WHAT THE FUNDRAISING
90: There Are No Fundraising Experts with Tim Kachuriak
“There are cool ways to create overlap (between marketing and fundraising). … We have one budget as a nonprofit, right? And the more that we start to splinter that off then the less total reach we have in the marketplace.”
– Tim Kachuriak
In this episode of What the Fundraising Podcast…
What might happen if we removed the veil and said that no one was a fundraising expert? I think it might lead to a lot more fundraisers trusting their gut, taking risks, testing, and realizing that their constant learning around fundraising is what matters – not being an ‘expert’. That’s what I’m talking about in this episode of What the fundraising with Tim Kachuriak, Chief Innovation & Optimization Officer at The NextAfter Institute. In the conversation, he highlights the forensic research, applied analysis, and behavioral study that are the basis for the actionable resources and training they offer and share. He’s also explaining why he prefers to see nonprofits flip the funnel paradigm and make it instead into a mountain built on understanding and respecting actual donor experience. “Using data to monitor how the donors respond is one of the ways that we can evolve our understanding of who our donors are, what they care about, and how we can message them more effectively,” says Tim. He offers fascinating thoughts about all the micro-decisions that impact fundraising outcomes and how to keep donors motivated. (Hint: It’s all part of creating a genuinely personal, engaging journey.)
Much of our conversation focuses on building humility and empathy into nonprofit fundraising culture while also emboldening each of us in our mission to do good from a place of abundance rather than scarcity. The NextAfter Institute’s many original, evidence-based resources and data-driven training have been developed specifically to support long-term, sustainable philanthropic relationships. Tim and I explore what it looks like to use AB testing – a powerful tool for quickly culling what’s working versus what isn’t in terms of metrics like email opens and click-throughs. We also consider the important upsides of failing. The episode wraps with a reminder of why those of us in the nonprofit sector remain committed to the work despite the noisy emphasis on sales and acquisition in our consumption-oriented culture. Two words: Meaning and purpose!
Tim and NextAfter
- Many thanks to our incredible sponsors at DonorPerfect. DonorPerfect has a lot of free educational resources for fundraisers. Learn more and download some of their guides and tools today at donorperfect.com/mallory.
- NextAfter Experiment Library
- If you haven’t already, please visit our new What the Fundraising community forum. Check it out and join the conversation at this link.
- If you’re looking to raise more from the right funders, then you’ll want to check out my Power Partners Formula, a step-by-step approach to identifying the optimal partners for your organization. This free masterclass offers a great starting point!
- The Institute for Sustainable Philanthropy.
TIPS AND TOOLS TO IMPLEMENT TODAY
Get to know Tim and The NextAfter Institute:
Tim Kachuriak is the founder and Chief Innovation and Optimization Officer for NextAfter, a fundraising research lab consultancy, and training institute that works with charities, nonprofits, and NGOs to help them grow their resource capacity. A nonprofit thought leader, Kachuriak is the author of the book Optimize Your Fundraising, lead researcher, and co-author of the Online Fundraising Scorecard, Why Should I Give to You? (The Nonprofit Value Proposition Index Study), and The Midlevel Donor Crisis. Kachuriak has trained organizations in fundraising optimization around the world and is a frequent speaker at international nonprofit conferences.
Kachuriak is also the co-founder and board member for the Human Coalition, a member of the board of directors for Open Doors USA, an Advisory Board Member for the SMU Digital Accelerator, and an Advisory Board Member for the Blackbaud Institute for Philanthropic Impact. Kachuriak lives in Prosper, TX with his wife Rebecca, and their four children: Max (14), Charlie (13), Gracie (11), and Joe (5).
Other episodes you would enjoy
I teach nonprofit fundraisers to bring in more gifts from the RIGHT donors… so they can stop hounding people for money. Fundraising doesn’t have to be uncomfortable.
02:11 Mallory Erickson:
Welcome everyone. I’m so excited to be here today with Tim Kachuriak. Tim, welcome to What the fundraising.
02:18 Tim Kachuriak:
Thank you, Mallory. It’s great to be here.
02:20 Mallory Erickson:
I am so excited for this conversation today. I love everything that you all do over it NextAfter. But why don’t we just start with a little bit about your story and what brought you to the work that you’re doing today and this conversation?
