← Nonprofit Nation with Julia Campbell
Nonprofit Nation with Julia Campbell
How the Subscription Economy is Transforming Recurring Giving with Dave Raley
00:41:02
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- [00:01]
Julia Campbell
Imagine nonprofit work transformed by purpose built tools. That would mean less guessing and more connecting, less admin and more impact, less stuck and more go. With the giving platform built for purpose, you don't have to imagine Bloomerang can help you raise more funds, retain more donors, save more time and grow stronger relationships with your supporters so you can spend time on what matters most, your mission. Want to see how over 20,000 nonprofits are using Bloomerang to raise, retain and recruit more supporters? Well, take a free on demand tour of the giving platform today. Go to jcsocialmarketing.com bloomerang that's jcsocialmarketing.com B L O O M E R A N G okay, on to the show. Hello and welcome to Nonprofit Nation. I'm your host, Julia Campbell, and I'm going to sit down with nonprofit industry experts, fundraisers, marketers, and everyone in between to get real and discuss what it takes to build that movement that you've been dreaming of. I created the Nonprofit Nation podcast to share practical wisdom and strategies to help you confidently find your voice definitive, grow your audience, and effectively build your movement. If you're a nonprofit newbie or an experienced professional who's looking to get more visibility, reach more people and create even more impact, then you're in the right place. Let's get started. Hello. Hi everyone, this is Nonprofit Nation. Your host, Julia Campbell. Today's topic, recurring Giving isn't just about convenient. It's about creating sustainable long term impact. And what if nonprofits took lessons from the booming subscription economy to revolutionize donor retention and engagement? And in this episode, I sit down with Dave Raley, speaker, consultant, writer and founder of. Oh, Dave, I realized I didn't ask you how to pronounce that.
- [02:20]
Dave Raley
Imago Consulting.
- [02:21]
Julia Campbell
Imago Consulting. Okay, we'll have to talk about the origins of that name. And we're going to discuss his new book, the Rise of Sustainable Giving. How the Subscription Economy is Transforming Recurring Giving and what Non Profits can do to Benefit. So, Dave, welcome to the podcast.
- [02:38]
Dave Raley
Thank you, Julia. This has been. You and I have talked about this for quite a while, so I'm excited to get to do it.
- [02:43]
Julia Campbell
So it's Imago Consulting.
- [02:45]
Dave Raley
Yes.
- [02:46]
Julia Campbell
Yes. So tell me about your journey, your background. Tell me about Imago Consulting.
- [02:51]
Dave Raley
Number one. Who uses Latin in their business name. The one justification I had when I realized half the audience is going to probably mispronounce the name is this is not a B2C company. You know, I work with a very few number of nonprofit leaders and leaders who work with nonprofits, so eventually they'll figure out how to pronounce. Yeah. Fun fact. Imago is actually Latin for the. It's certainly short for the word image or imagination. Like if you were. If we were speaking Latin right now and I use the word imago, the word picture that would come to mind is this idea of a future that will be but does not yet exist. So like an imago, like you would refer to a butterfly as an imago because it's a final form of a thing that will be. And so what I feel like part of, candidly, what I'm called to do is to help organizations and help leaders to see a future that will be, but does not yet exist. And so it's just something that I've just enjoyed throughout my life and I get to do in my day job.
- [03:53]
Julia Campbell
Oh, I love that. How did you come to working with non profits?
- [03:57]
Dave Raley
Oh, my gosh. I met a girl, went to school down in Southern California, and I just wanted to do something with computers. This was early, early 2000s, so, like the Internet was relatively new. So I wanted to do something with computers and the Internet and then eventually realized, like, writing code was not my. Not my gonna be my thing. And so fell into marketing and business and just was loving that. But my then girlfriend, now wife of 20 years.
- [04:24]
Julia Campbell
Wow. Oh, I'm celebrating 20 years this year as well.
- [04:27]
Dave Raley
Congratulations.
- [04:28]
Julia Campbell
Congrats. 2005.
- [04:29]
Dave Raley
Doing things in. In. In decade chunks now. She's originally from Oregon, I'm from Southern California. And basically neither of us wanted to stay at la. So we're like, well, let's just. We're young, we're getting married. Let's go figure something out. So we moved. Decided to move to Seattle, Washington, where we live today. And because of that, I ended up just looking for a job and finding out about an agency, fundraising agency. Did not know this industry existed that you could literally like, do professional marketing work for causes. Like you could get paid for that.
- [05:01]
Julia Campbell
I remember discovering that and loving it.
