Rob Wu, Founder of Causevox.com shares lessons learned from talking to over 100 large gift officers and donors. Learn about the BAIT approach to donor qualification. BAIT – Budget, Affinity, Intension, Timeliness
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[00:00:26] on the Whole Whale podcast, we have a returning guest who may, if I’m right, may be setting the record for the, the most, uh, appearances on the whole Whale podcast, episode 50, The Data Behind Donor Retention, Episode 1 53, Analytics Answer, Who are My donors? And Episode 1 59 Survive the nonprofit software business.
[00:00:47] Rob, we always appreci. Your candor, your willingness to come on the show to talk about it. And this is Rob Ru, of course, the CEO, founder of Cause Box. He has been diligently working in the sector, I believe, at least on cause box since
[00:01:03] 20 11, 27 officially.
[00:01:08] Officially 2010. Uh, actually also the same year that whole Whale was founded.
[00:01:12] So, uh, we were joking before we turned on record of our, our various, uh, check-ins with each other over the years. And, uh, we’re still, we’re still doing it. Rob,
[00:01:21] I’m so happy you’re still alive, George . Thanks,
[00:01:24] man. You know, we’ll, we’ll continue to, to check in over the years. I brought you in today though, because you are always looking for the upside for the nonprofits using ox.
[00:01:37] You’re trying to stay on, you know, the, the practical, I’ll say the practical cutting edge of how to raise more money for great causes. And so I was hoping you could share a bit on what you have been focused on this year with regard. Major gifts.
[00:01:55] Yes. How I see it in terms of my mission is that I’d rather be useful than to be sexy.
[00:02:03] I’d rather be valuable rather than to be a unicorn. So if you look at the field of all the animals, there are all these analogies. I’d rather be a zebra than a lion or a unicorn or whatever fancy animals there are. So, Starting cos walks Over a decade ago, you, we came into this, uh, this business to become a digital fundraising platform because there’s a big gap between technology and fundraising where a lot of nonprofits couldn’t go online.
[00:02:33] They didn’t know how to do it. They didn’t know how to utilize all the ways of social media fundraising. Digital fundraising, peer to peer. This and that. So it’s been a great journey to us help accelerate that piece of digital fundraising and by bringing more and more organizations online and where we had some of our best years of growth and over covid, unfortunately, where a lot of organizations were transitioning into digital fundraising.
[00:03:01] As we see the next steps of what’s coming up, I think one of my biggest frustrations is that a lot of organizations see. Online fundraising as a siloed approach where they think, Hey, I need to run an event. I need to run a gala. I need to do peer to peer fundraising. I need to be on Facebook. And they kind of just treat, uh, the, that style of fundraising as a one and done thing.
[00:03:26] They don’t look at it as a process of how you can grow donors, of how you can grow gifts, how you can upgrade folks up the pipeline to become major donors. So I went on this quest to figure. When you’re looking at major donors, how do folks actually get major donors? How do they qualify them? How do they really work through this process to grow a small $100 gift all the way to a hundred thousand dollars gift?
[00:03:54] And the results of this were actually really surprising, where it gave us a lot of inspiration behind what we should build next when it comes to major gift fundraising.
[00:04:03] That makes, uh, it makes a lot of. And as you’re, as you’re building this in this approach, the way I guess I look at it is that if you are ignoring, if you’re ignoring the major gift strategy of your digital fundraising, You are missing out on easily half of the potential revenue you could and should be making.
[00:04:25] What does that actually mean? If you have a hundred donors, I can very confidently tell you that there is probably a power law distribution of their wealth and capacity to give fancy way of saying that 10% of them have 90% of the wealth, because frankly, that’s just how the things in America are carved out.
[00:04:44] Thanks to capitalism, the question. That you should ask next is who are those people and what should we message them? So maybe you could pick up the thread there. Is it just, you know, smile and dial and be like, Hey, you have money. Give now please
[00:05:00] more. Right, right. It is kind of funny, like, so I did this huge research quest to, to speak to over a hundred people on major gifts.