02:33 Tim Kachuriak:
We chat a little bit before we hit record here and it sounds like we had a similar indirect pathway into the place where we currently reside in the middle of the non-profit field of fundraising. So, I graduated from college right after 9/11, which is like a horrible time to enter into a job force and especially for somebody who wanted to work desperately in the field of advertising and marketing. But fortunately, I worked at a country club all during high school and college. So, I had 432 aunts and uncles that were captains of industry, right? So, like they’re all members of the country club. And so, I called Uncle Joe. He ran the second largest ad agency in Pittsburgh, Pennsylvania where I grew up. And he was like, man, I’d love to hire you kid, but you know what, we just laid off 30 people yesterday. 9/11 hit our industry hard, agency harder, can’t help you. And so six months wandering in the wilderness, met a serial entrepreneur. He said, look, I’ve got all these little businesses, maybe you could do some freelance projects. I said, that sounds great. And then he is like, well, why don’t you start a business? And I was like, well, I don’t know how to do that. And he is like, well, I do. We’ve got an incubator on the second floor of our office building. I’ll be your partner. I’ll give you a desk, introduce you to people, and the rest is up to you. So, I did that for the first five years, started at a general kind of marketing company. Basically I’ll do anything that pays money, I mean within reason, and that’s legal. And then we kind of gravitate more towards digital marketing. And so, I did a lot of that kind of stuff. Five years in, I loved what I was doing. Wasn’t really excited about the clients we were working with. Not that they were bad. But a lot of car dealers and law firms and things like that. So, my church was doing a capital campaign to build a new building and I said, well, I can volunteer to help out with that. And it was like the first time I was doing something that I felt like I was wired to do, which is marketing, but for a cause that I cared about. And so, then after that I was like, well, I can’t go back and make car dealership websites anymore. I Ended up selling my business, moving from Pittsburgh to Fort Lauderdale, went to work for a non-profit, found out that there’s basically marketing agencies that work with nonprofits, and went to work for one in Dallas. And then in that time I just became obsessed with trying to understand how we optimize fundraising. And that’s kind of what I do today.
04:22 Mallory Erickson:
I love that story, and it actually immediately brings me to this question, which is, how do you view the relationship between marketing and fundraising? What does that diagram look like for you?
04:38 Tim Kachuriak:
I know that a lot of organizations tend to silo those two different functions. We’ve got our marketing group over here. We’ve got our fundraising group over here. And like they’re at war with each other oftentimes. And so, what I’ll do is, kind of bring those two groups together and say, look, let’s do a goal stacking exercise. So, let’s go and like you tell me all the things you need, marketing comms folks. Well, I need eyeballs, I need to find ways to reach people. I’d like to get people that subscribe, like I want engagement, things like that. And I say, okay, Mr. Fundraiser, Mrs. Fundraiser, what would you like? And they’re like, I also need eyeballs. And I want subscribers too, but I also need names, donors, dollars. We’re like, look, you guys have things in common, right? We can actually work together, not apart. And so, I don’t tend to separate them as much as some of our clients do. And I think that there’s cool ways to create overlap. And I know there’s different audiences and things that we can reach, but we have one budget as a non-profit.
And the more that we start to splinter that off, then like the less total reach that we have in the marketplace. So that’s what I try to bring those two groups together.
05:38 Mallory Erickson:
I love that. And I actually didn’t wanna lead you too much on the question, but I was sort of hoping you were gonna say what you said because I really agree. And one of the things that I’ve been exploring a little bit is, here in fundraising a lot, we don’t want fundraising to be transactional. But then we separate all of the elements of fundraising that the moments where the money is not moving into the organization, we call it other things. Communications, marketing, we silo it, we put it in these other things, and so we kind of dwindle down the fundraising department or person or whatever to be doing only the transactional work. And so, if a nonprofit is maybe growing and they’re at a point of deciding, do they have a marketing person and a fundraising person, and I’m also not a fan of giving one person a billion hats and not paying them for all of their work. So, I’m not suggesting that. But do you have any advice for how a nonprofit could think really creatively and have the most effective, cohesive communication plan, thinking about the different elements of that?
06:43 Tim Kachuriak:
Well, it kind of aligns with the point that you made. And so like, what I would say is, most people have the concept of the funnel clear in mind when they think about marketing or sales or even fundraising. And so the idea is that you try to reach people through various different channels, through like search engines on the internet, or email, or direct mail or radio or tv. At least from a fundraising point of view, we’re trying to consistently move these people from interest to involvement to investment. And to your point, oftentimes the marketing comm stuff is like the upper parts of that funnel, and then the fundraising is the bottom part of the funnel. We say, well, hold on a second. Why don’t you flip the funnel upside down? Right? Flip your perspective upside down. Because in reality, gravity’s not working for you, gravity’s working against you. Meaning like the organic forces in the marketplace don’t naturally lead people to want to give away their money. So, I don’t have an active group of people that are Googling at this point right now, today, hey, I’ve got a lot of money, where do I give it away? You know what I mean? That just doesn’t happen. Not like you go to Google for things you want to buy or consume. And so, we say, well, if you flip it upside down, it looks less like a funnel, it looks more like a mountain. And so we say, okay, well what is our goal ultimately? I know that nonprofits don’t like to ever think of themselves as a business. But a nonprofit is a business. The non-profit is like an IRS tax designation that says, instead of having shareholders and stakeholders that actually like take a dividend from the money that flows through the organization, all that money stays with the organization to go and do more impact. Right. So it’s a non-profit, it’s a tax status. And so, if you think about it in that context that a nonprofit is a business, well, what is their product? Well, their product is the impact, the social impact delivered through the organization, and the customer is the donor. So, separating the marketing comms just doesn’t make sense in that context, it’s all one. I mean, you could say it’s marketing and sales, I guess. But I think the best organizations that I’ve seen on the for-profit side today, don’t try to create separation between marketing and sales, they try to make them one. But anyway, in this donor mountain kind of analogy, the goal is to get the donor, the customer to the ultimate macro.