- [05:03]
Dave Raley
Oh, my gosh. I thought all nonprofits were volunteer organizations. I didn't know that was like a thing. So that was 20 years ago. And I spent 18 years at that agency. So did a lot of fundraising, marketing, direct mail, Digital. I spent 12 years building the digital team at the agency and running fundraising programs. And along the way, Julia, I found a real passion for teaching and helping leaders to connect the dots. And so I probably started speaking in the industry around 2007. So did that for many, many years as an agency person. But three years ago. Just felt like, man, I wish I had more time to do more of that teaching, advising type of work where, you know, I don't know if you've ever worked in an agency, but in my case, I was executive vice president of the agency. Probably 4% of my time was writing, researching. Oh, right.
- [05:56]
Julia Campbell
It's business development.
- [05:57]
Dave Raley
Cloudy work. Yep. Building the team, doing the client stuff, which is wonderful and so important, by the way. Agencies have such a critical role in our. In our sector. But I just felt like, man, I wish I had more time. I feel like part of my unique gifting is to do that. And so, long story short, founded Imago Consulting. So we're an advisory firm, and Basically I spend 50% of my time speaking, teaching, writing, researching, and then 50% of my time directly applying those lessons to a small set of clients that we advise and get to work with. And so it's been really fun. And so, so far, so good. It's what honestly unlocked my ability to finish the book and to do all of the things that I've. I've hoped for in the. In the past few years.
- [06:41]
Julia Campbell
I'm really excited about this book for a couple of reasons. One, I firmly believe in sustainable giving. I am a monthly donor. That's how I prefer to give. My audience knows this. And the subscription economy is something that I subscribe to. I guess I should say I was just, I love it for good or for bad. I was looking at my bank statement recently and realizing all of the different subscriptions. However, you know, there were only a couple that I really would want to give up. But we do live in a subscription economy, so can you break down sort of what that means and why it matters for nonprofits?
- [07:21]
Dave Raley
When I first started speaking about this, which was almost a decade ago, I did have to really like, when I'd say, hey, so there's this thing called the subscription economy. People would be like, what do you mean? And they'd have to say, but then.
- [07:31]
Julia Campbell
They know because they're like, oh, let me just look at my bank statement.
- [07:35]
Dave Raley
Today, they don't have to ask that question. So the reality is we have seen the rise of recurring automated transactions experiences in every area of our personal lives or business lives. And some of those have been begrudging. You know, I remember the first time I had to subscribe to Adobe Creative Cloud, and I thought, man, I want to own my software.
- [07:56]
Julia Campbell
I remember the first time subscribing to Spotify, and I thought, oh, I have to pay. But now I can't live without It.
- [08:02]
Dave Raley
Oh my gosh. And by the way, there are some, I think manipulative, negative subscriptions and we can talk about those today. The good news is those things don't last. Right? Because we'll talk about it. The vast majority of the value to any subscriber or by the way, recurring donor is in the post first transaction. You know, and so the sort of burn and churn trick donors or trick, you know, subscribers into subscribing turns out doesn't work very well. But I digress. So the subscription economy is just the reality. We have so many subscriptions in our lives today. By the way, Julia, did you know the average American, do you want to guess how many subscriptions the average American has?
- [08:42]
Julia Campbell
The average?
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Dave Raley
Yeah.
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Julia Campbell
I think for me I have about 25 and I'm not average. So maybe six.
- [08:50]
Dave Raley
Somewhere in between the two with 12. So the average American survey has 12 subscriptions. And in fact, the same survey that found that asked subscribers how much they spend on a monthly basis to subscriptions. And get this, the average American underestimated how much they spent on subscriptions by $133 a month.
- [09:11]
Julia Campbell
Oh, gosh, I really have no idea what we're doing.
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Dave Raley
$100 a year that people are paying to subscriptions, that they don't necessarily realize it. In fact, there are entire subscriptions today. Rocket Money is the leading one that actually help people to monitor what subscription. So you can subscribe to the subscription to monitor your subscriptions, which by the way includes your recurring giving.
- [09:35]
Julia Campbell
And so, oh, Rocket Money will include your giving. I always wondered that. That was actually a question I had. Like if those apps monitor recurrent giving.
- [09:43]
Dave Raley
They'Re saying, hey, did you know you were giving to such and such a cause every month? Are you sure you still want to do that? Like, so though that kind of, you know, we've, we've matured as humans over the last decade to say, I'm not just going to sign up for that thing blindly. I'm going to monitor it. I'm going to. And I do think some of that mentality does move into our philanthropic giving today.
