Busting Monthly Giving Myths with Tim Sarrantonio

FundraisingOperationsGovernanceCultureEthics
Written By Maria

Subscribe on Apple Podcasts or Spotify

Tired of the same old fundraising that just doesn't reflect your community? Wish you could break free from the stuffy, traditional approaches and find ways to authentically connect with your donors?  

In this episode, we ditch “best practices” and dove headfirst into fundraising in the queer community with Madeline Taylor, Development Manager at Out On Screen. Madeline, a passionate community builder and champion for equity, shares the strategic thinking behind their approach and how to channel the vibrant energy of your community into impactful fundraising. Out On Screen throws fundraising events true to them -  drag shows, burlesque, 20-minute land acknowledgements, storytelling, and more. 

Don’t forget to become a supporter of our show!

Key Episode Highlights: 

  • Busting myths with data: Don't base your strategies on assumptions. Look for reliable data sources to ensure you're making informed decisions that will drive real results for your nonprofit.

  • It's not just about the numbers: While data is powerful, don't forget the human element. Donors want to feel like they're part of something bigger than themselves. Build community and foster a sense of belonging.

  • The astonishing value of monthly donors: The average lifetime value of a monthly donor may surprise you. Focus on cultivating those long-term, impactful relationships.

  • Think outside the (December) box: Don't put all your eggs in the end-of-year giving basket. Explore opportunities to inspire giving throughout the year and build a diverse revenue stream.

  • Data is your friend: Embrace the power of data analysis to understand your donors better, tailor your messaging, and create a fundraising strategy that delivers lasting results.

    Don’t forget to become a supporter of our show!

    Watch this episode on Youtube: https://youtu.be/Nw4LPpPOtS4

Links and Resources:  

Transcript:

00:00:00 Tim: The average gift when we looked at things over the period of time in the five year analysis was about $78.10. We also found that recurring donors, 50% of them, gave an additional gift in that annual basis. Bam. So that's the answer is that they're not just giving almost $1,000 on an annual basis. On average, 50% of them gave an additional gift. And that is a beautiful statistic.

00:00:33 Maria: Hi, friends. Ever wondered how you could turn your big ideas into results? I'm Maria Rio, your go-to guide for helping small nonprofits have real world impacts. Together, let's reimagine a better sector to tackle systemic issues. And yes, raise some serious cash. Welcome back to the Small Nonprofit, the podcast where your passion meets action.

00:01:04 Maria: Good morning, good afternoon. Good evening friends. Today I have a really exciting guest talking about a report that I think you're all going to learn a lot from every time that I talk to Tim, I always learn a lot. So I'm really excited to hear what he has to share with us today. Tim, can you introduce yourself to our audience, please?

00:01:22 Tim: Yeah. Thank you, Maria, for having me. I'm excited to be here. And so I'm Tim Sarrantonio, I'm director of corporate brand at Neon One. That's just a fancy way of saying that. I talk about who we are and why we matter. And for your listeners, that's not the product. So do not expect some shilling from a tech company on this thing. We're going to get into real data., I lived as a small nonprofit practitioner, actually. My first job was in 2008 as a grant writer for a day labor center in the South Side of Chicago. So first organizational budget, folks, $90,000 for two staff members and all the overhead. So...

00:02:08 Maria: Did you say three staff members?

00:02:09 Tim: Two.

00:02:10 Maria: Oh, two.

00:02:12 Tim: But it included, like the church we were in and all this type of stuff, the board sued each other is actually a disaster of a job, but, like...

00:02:21 Maria: The board sued each?

00:02:21 Tim: Yeah. The FBI got involved, actually.

00:02:23 Maria: Oh my God, why are we not talking about that? Forget the report.

00:02:27 Tim: I do not want to talk about that, but no, that's fine, we can. But I think it would distract from where we are now.

00:02:34 Maria: Yes, yes, yes.

00:02:36 Tim: But yeah, I mean, look, I just, like a lot of people were an accidental entry into the fundraising space in particular. You know, you get into the program side of operations and there's like a clear path, right? It's like I might become a social worker in the I'm naturally led into casework. But with fundraising, it's like, how did you get on the Island of Misfit Toys?

00:03:01 Maria: I know.

00:03:02 Tim: Yeah, no. So for me, I was a failed academic. I thought I was going to be a labor historian. And so I've always been dialed in to the kind of what the reality of working class movements are and how that influences just people's everyday lives. And so that has carried over into my work of like when we're talking about the nonprofit sector, I don't want to talk about the 3% well-resourced nonprofits. And the data is generally the same in terms of revenue size for US and Canada, by the way. So I am focused on your audience, Maria. So I am very excited to be here so we can get into whatever we want. But like that's a little bit about me.

00:03:51 Maria: I love all that. And yes, I'd love to kind of hear a little bit more about the reports that you've been putting out. So what is the history of them? What have you learned in the past, two that you'd like to share today? And then we can dive into the new or someone coming out?

00:04:07 Tim: Yeah. Thank you for that. You know, and this does kind of tie into how our sector works today. During the pandemic, what I started noticing and I'll try to keep it tight and focused, but there's a few swirling things that I think your audience will benefit from, kind of understanding the context, which is how do tech companies produce reports, why do they produce reports? And what I started noticing during the pandemic, especially, is blurring of the lines between marketing and research.

00:04:41 Tim: And there is a role, obviously, because marketing, when you get down to it, because that's what I do, is just telling the story of the work. And so at its best, its intention is I am going to lead you through a story that you are actively involved in. It's not about us, it's about you. That's good marketing and that's for nonprofits. That's for profits. It doesn't matter. It's kind of Donald Miller's story brand is a really good kind of framework to think about. This is that I'm not Luke Skywalker, I'm Yoda, you know, and so or insert whatever fun pop culture hero journey type stuff that you want in a way.

00:05:23 Tim: But at the end of the day, during the pandemic, there was a rise of some concerning especially financial technology, digital forward technology platforms basically going like everything is moving to digital. And here's the data that proves that. And it was a little bit of like, well, I don't know about that. And so I've been deeply involved in industry wide research initiatives for a long time.

00:05:50 Tim: The most prominent is the Fundraising Effectiveness Project, and that is the largest analysis of individual giving data in the world. Whenever you hear bummer news about retention rates going down, that's FEP, that's FEP. And we understand that we don't want it to be a weather report. That's kind of the evolution of the initiative. As we kind of started partnering between AFP, Global Association of Fundraising Professionals, Global and Giving Tuesday.

00:06:18 Tim: So Giving Tuesday hosts the data. So it's secure from the data providers that give this data. So I get to work with Boomerang. I get to work with Keala, I get to work with DonorPerfect and Classy and [inaudible]. And that's exciting. because it basically steps back and says, we're checking our ego. And it's more important to get the data right, not to tell the story that sounds good. And that influenced us over here, because even during in parallel and I'm almost done kind of giving this little history context. But during the pandemic, in parallel, one of the best initiatives for just kind of like what's going on was blackboards giving index. And they basically ditched it. They don't care about it anymore. You go to the website and it's like, go look here. And it's just product marketing downloads.

00:07:10 Maria: What? Blackbaud... shocking, shocking.

00:07:13 Tim: Shocking. Well, so, you know, and look, I worked for Blackbaud's 11th client. Okay. I was a fundraiser. I used Razor's Edge. I have 100 hours of training on that thing. So I get the tech side very deeply from a user standpoint, and I really appreciate the research that they do. It's just a different company now, right? Like they bought CSR items, it just has a different focus. So for individual fundraisers and especially the 97% of organizations making under $5 million in revenue, what's our story. And so that's what we stepped into. So you know there's definitely elements when we talk about our reports that of course deal with NeonOne technology because we're drawing from our own data set. But I didn't want to make a piece that's like, here's why. To buy our thing.