[00:05:09] So I talked to, uh, over a hundred people who are either major gift officers, where the day to day is just about talking to rich people and China secure donations all the way to major donors who have carved out half a million dollars or more to give annual. Give to organizations. So across the board I’ve talked to like a lot of folks, and what’s really interesting is that it’s less about the message itself.
[00:05:31] Yes, having a compelling story and follow up and the exercise and activity of reaching out to prospective major donors is important, but what’s actually more important? Is understanding what the process looks like. Having a complete process of taking a mass donor, which is someone who gives what, 50 bucks, a hundred dollars at your Facebook fundraising or your, your gala, that kind of thing, and having them have a strong cycle and process and methodology of identifying who are the folks that I should be reaching out to as my short list of major gift prospects so I can grow them conversations.
[00:06:09] On one end you have a lot of folks who do events and mass fundraising and crowdfunding and peer to peer. On the other end, you have just a short portfolio of a hundred, 150 people, uh, where. Uh, those are just like your prime targets and essentially you’re just kind of reaching out to them and trying to secure meetings and tell ’em their story.
[00:06:30] It becomes a very one-on-one sales process, like for better work. And there’s a huge gap in a middle where I’ve also identified that for mid-level donors, nobody knows what to deal with em. So that part gets severely ignored. And when you look at parallel, which is kind of the distribution of, of uh, I, a handful of donations can have astronomical impact on your fundraising.
[00:06:53] Uh, the, the top matters a lot, like major donors matter so much where you get a 50,000, a hundred thousand dollars gift that’s transformational in terms of a small organization or if you get a number of mid-level gifts, which is around five 10 k each. Getting a handful of those, that’s also transformational.
[00:07:13] But then when you look at mass level gifts, if you get additional five more donations of a hundred dollars each, that’s not transformational anymore. So it’s kinda interesting where a lot of folks focus too much time on the mass, not enough time on the major, and no time at all on the mid-level donors.
[00:07:30] So they’re missing huge opportunities.
[00:07:33] Mm-hmm. , and that’s the graduating donors, I think is maybe one of the terms I. Used in the past, how do we upgrade our donors from this level to the next level? But also acknowledge that like, guess what, You know, somebody who’s given 50 bucks, maybe, maybe not. Is there, you know, wealth engine type stuff.
[00:07:51] I know Wealth Engine is a company, I know there’s other, uh, data pools out there. Does that bring any extra information to you, or do you prefer just to look. The spread of donation amounts. Say like, All right, here’s my bucket of people that donated an a hundred. As you mentioned, like, Oh, this person donated a thousand.
[00:08:11] That’s interesting. Maybe I have a talk with them. Which way do you like to.
[00:08:15] Yeah, if you have the resources and the time, the ability is to do both approaches. That’s where some of the organizations they, they really flourish because they have just a lot of different data pools to tap into. Of course, one of them would be like using folks like Donor Search and Wealth Engine and iWave, and to provide a great Kind of just well screening data where you can pipe out data into their services and come back with a rating in terms of the properties that a donor owns and if they have more of a propensity to give, you know, that kind of stuff.
[00:08:45] But really, when I talk to a lot of major gift folks, that data is rational at best. So it’s not very bad. Mm-hmm. , So the most accurate information actually is previous giving. So if you have giving history of a donor, uh, the two things that typically, uh, are really great indicators of a great and major donor prospect, one would be is their, their loyalty.
[00:09:09] Meaning that are they being retained year after year If a donor is donating year after year, Whatever it amount, they already meet a qualification of, they support your organization, they know something about it. They have shown this intent to give, and they’re just tied to you. So there there’ll be a great prospect.
[00:09:27] The additional layer you can layer on top is actually giving amount. So donors that give it over a thousand dollars typically be the threshold. .