- [10:05]
Julia Campbell
100. And I also agree. And I think that it's so important what you said about how we're starting off this conversation. Like we're not being manipulative. We're not coercing people. We're not hiding their subscription from them or not, you know, trying to have them do anything that they don't want to do. And I think that the trend in consumer purchasing and the trends in consumer subscriptions is having complete control apps like Rocket Money that we see ads for, where you do have control over your subscriptions. I do see the consumers want that, and I know donors want that.
- [10:41]
Dave Raley
So.
- [10:42]
Julia Campbell
So I think it's so important for us to, you know, frame the conversation in that way. And I'm glad we're on the same page, because I do know. I have heard from a couple of clients, maybe former clients. You know, we don't want to bother our subscribing or sustaining donors because we don't want to remind them that they're giving. And I thought, oh, my gosh, this is not. That's awful.
- [11:04]
Dave Raley
This is not a set it and forget it. And I've heard that phrase, probably half the time I speak, somebody says, oh, you know, set it and forget it. I'm like, no, no, no, no, that's old. Like, that is how the subscription economy might have been 10 years ago when it was like, ooh, can we trick people into subscribing? But it's not been the case in. In the subscription world, and it certainly shouldn't be the case in the. In the charitable giving world. And so I'm so glad you called that out.
- [11:29]
Julia Campbell
So in the book, you outline six key shifts from the subscription economy that nonprofits can leverage. And one of the shifts is moving from periodic interactions to ongoing value. And I think that's so interesting. So what are some ways that we can provide, you know, continuous value? Like, where should we go from the beginning to provide this value to recurring donors?
- [11:57]
Dave Raley
I love that you highlighted that one of the six, because that's the first one that I would want to talk about. This idea that in the sort of transactional economy, it's just about getting them to buy another widget, you know, buy another toothpaste or what have you.
- [12:12]
Julia Campbell
Upsell them, like, get them. Like. It's like Amazon. It's like, do you want this purchase? Do you want to buy this? You were looking at this. This is in your cart.
- [12:19]
Dave Raley
But the beauty of subscriptions is it's more about what is the ongoing value relationship. Because the. If. If I can get somebody to subscribe to a product, the one time, the vast majority of that value is after that first. That first transaction. Right. And so I have to think about what the ongoing value proposition looks like. So you mentioned Spotify. Let's just use that as an example, and then we'll. We'll make it a nonprofit, and then we'll talk about the nonprofit implications. If you would have told me, Julia, 10 years ago, Dave, you should pay the music company 12amonth to rent music. I would have said, no, thank you.
- [12:53]
Julia Campbell
Right.
- [12:54]
Dave Raley
I want to own my music. I have my CDs. And then, like, if I'm itunes. Yeah, yeah. And then if I'm renting music and I, like, cancel, then I lose all my music. That's the dumb. Well, first, in my. I don't know about you, but in my life, the first thing that came along that started to change my perception was Pandora. This is like, whoa. This whole, like, joy of discovery, like, it, like, learns what I like and then it, like, introduces me to new things that I haven't even heard of. Right. And then over time, and this took. I don't know about you, but it took me a few years as a consumer of listening to Pandora and then getting tired of not being able to control song. I gotta make a playlist. Exactly. I can't make a playlist or whatever. And so then Spotify, you know, came along and I did the free Spotify thing until I realized the ABs think so much value out of this thing. And I don't want that 30 second ad interrupting me. And so today we're. I mean, we're going on five or six years as a family subscribing to Spotify. But and this is the lesson, one of the lessons, this is not about taking that old value proposition of renting music and saying, you know, hey, would you just pay us monthly for music? It's about a much more holistic, ongoing value proposition. I listened to Spotify for an hour this morning as I wrote my latest Wave report article. My kids have their own playlists. I share and create custom playlists for them. I have that joy of discovery. There's a level of community. And so what Spotify and really good subscriptions have figured out is how to create ongoing value, candidly, so they can keep you paying. Right? So now let's talk about the nonprofit sector. So much of the nonprofit single gift fundraising is just like the transactional, you know, how do we get another person to a person to buy another two of toothpaste. And by the way, I'm not knocking that. I've spent 20 years doing single gift fundraising, and that's an important thing that we do, and especially when we're onboarding donors. So I'm not knocking single gift fundraising, I'm just saying it's different because the mentality in recurring fundraising should not be how do we get another gift out of them, but how do we actually create such a compelling ongoing value proposition. That they're not just going to give that one impulse gift at the end of the year or during the holiday season, but they're actually going to commit to stand with us on an ongoing basis, and they're going to receive that value in exchange, and we can go any direction you want. What I don't mean is sending, like, tchotchkes to your donors, although some organizations actually have great goods and services they can provide to their donors. So when I say ongoing value proposition, I don't mean you're selling things to your donors, but I am saying, what is a value proposition that your donors would want to stand with you on a recurring basis?