00:08:03 Tim: Like that's a product marketing team. We have people who do that. Michelle and Sam are great. That's their job, and they produce those things. What we do with our research is say, okay, what's actually happening and what can we learn from these and just ask and interrogate the data in some interesting ways. So the first foray was I basically saw so many research projects come out during the pandemic, but it was hard to understand what's happening. And so the first report that I believe Maria, you'll link in the show notes, is donors understanding the future of individual giving. And that kind of collected 50 different reports as well as some proprietary NeonOne research.

00:08:46 Tim: You know, we partner with Visa, so we were able to get some stuff from them. Some other providers like double the donation gave us some insights, but at the end of the day it's like, okay, what's the reality here? Because the big thing that kind of really flagged it for me was that there's always cited statistic. 33%, 31%. It's 31. Excuse me, 31% of all giving happens in December. And I was like that doesn't sound right. Turns out that's a 2015 data point from Network For Good. Only on online giving. But we cite these things. And actually in Steve McLaughlin, formerly of Blackbaud, his book Data Driven Nonprofit, he talks about this almost like how do you get to the root of a source?

00:09:39 Tim: And that's actually what drove me. That's why I was like, okay, I want us to do that again is to get to the root of the source. So when you see a piece of data, you know exactly what it's from, how it was done, why it was done. So that's a bit of what drives us. And I think our newest report is the best example of how to do that right.

00:10:00 Maria: So can you just kind of walk me through how you collect the actual data? Are you collecting it from tech companies that are serving nonprofits or, or the nonprofits are providing that themselves to the tech companies? How does that work?

00:10:14 Tim: So whenever you see a report in a sector, there's a few different ways that the data is going to be populated. When it comes to something like the Fundraising Effectiveness Project, it's a very small data set from a bunch of different providers, because the more data points you introduce, the higher likelihood that there's variances that make it not be the same. So what do I mean by that? Well, everybody agreed in February. What's a donation date? That's a date field on the donation. What's the amount? That's the number of the money.

00:10:51 Tim: And whether it was a unique individual ID and then the organization has an ID and that's it. That's literally it. FEP doesn't know anything else other than like those three data points and maybe a little bit about the organizations themselves, like the revenue and where they are geographically located. There is zero ability for me to look at that data and figure out who somebody is in that, like zero. Then you get the tech company side. And there's two ways that when tech companies or any actual kind of larger aggregator has to deal with these questions, too, is like giving USA is a good example where they're just looking at government data.

00:11:31 Tim: So they see more transactions, less detail on the individual side. So we kind of go the opposite route on the tech side, because I can actually know who donors are per se if it's done wrong by the way, because you still have to have that a layer that says, I do not know who these people are. So that's part of the process that we've learned from FEP is you have to add layers to strip out personal identification information before this kicks in, and especially with our recurring part, we had to do that for some interesting stuff.

00:12:05 Tim: So whenever you see an industry report from a tech provider, it's going to be 1 or 2 things, either their data, which is provided by people using the platform and in the terms of service, there is a thing that many of the tech companies started adopting because FEP actually gave the language here. That's like as long as it's anonymized and aggregated, you can research on it. And so our terms of service have that, that basically say when you're buying the software, we're allowed to do research on it, but we won't know who your donors are basically.

00:12:43 Tim: And we're allowed to publish that type of thing here is a way to opt out. Right. And so people can opt out, or it surveys. And that's the thing that drives me wild, is that we take like a few surveys, like when we did our email report, for instance. The biggest data on things like email and digital fundraising and digital marketing is the M&R benchmarks. People love M&R benchmarks. I think it's a great report. It's like 137 nonprofits filling out a survey. And if you've ever filled out a donor survey. Do your donors always tell the truth?

00:113:22 Tim: And so surveys are useful. But there's that. So when it comes to our reports we focus on usage data. And so we like to look at larger data sets like. You know, the recurring Giving Report has over 2000 nonprofits in it has over 100,000 anonymized donors to understand what they did when they did it, what they were even saying when they gave their gift. And so that's a little bit of like when you're looking at a report, just kind of try to figure out like the context of it.

00:13:55 Maria: What do you think were some of the top, like 2 to 3 things that surprised you about putting together the last two reports, or even some of the results of the reports?

00:14:05 Tim: I want to have things that are actionable, obviously, but I do want to note a surprising thing of human behavior that led to and I know we're recording video, but for the audio side, folks, I'm holding up a physical report right now. And so why do we have physical reports? So we only do 100 or so printed reports. And I've used those as an event to kind of launch the report itself and to give it out to folks who might be attending something like AFP icon. So kind of using that as a launch party. That's what we're doing this year again.

00:14:44 Tim: And the reason I started doing vendor reports is that when we put out our first report, donors in 2022, a bunch of people like Jess Campbell. For instance, Out in the Boons. She printed the entire thing, and it broke my heart because it was like 76 pages of black and white. And she's like, I just like to write notes. And so I was like, let me make it nice. Like I worked with our in-house designer and we do a special thing. And if you've ever worked with a print design, you know, it's not like, here's a PDF, you're done. Like you have to do page layout. You need to do bleeding. Like there's things that go into this that I had to add weeks of lead time in some ways to my team unnecessarily.

00:15:36 Tim: But I think it's important to elevate this and to put it in the hands of people as an opportunity to kind of elevate that. And so what was surprising is just how many people wanted to print the damn thing. And that's why I was like, fine, I will... I need to control a bit of the brand here, and I need it to look good because we put a lot of effort into it. So that's why we did that. But in a practical thing, what was surprising is the resilience of smaller communities of generosity. And what I mean by that is, is nonprofits under $1 million consistently showing.

00:16:18 Tim: We are worthy of consideration and discussion and review. If we look at MailChimp data, for instance, and you look at their benchmarks and you're like, I'm a nonprofit, let me go Google nonprofit email benchmarks. Before last year, you would be given, at best, MailChimp data. And they don't have anything under 500 or anything under 1000 on their email list. The benchmarks aren't there. So we were like, that's messed up. So we looked at that explicitly because guess what? Their pricing kicks in at 500.

00:16:54 Tim: The average list size was like 537 for our stuff, which means that most even, you know, small nonprofits, quote unquote, they're like getting priced out of this type of stuff. So they're always getting removed from the economic discussions here. So it's a bit of a swirling philosophy here, if you can tell but that was definitely one of the biggest things that we learned is that we need to to elevate these voices.

00:17:23 Maria: So interesting to hear that's such a unique detail. Okay. I want to jump into the monthly report then. So what were you looking at? You said there was over 2000 organizations that came in and over 100,000 individual donors. That's amazing. What was the scope of the report?

00:17:41 Tim: So when we ran it and this is important to there is a detailed methodology section that outlines this. There is definitions because again you have to design for your audience. And I'll… let me just quickly go back to our email report. Just as an example here, and then answer your question. We, you know, and I've handed the reins over in many ways, I want to make sure that the right person is elevated in terms of driving this, which is Abigail Jarvis and our team. She and I worked very closely together, and I'm kind of the data guy. She'll readily admit, like if you show me a spreadsheet, I really... that's not my jam.

00:18:22 Tim: But she wrote our email report and she wrote she definitely owned our recurring giving report in full. And that's because I'm too much of an academic writer. I need to be stripped down and kind of slapped on the hand. I'd be like, what are you talking about sometimes, man? So when we did our email report, we were all like, this is so amazing. And we have a digital community on Slack. And I was like, sharing. I have a dedicated channel called Data Drop where I just like basically put out PDFs and summarize them for people to be like, if too long didn't read, you don't have enough time to read this research. This is what's in here.

00:19:00 Tim: And so I did that for our email insights. And the first thing from one of our like, long time community members was like, what's preview text? Because I was like, use such a preview text as he's like, what is that? So that meant let's go back and define things very clearly for people. So in the recurring giving report, we did that out of the gate and we assumed don't assume everybody knows what the hell you're talking about.