[00:09:35] All right, I’m back.
[00:09:38] I really like. How you were talking about the behavior, It’s something that I consistently try to pull our clients toward, our teams toward in terms of finding insights, which are less about what public data we’ve scraped and more about, show me the behavior. Is this person acting like someone who cares?
[00:09:57] Are they showing the capacity to give through their actions? Because truth be told, a lot of this wealth data is essentially address zip code based. They pull it up and look at like, Oh, they live in this zone and live in this reason. They don’t even talk about the, the reason they may have given, which is maybe it was a, a one and done check because, you know, someone’s nephew wrote them one time and they don’t really have a emotional connection to the organization.
[00:10:22] So I like starting with your, your own data in your backyard as you. To these fundraising experts. I’m wondering what is the most common way of starting that conversation of like, Hey, you’ve got a lot of money and seem to care about us. How about more like what is the shape of that? What is the cold, warm intro?
[00:10:51] Yeah, so ideally you’re starting with a set of folks that have already donated to your organization. So you’re looking at your own, uh, donor pool, whether you have 200 donors or 2000 donors or 20,000 donors, which is whatever. Uh, whatever you’re looking at, you’re starting with these. Warm donor prospects who’ve given something to your organization so they know something about you.
[00:11:13] So it’s not a cold type of outreach. It’s something that is more about, uh, having a conversation with somebody that, uh, knows what you do. So you start with that kind of formulate a list of folks typically. If you’re looking at doing major gifts full-time, you can reasonably work only around 150 folks as part of your portfolio.
[00:11:32] So it has this account management focus where you short list list of folks who’ve, uh, given to your organization, uh, several years in a row that given over let’s say a thousand dollars or whatever that threshold is. They can be higher if you’re a larger organization, lower if you’re a smaller organization and you come up with a list of.
[00:11:50] If you do have the ability to bring in some of the wealth data, uh, that we just mentioned, then you can use that to segment even more until you get to a point where you have 150 people that you can work on for a year. So after you have that list, then what you wanna do is, uh, basically qualify. So your goal is to get to a qualification meeting with a donor.
[00:12:11] Qualification meeting just means that you have a conversation with a donor, uh, to better understand. Uh, the capacity to give as well as their affinity to give. So those two points, capacity to give would be, uh, this basic understanding of how much wealth they have. Is, is this somebody who has. The ability to give more than a thousand dollars.
[00:12:36] Like can they give $10,000? Can they give 50? Can they give a million? Basically having a conversation, asking some questions to better understand what, essentially what is their wealth, and not in those direct terms would be the first part. The second part would be understanding the affinity to give. Why did they give to your cause in the first place?
[00:12:55] Is it because they’re personally tied to your organization’s work? Or was it because a friend asked a friend or something else in some other circumstance? So to better understand, essentially the affinity to give, I also like to add in, add a few additional qualifications to it based on my conversations with actual major donors who are donating hundreds of thousands of dollars every year.
[00:13:17] Uh, one. The third one would be intent to give. So someone who has an intent to give, uh, that is typically a lot stronger than someone who does not have the intent to give. Intent is essentially what I, is an indicator of generosity. So someone who says, Hey, uh, I have a donor advice fund. I’m trying to spend it down every.
[00:13:40] And, uh, I already give as part of my culture, of my process, as part of my family values, then that person has a stronger intent to give and are, and will be more likely to give. All else being equal . And the second, uh, qualification that I wanna add in is around budget. A lot of major donors that I talk to, they actually have carved out budgets for giving.
[00:14:05] So when they look at their plans, look at their cash flow, uh, they look at their donor advice fund or kind of whatever they have, they think about, Okay, I have a budget. I, and I want to donate $300,000. So, and they try to figure out, how do I do that? I give to the folks that I already give to, Yes. But then I still have a chunk of it that I’m trying to figure out who to give to.