Yes, I want a gift, but there’s a series of micro yeses that they have to make along the way. So, like I send an email, the goal for me is to get a donor to give an email, but I need him to open, I need him to read, I need him to click. They click, they get a landing page. There’s a whole new series of micro decisions that the potential donor makes as they navigate content, copy, images, video. And if it’s compelling, if it’s inspiring, they click the donate button. And they have to still yet make a series of decisions, important decisions, even at that transaction state. Right? One time gift, recurring gift? How much do I want to give? Do I want to designate? These are micro decisions. And so then, what is it that we can do to help that donor on that journey up this mountain? As the fundraiser marketer, you’re standing at the top. What that means is like, we have a completely different perspective of that, of our potential donor. Because we live and breathe this stuff every day. We can see the impact the organization’s having in the field and the valley below, but the donor can’t see it. And so we have to help them. And the thing that we can use to help them is our value proposition.
09:32 Mallory Erickson:
I love it. Okay wait. There’s something that you just said that is triggering this thought in me, and I think this is what you’re talking about too. So, I had another guest on last season and we were talking about the science of motivation. And she talked about a common topic around motivation, which is this middle problem, that motivation is high at the initial, but in the middle there’s this big dip. And when you were starting to describe the series of decisions that a donor has to make, it made me wonder, is that sort of the same thing that we need to be aware of? That there is potentially a middle problem between when they get to the top of that landing page and when they’re finally clicking donate at the very end of all the form. And so, how do we build in the motivational aspects around each of those micro decisions?
10:20 Tim Kachuriak:
I think the reason why that phenomenon exists is because like, at the beginning stage of something, that’s one kind of cognitive lever that we can pull, which is like newness, or like this is an announcement that this big thing is happening. And then towards the end we have a different cognitive lever that we’re pulling, which is oftentimes urgency, deadline approaching, getting close to goal bandwagon effect. So, like there’s different kind of cognitive levers we can use. And you’re right, the middle part is just kind of like, why do I even care? Full disclosure, I’m very biased in this area, but this is why I think digital marketing and communications is so really powerful because we can cultivate those potential donors by using like content marketing and things where we’re feeding them, we’re taking them on their journey, we’re engaging them in different things that they can do as they kind of go through that middle phase of giving a donation online.
11:10 Mallory Erickson:
One of the things, even learning about NextAfter kind of illuminated for me, as not a digital fundraising expert, or like, that’s not the niche that I really fall into necessarily, but what I found to be so valuable for my work as well, and the way I talk about more of those one-on-one conversations, is the research that you do and really can only do in the digital space around understanding how different elements of a campaign or a piece of content or an email really shows the dramatic impact that made me so curious about what’s happening in that moment where they just saw a 450% increase on an open or something like that making that specific one up. And so I’m curious, how did you, and all of your research is open source, which is also amazing. And so, I go there often just to sort of see what’s being tested and what’s happening. So for you, can you tell me a little bit about how that relates to this journey that you’re talking about and why that research is so important?