00:19:28 Tim: So one, when you read this, we looked at 2018 to 2022 transactions. And this is millions of dollars of donations from over 2000 nonprofits. Let me get the specific number for your listeners. Okay, so 2,149 nonprofits that process transactions every single year from 2018 to 2022. There are some people that joined our community of users that are rocking it and would make the numbers look so good. Guess what? They didn't meet the criteria, so I removed them over. Performers were also removed. If people were overperforming like 300% higher than anything else, we removed them. That's a fair number.

00:20:18 Tim: I just said, I'm going to take the FEP number and do that minimum inclusion. You had to be 50 organizations at the minimum to basically count as part of the data set. To kind of get into a subset, meaning...

00:20:31 Maria: Sorry, 50 donors or 50...?

00:20:34 Tim: 50 Organizations. 50 organizations because otherwise, it's like one big nonprofit that might SKU everything. So it's like we wanted to kind of say there's a few specific instances, maybe when we start drilling down to a type of nonprofit that it's like, we don't have enough here to make an actual conclusion here.

00:20:54 Maria: Okay. Got it, got it, got it.

00:20:56 Tim: On the donor side, it's a little bit more straightforward. We generally looked at... I had to go back to the specifics, but it was a cohort of about 100,000, maybe 1100 and, you know, 13, you know, 113,000, something like that. Donors and the origin of their original recurring gift. Over that five year span. When did they set up the gift? When did he start giving things of that nature? And then we even used artificial intelligence after stripping out all the personal identification information to look at the donor notes of about 13,000 of those to know what is somebody thinking when they give.

00:21:40 Tim: So we used AI to kind of do sentiment analysis of that and kind of go, okay, what's the emotions people are feeling? And we followed the fundraising, AI ethical and responsible framework in order to actually design that and extended that into the rest of the report, too. So we're pretty excited about all of this. Folks, I know I'm throwing a lot of numbers. At the end of the day, that's kind of the point, because you don't want to be driven strategically by things that are basically only designed for a very large nonprofit.

00:22:11 Maria: Or anecdotes.

00:22:13 Tim: Yes, yes I do. I say that a lot. I go, you know, is this anecdotal? I've even had some arguments with people where I somebody would say, here's a thing that's happening. And I said, where's the data? And they're like, I have the data. Here's this one nonprofit that it happened to. And I said, I can find another nonprofit that completely contradicts that. So what we need is larger analysis on some of these things. So benchmarking especially, you know, it's pretty good to have 2,149 nonprofits to know average size, gift average donations, average retention rates, things like that. So we can reference those for actionable data in this too.

00:22:53 Maria: And then for recurring, are you talking about only monthly donors or are you talking about quarterly donors? Because I know some platform, something different?

00:23:00 Tim: Yeah, we support even down to weekly. And for all intents and purposes, the data is monthly just because that's what people choose. So there are some organizations that we had in the data set where it would be like even a very large gift that was set to trigger yearly. But for all intents and purposes, we're going to say this is monthly giving because that's the majority of the donor behavior and preferences.

00:23:28 Maria: So I have like a million questions because of course I started with a monthly giving. So I started as a face to face fundraising person with the best, and I just have so many questions because there's been a lot of platforms for saying, hey, like, if you click monthly and this little heart pops up and like, floats up in a really cute animated manner, like that actually helps increase someone's likelihood of making a monthly gift and committing. Is that true? Is that stuff that we're hearing from the people who make the platforms?

00:23:59 Tim: I can't speak to the design elements yet. I want to get there. But what I do know, if I look at our data, one of my favorite examples is the Turner Society. And so what they are is a smaller organization, and they are leveraging our platform in a very straightforward way. There's not any bells and whistles. It's just kind of here's the form. And they have built one of the strongest sustaining donor programs that I've seen. We're talking like 90% retention rate of these donors and the average gift on an annual basis for, their… and they're spotlighted in the report. We have four spotlights in the report.

00:24:40 Tim: And so they kind of represented the “small nonprofit” under $1 million. And what I loved about them is that they aren't focusing on bells and whistles and digital confetti. What they're focusing on is building a community. And their average gift annually is higher for the recurring donors than it was for their one time givers. So I can't speak, yet, to the data on the design elements. Do I want that? Yes. Have I even nerd it out and asked my team, can I pull down the hex colors on buttons? Yes, this takes time. We don't have a data science team. This is why we're starting to talk with, like Giving Tuesday, for instance, and other partners to go, okay, how can we go deeper here?

00:25:24 Tim: But I am going to confidently say that the reason somebody is there, based on donor notes alone, is not because of the tech. It is because of the cause, and it is because of the identity that it validates within these people. We had stories and again with the donor privacy completely and 100% maintained during all of this, where people were talking about inspirations on older folks in their lives and why they were doing an honor and memorial gift. And here's another fun fact for you data nerds, only 1.2% of recurring gifts had an honor and memorial formal flag in the database. It is very evident if you read donor notes, it is way more than that. And so we have to be careful too and understand. And this does not get talked about, Maria. And I know it's like a podcast. I feel like I'm talking too much so just kind of keep me honest here and be like, okay, slow down.

00:26:27 Maria: No, I think a lot of people don't usually get to hear about the data, like we always call the stories in a story format, not around the data. Right? So getting the hard numbers, especially as fundraisers I think is always very interesting.

00:26:41 Tim: I was an administrator and so like I use the database. And so this is why I, like, started asking these questions to be like what, what's fundraiser behavior here influencing things. And like, okay, so 1.2% honor and memorial flags. The donor notes made it pretty clear that there's more actual memorial gifts happening, honor gifts happening than are properly tracked. So one, check your donor notes, folks, and then go back. And double check if you're flagging it as an honor and memorial gift. Number two, this is really nerdy, and I remember I think I commented on a post by Dana Snyder. And this is like, and because we're, she's in the report, we actually have some experts that come in and give some insights to. And Dana's one of them, love Dana.

00:27:31 Tim: And so I commented while writing like the data. And I was like, I gotta get this out. Like, I gotta get this out, which is, somebody asked, well, what about like, communications? Do you communicate with monthly donors or should you not? Well, almost everybody doesn't bother. We give the option, but most people don't turn off the monthly receipt. So that's number one is like it's not hurting retention rates if you like, give somebody a monthly receipt. But what was fascinating and this is a bit of, like I need to caution that this is my opinion versus the data telling a hard facts story. But this is kind of like a nerdy thing that I noticed. When I looked at the retention rates between people who triggered the condition of, this is a recurring gift, and I'm sending a special message, not just my regular receipt.

00:28:29 Tim: The retention rates of those folks were slightly higher, slightly like maybe 1%, 2% higher. So within the margin of error. So maybe let's not go wild here. But if you have capacity, Maria, adjust your receipt for the monthly donors to at least recognize this is a monthly gift. Just these little things I do think matters. So that's why I can't say with confidence, the heart popping up on the form doesn't do anything.

00:28:59 Maria: Yeah.

00:29:00 Tim: But is it the primary driver? I don't think so. I think that what ultimately is the primary motivational driver is that people see themselves in the mission and they are giving through the nonprofit.

00:29:12 Maria: Okay, I have another question. This is the stuff that I always learned.

00:29:16 Tim: Yeah.

00:29:17 Maria: A monthly donor will stick around for 5 to 7 years. True or false?

00:29:22 Tim: False.

00:29:23 Maria: False. No.

00:29:25 Tim: It's eight years.

00:29:26 Maria: Eight years. Oh, so much better for you.

