What Matters Right Now: Donor Behavior is King - Jonathan McCoy, CFRE, Becky Endicott, CFRE and Lynne Wester

11:15PM Mar 3, 2022

Speakers:

Becky Endicott

Jonathan McCoy

Lynne Wester

Keywords:

donor

giving

year

gift

nonprofit

people

organization

donor relations

whitworth

friends

retention

lynn

incredible

build

mindset

conversations

impact

matters

velocity

behavior

Hey, I'm John. And I'm Becky.

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So let's get started. Happy Friday, Becky,

happy Friday. Hey, everybody, I don't know if you could tell. But I have loved the series. And I am geeking out that we're winding down with one of our favorite people on an amazing topic today.

And of course, our favorite person brought us to the mat and like told us what really matters over holiday break. Like we were spending time with Lynn Wester she was recording this incredible class for we are for good pro, and she like changed the paradigm for what we've spent our entire careers in development, like hearing, you know, we would go to workshops around the country. This is not the stuff that's being taught. But she's saying the tides turned. And today we're going to unpack that really disruptive idea that donor behavior matters most. It's not just about giving level, and this is going to rock your socks, or at least it did ours.

And what Lynn is saying about donor behavior is really going to change and shift I think the way that we engage with our donors, the way that we see them, the way that they are dropping almost these little bread crumbs within our data points in within our worlds that we're not even noticing. And so Lynn has an incredible framework, she's going to help us, like work through the nuance of this and just buckle up because it's going to be

awesome. Yeah, and I do think there's some mindset work that has to be shifted. And I love that we've already touched on this in the series that we all have mindsets, it's just a matter of if they're serving where we want to go or not. And if you're not postured to really embrace this idea, as an organization, I'm looking at you, especially leaders that are setting the tone for where your organization's going. If you're not bought into the mindset, that behavior matters, and not just dollar amount, it's going to trickle down into how you show up, and how you build relationships, and how you build campaigns. And how you activate and encourage and show up on social media. Every aspect of it like points back, do you really believe that everybody that is engaging with you has just as much value to be there at the table as that major gift donor. And so it's a paradigm shift. And so that's why we think this is really disruptive. And we've kind of saved it to the end of this because we want to see what happens as more and more organizations lean into this. Because we can tell you, they're really progressive ones are already there, like they've been there. But they're just kind of putting a name on it because they see the value of the many, over just a few.

Oh, I love that job that was so astute. And I want to kind of just cast what's about to happen here. So so you'll get to stay tuned for all of this, but Lynn's going to talk to us about why this is going to build a funnel and not a pipeline. She's going to talk about how we can build sustainable donor retention practices. It's about using this framework is going to allow you to reframe all of your fundraising through a dei and an inclusive lens. I love what you talked about John about seeing every human and it's really about again, I know everybody's tired of us talking about flipping that donor pyramid. And looking at the base, what is the base offer, and lens research and everything they're saying over at donor relations Guru is showing that this is going to bring in seven to 10x and sustained revenue over time. And that's just the financial output of this that says nothing about the emotional connection that someone has to your organization, the way that they are casting your organization into their network. There is so much to be learned here. And so we are so delighted to introduce our incredible guest who's here today,

when we're talking donor relations, don't you just feel like you have the voice of our guests in your head at all times. It is my sincere honor to bring back Lynn Wester to the podcast. Lynn.

Hi. I'm so excited to be back with you all.

We like to do tone setting with these conversations. And you're really giving us permission to really bless and release the old ways that we just value donors, looking only at the commas looking only at the dollar signs. We kind of walk us through that because this is a big cultural shift. It's a big mindset shift to throw that out or maybe not to prioritize that. Where do we start?

Well, I think thinking differently about fundraising requires some level of as the folks on the movie The holiday would say gumption. It's one of my favorite words. And I think it requires us to say that maybe the way we've been thinking about donors and those who are generous, is is flawed, both from an equity and inclusion standpoint. or from a how we prioritize our work. So when I got into the industry it was all about the more you gave the better person you were. And I think there are shops that have built. And we have charts and graphs. And we think about, oh, I can't wait to get the big whale and big donor and you know, all things like that. And there we stand over looking people who, through good times and bad through good leadership and bad through winning on the field and not winning on the field and bad through a horrible economy and a great economy and even during a pandemic give to us, and why we don't value them as much as somebody who walks in the door and drops a large check with tons of strings on us, it always has nagged at me at the back of my head. And so for the past five or six years, I've been pounding the drum about not only do all donors matter, but that we need to rethink what we consider good donors and change our behavior to rectify some of the wrongs and make it a more inclusive experience for anyone who decides to be generous.

