Mallory Erickson  02:00

Welcome, everyone, I am so excited to be here today with Justin Wheeler, Justin, welcome to What The Fundraising.

Justin Wheeler  02:07

Thanks so much for having me, really excited to be here.

Mallory Erickson  02:09

I am really excited to have this conversation and you have a particularly interesting story and history in the nonprofit sector. So why don’t we start with you just telling everyone a little bit about yourself and what has led you to your work today?

Justin Wheeler  02:22

Absolutely. So I’m going to take us all the way back to my sophomore year in college, but I’ll make it short. Sophomore year college, I saw this very rough cut documentary called Invisible Children. At the time, it was just three filmmakers who just got back from Africa made a film. And I couldn’t believe that children were being abducted and that the world didn’t know about it. So that summer, I purchased a plane ticket with my friend’s parents credit card, and spent the entire summer in Uganda learning about this conflict. 

And on several occasions getting caught up in the Civil War where the Ugandan military and the rebel army were I was caught in crossfire between the two, which made the issue extremely real. And it made me think that when I was a kid, I didn’t have to worry about soldiers coming into my home and abducting me. This is absurd. We got to do something about it. So I helped lay the groundwork and spent the next eight years building Invisible Children, which is a pretty well-known organization that has raised tens of millions of dollars to end one of Africa’s longest standing wars. And then during that experience got inspired by another very challenging issue, North Korea. I learned that at the time, there was no organizations, nonprofits working United States to help North Koreans. So my wife and I went to the border spent two months at the border of North Korea and China, where we met North Korean refugees that were in hiding and basically over the next five years created an underground railroad to help smuggle North Korean refugees out of China into Southeast Asia so that they can get asylum and seek refugee status in places like the US and South Korea. All of my experience, this is about 12 years’ experience in the nonprofit sector. Most of our fundraising was grassroots. And so we raised tens of millions of dollars through digital fundraising. We were not reliant on like large corporations or foundations. And we were always frustrated just with the technology that we would use to fundraise. We felt like it had limitations. It didn’t convey sort of the brand trust that we were trying to go with our donors. And so finally, me and two of my colleagues at Liberty in North Korea, decided to step out and start Funraise in 2015. 

And Funraise is a platform for nonprofit organizations. It’s really an end to end platform that helps organizations manage their donors, CRM, front end fundraising, digital fundraising, and so forth. That’s what I’ve been working on for the past seven years now, which is crazy.

Mallory Erickson  04:41

Wow! So when you left being inside the nonprofit sector and started Funraise, what were some of your sort of biggest surprises starting to see the sector on a more macro level?

Justin Wheeler  04:53

I started to see this, the last couple of years that I was at Liberty In North Korea, but it was definitely more eliminated coming out and that was just this whole overhead myth fiasco, we worked so hard for so long to try to keep these financial ratios in check. And it definitely harmed our growth, it definitely meant that we would help less people, it was the right thing to do to please donors. Coming out of the nonprofit sector and starting Funraise, which is a venture backed company, we’ve raised about 35 million to date. And if we were to use the same sort of financial ratios of our business, it would be canceled. It’d be absolutely terrible. But that is an investment in our growth. It’s an investment in the future, because we know that the money we put into the business today, specifically the product and our team, it will pay dividends in the future. And that’s one of the I think the most illuminating things that I’ve realized coming out of the nonprofit sector is that so many nonprofits are just under investing to the point and it’s because we’re chasing dollars, right? We have to chase donors, we have to chase those dollars. And there’s a certain way to budget your nonprofit. And so that I would say is one of the biggest eye openers for me coming out.

Mallory Erickson  06:03

Okay, that’s really interesting. And I’m really fascinated by the way that who the leader is of a Tech company and their experience fundraising or in the sector probably influences the technology in some way. I mean, you already highlighted a number of ways that that’s happening because of your experience. But I’m curious. Okay, so we think about this overhead myth that has many different types of implications. And I would say a lot of self-fulfilling prophecies in the ways that nonprofits are perpetuating it or not pushing back when they have the opportunity to, and I think about, particularly the front end capabilities around fundraise, which is really improving the donor experience, their experience on your website, and throughout an entire transaction process afterwards. 

What do you think technology’s role is in not necessarily tackling the myth head on, but shifting the experience of donors so that that myth becomes less and less important?