00:29:28 Tim: It's so much better. The lifetime value. We analyzed using the baseline metrics from, Fundraising Effectiveness Project for this. So it's a bit of a calculation. It needs to be stated. But everything, when you're looking at a benchmark, everything's always a projection or a, like historically this is what we think happen. Here's the reality, folks. We're all making this up as we go along. Okay, so benchmarks are there for you to go. Okay. I think this is a good thing. So when I say eight years and you look at your own data and it's ten, don't go. He's wrong. Go. I'm outperforming the benchmark. That's great. Or the opposite is true. If you're below a benchmark, that's okay. It's that benchmark important to you will then improve on it and get your own data as quickly as possible.

00:30:17 Tim: So we did find that the average lifetime value is about eight years for recurring donor versus a little under two years for a one time donor. And that matches industry data in the Fundraising Effectiveness Project for overall lifetime, you know, giving and retention rates. But certain organizations had stronger lifetime value, such as midsized organizations between 1 and $5 million up to ten years, like a decade. So that's my answer on that one.

00:30:50 Maria: Okay. My next question is, okay, so I'm looking at my donor list, and I see this donor has been giving four gifts a year, not monthly, but they're just giving multiple times. It's like four or five or six. What is the target that I'm looking at for people who are not yet monthly donors that are very likely to convert to monthly?

00:31:10 Tim: I'm trying to remember who posted this. I think it might have been NextAfter or [The Toro]. And apologies to either of those great firms, but street donors that what you're referring to is, street donors, which is people who give kind of multiple times but not necessarily fully out. That's a tough one, because kind of we're looking at somebody who has a dedicated schedule set up. And so to convert them, I think we need to do a little bit more deeper dive in terms of that level. I would say almost like you, boy, you were so close. You were so close to get that person to convert in. But it's also like maybe they prefer that, maybe that they get bonuses or stuff like that. And part of that does align, I think, with timing of recurring gifts too. So one, I'm kind of dancing around your answer because I actually don't know the answer on that one, but like–

00:32:02 Maria: That's okay. That's okay.

00:32:04 Tim: But I think it does align into when people decide to kick start their gifts. When do you think is the, what, in our data, at least the most popular time of the year to initiate a recurring gift?

00:32:20 Maria: November.

00:32:23 Tim: Close.

00:32:24 Maria: Okay.

00:32:25 Tim: That's number two. Or three. Top three.

00:32:30 Maria: That's my best guess. What is it?

00:32:32 Tim: It's May.

00:32:33 Maria: Why May? Mother's day?

00:32:34 Tim: I don't know. In the US, it might be because of taxes. Our taxes get triggered in April, but everybody files late. So I don't know, I actually, this is the part where it's like, we, there's more to come. Let's just say that. And so some of the things that we want to deepen our research on are definitely motivation. So we have some plans on some follow up research that we're talking with a few different partners on that. So, more to come.

00:33:05 Maria: Okay. I have another question, but I don't know if this is in the scope of the report. So did you also track the individual gifts that monthly donors were making?

00:33:14 Tim: Yeah.

00:33:15 Maria: Oh, okay. Did you find that that was a lot? Not a lot? Because, you know, you always hear charities like, I don't want to ask my monthly donors for an extra gift with this appeal.

00:33:24 Tim: So with the understanding that. And I'm just, if you're watching the video, folks, I'm staring at the report right now. The average gift, when we looked at things over the period of time in the five year analysis, was about $78.10. We also found that recurring donors, 50% of them, gave an additional gift in that annual basis. Bam. So that's the answer, is that they're not just giving almost $1,000 on an annual basis on average. And I know Kirk Schmidt, if you're listening, I understand that there's median and average. We're going to get there. We did average this time. It's still pretty good given our data set. But 50% of them gave an additional gift. And that is a beautiful statistic.

00:34:16 Maria: Were you able to kind of suss out other factors about these donors through the data? So I don't know how you would do this, but like suss out like their age or something like that or, yeah, like any other factors that you could suss out from just the hard numbers. So you describe.

00:34:35 Tim: This is where it gets dicey. This is where the ethics come in because there are ways of potentially getting that information. I did a presentation with Visa, David Graves over at Visa recently where that very same question was asked. I was like, David, do you got that? Because they did provide some generational insight on overall giving. So actually, let me pull out the old report and I can give you at least what Visa provided us on generational demographics.

00:35:11 Maria: Because you're always here like monthly donors are millennials or, you know, people at lower income. And it's like, is that true? I don't know.

00:35:20 Tim: No. So this is where we kind of have to correlate an inference, other data. That's why I love my first report because it was like let's kind of build a holistic picture, because other than like Google and OpenAI and like Facebook. It's very hard to get all of this information in one place in an affordable way as well. Like, here's the reality, folks, is that appending large amounts of creepy data on, like things, like this costs a crap ton of money. And so, and there's laws, there's like laws to like the privacy laws, like there's just so much swirling when it comes to appending that type of information. You have to make guesses. But this is what, based on my historical analysis of things like data panels from University of Michigan, for instance, has such an amazing data set where they've been doing a panel analysis of several thousand donors for decades.

00:36:25 Tim: And they have found that like there is no discernible like lower income people give, LGBTQ people give. People of faith and people who do not believe in God give. Everybody is generous. This is why it's in our DNA. And it goes back way further than capitalism. Okay, this is the thing that I have to stress and why I almost prefer the correlation of tithing versus a subscription model is that tithing or the understanding that I am going to kind of dedicate part of my bounty regardless of who I am or regardless of my, you know, economic circumstances. I think it's a better correlation of what's actually happening psychologically than subscriptions.

00:37:22 Tim: Some people like to draw it out and say it's like the Netflix of giving. Here's the problem with that is that the motivations are different. When I'm doing Disney Plus, it's because I need to get Bluey in front of my kids. That's my reason that I'm doing it. There is a ultimate selfish element on it because this is economically what I need. When I give on a monthly basis is because I want something to, as a catalyst, to change. And so psychologically, if you even follow some of the research from the Institute for Sustainable Philanthropy in Philanthropic Psychology, the strongest motivation is identity when it comes to giving. It's not a situation.

00:38:06 Tim: So that's like Netflix stuff is like I'm giving because it's convenient. That's not what keeps people doing it. And it's not even, I'm giving because I like the executive director. That person leaves. Where's your money? People ultimately maintain relationships with the organizations and there's a lot of data. And again, I want to be very careful about making a direct correlation between, like our research and some of this stuff. This is an emerging field. This is an emerging set of data. But there's very strong indicators that show that identity is driving a lot of these decisions. And especially the donor notes data. It is like my favorite part of the report, because I think it gets to the heart of what you're talking about there. I hope that helped answer the question. I know I went on a bit of a journey there.

00:38:55 Maria: Oh sounds good. Okay, so the reports, coming out, when again, April?

00:39:01 Tim: April 8th is the public release. We will not be charging for the report. The access is, give us your email to download it. Okay. Sorry. We gotta do that. The reason that this is important is the success of reports like this demonstrates that tech companies don't have to go to the lowest common denominator in order to educate that it doesn't always have to be a shill. And that's very important to who we are. And our brand philosophically, is that this is a service. This is a gift almost, that we want to make sure people are given. So I'm very grateful for you allowing me to rant about data today.

00:39:48 Maria: No. So excited. Okay. So where can people get the report? We'll have the link in the URL. Is there going to be a one pager as well? What's that look like? Is it–

00:39:58 Tim: Yeah. Yeah. We, if I told everybody you have to download 97 pages.

00:40:03 Maria: Yeah.

00:40:05 Tim: People are going to go, I'm not going to do that. So we're going to have a few things that tell that story in a few different ways. So we'll strip it down. We'll have some charts that you can quickly have. We'll have, you know, webinars. We'll have shorter things. I mean we're going all out, I… Maria, I just printed and I know at the time of this when it, release or when this drops, you know, it's still… might be out of date in terms of getting one of these, but I'm doing scratch off cards for, AFP icon.