- [15:42]
Julia Campbell
So what are the key ingredients to a successful recurring giving program?
- [15:47]
Dave Raley
So, in the book, I talk through a lot of key ingredients. There's actually 10 areas we cover, but then I compress it down to essentially seven steps to building a thriving sustainer program. So let me just hit a couple of those.
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Julia Campbell
Sure, sure.
- [16:03]
Dave Raley
The first is to understand your donors. And I mean that in two ways. Number one, literally actually talk to them. The field of. Some people would be familiar with the field of human centered design, which really pioneered this whole idea of, like, we actually literally talk. Like, we pick up the phone and we talk to our donors, and we try to understand what their underlying motivations are, what, you know, inspires them. So that's one piece of the puzzle. The other piece on understanding your donors is understanding the experience you're actually giving to donors. And so a lot of the ways we do that is through secret donor studies of not just saying what is the experience for our recurring donors, but actually going and doing it and experiencing it. Julia, every time I've done one of these secret donor studies, we. I've had the multiple, what I call face palm moments. Oh, yeah. You know, the face will be like.
- [16:57]
Julia Campbell
Yeah.
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Dave Raley
Oh, my gosh. I cannot believe that that onboarding, whatever didn't trigger because somebody changed a checkbox somewhere, you know, And. And so we. We don't just say, what is the experience? We actually go and experience it. And I talk in the book about this, but we specifically look for the four things. We look for the peaks, the peak moments. And these are. These are lessons drawn from a book called the Power of Moments, by the way.
- [17:23]
Julia Campbell
Oh, yeah. So I love everything by Dan and Chapel.
- [17:26]
Dave Raley
Okay, so we look. When we do the secret donor stuff, we look for the peaks. So the. What are the. Actually the best, highest of high experience points of the experience? The pits. Like, what are the worst parts that really drain donors or annoy them or whatever. The milestones and transitions. If you read the Power of Moments, which I highly recommend, they talk about how those are the four key types of moments that people tend to really remember and, and like influence their decisions. And so then I talk about how we, then we need to look for how to elevate the peaks, like how to make them even better, like just double, triple down on the peak moments, like, and just make that a core thing, flip the pits. So sometimes you can turn the worst pit moments into just like actually amazing peak moments and then celebrate the milestones and transitions. Those are just a couple on the understand your donors. But I walk through in the book seven different steps, you know, to build your thriving recurring giving program. And we've actually put together, for anybody who's listening, who's interested, we put together a free guide. It's called the Sustainable Giving Growth Blueprint, which doesn't quite cover all the copy in the book because there's a lot of content there. But it does offer like a compressed version if you wanted to just, you know, preview those, those seven steps.
- [18:43]
Julia Campbell
Where can they get that?
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Dave Raley
The book and all the stuff is just available@sustainablegiving.org and so you can, you can sign up for that, you can grab a free, free chapter of the book and, and, and the blueprint as well.
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Julia Campbell
Amazing. So in terms of the steps and also the key shifts, where do you think nonprofits struggle most? Like, where do you think that there's the most opportunity for growth and where do we just get lost in our own heads?
- [19:10]
Dave Raley
I think it used to be the struggle was just simply not recognizing that recurring giving was even an opportunity for them. Historically, Julia, there have been in my, I've done Some estimated math, 75 of all non profits in the U.S. this is a North American kind of U.S. canada centric stat. 75% of charities have historically been left behind in terms of being able to build strong, growing, recurring, how resilient programs. And that's because they've not historically been what I would call one to one recurring giving program. So that's like child sponsorship, missionary sponsorship, staff support. That's been a very strong type of recurring giving for many years. The second type that has historically done really well is what I would call membership. So that's your local zoo or museum or aquarium or public television or public radio or you know.
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Julia Campbell
Right.
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Dave Raley
Basically charities where the donor is at least partially the benefit beneficiary of the charities services. And those two are great. And by the way, they're being revolutionized by the subscription economy as well. But I'm just as excited about that third category, which has literally been everybody else, which have historically been left behind. So it's the food bank, it's the local rescue mission, it's the relief and development agency. It's. You know, so many charities just have kind of. I wouldn't say written off, but they've just never felt like recurring giving has been accessible to them.