I love how lens casually like you called this fresh, and I've been trying to push this for six years, we are fully awake, my friend, and we are drinking this Kool Aid. And I just love this notion of believing that a worth of a donor is just not tied to the dollar amount that they give. And it's that simple. And I feel like you have such incredible data, story case studies that you've seen over and over that you have built within the donor relations guru framework, talk to us about some tactics and behaviors that we can employ to start getting this behavior in our mind and pushing the worth and the value sort of off to the side a little we're not we're not devaluing it. And I want to be clear about that. But we're also saying it's not the motivator, and it's not the driver for long term sustainable growth.

I think in my good guide, we talk a lot about some of the core components of switching that mindset and also some behaviors. But I think the first and most important thing starts with you and starts with the person doing the work in that we need to recognize that generosity needs to be supported, rewarded and encouraged. I think that when donors give to us, and when we're we're fortunate enough to be the beneficiaries of generosity, the donor doesn't say the first and most important thing I'm going to decide is how much money you get. It's how much of an impact do I want to have, I'm going to do the best I can, given my resources. Now we tend to think of them as our donors, but I really think that we're their charities were their organizations. And I think we need to start with our own viewpoints about worth, self worth, the worth of the work that we do, you know, nonprofits are undervalued, in society, our work is undervalued, I can't tell you sometimes when I look at the salaries of the people who report on billion dollar endowments making $40,000 a year or, you know, handling donor relationships and struggling to make ends meet. And so I think also generosity has worth not just the amount of generosity, but the fact that in the United States, for example, and only 16% of the population gives charitably. And we know that the converse is true. When it comes to wealth, like we think, Oh, the wealthier you are, the more charitable you are. But in the United States, the converse is true, the less you have, the more generous you are, it may not be formally and you know, only 7% of America even deducts charitable giving from their taxes, because oh my god, we're not getting into that part. Because that's a that's a we are for good for another day. But all this to say that, you know, you commonly see someone who's down on their luck, and they get $10. And they give five of it away. And even if we look at remember when the giving pledge was like the hot, fresh thing, and we raised to have all these billionaires signed up for the giving pledge, it has not moved the needle on philanthropy yet, though. Like we're still at 2% of the GDP. What does that mean? And so I think we need to take a new and refreshed look in the mirror, who we value at our organization. And who do we want to keep giving? I mean, yeah, I'd love to keep a billionaire giving, but also, if I keep a billionaire giving, does that alienate 100 Amazing donors of another ilk?

Yeah, I mean, I think you challenge us through the good guide that you recorded for pro in that this could be some of the answers to our retention problems, because I still can think back to being you know, my first time diving into the reports as a way working inside of nonprofit leading an annual giving team in realizing that the benchmark across our country was like 40 some odd percent of retention of donors like it's positively shocking, you know? And then you look at first time donor retention, and it's in like the 20, low 20s. What about this can help us turn the tide on that? Because we all know that that can lead to more people in the door, which together collectively could be huge for our missions. How does this kind of give us the ticket to go retention,

it never ceases to amaze me that we still rate nonprofits by how much money they raise a year. And that indicates whether you're a good nonprofit, or a good fundraising shop, not how many donors you keep happy every year. So if I ran my business and had less than a 30% retention rate, I wouldn't have made it through my first year of business. If I ran a restaurant, an eight out of the 10 people who came into my restaurant and ate left and never came back. Gordon Ramsay would be banging down my door talking about we have to think about what are our core values? How do we measure success? I will tell you that as a business owner, I have not measured my success by how much money my business makes, but by how happy my clients are, and whether they come back to me and refer me to other people. And there's a lot of other excuses. Well, there's 2 million nonprofits in the States. And, you know, the number one reason why people stopped giving is because we asked them for money too often, like chill, chill out nonprofits. And somewhere some body either wrote a blog or hired a direct marketer or did something that said, the more we ask, the more money we'll get. I'm here to combat that with respect. And, you know, gratitude and impact for those that choose to be generous. And then when I build a relationship, they can trust me, then I can respectfully ask for more, but only when I've done my part, which is giving gratitude and telling them what we did with their money.

Hey, friends, we've got to pause the podcast for a minute, we have some really exciting news to share.

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I agree with you. And you have really taught me this well, in just in terms of the ask to thank ratio. And I'm here to say it's not just even the thank, I mean, there's so much more that we could be peppering this conversation with I mean, hello, impact impact for sure, we could never go back and ask for another gift. Unless we have first gone back and shown what the original gift has done and said, thank you. And here's how it's illustrated. And here's how it made someone feel. And I want to turn just a little bit into this other topic that really blew my mind and your good guide. And it was this concept around velocity and doublers. Could you go into that just a little bit and give our listeners a taste of what you mean when you talk about velocity in this conversation with donor behavior?