00:40:37 Maria: Yay.

00:40:38 Tim: Where it has five different prizes for people to hand out. I printed a thousand of these. Spoiler. Most of them are. You've won knowledge turnover and it's a QR code. But like I'm giving. I'm, we're doing donations that basically equal the total of the average monthly gift times 12. I've slotted two of those.

00:41:02 Maria: Nice.

00:41:04 Tim: Some hats. So there's a hat that's going to say spoiler, let's be besties.

00:41:08 Maria: Yes.

00:41:10 Tim: So we're going to do some fun things to kind of spread the word and make it easy and accessible for people. We'll have a live stream show about it too in April. So that's going to be, theme of our monthly live stream show Generosity Experience Live.

00:41:24 Maria: Nice. Awesome. And then if you can leave our audience with one key takeaway from this report, what would it be?

00:41:30 Tim: People before money. What that means is that if we prioritize the affluent over the affinity of people, we ultimately will lose both because donors of all economics, all demographics, all, ultimately, motivations are there because they see themselves in the cause, ideally, and they stick around because of that. So if you prioritize your revenue streams with a people first approach, you can build a community, not a pipeline. And that's ultimately what we need to do here to turn all of this around.

00:42:10 Maria: I love that. Thank you so much for sharing. Where can people find you if they want to continue the conversation?

00:42:15 Tim: I'm on LinkedIn. That's my preferred social media channel. You can kind of find me if you look hard enough on Instagram, but like it's just mainly pictures of my kids there and cats, or me taking pictures of what I'm watching on TV and commenting on it. My wife hates that, but that's something that I'm like, I miss Twitter, so I actually am. I want to show you the shirt that I'm wearing.

00:42:41 Maria: I still call it Twitter. Yes.

00:42:43 Tim: With the old font, with the old font. And so, yeah, I'm on LinkedIn and I have like a weekly newsletter that I put out called the Generosity Compass and try to, you know, look at the history of things and really demystify the data. That's my biggest passion. So yeah. And neonone.com for the report. The show notes will have the direct link but it'll be on the home page. So you know.

00:43:06 Maria: Yeah. Well thank you so much for joining me today. This was great. I loved it.

00:43:10 Tim: Well thank you. I know you usually want like, a half an hour. We went over but like it's meaty. It's meaty.

00:43:16 Maria: No no. It's so great. It's so good to hear about all the work that you're doing, because there's definitely not enough data that is being aggregated. We work in such silos, so just having a little bit of a better understanding, plus, that 31% stat of 31% of giving happens at the end of the year.

00:43:34 Tim: It's 18. It's like it's important, it's good. But it's like, let's like, use accurate data, please.

00:43:41 Maria: I didn't know it was 18.

00:43:43 Tim: Yeah.

00:43:44 Maria: But yeah, having, like, accurate data is like, so important in making decisions. So I really appreciate that. Thank you again for joining us today.

00:43:51 Tim: Thank you for having me. Very, very grateful for the opportunity to talk.

00:43:55 Maria: And thank you everyone for tuning in to this episode of the Small Nonprofit. I will have all those links in the show notes below. So the past two reports and also the new one that's coming out on Monthly Giving, but yeah, this was super interesting. I love talking about the data, and with the power of AI, as being integrated into a lot of our platforms and into a lot of our systems, I think we'll get more and more interesting data coming out in the future. So definitely stay tuned into what Tim is doing and we'll see you at the next episode. Bye for now.

00:44:32 Maria: Thank you for listening to another episode of the Small Nonprofit. If you want to continue the conversation, feel free to connect with our guests directly or find me on LinkedIn. Let's keep moving money to mission and prioritizing our wellbeing. Bye for now.

Links and Resources:

Connect with Tim Sarrantonio on Linkedin: linkedin.com/in/timsarrantonio

Connect with Tim Sarrantonio on Website: neonone.com/

Connect with Maria on LinkedIn: http://www.linkedin.com/in/mariario/

Support the show: https://www.buzzsprout.com/208666/supporters/new

00:00:00 Tim: The average gift when we looked at things over the period of time in the five year analysis was about $78.10. We also found that recurring donors, 50% of them, gave an additional gift in that annual basis. Bam. So that's the answer is that they're not just giving almost $1,000 on an annual basis. On average, 50% of them gave an additional gift. And that is a beautiful statistic.

00:00:33 Maria: Hi, friends. Ever wondered how you could turn your big ideas into results? I'm Maria Rio, your go-to guide for helping small nonprofits have real world impacts. Together, let's reimagine a better sector to tackle systemic issues. And yes, raise some serious cash. Welcome back to the Small Nonprofit, the podcast where your passion meets action.

00:01:04 Maria: Good morning, good afternoon. Good evening friends. Today I have a really exciting guest talking about a report that I think you're all going to learn a lot from every time that I talk to Tim, I always learn a lot. So I'm really excited to hear what he has to share with us today. Tim, can you introduce yourself to our audience, please?

00:01:22 Tim: Yeah. Thank you, Maria, for having me. I'm excited to be here. And so I'm Tim Sarrantonio, I'm director of corporate brand at Neon One. That's just a fancy way of saying that. I talk about who we are and why we matter. And for your listeners, that's not the product. So do not expect some shilling from a tech company on this thing. We're going to get into real data., I lived as a small nonprofit practitioner, actually. My first job was in 2008 as a grant writer for a day labor center in the South Side of Chicago. So first organizational budget, folks, $90,000 for two staff members and all the overhead. So...

00:02:08 Maria: Did you say three staff members?

00:02:09 Tim: Two.

00:02:10 Maria: Oh, two.

00:02:12 Tim: But it included, like the church we were in and all this type of stuff, the board sued each other is actually a disaster of a job, but, like...

00:02:21 Maria: The board sued each?

00:02:21 Tim: Yeah. The FBI got involved, actually.

00:02:23 Maria: Oh my God, why are we not talking about that? Forget the report.

00:02:27 Tim: I do not want to talk about that, but no, that's fine, we can. But I think it would distract from where we are now.

00:02:34 Maria: Yes, yes, yes.

00:02:36 Tim: But yeah, I mean, look, I just, like a lot of people were an accidental entry into the fundraising space in particular. You know, you get into the program side of operations and there's like a clear path, right? It's like I might become a social worker in the I'm naturally led into casework. But with fundraising, it's like, how did you get on the Island of Misfit Toys?

00:03:01 Maria: I know.

00:03:02 Tim: Yeah, no. So for me, I was a failed academic. I thought I was going to be a labor historian. And so I've always been dialed in to the kind of what the reality of working class movements are and how that influences just people's everyday lives. And so that has carried over into my work of like when we're talking about the nonprofit sector, I don't want to talk about the 3% well-resourced nonprofits. And the data is generally the same in terms of revenue size for US and Canada, by the way. So I am focused on your audience, Maria. So I am very excited to be here so we can get into whatever we want. But like that's a little bit about me.

00:03:51 Maria: I love all that. And yes, I'd love to kind of hear a little bit more about the reports that you've been putting out. So what is the history of them? What have you learned in the past, two that you'd like to share today? And then we can dive into the new or someone coming out?

00:04:07 Tim: Yeah. Thank you for that. You know, and this does kind of tie into how our sector works today. During the pandemic, what I started noticing and I'll try to keep it tight and focused, but there's a few swirling things that I think your audience will benefit from, kind of understanding the context, which is how do tech companies produce reports, why do they produce reports? And what I started noticing during the pandemic, especially, is blurring of the lines between marketing and research.