[00:14:27] So, uh, in another instance, my framework for qualification is called Bait. Bait. Yeah. The budget, the affinity, the intent. And you also need to have the timeliness to give as well, like talking to somebody at the right time. That would be the last point I didn’t really touch on, which is around this idea of like, did something happen where they, they come into an liquidity event where someone sold their business or they had a windfall of some sort.
[00:14:55] So a lot of major donors I talked to, uh, come to that point where they’re like, Hey, I just sold my business. I have a lot of millions to, uh, to give away. Uh, now is the right time for me to get an ask from a non. So,
[00:15:10] and being top of mind in that moment is probably pretty valuable.
[00:15:14] Yep. Yep. So after you have this qualification framework and kind of the screening then really becomes an exercise of saying, outta these 150 people that have on my list do they check the boxes in terms of, uh, being qualified for B ait?
[00:15:29] And if they do, then I will make a. So it’s as simple as that. The hard part though, is actually reaching out to each one of the hundred 50 donor prospects and trying to get that conversation so you can qualify them to get to a point where you can make a ask.
[00:15:46] Yeah. I imagine people are not itching to have a, a conversation like this, and I imagine it is packaged in a different way, such as talking about, you know, the, how the organization plans to grow.
[00:15:58] Maybe it’s a capital campaign, maybe it’s an upcoming event. It seems like there is more effective if you’ve got some sort of branded thing that you can talk about as opposed to give because it’s Tuesday,
[00:16:10] right? Right. It’s give, because it’s Tuesday is definitely not a good reason for major donors to give.
[00:16:15] It, it, a lot of the outreach that happens with major donors happens way beyond the giving season that follows every year. It’s really about, uh, thanking a. For making that initial, uh, donation or series of donations and having a conversation with them to better understand why they give to the organization and how the nonprofit can better match, uh, opportunities and present opportunities of giving to the donor.
[00:16:46] So, so that’s really the key, getting that conversation, doing the qualification and understanding if this major don. Prospect would be a good person to make up bigger asks too. So a lot of it just revolves around just getting to know a donor.
[00:17:04] Yeah, and I mentioned, I mean, I just kind of threw out there the like events, the capital campaign, or maybe you’re asking them, Hey, it’s the end of year, we’re looking for someone to put up a matching gift that will help other people.
[00:17:18] Are there other programmatic activities or types of packaging? I, I guess, that these conversations revealed as more successful than others? Things that are trending more given the, you know, shift in wealth or shift in, uh, philanthropic interest? Yeah,
[00:17:37] I think was it really interesting, especially when I talk to major donors they, they, they.
[00:17:42] they profile the same as any other person that you talk to where they’re really interested in causes, they wanna connect their dollars with making an impact. They want to hear a compelling story. So it’s, it’s less specific about the time of the year and more about, uh, what kind of programs are available.
[00:18:01] There is an information gap when it comes to major donors and major gift officers, where major donors have the capacity. And they need to know what giving opportunities are out there because nonprofits never do a good, a great job of presenting all the opportunities that someone can give because they’re just limited to their, their tools that they have, like their website or social media.
[00:18:25] And then major gift officers need to figure out what makes it a donor click and then presenting those opportunities. So I do think that there. Campaigns that organizations do, if you’re doing a capital campaign, like building a building, that kind of thing, uh, that, that is a great opportunity. But by and large, when it comes to major donors, uh, they’re supporting the programs, uh, the annual funds or just kind of whatever gap fundraising an organization needs to do.
[00:18:51] Yeah, the opportunity. To match that donor along their interests could be, you know, around a program, something they are particularly passionate about inside the organization and like, Hey, here’s an opportunity for a, a multi-year support of this program happening in this region that I know you’re interested in.
[00:19:11] Mm-hmm. , but it’s about, it’s about matching that. But it does sound like a lot of work, right? This like tracking, tracking down 150 people, having those convers. But it does seem like you, I mean, you only need a hit rate of what? 5% if they’re the right gifts.