- [20:32]
Julia Campbell
Yes.
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Dave Raley
And the thing I want people to come away with, and honestly, the number one thing for the book. Book is basically summed up. I had a nonprofit leader who I spoke at a conference recently, and she came up to me and she said, dave, I just. At the end of your talk, I was like, we can do this too. And that's what I'm like, yes, you can do this too.
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Julia Campbell
Oh, my gosh. That's the only thing I want people to come up to me and say to me after I give a talk, either on social media or storytelling, is, I can do this too. That's such a great feeling.
- [21:00]
Dave Raley
I love it. Yeah. So there's, yes, lots of details, but the first thing is just getting over that initial belief that this is not for me. And then, yes, lots of tactics we can do, lots of strategies. And it reminds me, by the way, of the early days of digital fundraising. Like, I'm. I'm. I'm old enough to. I consider myself the grandfather of digital in some of our space because I'm multiple generations, you know, sort of removed from the beginning of it. But I remember the early days when people were, like, really reticent to put in a credit card online. And social media wasn't really a thing unless you had a MySpace account. And. And we've seen so much growth, but a lot of that growth has been preceded by these consumer trends. People getting used to buying milk online.
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Julia Campbell
And doing banking and doing it. Paying their bills. Yeah.
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Dave Raley
And getting used to buying, you know, stuff related to their social media presence. That all basically created the kind of conventions and sort of paved the way, candidly for generosity. So we're seeing the same thing with recurring giving or just, you know, in the kind of the early days of the Internet part of recurring giving.
- [22:06]
Julia Campbell
No, I agree with that. I think that's a really great point. How do you see technology shaping the future of sustainable giving?
- [22:14]
Dave Raley
The way I talk about technologies, I don't think it's what will grow your sustainable giving, but it can either be your biggest barrier or your best ally to scaling recurring giving. And I do have a chapter in the book on the your sustainable giving tech stack, I call it. And so I just go through what are all the component parts of your recurring giving tech stack, including, by the way, the three most important parts which you will not be surprised to hear but are important for our listeners. Number one, your CRM, you're on your donation donor platform. Number two, your donation, what I call your donation platform. So that's the whatever provider is actually processing experience for gifts. And then number three is actually your donation processor. And number two and number three often confuse people because they're like, isn't that the same thing? The answer is it often looks like the same thing because the same provider that's giving you the donation forms is also saying that doing the processing. But those are two different technological, you know, components of the system. And both have implications on either being huge hindrances to growing your recurring giving or again, great allies in growing your recurring giving. And so I talked through all the different components of the subscription giving tech stack and then six different sort of elements we look through, including ease of use, donor experience, automation, integration, different things you want to look at to make sure. So bottom line is technology is not going to be your silver bullet. It's not going to, you know, create growth, but it sure could hinder growth. And I have, I have organizations right now. I have one I'm working with right now. We're early on and we've got a really great strategy that will both acquire new donors, convert existing donors and upgrade donors. So super awesome problem. Due to their technology, two thirds of that strategy is unavailable to them because their platform doesn't allow people to upgrade their gifts. You know, like so, okay, this is where I'm saying like it's, the technology itself is not going to do the trick, but it sure can get in the way. And you want to make sure you have technology that's not getting in the way.
- [24:13]
Julia Campbell
Where should nonprofits look for recurring donors? You know, maybe they have a program, they started it, maybe they have not started a program yet. Where are some places we should find recurring donors?
- [24:27]
Dave Raley
So there's two primary ways to grow the number of recurring donors you have. Number one is acquisition and number two is conversion. Those terms are used elsewhere in our industry, so I'll define them. Acquisition means their first gift is a recurring gift. So they are a brand new donor and they're giving on a recurring basis from gift. Number one. Conversion, on the other hand, is they're a donor, they've given at least one gift or maybe multiple gifts and they are, quote unquote, converting to recurring giving. In my experience, charities are either wired to be acquisition oriented or conversion oriented. Now, everybody should do a little bit of both. But one of the biggest mistakes I see is that charities think that their best growth method, for example, is acquisition, when it should be conversion and then vice versa. And I actually unpack in the book how to know which one you are. So I'll give you just a few dimensions. So organization. And by the way, I believe this is a hunch. I don't have the math on this, but my hunch is that the majority, more than half of donors or of charities should be more conversion oriented, where they bring in donors with a single gift and then convert them. But there is a pretty sizable number of nonprofits that can go straight to acquisition, and that's where they should start. So if you're an acquisition oriented charity, couple of the things I look for, that they have a very highly visible need. Like literally visible. Like people can see it. There's not a lot of questions. There's an organization called Operation Smile. I don't know if you're familiar with that.