00:04:41 Tim: And there is a role, obviously, because marketing, when you get down to it, because that's what I do, is just telling the story of the work. And so at its best, its intention is I am going to lead you through a story that you are actively involved in. It's not about us, it's about you. That's good marketing and that's for nonprofits. That's for profits. It doesn't matter. It's kind of Donald Miller's story brand is a really good kind of framework to think about. This is that I'm not Luke Skywalker, I'm Yoda, you know, and so or insert whatever fun pop culture hero journey type stuff that you want in a way.

00:05:23 Tim: But at the end of the day, during the pandemic, there was a rise of some concerning especially financial technology, digital forward technology platforms basically going like everything is moving to digital. And here's the data that proves that. And it was a little bit of like, well, I don't know about that. And so I've been deeply involved in industry wide research initiatives for a long time.

00:05:50 Tim: The most prominent is the Fundraising Effectiveness Project, and that is the largest analysis of individual giving data in the world. Whenever you hear bummer news about retention rates going down, that's FEP, that's FEP. And we understand that we don't want it to be a weather report. That's kind of the evolution of the initiative. As we kind of started partnering between AFP, Global Association of Fundraising Professionals, Global and Giving Tuesday.

00:06:18 Tim: So Giving Tuesday hosts the data. So it's secure from the data providers that give this data. So I get to work with Boomerang. I get to work with Keala, I get to work with DonorPerfect and Classy and [inaudible]. And that's exciting. because it basically steps back and says, we're checking our ego. And it's more important to get the data right, not to tell the story that sounds good. And that influenced us over here, because even during in parallel and I'm almost done kind of giving this little history context. But during the pandemic, in parallel, one of the best initiatives for just kind of like what's going on was blackboards giving index. And they basically ditched it. They don't care about it anymore. You go to the website and it's like, go look here. And it's just product marketing downloads.

00:07:10 Maria: What? Blackbaud... shocking, shocking.

00:07:13 Tim: Shocking. Well, so, you know, and look, I worked for Blackbaud's 11th client. Okay. I was a fundraiser. I used Razor's Edge. I have 100 hours of training on that thing. So I get the tech side very deeply from a user standpoint, and I really appreciate the research that they do. It's just a different company now, right? Like they bought CSR items, it just has a different focus. So for individual fundraisers and especially the 97% of organizations making under $5 million in revenue, what's our story. And so that's what we stepped into. So you know there's definitely elements when we talk about our reports that of course deal with NeonOne technology because we're drawing from our own data set. But I didn't want to make a piece that's like, here's why. To buy our thing.

00:08:03 Tim: Like that's a product marketing team. We have people who do that. Michelle and Sam are great. That's their job, and they produce those things. What we do with our research is say, okay, what's actually happening and what can we learn from these and just ask and interrogate the data in some interesting ways. So the first foray was I basically saw so many research projects come out during the pandemic, but it was hard to understand what's happening. And so the first report that I believe Maria, you'll link in the show notes, is donors understanding the future of individual giving. And that kind of collected 50 different reports as well as some proprietary NeonOne research.

00:08:46 Tim: You know, we partner with Visa, so we were able to get some stuff from them. Some other providers like double the donation gave us some insights, but at the end of the day it's like, okay, what's the reality here? Because the big thing that kind of really flagged it for me was that there's always cited statistic. 33%, 31%. It's 31. Excuse me, 31% of all giving happens in December. And I was like that doesn't sound right. Turns out that's a 2015 data point from Network For Good. Only on online giving. But we cite these things. And actually in Steve McLaughlin, formerly of Blackbaud, his book Data Driven Nonprofit, he talks about this almost like how do you get to the root of a source?

00:09:39 Tim: And that's actually what drove me. That's why I was like, okay, I want us to do that again is to get to the root of the source. So when you see a piece of data, you know exactly what it's from, how it was done, why it was done. So that's a bit of what drives us. And I think our newest report is the best example of how to do that right.

00:10:00 Maria: So can you just kind of walk me through how you collect the actual data? Are you collecting it from tech companies that are serving nonprofits or, or the nonprofits are providing that themselves to the tech companies? How does that work?

00:10:14 Tim: So whenever you see a report in a sector, there's a few different ways that the data is going to be populated. When it comes to something like the Fundraising Effectiveness Project, it's a very small data set from a bunch of different providers, because the more data points you introduce, the higher likelihood that there's variances that make it not be the same. So what do I mean by that? Well, everybody agreed in February. What's a donation date? That's a date field on the donation. What's the amount? That's the number of the money.

00:10:51 Tim: And whether it was a unique individual ID and then the organization has an ID and that's it. That's literally it. FEP doesn't know anything else other than like those three data points and maybe a little bit about the organizations themselves, like the revenue and where they are geographically located. There is zero ability for me to look at that data and figure out who somebody is in that, like zero. Then you get the tech company side. And there's two ways that when tech companies or any actual kind of larger aggregator has to deal with these questions, too, is like giving USA is a good example where they're just looking at government data.

00:11:31 Tim: So they see more transactions, less detail on the individual side. So we kind of go the opposite route on the tech side, because I can actually know who donors are per se if it's done wrong by the way, because you still have to have that a layer that says, I do not know who these people are. So that's part of the process that we've learned from FEP is you have to add layers to strip out personal identification information before this kicks in, and especially with our recurring part, we had to do that for some interesting stuff.

00:12:05 Tim: So whenever you see an industry report from a tech provider, it's going to be 1 or 2 things, either their data, which is provided by people using the platform and in the terms of service, there is a thing that many of the tech companies started adopting because FEP actually gave the language here. That's like as long as it's anonymized and aggregated, you can research on it. And so our terms of service have that, that basically say when you're buying the software, we're allowed to do research on it, but we won't know who your donors are basically.

00:12:43 Tim: And we're allowed to publish that type of thing here is a way to opt out. Right. And so people can opt out, or it surveys. And that's the thing that drives me wild, is that we take like a few surveys, like when we did our email report, for instance. The biggest data on things like email and digital fundraising and digital marketing is the M&R benchmarks. People love M&R benchmarks. I think it's a great report. It's like 137 nonprofits filling out a survey. And if you've ever filled out a donor survey. Do your donors always tell the truth?

00:113:22 Tim: And so surveys are useful. But there's that. So when it comes to our reports we focus on usage data. And so we like to look at larger data sets like. You know, the recurring Giving Report has over 2000 nonprofits in it has over 100,000 anonymized donors to understand what they did when they did it, what they were even saying when they gave their gift. And so that's a little bit of like when you're looking at a report, just kind of try to figure out like the context of it.

00:13:55 Maria: What do you think were some of the top, like 2 to 3 things that surprised you about putting together the last two reports, or even some of the results of the reports?

00:14:05 Tim: I want to have things that are actionable, obviously, but I do want to note a surprising thing of human behavior that led to and I know we're recording video, but for the audio side, folks, I'm holding up a physical report right now. And so why do we have physical reports? So we only do 100 or so printed reports. And I've used those as an event to kind of launch the report itself and to give it out to folks who might be attending something like AFP icon. So kind of using that as a launch party. That's what we're doing this year again.

00:14:44 Tim: And the reason I started doing vendor reports is that when we put out our first report, donors in 2022, a bunch of people like Jess Campbell. For instance, Out in the Boons. She printed the entire thing, and it broke my heart because it was like 76 pages of black and white. And she's like, I just like to write notes. And so I was like, let me make it nice. Like I worked with our in-house designer and we do a special thing. And if you've ever worked with a print design, you know, it's not like, here's a PDF, you're done. Like you have to do page layout. You need to do bleeding. Like there's things that go into this that I had to add weeks of lead time in some ways to my team unnecessarily.

00:15:36 Tim: But I think it's important to elevate this and to put it in the hands of people as an opportunity to kind of elevate that. And so what was surprising is just how many people wanted to print the damn thing. And that's why I was like, fine, I will... I need to control a bit of the brand here, and I need it to look good because we put a lot of effort into it. So that's why we did that. But in a practical thing, what was surprising is the resilience of smaller communities of generosity. And what I mean by that is, is nonprofits under $1 million consistently showing.

