you to like enter the four digit code you just got texted to take out all of the pain.
[00:33:17] Speaker A: Right.
[00:33:17] Speaker B: Like remove as much friction as possible.
I think the one important point here though is, is Carly and I were talking about why we're seeing online giving go up. And I do think there's some of it's. People are introducing better technology that can drive up average gift. But I think part of it's like the story that nonprofits have told for a long time is like, hey, our check writers are really our big donors and older donors. Our average age of donor is like 61. And so they're not our online givers. Our online givers are younger givers.
Cool. But my parents are in their mid-70s and they.
The Internet was invented. It came out in the mid-90s.
You know, my parents use the Internet to pay all of their bills and get their net Netflix subscription like everybody else. Yeah, they're, they're using. Which means like people now that are thinking, hey, I want to give my year end gift of a hundred thousand dollars.
Like they don't, they don't always think I'm going to write a check. They're, they think I'm going to go to that online giving forum because it's like how I do everything else in my life and that. And so it's, we're not talking about 20 year olds anymore. So I think just fundamental shift is, is important to realize of like who's showing up at your online giving form.
[00:34:39] Speaker A: Yeah, absolutely. That makes sense. Let's talk about acquisition a little bit. What, what, what kind of trends did you see in the acquisition space?
[00:34:48] Speaker C: Yeah, we saw new donor acquisition just continue to drop slightly since last year, but about 5 percentage points since 2020. This wasn't super surprising to me as less donors are giving overall, less nonprofits are investing in acquisition. I think because of economic changes during COVID You know, people were just cutting back on acquisition. But Gabe and I talk about this often. Like the number we use in the benchmark report is what percentage of your active file is new donors. But if I was really looking at measuring my new donor acquisition, I would be looking at cost to acquire per donor. We just can't look at that because we don't have cost information. So this is just a way for us to get a pulse. But if I was talking to a nonprofit, I would be saying you should be looking at the efficiency metrics of your acquisition and not just percentage of your active file.
[00:35:41] Speaker A: Yeah, I think that's so important. In fact, I was really appreciated seeing that you all talk about payback period in acquisition. Right. Because so few organizations look at that. I was speaking with an organization recently and they're, they're so proud of their acquisition program. And then you ask that question like, oh well, yeah, it takes us 38 months to pay back in acquisition. It's like, okay, well you're going to go broke at that. Right. That's crazy.
And so that payback period is so important and I wonder, there's not a lot of long term context in it, but do you have access? And are you looking at the differences in the payback windows for offline versus online or what kind of data are you looking at with respect to that? And what are you seeing.
[00:36:33] Speaker B: For our individual customers? Certainly we're advising them to do that. And so if they can put their cost data into virtuous to look at those metrics. But like Harley said, we don't like it's hard to get visibility into the cost side. So payback's always tough. I think the thing that I'll double down on is like, is if, you know, if you don't have cost visibility, you should at least look at retention rate by channel. Right. So, you know, the classic example of this is peer to peer is great for bringing in new donors, but it doesn't mean it's great at bringing in high lifetime value. Meaning you have a bunch of people show up at a run walk, they all give 20 bucks because they were so glad that their friend asked them, but they have no idea what the cause does. And like the conversion first to second gift is so low.
[00:37:12] Speaker A: Yeah.
[00:37:13] Speaker B: So everybody's high fiving around these new donors and like. Yeah. But none of them stick stuck around. Now I think peer to peer can be really effective and there's ways to bridge that gap. But you should be, you should really take a hard look at at the very least your retention rate by channel. And so you're acquiring on channels that have the highest loyalty. Right. And then you layer in cost into that, but really it's a, a cost versus life value that you care about.
[00:37:41] Speaker A: Yeah, no, that, that makes a lot of sense. So since you went there, let's talk about long term or lifetime value, you know, however you want to talk about it.
What, what are the trends this year in that respect? And, and I'm, I'm assuming that what we're seeing is an increase primarily driven by larger gifts. Are you seeing anything else that's, that's interesting in that arena?
[00:38:03] Speaker C: Yeah, I mean we did see lifetime value increase substantially over the previous year, which aligns with anyone who's reading any other industry news. Right. Like less donors giving, donors giving more.
As Gabe knows, I love ltv. It's my favorite metric because I feel like it gives so much into insight into what we were just talking about, like, new donor acquisitions shouldn't be looked at without looking at lifetime value.
If you're bringing in a new donor, like, you have to know how long they're going to be giving and when you're going to break even and you know, when, how much money they're going to give.
So we did see an increase there. And I think, you know, that plays into what we, what we've been talking about just people giving more, but less people giving.
There was also, like, through the different sectors, which I don't think you saw that, Andrew. We haven't even rolled them all out yet, but we have them for, like healthcare, higher ed, faith and human services. You can see all these metrics by each vertical.
So it's really interesting to see, like, for example, like, education has, you know, a very different number than faith has for ltv. So if you are a nonprofit, listening, like, benchmark against your sector also because it may be very different just because of the way your donors give compared to just the overall industry average.
[00:39:23] Speaker A: Yeah, absolutely. No, I'm, I'm looking forward to seeing that. I did not see that in the data that I looked at, but that I think that'd be really insightful.
I want to go back to something we were talking about a little bit ago, because I think it's really important.
Gabe, we were talking about retention and you were talking about the different things that organizations can do to increase that. One of the things I hear all the time is charities say something akin to, well, my boss said that every time we send something out, it has to have an ask because it costs us time and money to send stuff out. So we need to make a solicitation.