12:14 Tim Kachuriak:
You said that like, I’m not a fundraising expert, or you said, I’m not a digital fundraising expert, is what you said. And I would just say, same here. I’m not a digital fundraising expert. I’m not a fundraising expert. Nobody is. The only experts are the donors themselves. And so what we need to do is humble ourselves and put ourselves in a position where we can allow the donors to be the teachers of what works and what doesn’t. And the way that we can study that, the way we can put them in a position of being a teacher, is through testing and experimentation. By studying their behavior, what they communicate to us by what they do and what they don’t do. One big kind of pet peeves I have is a lot of times fundraisers will look at metrics like, our KPIs based on the things that we want. Like I want impressions, I want opens, I want clicks, and so I’ve got a click through rate, I’ve got an open rate, I’ve got a conversion rate, or whatever. Oftentimes, if you invert those things, those are like, I don’t care, kind of metrics, right? So all the people that are saying yes to you, there’s always so many more people that are saying no to you. So then you have to ask yourself the question, what do I change to get more people to say yes? I mean, that’s all we’re trying to do is basically engineer a series of yeses on that journey. Maybe just to back up like, so your audience understands what I’m talking about when I say testing. So, we do a lot of AB testing. So, if I get a hundred visitors to my website, I can make sure that every other visitor sees version A of the page versus version B. And then if I’m tracking what happens on that page, and the number of people that convert or give a gift or how much they give, then I can compare the difference between both version A, the control and version B, the treatment. And then I can validate that if it’s statistically valid, I can actually gain learning from that experiment. So, that’s kind of like what I’m referring to when I say AB testing and experimentation. But that’s why I love it, is because I’m learning all the time. That’s probably why you love it too.
13:55 Mallory Erickson:
Yeah, definitely. And I had a friend who donated Facebook credit to me for ads. And I used all of it to study copy and to just see how different types of ads performed, how different types of language resonated with people. And I think that point is really important around the fact that we gets so in our heads around our perspective of our own organization and of our own work of what our board maybe is asking for on a KPI sheet, that we don’t step out of that. And I talk about this a lot, I call them funder lenses. Like, what does it take to actually put on the perspective of your donors. And how different those can be in different moments for different groups at different decision points. And so I love that visualization. When you said that piece around, we’re not experts. So, I also really love that because I had a friend recently, another consultant in this space, talk about me as an expert and da da da. And I said, you know, I’m really uncomfortable with that terminology. I don’t really feel like an expert. What I do is, I ask really curious questions.
I’m willing to try, I’m willing to think differently about something that isn’t working and go outside of maybe the parameters of what we’ve historically done in this sector, but like what does it mean to be like an expert. But what are the impacts to like, the ecosystem around this sector, if that belief is adopted more widely?
15:25 Tim Kachuriak:
First of all, I think you’d see a tremendous increase in two things, humility and empathy. I think those are probably the two most important skills for any fundraiser, marketer, or in general. So, like humility and empathy. So what do I mean by that? Well, humility is saying, look, I don’t know all the answers, especially people that have this expert label attached to them. They have all of this pressure on them, like everybody’s looking at them in the room, like they have the answers to the questions. And we know deep down inside that we don’t, right? And so we have to project all this like false confidence and like say, trust me, I’m a doctor, or whatever. And sometimes that leads to us leading our clients or our organizations or whatever astray. Whereas if we say, look, let’s go and bring everybody together. Let’s get a diverse group of perspectives on this issue, and let’s kind of like get the best ideas on the table. There’s different ways you can sort through those ideas and prioritize them or whatever. But then let’s get down to, okay, here’s the two things we’re gonna test based off of this collaborative exercise, and then we’re gonna allow the data to tell us what works and what doesn’t. That’ll teach you a couple things.
Number one, that even as a group, sometimes you’re wrong. You know what I mean? Like, you’re not the smartest people. But also it’ll hopefully enable you to get more in touch with that idea of like, allowing the donor to be the teacher, which is really what empathy is about. Of like, kind of like saying, I need to understand or put on, would you say the donor lenses, but I don’t have donor lenses because I’m not a donor. But I can start to put on my donor lenses, which I would say is like analytics or data. It’s like using data to kind of monitor how people that are the donors respond. And that’s one of the ways that we can kind of evolve our understanding of who our donors are, what they care about, and how we can message them more effectively.
17:01 Mallory Erickson:
I love all of that, and I think the other impact of that adoption of recognizing that nobody is the expert, I totally agree with you. I think it leads to a lot of imposter syndrome actually of consultants in this sector that ultimately holds back progress. And I also think that it would lead to marketing from the consultant, even like the tech side in the sector to be more value based instead of leading with scarcity and urgency. Because I worry sometimes that the marketing we see to sell to non-profits, leads to a lot of their own imposter syndrome, a lot of their own fears. You know, when I was a fundraiser, I was sure I was bad at fundraising, even though the numbers were actually good. I was growing an organization from 300,000 to over 2 million. But I was like, I’m definitely bad at fundraising because there’s no way that good fundraisers feel the way that I feel. There’s no way that good fundraisers wanna throw up before a major donor meeting or doubt themselves when they’re doing these things. When we project that, and a lot of the marketing comes across to tell you that like, you don’t know enough. And so, you need this one thing to be ready to go into that donor meeting, and I feel like that ultimately traps our sector a lot in more of that scarcity mindset and holds a lot of orgs back.