00:16:18 Tim: We are worthy of consideration and discussion and review. If we look at MailChimp data, for instance, and you look at their benchmarks and you're like, I'm a nonprofit, let me go Google nonprofit email benchmarks. Before last year, you would be given, at best, MailChimp data. And they don't have anything under 500 or anything under 1000 on their email list. The benchmarks aren't there. So we were like, that's messed up. So we looked at that explicitly because guess what? Their pricing kicks in at 500.

00:16:54 Tim: The average list size was like 537 for our stuff, which means that most even, you know, small nonprofits, quote unquote, they're like getting priced out of this type of stuff. So they're always getting removed from the economic discussions here. So it's a bit of a swirling philosophy here, if you can tell but that was definitely one of the biggest things that we learned is that we need to to elevate these voices.

00:17:23 Maria: So interesting to hear that's such a unique detail. Okay. I want to jump into the monthly report then. So what were you looking at? You said there was over 2000 organizations that came in and over 100,000 individual donors. That's amazing. What was the scope of the report?

00:17:41 Tim: So when we ran it and this is important to there is a detailed methodology section that outlines this. There is definitions because again you have to design for your audience. And I'll… let me just quickly go back to our email report. Just as an example here, and then answer your question. We, you know, and I've handed the reins over in many ways, I want to make sure that the right person is elevated in terms of driving this, which is Abigail Jarvis and our team. She and I worked very closely together, and I'm kind of the data guy. She'll readily admit, like if you show me a spreadsheet, I really... that's not my jam.

00:18:22 Tim: But she wrote our email report and she wrote she definitely owned our recurring giving report in full. And that's because I'm too much of an academic writer. I need to be stripped down and kind of slapped on the hand. I'd be like, what are you talking about sometimes, man? So when we did our email report, we were all like, this is so amazing. And we have a digital community on Slack. And I was like, sharing. I have a dedicated channel called Data Drop where I just like basically put out PDFs and summarize them for people to be like, if too long didn't read, you don't have enough time to read this research. This is what's in here.

00:19:00 Tim: And so I did that for our email insights. And the first thing from one of our like, long time community members was like, what's preview text? Because I was like, use such a preview text as he's like, what is that? So that meant let's go back and define things very clearly for people. So in the recurring giving report, we did that out of the gate and we assumed don't assume everybody knows what the hell you're talking about.

00:19:28 Tim: So one, when you read this, we looked at 2018 to 2022 transactions. And this is millions of dollars of donations from over 2000 nonprofits. Let me get the specific number for your listeners. Okay, so 2,149 nonprofits that process transactions every single year from 2018 to 2022. There are some people that joined our community of users that are rocking it and would make the numbers look so good. Guess what? They didn't meet the criteria, so I removed them over. Performers were also removed. If people were overperforming like 300% higher than anything else, we removed them. That's a fair number.

00:20:18 Tim: I just said, I'm going to take the FEP number and do that minimum inclusion. You had to be 50 organizations at the minimum to basically count as part of the data set. To kind of get into a subset, meaning...

00:20:31 Maria: Sorry, 50 donors or 50...?

00:20:34 Tim: 50 Organizations. 50 organizations because otherwise, it's like one big nonprofit that might SKU everything. So it's like we wanted to kind of say there's a few specific instances, maybe when we start drilling down to a type of nonprofit that it's like, we don't have enough here to make an actual conclusion here.

00:20:54 Maria: Okay. Got it, got it, got it.

00:20:56 Tim: On the donor side, it's a little bit more straightforward. We generally looked at... I had to go back to the specifics, but it was a cohort of about 100,000, maybe 1100 and, you know, 13, you know, 113,000, something like that. Donors and the origin of their original recurring gift. Over that five year span. When did they set up the gift? When did he start giving things of that nature? And then we even used artificial intelligence after stripping out all the personal identification information to look at the donor notes of about 13,000 of those to know what is somebody thinking when they give.

00:21:40 Tim: So we used AI to kind of do sentiment analysis of that and kind of go, okay, what's the emotions people are feeling? And we followed the fundraising, AI ethical and responsible framework in order to actually design that and extended that into the rest of the report, too. So we're pretty excited about all of this. Folks, I know I'm throwing a lot of numbers. At the end of the day, that's kind of the point, because you don't want to be driven strategically by things that are basically only designed for a very large nonprofit.

00:22:11 Maria: Or anecdotes.

00:22:13 Tim: Yes, yes I do. I say that a lot. I go, you know, is this anecdotal? I've even had some arguments with people where I somebody would say, here's a thing that's happening. And I said, where's the data? And they're like, I have the data. Here's this one nonprofit that it happened to. And I said, I can find another nonprofit that completely contradicts that. So what we need is larger analysis on some of these things. So benchmarking especially, you know, it's pretty good to have 2,149 nonprofits to know average size, gift average donations, average retention rates, things like that. So we can reference those for actionable data in this too.

00:22:53 Maria: And then for recurring, are you talking about only monthly donors or are you talking about quarterly donors? Because I know some platform, something different?

00:23:00 Tim: Yeah, we support even down to weekly. And for all intents and purposes, the data is monthly just because that's what people choose. So there are some organizations that we had in the data set where it would be like even a very large gift that was set to trigger yearly. But for all intents and purposes, we're going to say this is monthly giving because that's the majority of the donor behavior and preferences.

00:23:28 Maria: So I have like a million questions because of course I started with a monthly giving. So I started as a face to face fundraising person with the best, and I just have so many questions because there's been a lot of platforms for saying, hey, like, if you click monthly and this little heart pops up and like, floats up in a really cute animated manner, like that actually helps increase someone's likelihood of making a monthly gift and committing. Is that true? Is that stuff that we're hearing from the people who make the platforms?

00:23:59 Tim: I can't speak to the design elements yet. I want to get there. But what I do know, if I look at our data, one of my favorite examples is the Turner Society. And so what they are is a smaller organization, and they are leveraging our platform in a very straightforward way. There's not any bells and whistles. It's just kind of here's the form. And they have built one of the strongest sustaining donor programs that I've seen. We're talking like 90% retention rate of these donors and the average gift on an annual basis for, their… and they're spotlighted in the report. We have four spotlights in the report.

00:24:40 Tim: And so they kind of represented the “small nonprofit” under $1 million. And what I loved about them is that they aren't focusing on bells and whistles and digital confetti. What they're focusing on is building a community. And their average gift annually is higher for the recurring donors than it was for their one time givers. So I can't speak, yet, to the data on the design elements. Do I want that? Yes. Have I even nerd it out and asked my team, can I pull down the hex colors on buttons? Yes, this takes time. We don't have a data science team. This is why we're starting to talk with, like Giving Tuesday, for instance, and other partners to go, okay, how can we go deeper here?

00:25:24 Tim: But I am going to confidently say that the reason somebody is there, based on donor notes alone, is not because of the tech. It is because of the cause, and it is because of the identity that it validates within these people. We had stories and again with the donor privacy completely and 100% maintained during all of this, where people were talking about inspirations on older folks in their lives and why they were doing an honor and memorial gift. And here's another fun fact for you data nerds, only 1.2% of recurring gifts had an honor and memorial formal flag in the database. It is very evident if you read donor notes, it is way more than that. And so we have to be careful too and understand. And this does not get talked about, Maria. And I know it's like a podcast. I feel like I'm talking too much so just kind of keep me honest here and be like, okay, slow down.

00:26:27 Maria: No, I think a lot of people don't usually get to hear about the data, like we always call the stories in a story format, not around the data. Right? So getting the hard numbers, especially as fundraisers I think is always very interesting.