Justin Wheeler  07:01

Yeah, that’s a great question. It’s interesting angle to take on this topic. Some do this really well but a lot just don’t understand this concept of digital trust. And when a donor comes to your site, or a potential donor comes to your site, and doesn’t have a pleasant experience, it’s hard to maybe find what they’re looking for, it’s hard to find the donate button, it’s hard to get through the donation form, whatever it may be, all these things start to erode a donors trust in your organization, which may mean they may not make a gift, may make a smaller gift, or it may take longer for them to give in general. And so I think investing in world class experiences for your donors online, will go a long way in building that trust. 

So that when you do have that face to face, when you do have that conversation, or you have the harder conversation about overhead, there’s already initial trust built up, this organization knows what they’re doing. They feel like a Netflix or Amazon in terms of their technical footprint online. So they obviously have smart savvy people working for them, I got to talk to this organization and get to know them. I think it just helps shifts the conversation a bit. It takes it away from how are you spending your resources? Are you being wise with them to organization has their shit together and they’re a serious business. And so I think that could be one potential angle, it changes the conversation to the advantage of the organization.

Mallory Erickson  08:21

Yeah, I agree. And I didn’t know that term before. It makes sense, of course, digital trust, but we talk so much in this sector, about building trust with donors, and we have a lot of archaic ways of evaluating how much they trust us. And I think what you’re talking about is something you’re right, that a lot of organizations aren’t talking about that matters way more than they know, in terms of how they’re building trust with those donors. And even I think, where they’re getting some of those other questions, as opposed to what you said, this organization knows what they’re doing. I trust them to solve this problem. I don’t feel like I need to micromanage how they’re spending their funds, because I feel aligned with how they even created this experience for me.

Justin Wheeler  09:02

Yeah, totally where everyone today has become a Digital Maven. We do so much online today, from grocery shopping to clothes shopping, to entertainment, whatever it might be. And you inherently and sometimes it’s subconsciously. But when you go and you’ve never heard of a store online, and you buy something from it, and it’s a very easy checkout experience to the point where it’s like a few clicks, and you have a shipping notification of when your package is going to arrive. Like from end to end its seamless, you just build trust in that company. And it’s all technology that’s really powering that end to end sort of experience. And nonprofits need to replicate that forgiving, and the ones that are doing really well and are raising more online and are converting more supporters to donors. And so I think that this idea of digital trust is so important for organizations to adopt and to really check out their own kind of experiences online.

Mallory Erickson  09:52

Yes, I love that. I’m curious in terms of other things you’re seeing in the sector right now, what other parts utterance or yes shifts, are you noticing that you’re excited about?

Justin Wheeler  10:04

One of the things that has been fun to watch as people are doing things in person, again, they’re not forgetting the digital component of that thing, that event, that Gala, whatever it is. So we’re starting to see a lot more just hybrid type of events that can cater both to in person and obviously online. And aside from like the audience just being much bigger and the potential to raise a lot more money. I also think this is a more inclusive way to host events because it opens up to just different demographics, different geographies that otherwise wouldn’t have access to participate, and people want to participate, they want to help your nonprofit. And so making it more accessible to folks from all over the place is the right thing to do. And so we’re seeing that happen a lot more. And therefore, we’re seeing a lot more demand for products and tools that will help support these hybrid events to a greater degree. And so that’s something that is super interesting. There’s also something we’re tracking, and it’s still too early to tell but we’re tracking to see how is donor sentiment with the economy and the macro kind of environment. Like, is this going to be as big of a Giving Tuesday? Is this going to be as big of an end of year. And so far, the way that we’re able to predict at least customers on Fundraise, how large is going to be is looking at like the trailing kind of 12 months. And so far, we’re only seeing growth so far, we’re only seeing positive signals. 

So we believe Giving Tuesday, and end of year fundraising is actually going to be another big year for nonprofits, contrary to what the headlines may suggest, and just the general fear that’s in the markets today. And so that’s something that we’re closely monitoring and watching to see if that holds strong and holds true, but we suspect that it will.

Mallory Erickson  11:40

Okay. I love that you brought that up. Because a big question I’ve been having recently around this is really this sort of like chicken in the egg thing. Right? So at the beginning of COVID, I did this webinar, it’s sort of what launched my business today. And it was all about the paralysis that people were experiencing fundraising, there was this language that it was inappropriate to fundraise right now. And the thing that I kept saying is, if that’s the narrative, you’re not going to fundraise, and then you’re not going to raise money. So like, you’re definitely going to be right. If you show up, if that isn’t the narrative, if you pick another narrative, you’re actually going to see wildly different results. And it’s interesting to me, because my guess is that folks who are on Fundraise are perhaps also taking more actions in alignment with continuing their fundraising efforts with making those offerings to their community, inviting people to give, as opposed to having a narrative that people don’t want to give, we shouldn’t do this, we should take this down, maybe don’t do that campaign. And so they really have the opportunity to be the chicken instead of the egg. What do you think about that? How do you feel like that shows up?