18:22 Tim Kachuriak:
I would agree with that. It causes a lot of organizations or fundraisers individually to look for easy bucks, maybe technology companies or consultants or whatever. They’ve kind of, Ah, they’ve kind of seized upon that. They leverage that to your point, kind of like twist the knife a little bit until you’re like, oh, make it stop. And so, oh, you got the anecdotes, great. Let me take the magic talisman, or whatever. But that’s never the case. And so everybody kind of gets addicted to like the next and latest tool or tactic or whatever, and they don’t have time to focus on what they really need to do, which is like focus on strategy and focus on things like messaging. I liken it to, okay, if I go buy a CRM system before I’ve actually gone and determined what my needs are as an organization, then it’s like going and buying all the supplies to build a house without having plans first. You know what it means? It’s like, it doesn’t make sense. You would never do that. But we do that every day. So, I think that that’s another outcome.
19:17 Mallory Erickson:
Yeah, I agree. We’re more reactionary in a lot of our decisions and we let other people tell us what we need instead of identifying what we need. I think that’s a really important point. I think there’s another piece to what you were saying before and that last sort of question is that a lot of times the solutions provided to nonprofits in this sector don’t include a conversation around testing and failure and trying and learning. And one of the reasons I appreciate what you all do so much, and especially around sort of the open source research on your site, is that you’re obviously showing incredible metrics of success with things that you’re trying. You can also see when something you guys tried with a client didn’t work. And I’m curious if there’s something that you’ve noticed with your clients around their sort of mindset around testing and failure. Like, what is that like in this process?
20:11 Tim Kachuriak:
I think we’re fortunate, the fact that a lot of these big technology companies have kind of almost romanticized failure. It’s like, failure is progress. You know what I mean? Like, well, sometimes failure is just failure, but what we’re trying to do is we’re trying to mitigate risk. That’s what testing is really all about. So you could say, oh gosh, I can’t afford to change this thing because this has been working forever. And it’s like, yes, but what if it’s not working as well as it could work? So, almost by not testing, you may be like leaving huge amounts of opportunity on the table and it’s actually much more risky expecting everything to work over and over again the same way is insane because the world’s constantly changing. So, if you don’t test, then you’re setting yourself up for significant failure.
20:54 Mallory Erickson:
That’s really interesting because the testing that you guys do then is like a small population test before the folks would apply that learning to their whole list or something like that.
21:05 Tim Kachuriak:
Yeah, exactly. I’m sorry. You’re asking like, what’s our theory of change when we kind of bring this into a non-profit client that is very averse to change, right? We’ve learned this over time, so we’ll kind of create this design of experiments, like these are the things we’re gonna test. Some of those tests are ones that we’re 100% pretty sure it’s gonna work. We call those kinda like the low hanging fruit, the quick wins. These are things we’ve tested over and over and over again with other organizations. We could say, just do it. But you know what, we need to demonstrate the power of testing. So we kind of do that, and you get some of these quick wins and some green arrows, and it starts to kind of engulf the culture and everybody starts to get excited about testing the bigger and bolder things later, which if you want transformation, you’re gonna have to go there.
So we try to build credibility for testing by starting small, with things that we are pretty certain are gonna work. But you’re right, once we get into an engagement, like we may have a test and it’s like very well researched, we’ve got all great hypothesis, and it just totally bombs. That means we were so off, we were going in this direction and we thought this was right, but we’re totally wrong. So, we get a boo, go in this direction now. So it can kind of redirect you. And if you’re doing a test appropriately, you’re not betting the farm. It’s a limited time window. It’s a certain amount of data points you need to get statistical significance. And then you analyze the experiment and then you move on. So it’s about not just adopting wholesale change.
22:22 Mallory Erickson:
Yeah, I hear you on the romanticizing failure in the for-profit world. I feel like in the nonprofit world, most of the folks I work with are miles away from that, and failure feels like this incredibly scary concept, even failure around an email. I watch organizations send out emails with an 11% open rate and they’re terrified of change of what if it could lead to a 10% open rate. And it’s like the upside is obviously so much greater than that, but the fear of doing something wrong sort of controls their decision making. And I was just recently listening to something where someone was saying like, listen, the nonprofit industry was created to fail. In many ways it was not created with shareholders and profit and all this stuff because we didn’t want these organizations to be beholden to always doing better. We wanted them to test and try things. And I feel like when we’re talking about changing the status quo, how on earth can we do that without some failure? If we knew how to solve these problems, they would be solved.