React to that. For me, yeah.
[00:40:03] Speaker B: I hear this all the time. And some variation of that, which is. Or you could ask a question like how many emails or two emails. Right. Or some variation of that. And I do think if you focus first on the donor and their needs and delivering value, you have permission to ask for like, you know, if you ask for generosity in a very. Or giving in a very impersonal, mechanical way where your donor feels like an ATM machine. Yeah, that's going to get really alienating really fast. But the fact is, like, your donors aren't ungenerous. This is a way for them to make an impact in the world. And not asking them does them a disservice. And so you're actually.
This isn't a chore for them or something where somebody's like, you know, threatening them if they don't give, this is something that they want to do and they're glad to do so you should ask and provide opportunities to give, but deliver value. So every time you send something, think like, have we sufficiently thanked this donor? Have we expressed gratitude in a really meaningful way? I joke. There's a buddy of mine that says thank you five times before you ask again. Like, go over the top.
Like, did you deliver value? So I think recurring monthly giving programs are a great example of this. Like, for that set of your donors, how are you delivering unique value? Like, how are you really telling the story in a kind of an exclusive, fun way that makes it easier for them to share and excited about? Like, if that's a great example of, if you're doing that really well with your recurring gift donors, you have permission to ask them for another gift out of cycle. Like, you can ask them for a couple thousand dollars more if they feel like you're delivering value and loving on them during the course of the year. Right. So it's not like, can I ask again? It's like, have I earned the permission and trust to ask again by actually treating them like people, not like ATM machines?
[00:42:04] Speaker A: Yeah, no, totally agree. Thank you for expanding on that. All right, I'm going to wrap us real quick, but before I do that, I want to know from each of you, what are you most encouraged by in this data this year?
[00:42:16] Speaker C: God, Gabe, you start.
[00:42:21] Speaker B: I, you know, it, it is nice to see retention leveling off. I think there's always a fear, oh my gosh, it's going to go down every year and we're not actually seeing it go down. And so I think Carly had said before, like, sometimes flat is a win. I think we saw a bunch of new donors during COVID and I think the, those donors have like, sort of the, the one time we're experimenting have kind of flushed through the system and now you're back to like maybe the new normal. And so, you know, you never want to say flat as encouraging, but I, after the, after the spike, during COVID to look sort of four or five years back and say, okay, we're at a good spot now. Like, that felt good to me.
[00:43:01] Speaker A: Awesome. Carly.
[00:43:03] Speaker C: Yeah. You know, I also feel like just kind of the vibe in the non profit industry lately has been really tough. You know, it's hard to find donors. Giving isn't growing all of those things. And just the fact that there were things in here that were kind of like light spaces for us to look at, like recurring giving is still Growing online. Average gift is growing. We're shifting to mid level. Like LTV is growing. There are areas that everyone should focus on. Like every organization has opportunities. But to see some areas that are like, hey, that we're still making progress here is just encouraging as a nonprofit or of like kind of that in that grind all of the time. Like there are still things that are, that are positive trends.
[00:43:42] Speaker A: Yeah, definitely. It's, it's a. The sky is not falling. Right?
[00:43:45] Speaker C: Right.
[00:43:45] Speaker B: Yeah, yeah.
[00:43:46] Speaker A: No, that's awesome.
How do people get access to the report?
[00:43:51] Speaker C: Yeah, you can go to virtuous.orgbenchmarkreport to get it. And I'm guessing you'll like put that in the show notes or whatever.
[00:43:59] Speaker A: I'll link it in the notes too.
[00:44:00] Speaker C: Yeah, yeah. And then like I said, regardless of when this podcast comes out, probably by the time it does, we have four versions for different verticals as well. So if you want to see like your specific industries metrics, you can get that too.
[00:44:12] Speaker B: Yeah.
[00:44:13] Speaker A: Okay, great.
[00:44:13] Speaker B: And super cool thing that Carly did this year, which I was stoked about, is there's like an addendum that's a deck, like for presenting to your board.
[00:44:22] Speaker A: Oh, nice.
[00:44:22] Speaker B: So it has like, it's a pre made deck with all the benchmarks in it. So if you're like need to present to your exec team or your board and you want to show how you shake out against the benchmarks, it's like all done for you and set up so that Carlene team added this year that I just love.
[00:44:37] Speaker A: That's super valuable. Yeah.
How do people reach the two of you?
[00:44:44] Speaker C: LinkedIn is probably easiest.
I think we're responsive there. I don't know about you, Gabe.
[00:44:51] Speaker A: I would agree.
[00:44:53] Speaker B: Yes, LinkedIn. Gabe Cooper on LinkedIn.
And if you really feel like emailing me gabecuous.org and I reply pretty quick on both of them. And if you want to learn more about virtuous in general, just virtuous.org is a great place to start as well.
[00:45:08] Speaker A: Awesome. Thank you both for being here. Thanks for the commitment to the sector and the investment that you make in running a benchmark report like this. I know it's not an easy thing to do on top of the day jobs that everyone has at Virtuous. So really appreciate that you guys are so committed to the sector and to learning and helping grow. Thanks again.
[00:45:28] Speaker B: Yeah, ditto.
[00:45:29] Speaker C: Thank you.
[00:45:30] Speaker A: Have you read My Amazon Number 1 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.
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 of a favor to ask, but also a little bit of a gift to you. I write a daily substack newsletter called the Leadership News Growth Newsletter. It's free to you and I write it to help people leave 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.