[00:19:27] You only need a small hit rate. So that’s why a lot of organizations that invest so much staff time and effort into major gifts, where if you just secure a handful of them, then it’s transformational as well as when, when I look at, uh, fundraising folks, development folks at an organization, they’re better equipped to have conversations and tell stories on a one-on-one basis than on a one to many basis.
[00:19:51] Uh, I think for a long time, uh, we’re. We as kind of just an industry we’re trying to transform, uh, kind of fundraising people who are really good at one-on-one communications and turn them into digital marketers where you’re saying, Hey, like, learn how to do direct mail or learn how to do social media, or learn how to put on large virtual events.
[00:20:12] So kind of forcing people out of like their skill sets. Or what they know the best and trying to push ’em into kind of this mass fundraising. And I, I believe that if you’re able to do mass fundraising well, or just do it okay, as long as you have a, a, a steady inflow of new donors. You just kind of need to set some parameters and throw them at fundraising people so they can have these one-on-one conversations, get the major gifts, and use the parallel effect to transform the fundraising results of the organization.
[00:20:46] I have this,
[00:20:47] this assumption that if you gave me the fundraising data of, you know, a donor pool, I could calculate a projected potential. Upside for a large gift. Am I like, you know, am I on some sort of, you know, data island with this? Is this like an assumption too far because you know, if you’ve seen one, you’ve seen one?
[00:21:08] Or is it pretty immutable? Once you see like major gifts implemented over a period of time that you would get a distribution saying like, All right, if you have got, you know, 30% of your audience donating a hundred dollars, here’s your upside. Here’s what’s potentially sleeping in
[00:21:24] in your backyard. Oh, for sure.
[00:21:26] I, I think you can completely forecast it given enough data set. Now, of course, if you’re a small organization, let’s say you only have a hundred donors, then your distribution in your data forecasting is gonna be grossly inaccurate. But once you get to, uh, several thousand, tens of thousands of donors, then you can easily make assumptions to start forecasting.
[00:21:46] And then that’s where things get interesting, where then you can know, Oh, we need to talk to X amount of people every year because then we’ll close a dozen major donors. And this is implication of that forecast.
[00:21:59] I think that’s helpful, especially if there’s somebody listening that has a. A standard, we’ll say, sort of let people donate as they’re going to donate.
[00:22:10] We’ll go after grants and things like that. But individual donors are just, you know, fine at this, whatever level they wanna access at. We have an annual event. But I think looking at it as saying like, you’re leaving money on the table if you aren’t seeing this type of. Power law in giving, cuz it certainly exists in wealth.
[00:22:25] Is that a fair phrasing?
[00:22:27] Yeah, a hundred percent fair. I, I think for a long time, uh, and this is one of my frustrations, uh, at cos box is that, uh, we’re empowering folks to do kind of these mass giving opportunities, but then there’s not an easy way for folks to say, Okay, now what I. These couple hundred donors that I got from my peer, peer or craft funding campaign, let me have an easy way to move them on, upgrade them into a major donor.
[00:22:53] Uh, so that’s something that we’re building towards, to helping organizations have, have the right tooling so that they can reach out to folks, have those conversations, qualify them, track the stages, and eventually close on these major gifts.
[00:23:08] Does it make sense to be really trying to have those. Obviously qualifying conversations earlier in the year, and then as you move to the end of the year when you know, uh, you know, tax advantages, especially for the rich, they’re thinking about donations and making those final donations.
[00:23:23] Is it more extreme in that, like you gotta have those closing conversations in q4 or are large net worth individuals just dealing with DAFs and it really doesn’t matter when, when that gift is.
[00:23:36] Yeah, it, it is more of a letter. It, it is not as, uh, important when it comes to time of the year. Uh, but you before, for most major gift plans, their work plans is based on an annual cycle though, where at the beginning of the year, uh, they come up with a portfolio of folks to work and then they figure out what is my work plan for each specific person?