23:30 Tim Kachuriak:
That’s right. Fear of loss is definitely a very powerful motivator and can keep people kind of in bondage. That’s kind of why we open source our whole research catalog. So we’ve got 3,700 experiments from some of the largest and even smallest organizations on the planet that are doing testing. And look, that thing that we’re recommending that we go try and test, look it worked for this organization, this organization. Now, we can’t guarantee it’ll work with us or else we would just make the change, but we can test it and we can see what the impact will be. So, it’s like, you know, leveraging other people’s research can sometimes help. And then honestly, like you’ll run into situations where even bringing data to the table, even say you run an experiment and it gets a big lift in performance. And then the executive director or CEO or whatever’s like, I don’t care, I don’t like it. They’re just like, well see you later. You know what I mean? Not my partner, not my kind of client. So, but that’s rare that we run into that.
24:20 Mallory Erickson:
Yeah. Okay. My next question is a little bit maybe long-winded to get to. And I’m not gonna quote this experiment perfectly, so I’ll find it and put it in the show notes for folks who are interested. But I was just listening to Seth Godin’s podcast and he was talking about this experiment they did with positive reinforcement tactics with dogs. And how there was this certain type of dog training where folks were giving food or positive reinforcement, like every few seconds basically to drive the dog’s behavior. And that people were really resistant to this dog training method, not because it didn’t work, but because it felt so manipulated. And what hit the point that he was trying to make is that, so often we sort of want people to want to do the thing. And there’s this great line in The Breakup with Jennifer Aniston, where she screams at her husband like, I want you to want to do the dishes. And he’s like, why would I want to do the dishes? We do that so much as humans. We want to believe that the other person wants to do the thing, even if we don’t so closely manipulate their behavior to do it. Talk to me about how that shows up in this work, or if it does, and what you think about that concept.
25:36 Tim Kachuriak:
Yeah. Earlier this year we did something like this innovation summit where we bring thought leaders together. And my topic was on these different, like behavioral economics and things that you can kind of go do and put in play, like these different levers, cognitive levers you can pull. And at the end of that session, I said, you know, just because we can, just because it works, should we? There’s a fine line, I think in my mind between persuasion and manipulation. Two different things, but there’s sometimes like, it’s hard to decipher which is which. So, you know, behavioral science and like philanthropic psychology, there’s all these different ways we can understand how humans are wired and how people respond, how they make decisions. And I don’t think that it’s bad to understand that. I don’t think it’s bad to align the way that you package a message or deliver a product or a service or ask for a donation that aligns with these things that we understand about how humans go about decision making. There’s nothing wrong with that. But I’ll give you an example. A lot of time in the non-profit space we’re talking about problems and a lot of these problems are societal problems and there’s people that are just becoming so consumed with anxiety and like their mental health is suffering tremendously because of this constant barrage of like, look at these problems. And so, that’s one question we ask is like, are we helping at that point or are we hurting? That’s something that we have to kind of think about. But honestly, it’s an issue that we discuss with our clients. I can’t say that I have a hard fast answer to that, but it’s something you have to be aware of because the point when you flip over from using principles of persuasion and turning that into manipulation and getting people to do something that, number one, they shouldn’t do. Number one, they probably wouldn’t do or that could in some way leave them in a bad state of wellbeing, like using anger fundraising like, which a lot of political campaigns do. It’s like, mud slinging and like, she said this, and he said that, give money and we’ll go and get them. I don’t know if that’s good. I don’t have a real simple answer there, but it’s something, I think a topic of conversation, especially once you start to move into this world of behavioral science, because it’s a very powerful thing. But with great power comes great responsibility.
27:37 Mallory Erickson:
Yeah, I really appreciate that answer. And my executive coaching background is in something called energy leadership. And there are these seven styles, seven levels of leadership. And I’ve turned them into these seven styles of fundraising. And they are a relationship between two types of energy; catabolic energy, and anabolic energy. Catabolic energy being very depleting, defeating that kind of quick sand paralysis, comes with a lot of judgment, black and white thinking. That’s where that sort of like anger lives, martyrdom lives. And then anabolic energy being a very fueling, healing,0 flow state energy. And that’s where helper energy is, or joy in connection. So the way I think about this, win-win partnerships are up in anabolic energy. And so it’s interesting what you were saying because I think about this a lot, and I say this to clients a lot. Like, you can fundraise from any of those energy levels. You totally can fundraise from anger fundraising. You can’t, in my opinion, build a sustainable fundraising pipeline from that type of fundraising. That fundraising happens up in anabolic energy because if you’re manipulating behavior with a short term goal in mind, that’s where you are likely to be maybe more irresponsible about how you are doing it. But if you have in your mind, what does it look like to bring in this donor as the first step in a long term relationship with them? I think that’s when you’re gonna use more of that. For me that is an anabolic style of fundraising. And I think that speaks to what you’re saying too.
29:03 Tim Kachuriak:
Absolutely. Are you familiar with the Institute for Sustainable Philanthropy?