- [26:00]
Julia Campbell
Yes. And they do cleft palates.
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Dave Raley
Yeah, cleft palate surgery. So talk about a visible need. Like you literally look at a child and you're like, we need to do something. Right. So that's a quintessential example of a highly visible need. A very clear solution. Let's do cleft palate surgery. You know, and it's easily scalable. There's not a lot of explaining to do. And I talk about some other dimensions. Contrast that with more conversion oriented charity. They might have a little more complex need. You know, it may take a little more explaining to get people to ultimately buy in, to give and stand with the organization. Often organizations that are really good at conversion more than acquisition, have a really healthy new donor pipeline. Like, they know how to get single gift donors, but what they haven't figured out yet is how to convert them to recurring. Yeah, it's a great problem to have. Let's deal with that. Right. But I think a lot of times organizations are more conversion oriented and then they spend all their time and effort trying to figure out acquisition and then vice versa. And it's just about discerning for you. Where should you put your effort on the acquisition or conversion side?
- [27:06]
Julia Campbell
How can we retain more of our recurring donors? What are some strategies we can use for retention?
- [27:14]
Dave Raley
Yeah, we talked about that ongoing value proposition. That's where it starts, but that's not where it finishes. Because as I mentioned, the vast majority of the value of a recurring donor takes place after their first gift. In fact, I did the math. It's 97% of the value of a recurring donor comes in after the first gift. So if you knew that about your recurring donors, which you now know, just like with the subscription economy, you had spent a lot of effort in thinking about what that retention strategy looks like. So what I walk through in the book and what I take clients through is what does your onboarding look like? How are you welcoming them into the recurring giving program? Yes. What does your cultivation look like? How are you treating them? Which does include, by the way, additional asks, because recurring donors are actually some of the most generous single gift donors. The average recurring donor will give 25% on top of their annual recurring giving. So if a charity is bringing in a hundred thousand dollars a year, a million dollars a year, that's $25,000. They should be seeing an additional one time gift from those same donors. In the case of a hundred thousand, if it's a million, it should be 250. You can do the math. I have a client right now that I'm working with that their average recurring donor gives 37% on top of their annual recurring giving. So these are very generous donors. And think about it like they're the ones that are the most bonded to the cause. Right. They're subscribing. Right. And so of course they're going to be more responsive to single gifts. So being strategic about those single gifts and then upgrading, which is another key strategy I walk through in the book. And then the final one I would probably highlight here is churn prevention. So churn is not a term that I hear very often in the nonprofit world, but if you're in the subscription world, churn is a very common term. We call it retention. We say we're retaining 86% of our recurring donors or we're retaining 42% of our multi year donors. But as you and I both know, Julia, that means you're either you're churning 14% of your recurring donors or you're churning 68% of your multi year donors. And so I have a whole post, by the way, on why I think retention is, I don't want to say overrated, but using it in the positive, which is nice, I'm a positive guy. But it, it lacks the urgency. Urgency. Yeah. And so when you're saying you're churning 68 of your donors, that feels a lot.
- [29:36]
Julia Campbell
Churning. Sounds like you're on a boat and there's a tide. Yeah.
- [29:40]
Dave Raley
You're like, I gotta go. So I honestly, I think there's some really important psychology for us fundraisers. Just we're churning, you know, X. Right. So there are two kinds of churn. And again, this is from the subscription economy that we can apply. One is involuntary churn, and then the other is voluntary churn. So involuntary churn is anytime the donor stops giving, but they didn't mean to. So credit card change, expiration date, payment failure, whatever. Right. And by the way, I've heard different percentages, but let's just say the majority of churn often is the involuntary type. So that's where you go back to that technology question we talked about earlier. That's why your tech is so important, is because your technology is the number one sort of response to preventing and addressing involuntary churn. Like what happens when that credit card payment declines, by the way? Personal story. About a year ago, as I was writing the book, my credit, I got a letter from my bank. I thought, oh, somebody lost my credit card information. So it had a new credit card, new number in it. And I thought, well, I'm going to do an experiment. We, our family, we give to a lot of charities on a recurring basis. I'm not going to contact any of them. I'm going to just see what happens.
- [30:51]
Julia Campbell
See what happens.