Justin Wheeler  12:49

First off, I think we need to stop paying attention to the headlines, because the headlines do just create this paralysis around where things are going and whatnot. Instead, we have to take a look at the data. And yes, like the economy isn’t growing as fast as it grew during COVID, which is insane. But it’s growing still. And it’s the best labor market in the last like two decades or three decades, I think it is. So more people are working than ever before, which means you have a larger audience to raise funds from. Now, I think it’s incredibly important as an organization to understand how your donors and supporters may be impacted by an economy that’s not growing as fast. And typically, where this impacts the most is your high net worth donors, your larger capacity donors, donors that maybe own their own businesses that need to reinvest more back into the business to keep headcount and so forth. So that’s the population that may experience some restriction. But the vast majority of people are working. And so I think that it would be very foolish not to run campaigns, end of year, Giving Tuesday campaigns, I think that that would just be a cause of disaster, because we’re just not seeing that they’re out, like some of the headlines. And so I think I totally agree with you. It’s important to keep asking, to keep fundraising. And the last thing I’ll say on this, which is not totally relevant to topic, but relevant to just a larger problem that we see nonprofit space is just donor retention. And a lot of nonprofits are scratching hands, like why aren’t donors coming back and giving again, and my answer to them in the most cases is because you’re not asking them to give again. You have to ask people to give like, you can’t just think putting something up online sending an email equates to asking somebody to give. Your donors are not giving because they forgot about you. You’re just not asking. And I think that goes hand in hand with the environment today, the economy today and getting to know your donors in a more intimate way.

Mallory Erickson  14:34

Yeah. Okay. I love that you said that. I thought my head was going to fall off because I could not agree with that more. And I think it’s so interesting how often I hear from clients or folks inside Power Partners, this person didn’t give this year or this person isn’t giving what they were hoping they were going to give and when I asked them, Okay, well, what did you ask for? How did that shake out? Oh, we didn’t ask for it. And there’s this sort of belief that people are going to do the thing we want them to do without a prompt. And we know that thing, behavior doesn’t happen without a prompt and part of that call to action for nonprofits is prompting donors to give. And so it needs to be happening repetitively. And I’m curious, what do you think about the relationship between that and what I consider to be a myth of donor fatigue?

Justin Wheeler  15:25

Oh, wow, that’s interesting. Donor fatigue, I would totally agree with you on that point. Yeah, I think a lot of times, it’s just fundraisers think they asked. What I mean by that, is they take a donor to dinner or they have a phone call and they tell them about all the cool things they’re hoping to do and hoping to accomplish this year. How many X people they’re going to help. But there’s no specific requests and specific ask they leave it open ended. And that never works. Best case, you get something marginal, but worst case is the donor thinks you don’t need any money, because you’ve never made the actual ask. And so yeah, I think that donors give cyclically, essentially, like, if you have a checking account or savings account, you have an account for philanthropy, like how much you’re gonna give in a year. And whoever asked first is gonna get it. Unless a donor is so dialed in, maybe sits on the board, maybe it was an early sort of like donor to the organization and has like deep roots with it, they maybe don’t need as much like stewardship, although they should still be, there should be a lot of gratitude, and so forth. But most owners aren’t that connected to the organization, maybe they’re connected to a person or something like that. And so I just think it’s important to stay in front of it. But depending on how many donors you have, it could be a hard challenge to do compared to headcount and donor portfolios. But that’s where technology can come in, and really help manage this for you and help make it a little bit more efficient. But I totally agree. There’s this concept of donor fatigue, I think it’s just an excuse that a lot of fundraisers use when they’re not hitting their numbers, when they’re not hitting their goals.

Mallory Erickson  16:49

Yeah, I agree. I think it’s like, they might be fatigued around a particular message or a particular sort of like bland communication strategy, because you’re worried about the unsubscribes. And so you don’t want to come out too strong. And there can be communication fatigue, I don’t think it’s donor fatigue at all. So I totally agree. And I think what we see is like, oh, let’s communicate less because they’re fatigued, and what I really push is, no, communicate better. If they’re having a problem with the messaging, then it’s not about less, it’s about better, and how do we actually create stronger experiences and messaging. I’m curious if you could go back however many years now and talk to your newly fundraising self, what would be some advice you would give him?