Jen Shang and Adrian Sergeant. Okay, so this is like their whole central thesis, right? It’s that there’s certain ways that we can do fundraising. Yes, it works and yes, it kind of does. It gets the short term transaction, cash register ringing, but it leaves the donor in a worse state of wellbeing. Or there’s these other things, they may not get as much money today, but it’s gonna build these lifelong partners where you actually have this donor for the lifetime and they will get way more money. But the problem is, in the nonprofit space, we’re so addicted to like the annual fund, direct response, I put a dollar in, I need $5 out this month, this year. And so we don’t make decisions based on the long term. Everyone talks about lifetime value, lifetime value, but nobody makes decisions based on lifetime value. If they did, it would look a lot different. So, that’s kind of like the next level of a lot of our experimentation we’re starting to launch. Because we’ve established some relationships over the last 10 years with some great nonprofits where we’ve demonstrated like, oh, we can get some quick win kind of stuff and we can go and fix these things. But we’re like, let’s do some longitudinal studies. Let’s run a year long experiment on how to fix the epidemic of retention, donor retention. The average retention rate for a first year donor across the industry is like 30%, something like that.
30:14 Mallory Erickson:
It’s worse these days. It’s like 20%. `
30:17 Tim Kachuriak:
Why not fix that problem? Because then you don’t have to acquire so many donors. You don’t have to use so many shady tactics, like taping pennies on envelopes and just getting people to sign angry petitions so we can go and..
30:29 Mallory Erickson:
I do think it’s a really important point, and I’ll say like, for folks listening, another question I ask clients a lot around this is like, would you write that as you think about going back and having this conversation with that same donor in five years, right? Like, what would you do if you knew that you were gonna be fundraising for this organization from this donor in five years? And are you making decisions through that lens? Because I think that then starts to shift the way we think about that sort of urgency and one year turnover. I also think in my experience, that sometimes the obsession with donor acquisition versus retention has a fear component to it because it feels a lot more emotionally significant to be turned down by somebody who said yes before. We like to attribute fault to ourselves. Like, they gave last year and then I did something wrong because they didn’t give this year, I reached out to have a meeting and they ghosted me. Or there’s all these like more charged experiences in the donor retention piece than in just the acquisition where we are sort of invisible to the new people who don’t join our thing. I think that’s a piece of it too, and I think retention is essentially a middle problem.
31:41 Tim Kachuriak:
Yeah. This is controversial, but I’ll say it because both of us are kind of like consultants or agencies or whatever, right? So, I wonder too if it’s the agencies that are doing this to a lot of nonprofits. Cause you think about it like, are we part of the problem? A lot of agencies, especially direct mail agencies, like they make a lot of money on direct mail acquisitions. Let’s go mail a bunch of people, you know. And that’s like, in some sense, almost easier to measure and manage than like trying to keep a donor through good customer service and engagement and like feedback loops and like reporting on impact and stuff like that. And so I just wonder if we kind of perpetuate, well, you’re gonna lose 80% of your donors this year so you better go with some more of them. You know what I mean? Like, I just wonder if we’re kind of part of that process that’s self-serving for agencies to operate that way. I asked my staff that, by the way, all the time. I said, look, this is not the business we’re in. We’re not in the business to go and like to get our clients to have to rely upon us. Our goal is to set the caps free. So what does that look like? Well, first of all, what we’re doing in year three should not look like what we’re doing in year one, right? So, we need to build capacity back into our client organization. I mean, that’s why we started the institute. The next after institute is like, look, let’s go train them how to go do the things that we’re doing for them now, so that they don’t need us to do it again. And you know, the more that you empower, I mean like you’re a leadership coach, the more that you empower people to be successful in their careers and be effective, the less you have to hang onto them, the more they wanna hang onto you, because they’re still gonna have problems in the future. They’re gonna look different, just like I’ve got a 16 year old and I’ve got an 8 year old. And some in between there. But my 16 year old’s problems are different from my eight year old’s problems, but I’m still both of their dad’s. You know what I mean? So, it doesn’t kind of change the relationship, but the nature of the relationship changes, if that makes sense.
33:16 Mallory Erickson:
Yeah. I really appreciate and respect your call in for the consultant community because I do think it is something that we’d need to look at. It’s easy to get caught up in the scarcity mindset in the nonprofit sector, especially doing the work. And we start to feel our own fears around, will there be enough clients if I don’t sign. You know, I just signed up a woman to work with me one on one, and she was like, can’t I do like a 12 month contract with you for coaching? And I was like, no. I was like, it doesn’t mean we can’t work together for 12 months, but my hope is that it wouldn’t take you that long to get to where we’re trying to go. And we’ll revisit it then, but you should have a choice every few months around whether or not you still want to work with me. And if there’s a problem that it makes sense, or maybe you want a different coach at that point, or maybe you’re ready to fly on your own for a while, then you’ll come back later. And I have to ask myself that question all the time too. Like, yes, I have to build a business and pay my mortgage and all those things. But at the end of the day, I want to be making a positive impact on this sector. And I don’t want anything that I do, my marketing, my sales strategies, any of those things to be harming organizations. And I’ve definitely done things that have harmed organizations as I’ve been trying to figure this out. And so I just do think it’s work that I’d like to open a conversation around for the consultants in our space. So I really am grateful that you brought it up.