- [30:53]
Dave Raley
You want to know what happened?
- [30:54]
Julia Campbell
Oh, gosh. No one contacted you at all?
- [30:56]
Dave Raley
One authority contacted me within two or three weeks, like, Right. You know, on the, on the spot. And then one more charity, like, three months later. And it was a very small charity. And they were like, friends, and they're like, hey, I noticed. I noticed you stopped giving. Did you mean to do that? And I was like, no, no, no, I'll, you know, I'll set that up. But, you know, that is just brutal because how many of us have gotten that new credit card in the mail?
- [31:19]
Julia Campbell
Oh, I remember there was a period of time where I had to change my debit card, like, every three months. Months, because everything was getting hacked or, you know, compromised. And I think about that, and I'm not going to remember to call every single place and say, let me change my credit card. Like, I rely on them. It's just such a huge missed opportunity. And I just think that nonprofits are so scared of stepping on toes and annoying people. And really, if you think about it, it's almost unkind if you want to continue your relationship with this organization and give to them. And the cherry itself is not giving you that opportunity. And not reminding you. I don't know. I. I think.
- [32:02]
Dave Raley
And it makes the donor feel the way. I had one of those earlier.
- [32:06]
Julia Campbell
I know you feel like, oh, this is terrible. This is my fault.
- [32:09]
Dave Raley
I've let them down. I haven't been giving, you know, and it's so. It's honestly such a critical piece of that retention strategy.
- [32:17]
Julia Campbell
I want to talk about the Wave Report, which is your weekly column on innovation and leadership. And I know people can sign up on your website. So what's one recent trend it can be around recurring giving or not that non profit leaders need to pay attention to.
- [32:35]
Dave Raley
Oh, I love that. By the way, you heard the Southern California thing earlier. So that's part of the wave metaphor.
- [32:41]
Julia Campbell
Yes, the surfer.
- [32:42]
Dave Raley
I am a failed, by the way, surfer.
- [32:45]
Julia Campbell
I've surf one from. I surfed in Australia. Oh, it was amazing. It's really hard.
- [32:51]
Dave Raley
Don't do it in Washington state. I don't recommend it, but I just love that metaphor because there are so many lessons we can actually learn from surfing. I have a whole keynote on that. We should talk about it sometime. But one of the lessons is that you can miss a wave just as much by paddling too early as you can miss a wave by paddling too late. So I don't know about you, but the first time I ever tried to surf, I was like, I'm gonna catch that wave. I'm gonna get going and paddle, paddle, paddle, paddle, and bolt. By the time the wave got to me, I was exhausted because I started paddling way too early. And so, so what I, you know, I mentioned with Imago, and what we're trying to do is just help leaders to see what are the waves that are coming. And is this one for you? You know, like, I'm not saying every wave is for everybody, but I do like to point to those. So I would say, you know, obviously I. I do think sustainable subscription giving is one of the key waves. Probably one in every five or six of my wave reports is about sustainable giving and recurring giving. But one of the other waves that I think is really critical, and I don't want to be cliche here, but you and I just talked about it before we hit record, and that is how nonprofit leaders can leverage artificial intelligence tools to extend themselves and their staff. And the reason I said artificial intelligence tools is because I'm on a bit of a crusade. I think the way we talk about artificial intelligence is scary and it's just not helpful. So it's scary. It's kind of like a little bit Abstract. Like, well, I use AI. Like what does that even mean? Yeah, what does that mean? That's like in the early 2000s saying, do you use the Internet? Yes. But today we would never say that. Right. We would say, oh, I'm using social media or streaming or online banking. We would refer to the tool or the use case.
- [34:32]
Julia Campbell
Exactly.
- [34:33]
Dave Raley
So what I'm trying to get way better about is not saying I use AI and I think you should too. I'm trying to say you and I talked about this. I used ChatGPT to help me with my 14 year old daughter the other day to create a recipe that she had found on like Pinterest TikTok that failed to include the ingredients and the like measurements and stuff, which I don't know, maybe I'm old, but I'm used to cooking with instructions. So I said to her, let's experiment. So we turned on Chat GPT voice and just explained, hey, trying to make this recipe, it was funfetti popcorn balls or something like that. And I said, I said, how would you. Here's the ingredients. I know, but I have no instructions. What ingredients, what proportions? And then how should I do this? ChatGPT very happily it responded, I'd love to help, and then gave me actually a super helpful step by step instructions and I used it. The dessert was delicious, by the way. Yes, fun thing.