Justin Wheeler  17:33

The thing that I wish I would have done more I started to do this later in my fundraising career, what I wish I would have done earlier was actually get to the office and get to meet donors more. I remember one of the first times I did this, it was a fake it till you make it sort of experience where we had this potential donor base in Europe, we knew that he had lots of capacity. And he was interested but hadn’t like pulled the trigger yet. And so we got to meet him in person. And so I dropped an email to him, I’m going to be in your neck of the woods, like during this week, would love to find time to meet even though I had no reason to be out there. He invited me over to his house, we spent half a day together. And he has continued to give six figures since then. I think the thing that I wish I would have done earlier, and if I would have told myself was just to get out on the road more, especially with the donors that could really alter the trajectory of your growth, because this particular donor actually invested in areas that allowed us to grow our fundraising that allowed us to grow our overall efforts. 

And I think that’s incredibly important type of donor to find, and it often takes getting to know the person spending time with them face to face. And so I think that’s one of the things I wish I would have done differently earlier on in my career.

Mallory Erickson  18:40

Okay, we talked about a number of different things that are holding organizations back and where some real opportunity lies, for nonprofits to lean in, what is your goal and sort of vision in terms of the way that Funraise fills this gap in the sector to allow nonprofits to overcome some of these hurdles and really realize their potential?

Justin Wheeler  19:00

I mean, first, this just starts with making our platform accessible, and a few different things. We are definitely one of the cheaper platforms in the market today. And that’s not because the products cheap like, as I mentioned, we’ve invested about 40 million into the product. So it’s I mean, it’s a robust world class enterprise product. But we realized that really, as we were early on in selling the platform to the nonprofit community, it was really only a subset of organizations can afford it. And our goal was that nonprofits of all sizes, small or large, would be equipped with world class software and technology that would enable them to accelerate their mission faster. And so we often talk about what is our role in this community. It’s to help organizations accelerate their impact as quickly as possible. And we believe that the tools that we’re building help organizations raise more funds to a greater extent, our data bears this out. And so we’ve completely overhauled the way that we price our product so that organizations of any budget can afford it. And so that’s something that’s important to as we continue to develop, and we ship new product every two weeks, and so we’re constantly innovating, but we’re giving that product back to our customers so that they can experiment in new verticals, and new strategies. And we think that’s important to push kind of this sector forward in achieving their goals. Because a lot of the problems nonprofits are trying to solve are solvable, it really comes down to, not in all cases, but in many cases, it just comes down to money. And if more money was given to the nonprofit sector and or social good type of businesses, I think that we can solve things like world hunger, poverty, so many different causes that are important to all of us. And so hopefully, we as a company can play a small role in that through the technology we build for the nonprofit community.

Mallory Erickson  20:43

I love it. Thank you so much for taking the time to have this conversation with me and for sharing all of your experience and history and wisdom and this amazing product with our sector.

Justin Wheeler  20:54

Absolutely. Thanks for having me on. It was fun.

Mallory Erickson  21:01

All right, there is so much inside this episode that I love. But here are my top takeaways from this conversation with Justin. Number one. When it comes to removing friction looks matter. It’s important that your digital interface is clean, professional and efficient, all of which will inspire donor trust. Number two, news headlines don’t need to be your destiny. Donor behavior is very much shaped by the stories we tell and the expectations we set. 

Number three, if you’ve been scratching your head and wondering why a donor isn’t coming back or hasn’t given again, you need to ask yourself whether or not you really asked them. I appreciate Justin storytelling here that really paints the picture of times when we think we’ve asked, but we haven’t really. And number four, staying in front of donors is key to protecting and promoting your organization’s profile. To that end tech platforms are a great ally in automating and improving the quality of the donor experience and your communications. 

Okay, there are so many more takeaways and tips inside this episode. So head on over to www.malloryerickson.com/podcast to grab the full show notes and resources now. You’ll also find more information there about Justin and Fundraise. Thank you for spending this time with us today. If you enjoyed this episode, we would love it if you would give it a rating and review and share it with a friend. I am so grateful for all of my listeners and the good hard work you’re doing to make our world a better place. And if you miss me between episodes, stop by and say hello on Instagram, under @whatthefundraising_. 

Have a great day and I’ll see you next week.