34:37 Tim Kachuriak:
Yep. Rule number one is like, do no harm. Right? So, we gotta start there.
34:41 Mallory Erickson:
Okay. What question am I not asking you that you wish I would ask you?
34:47 Tim Kachuriak:
Why is giving important? That’s a question that I think about a lot. And the reason why I think it’s important is, because look at the modern world that we live in today where there’s like so much mass consumerism. And I’m trying to raise four kids in this world now that’s constantly just helping them with all these things that they should kind of get for themself and to feed themself and to go and experience for themselves. You know, it’s just all about me. You know what I mean? What I think is cool about fundraising and like non-profit work and giving in particular, like the thing I love about the donor is that like when we do fundraising, we’re competing, it’s like a David versus Goliath, right? Cause like, we don’t have the budgets of these big billion, trillion dollar consumer brand companies that have unlimited budgets. But every once in a while we break through and we kind of reach somebody with a message that says, yes, you could go take everything that you have and spend it on your own needs and desires. Or you can look to meet the months needs and desires of somebody else or something else or cause that’s bigger than just you. And I think that every time that happens, when a donor gives that gift, it’s like a miracle. It feeds them and like, actually it does good for the donor. So the reason why I’m so focused on trying to optimize giving and like getting more people to experience that, is because I think it’s better for society.
36:02 Mallory Erickson:
I agree so much with that, and I think that we talk often about fundraising being a means to the end, the end being the program impact.
36:12 Tim Kachuriak:
Unnecessary evil, right?
36:13 Mallory Erickson:
Right. Exactly. But I actually think the movement of money in the way that you described is such a powerful, important element of society, the decision to invest your funds in something you care about, the way it builds our identity and belonging and changes us every time we do it. And so, my hope is that fundraisers feel proud to be the stewards of that experience that it’s not just about how much money they’re raising, but that they’re giving people every day the opportunity to change how they see themselves, how they see their community, the impact they can have on their community. And it’s ultimately gonna make them more generous, in all the ways we are generous humans in our lives because we’re connected to nonprofits and organizations and donating in these different ways.
37:03 Tim Kachuriak:
Yeah. Couldn’t agree more.
37:04 Mallory Erickson:
So, tell everyone where they can find you? How can they learn more about the work at NextAfter? Where do you wanna send folks?
37:12 Tim Kachuriak:
The easiest place is probably just to go to nextafter.com. All of our research is there. All the experiments, all the studies, like all the training and free resources and stuff, it’s all available there. If you can spell Kachuriak, which I’m guessing most people can’t, you could find me on LinkedIn, but probably just start with nextafter.com.
37:28 Mallory Erickson:
Awesome, and we’ll put those links below. And thank you so much for this incredible conversation today.
37:33 Tim Kachuriak:
Yeah, it was great. I enjoyed it. Thank you.
37:42 Mallory Erickson:
Could you feel the energy in that interview? We are both clearly riled up about this. And there are so many takeaways from this conversation, but here are the top things that I’m double clicking on.
Number one. What happens when we take the mantle of expert out of fundraising? I think it’s a big increase in humility and empathy. The last thing I ever want is for any of the advice on these shows to make you feel more unready or unsure of yourself as a fundraiser. Great fundraising isn’t about expertise. It’s about willingness to try, test, fail, learn and listen.
Number two. Are your marketing and fundraising teams working in tandem? The best bang for your budget buck comes from the optimization of both sides of the equation through collaboration.
Number three. AB testing is a great way to acquire meaningful marketing metrics. Try introducing alternative content and prompts to see how campaigns trend in terms of open rates, click through rates, et cetera.
Number four. Are you afraid that testing might reveal failures in your marketing strategy or fundraising strategy and tactics? It might, and that’s actually a good thing. The marketplace is changing all the time.
Number five. Feelings of fear and scarcity are what make us afraid to be bold and measure for results. But we can never improve if we’re afraid to look at the numbers.
Okay, there are so many more takeaways and tips inside this episode, so head on over to malloryerickson.com/podcast to grab the full show notes and resources now. You’ll also find more information there about Tim and NextAfter. 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’m 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.