- [35:27]
Julia Campbell
Sounds amazing. I have a 15 year old daughter who loves to bake and cook things off of TikTok and we actually had to get an air fryer because I, it was about a year ago when the TikTok trend was to cook like 2 inches of boiling hot oil in a cast iron pan. And we had to say, no, we're not doing that in our house. We're gonna get an air fryer.
- [35:48]
Dave Raley
Oh my goodness.
- [35:48]
Julia Campbell
Well, simplifying, simplifying concepts, asking questions and using it like we talked about previously as an intern or an assistant or.
- [35:58]
Dave Raley
And we can, you know, we can pontificate about the broader societal effects and I think about those too, by the way. But I think as a practitioner, as a leader, how is this helping me? Oh, by the way, the, the nonprofit example, or in my case, my example. So I obviously launched a book. We're selling books. I use the same, I use Claude in this case, I said, help me with a step by step process of how to integrate my book sales website to my CRM.
- [36:25]
Julia Campbell
Yes.
- [36:25]
Dave Raley
Because I'm like, I can't figure out how to do that. And so I'm like, I'm going to ask An AI tool, in this case, Claude, to help me develop a process to how to import from Data Place A to Data Place B. So it's not all dessert recipes, but just trying to make it practical.
- [36:42]
Julia Campbell
There's definitely ways you could use it to analyze your recurring giving donor data, because if you export it from your CRM and you export it in an anonymized fashion, obviously no names and no addresses. But if it has the data of when did they join? How did they join? Where did they come from? Did they come from givingtuesday? Did they come from an email campaign? Did they come from an event? You can look at the data and really see, oh, these are our big recurring donor capture events. Or this is the time of year when we could be focused more on this. These are the kinds of messages that really resonate with our recurring donors. So I think there's so much opportunity, like you said, for these AI tools to just help us do our jobs in a more efficient and effective and creative way. So I guess my last question would be, if someone is listening and they want to take a step to create a recurring giving program at their organization, what's the first step they should take?
- [37:47]
Dave Raley
Ooh, I love that. The first step I would absolutely take is to benchmark. And benchmark almost sounds too fancy. I just have two questions I want you to answer if you're listening to this. Number one, how many? Number two, how much? Just start there. How many recurring donors do you have today that are giving on a recurring basis? And then how much are they giving? And bonus points if you know how much they're giving. Express that in two numbers. How much they're giving monthly. So your monthly recurring revenue, and then what does that mean? Annually, your annual recurring revenue. In the subscription world, Juliet, people understand the acronyms MRR and arrow, the monthly recurring revenue and annual recurring revenue. And that is a. Not only is really good to know because it tells you where you are today, but it also is very motivational. We talked about CHURN is a very motivational metric, right? MRR is a very motivational metric because you can actually see it, you know, like, wow, it's $2,000. Mrr now. And then if next month it's $2,100, that's super awesome, you know, and so the first step, I would say, is just a benchmark and then basically grow from there. Because one of the things I think that really can discourage nonprofit leaders, and I try to be careful about it in the book, is, you know, you look at a charity Water, for example, I've highlighted several times in the book. And you know they're at 80,000 monthly donors and 20 to 30 million dollars a year. Well, if you're comparing yourself to them, this can be really a discouraging journey early on. They're 10 years into doing this, so compare yourself to yourself and grow from there.
- [39:19]
Julia Campbell
Dave this has been absolutely wonderful. Where can people connect with you and learn more about you and your services?
- [39:24]
Dave Raley
Easy place that sustainablegiving.org is the book site, but it'll actually send you on to Imago Consulting, which is our main website. So you'll see the book, but you can also subscribe to the Wave Report via that and then my favorite just personal if you want to connect with me or just follow what I'm doing. LinkedIn I'm just a huge fan. I'm so grateful for professional social media and just the ability to connect with people and both learn but also create relationship and all that kind of stuff. So LinkedIn and sustainablegiving.org awesome and everything.
- [39:55]
Julia Campbell
Will be in the show Notes thank you so much for being here today. Well, hey there. I wanted to say thank you for tuning into my show and for listening all the way to the end. If you really enjoyed today's conversation, make sure to subscribe to the show in your favorite podcast app and you'll get new episodes downloaded as soon as they come out. I would love if you left me a rating or a review because this tells other people that my podcast is worth listening to and then me and my guests can reach even more earbuds and create even more impact. So that's pretty much it. I'll be back soon with a brand new episode, but until then you can find me on Instagram @JuliaCampbell77. Keep changing the world you non profit unicorn.