Sure. So we know it takes a couple of things for a donor to become a major gift donor right? So people don't just walk in the door with a million dollars and if they do, you should look twice at them and give them some side eye too. Because usually there's something amiss, you know if it is if it's too good to be true, it probably is. So trust your gut on that one, especially if you're an emerging leader. Profit. But the other thing to realize is that you have a long term relationship with a donor in higher ed world 60 to 80 year relationship, right? In that relationship, there's going to be times when a donor may go from $100 to 250, or from 250 to 1000. Doubling. I'll give you an example back in January, on the 17th, it was Betty White's birthday her 100 birthday, she didn't make it. But a lot of us gave gifts to animal welfare organizations into animal charities. And the most I'd ever previously given to one organization was $25. And because it was Betty White's 100 birthday, I gave $100 gift to a vet med school who was taking care of a dog that my friend Oh, is partnered with and I care about. And I'm like, why haven't they contacted me and said, Oh, my goodness, that is so nice. You went above and beyond and understanding that velocity of my giving will continue to go up. And but if you don't notice, I will go away. And I will find somebody who will appreciate my velocity and my caring about the cause, or the organization. And it could be something as simple as I got a promotion at work, or I changed territories and or I got a bonus, you know, Michael Bloomberg, who is to this day, the single largest cash donor to higher education at $1.7 billion in one gift. Michael Bloomberg started to Johns Hopkins in 1965. As a $5 donor, a lot of people don't know the story, but he tells it wherever he goes, I've heard him tell it to me twice, because he goes, Oh, you're the donor relations guru lady. And I'm like, Hi, sir. He said, my first ever gift to Hopkins was $5. And he got a raise and a promotion Three years later, and he gave $10. And Hopkins noticed and they said Thank you, sir, for increasing your commitment to us. And he said, That felt so good that the next year he gave $25. And so every time he changed his velocity, Johns Hopkins took notice. Now I don't know if it was one great annual giving person. I don't know if it was the 60s and people were polite back then. And $25 is a lot of money. But he tells the story that they would never have gotten his billions and billions, had they not treated him well for his $5 $10.20 $5 gifts. So somewhere in your database, is the next million dollar donor, she is waiting for you to notice her and stop, you know, catering to well, he gave $1,000 And she or they gave $75. So I'm going to go live on the $1,000 donor. Well, yeah, but what what is sacrificial giving? And did he have 10 million? And he gave you 1000? Because if so he's kind of cheap. And she had $75 Extra and gave you 75. She's a hero. And like I think about that, and I think about we're not rewarded in fundraising for sacrificial or sustaining, giving, like, why aren't we thinking about instead of accepting these big gifts with lots of strings on them, you know, the scholarship for the, you know, one legged redheaded swimmer born under full moon in April, you know, why not say and that gets us, you know, $500,000, which is better that gift, or $250,000 for need based students? See, we get rewarded at a different level for the 500,000. But the 250k is a better gift. It's more sustainable, and it's probably more of a sacrifice on that donors part. So, again, why is dollar amount the determiner

I think everything you point to, I mean, from my career of leading annual giving for a while, in health care, it is very easy to focus on the wrong KPIs, you know, and there's a lot of emphasis always on money. And it's you can't look it in your giving in that way. And that's primarily the people that would that are making their first gifts or in these recurring gifts that are smaller donors. And it's like, if you only focus on that top dollar amount, you will literally miss everything that's happening. And you can disguise the fact that your program can be hemorrhaging, you know, and that it could actually be on life support in terms of how many people are coming in and staying with you. So all these points are so good, Lynn, you have to do a TED talk, and we want to be on the front row.

If Lizzo my hero can do a TED talk on twerking. I can do a TED talk on generosity and like giving it's on my goal list.

Well, then you work with so many amazing clients. I mean, your client list is unbelievable. I'm sure you've got a case study of somebody that just does this well a team that just rallies around these kind of philosophies and has seen incredible success. Can you share one with us?