[00:23:57] When am I gonna reach out to them and when I’m gonna make an ask, But ask, coming on a rolling basis. Uh, some donors are qualify a lot faster so they can make a proposal center proposal, make an ask for a major gift while folks, uh, sometimes just kind of drag it out depending on time of the year. There is more urgency at the end of the year, typically speaking.
[00:24:17] But, uh, for major donors, they really break this process. They’re not molded into, uh, this seasonal annual in of year giving.
[00:24:27] I think it’s just super helpful and it’s something that continually is on my mind because we work at various levels for digital fundraising, but also just for awareness building.
[00:24:37] But inevitably it is looking at a marketing funnel where you’re turning attention into interest as measured by emails, converting those folks into people that care enough to open their wallets, and then sometimes it can sort of be left. At that point of the funnel as opposed to saying, and the next phase is this.
[00:24:59] You gotta have conversations. Your CEO needs to be set up with people that have been qualified to say, Hey, here’s our larger vision and here’s why I need a quarter million dollars to get there. .
[00:25:09] That’s right. I, I think it’s, the challenge right now is to make sure organizations are set up to have opportunities for major donors to donate.
[00:25:17] Uh, or kind of presenting in that format is one of the big challenges. I think the second big issue is that, uh, organizations don’t have the right tooling. You know, I, I’ve been on this research quest and essentially folks have been telling me that when it comes to major gift fundraising, they just take data outta their data.
[00:25:36] Their CRMs and they just manage it in their head or in their spreadsheet when it comes to major gifts. So, the, the work of someone who’s touching major donors, it really isn’t served by by tools. So I think that’s another gap too, where infrastructure, having the right tooling, having the right process built into the tools just aren’t there for folks, and that’s one of the reasons why folks don’t do it.
[00:26:00] Well, it sounds like a, a great opportunity and a natural evolution. Maybe you can tell us a bit more about how people find you and maybe some of these new tools that they can check out at cause box dot.
[00:26:11] Yeah, so at Cosmos we’re launching a new product. The, the product name’s called Morningside. For now, probably need a better name, but the idea is that we want to build, uh, a product geared towards major donors.
[00:26:24] So we call it a major donor workflow Product essentially has three different tiers, uh, three different pillars. The first pillar being that, uh, you have a suite outreach tools, so you can send. Like one on one emails to donor prospects. You can text them, you can make calls, you can do all your outreach in one tool instead of depending on your phones or depending on your email system, uh, so that you can track everything in one place.
[00:26:48] Uh, the second piece of it would be this idea around donor tracking, where you can track. What stage a donor is in from prospect all the way to committed and fulfill. So you can easily see outta my portfolio. Major donors here are folks I’ve had meetings with. Here are people who are qualified. Here are people who’ve committed but haven’t paid, and here to people who paid.
[00:27:07] So you can easily see that as well as you can apply different work plans to each donor where you can chart up. Uh, for this donor prospect. I’m gonna touch ’em four times a year, hear the dates that I’ll touch them. It’s basically like a. Giant reminder list or to-do list that lets you easily just see what needs to happen on one day.
[00:27:26] Uh, and then the D pillar will be attaching payments. So just the easy ability for, for donors to, to, to make a payment. But, uh, And have a customized, uh, donation page, equipment page for that. As well as if you’re doing an offline, then they can send in checks or, uh, forward that information to their donor advised fund, uh, for our stock transfer, things like that.
[00:27:48] Uh, essentially the idea is that we wanna be end to end when it comes to major donors. So gonna help folks not only automate but accelerate their major gift fundraising.
[00:27:57] Awesome. Really appreciate you walking through it and excited that you’re gonna be helping more organizations get a, get a bit more in their, uh, in their bank accounts.
[00:28:07] So thanks,
[00:28:07] Rob. Yeah, my pleasure. Thanks George.