They're the people who took a risk on me as a young consultant who had this wacky idea nine years eight or nine years ago and it's Whitworth University out in Spokane, Washington, Tad and Scott and The whole group there when I brought this to them, they were like, huh, and they're very core values driven, they're very humanistic. They took a chance, because their retention rates were falling, and we changed it around and their retention rates aren't falling and their 10 year consecutive donor retention rates are in the 90th percentile. And they make a commitment every year to make retention of focus. And, you know, some years we've had better years than others, but they've been consistent in their vision that retention matters. Now, they're facing the same thing. A lot of organizations face, fewer donors more dollars, but the retention has gotten them off the hamster wheel, a very expensive acquisition, because we know that acquisition is seven times more expensive than it is to retain a donor. I talk about that in my good guide. And we break down you know why that's true. But Whitworth really does care about their donors as human beings. And the ethos runs through their entire department from major and planned gifts, all the way through to annual giving alumni relations. But they believe it. And I think they've seen that they can actually enhance or I don't want to say manipulate because it's a bad 10 year word. But they can change a donors behavior based on their behavior as well. And that, you know, more than anything more than just the behavior base versus dollar amount has been their embracing of segmentation

way to go friends in Spokane, Washington. So impressed by you

in I have to like give another little nod to something you said earlier, which is, if you are embracing these sort of mindsets, we just had Mallory Erickson on to talk about why you have to dive into your mindsets as a fundraiser. But when you dive into this, it harkens back to something else you said, which is you're playing the long game. And when you play the long game with a major gift donor, yes, you can likely yield if you're doing it very well, possibly something good at the end. But if they're major gift donor, everybody in town is courting them in the exact same way. If you play the long game, with someone who just wants to be seen, who wants their gift to be appreciated, and to know that it has impact, you are into a whole new ball game of plan giving of I mean, the legacy giving that comes from this, the testimonials that come from this and then you have hundreds of them or probably to Whitworth, you know, point 1000s of them at this point? And how much better does that feel, when you have a community of people behind you, rather than the one or the two that we are just praying keeps going,

I'm gonna throw something out there that may burn a little bit. For some people, if we're going to say that we're going to commit to the long game, then don't we have to stick around to see it. One, you know, our fundraiser turnover is 16 months at this point. And people get very impatient and aren't willing to build long term. They're not I don't get to pay off fast enough. I'm not closing the gift fast enough. And so I think we need to have more patience and more respect and less. You know, you know, one of the things that Whitworth has is their leadership team has been intact, all eight years, their top three top four positions have been the same. And that continuity means they can be innovative. And while other staff, some of them have turned over, they all are hiring to the same ethos. So I'm just challenging you all to say, then you need some stick to itiveness, you know, an annual giving, we throw out a new idea. And we're like, oh, let's try that. Then six months later, well, that didn't work. Well, you had six months. My god, that's not even a pandemic long at this point. Like stick with it for a little while, you know, like, I was talking to my Pilates instructor and she said it takes 1000 reps to master an exercise like a thought, first of all, I was like, You expect me to do 1000 of something. And she's like, not today. And I was like, Oh, now that's my cue to leave. But she was saying for your body, it become natural for your body, you need 1000 times and Malcolm Gladwell. Right? And it's 10,000 hours and all that other stuff. So our have you as fundraisers put in 10,000 hours worth of work on your donors? Or are you just expecting a quick hit? I mean, I just think we need to have some respect for that as well.

And these conversations we've been having on Fridays are threading together, you know, because we started this series with culture matters. And that's at every level pouring into making it a place that's a vibrant place that not only is attracting and keeping the people but also attracting the donors that you know are the same in that regards for values. So there's really really something to this? I love that we're kind of bookending the trends with these two paradigms. Lynne. You know how we wrap up these conversations? What is one good thing that you can leave us with our audience? Us, you know, we hang on every word you say, so can't wait to hear.

I want you to go and find the story of a donor, who had no one has ever paid attention to, that's probably been giving it your organization for 1015 20 years. Eugenia Curtis and others are who I think have the unsung heroes, the Burton Tilly hood. And I want you to go find that person that's given 50 $25 a year that nobody's ever visited, and go find their story. Ask them why they gave their first gift, why they continue to give to you, and go spend some time with those people. At least do a biography of them and get to know the loyal donors in your in your data and go dig for those people. Because those are the people that while they may not have capacity, they have the one thing that matters most. And that's the heart for it. So we'll talk to them.

I will just say you shared the Eugenia Curtis story on your good guide, and we were on the floor and she was from Tennessee, right was at the University of Tennessee. And if you are in pro, run, do not walk, run and go watch this good guy. Because there's so much good information like this. Not only is it strategic and tactical, it's mindset shifting. And it's also the storytelling is incredible. But the story of what this one woman did for the University of Tennessee, when she was seen and what they did to honor her legacy is just next level donor relations. And it is putting this entire theory of what we've talked about today, in practice for good. So thank you, my friend for always coming in here rocking our world and go check out donor relations guru. They have incredible resources, trainings, books, online webinars, so it's donor relations. guru.com. Please go follow Lynn. She has incredible thought leadership both in LinkedIn, Facebook, Instagram, and your whole team is just awesome. So I have to give a shout out to hi Ashley and Shannon, thanks for all you do to make us look good.

Thanks. So happy to be here again.

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