00:26:41 Tim: I was an administrator and so like I use the database. And so this is why I, like, started asking these questions to be like what, what's fundraiser behavior here influencing things. And like, okay, so 1.2% honor and memorial flags. The donor notes made it pretty clear that there's more actual memorial gifts happening, honor gifts happening than are properly tracked. So one, check your donor notes, folks, and then go back. And double check if you're flagging it as an honor and memorial gift. Number two, this is really nerdy, and I remember I think I commented on a post by Dana Snyder. And this is like, and because we're, she's in the report, we actually have some experts that come in and give some insights to. And Dana's one of them, love Dana.

00:27:31 Tim: And so I commented while writing like the data. And I was like, I gotta get this out. Like, I gotta get this out, which is, somebody asked, well, what about like, communications? Do you communicate with monthly donors or should you not? Well, almost everybody doesn't bother. We give the option, but most people don't turn off the monthly receipt. So that's number one is like it's not hurting retention rates if you like, give somebody a monthly receipt. But what was fascinating and this is a bit of, like I need to caution that this is my opinion versus the data telling a hard facts story. But this is kind of like a nerdy thing that I noticed. When I looked at the retention rates between people who triggered the condition of, this is a recurring gift, and I'm sending a special message, not just my regular receipt.

00:28:29 Tim: The retention rates of those folks were slightly higher, slightly like maybe 1%, 2% higher. So within the margin of error. So maybe let's not go wild here. But if you have capacity, Maria, adjust your receipt for the monthly donors to at least recognize this is a monthly gift. Just these little things I do think matters. So that's why I can't say with confidence, the heart popping up on the form doesn't do anything.

00:28:59 Maria: Yeah.

00:29:00 Tim: But is it the primary driver? I don't think so. I think that what ultimately is the primary motivational driver is that people see themselves in the mission and they are giving through the nonprofit.

00:29:12 Maria: Okay, I have another question. This is the stuff that I always learned.

00:29:16 Tim: Yeah.

00:29:17 Maria: A monthly donor will stick around for 5 to 7 years. True or false?

00:29:22 Tim: False.

00:29:23 Maria: False. No.

00:29:25 Tim: It's eight years.

00:29:26 Maria: Eight years. Oh, so much better for you.

00:29:28 Tim: It's so much better. The lifetime value. We analyzed using the baseline metrics from, Fundraising Effectiveness Project for this. So it's a bit of a calculation. It needs to be stated. But everything, when you're looking at a benchmark, everything's always a projection or a, like historically this is what we think happen. Here's the reality, folks. We're all making this up as we go along. Okay, so benchmarks are there for you to go. Okay. I think this is a good thing. So when I say eight years and you look at your own data and it's ten, don't go. He's wrong. Go. I'm outperforming the benchmark. That's great. Or the opposite is true. If you're below a benchmark, that's okay. It's that benchmark important to you will then improve on it and get your own data as quickly as possible.

00:30:17 Tim: So we did find that the average lifetime value is about eight years for recurring donor versus a little under two years for a one time donor. And that matches industry data in the Fundraising Effectiveness Project for overall lifetime, you know, giving and retention rates. But certain organizations had stronger lifetime value, such as midsized organizations between 1 and $5 million up to ten years, like a decade. So that's my answer on that one.

00:30:50 Maria: Okay. My next question is, okay, so I'm looking at my donor list, and I see this donor has been giving four gifts a year, not monthly, but they're just giving multiple times. It's like four or five or six. What is the target that I'm looking at for people who are not yet monthly donors that are very likely to convert to monthly?

00:31:10 Tim: I'm trying to remember who posted this. I think it might have been NextAfter or [The Toro]. And apologies to either of those great firms, but street donors that what you're referring to is, street donors, which is people who give kind of multiple times but not necessarily fully out. That's a tough one, because kind of we're looking at somebody who has a dedicated schedule set up. And so to convert them, I think we need to do a little bit more deeper dive in terms of that level. I would say almost like you, boy, you were so close. You were so close to get that person to convert in. But it's also like maybe they prefer that, maybe that they get bonuses or stuff like that. And part of that does align, I think, with timing of recurring gifts too. So one, I'm kind of dancing around your answer because I actually don't know the answer on that one, but like–

00:32:02 Maria: That's okay. That's okay.

00:32:04 Tim: But I think it does align into when people decide to kick start their gifts. When do you think is the, what, in our data, at least the most popular time of the year to initiate a recurring gift?

00:32:20 Maria: November.

00:32:23 Tim: Close.

00:32:24 Maria: Okay.

00:32:25 Tim: That's number two. Or three. Top three.

00:32:30 Maria: That's my best guess. What is it?

00:32:32 Tim: It's May.

00:32:33 Maria: Why May? Mother's day?

00:32:34 Tim: I don't know. In the US, it might be because of taxes. Our taxes get triggered in April, but everybody files late. So I don't know, I actually, this is the part where it's like, we, there's more to come. Let's just say that. And so some of the things that we want to deepen our research on are definitely motivation. So we have some plans on some follow up research that we're talking with a few different partners on that. So, more to come.

00:33:05 Maria: Okay. I have another question, but I don't know if this is in the scope of the report. So did you also track the individual gifts that monthly donors were making?

00:33:14 Tim: Yeah.

00:33:15 Maria: Oh, okay. Did you find that that was a lot? Not a lot? Because, you know, you always hear charities like, I don't want to ask my monthly donors for an extra gift with this appeal.

00:33:24 Tim: So with the understanding that. And I'm just, if you're watching the video, folks, I'm staring at the report right now. The average gift, when we looked at things over the period of time in the five year analysis, was about $78.10. We also found that recurring donors, 50% of them, gave an additional gift in that annual basis. Bam. So that's the answer, is that they're not just giving almost $1,000 on an annual basis on average. And I know Kirk Schmidt, if you're listening, I understand that there's median and average. We're going to get there. We did average this time. It's still pretty good given our data set. But 50% of them gave an additional gift. And that is a beautiful statistic.

00:34:16 Maria: Were you able to kind of suss out other factors about these donors through the data? So I don't know how you would do this, but like suss out like their age or something like that or, yeah, like any other factors that you could suss out from just the hard numbers. So you describe.

00:34:35 Tim: This is where it gets dicey. This is where the ethics come in because there are ways of potentially getting that information. I did a presentation with Visa, David Graves over at Visa recently where that very same question was asked. I was like, David, do you got that? Because they did provide some generational insight on overall giving. So actually, let me pull out the old report and I can give you at least what Visa provided us on generational demographics.

00:35:11 Maria: Because you're always here like monthly donors are millennials or, you know, people at lower income. And it's like, is that true? I don't know.

00:35:20 Tim: No. So this is where we kind of have to correlate an inference, other data. That's why I love my first report because it was like let's kind of build a holistic picture, because other than like Google and OpenAI and like Facebook. It's very hard to get all of this information in one place in an affordable way as well. Like, here's the reality, folks, is that appending large amounts of creepy data on, like things, like this costs a crap ton of money. And so, and there's laws, there's like laws to like the privacy laws, like there's just so much swirling when it comes to appending that type of information. You have to make guesses. But this is what, based on my historical analysis of things like data panels from University of Michigan, for instance, has such an amazing data set where they've been doing a panel analysis of several thousand donors for decades.

00:36:25 Tim: And they have found that like there is no discernible like lower income people give, LGBTQ people give. People of faith and people who do not believe in God give. Everybody is generous. This is why it's in our DNA. And it goes back way further than capitalism. Okay, this is the thing that I have to stress and why I almost prefer the correlation of tithing versus a subscription model is that tithing or the understanding that I am going to kind of dedicate part of my bounty regardless of who I am or regardless of my, you know, economic circumstances. I think it's a better correlation of what's actually happening psychologically than subscriptions.

00:37:22 Tim: Some people like to draw it out and say it's like the Netflix of giving. Here's the problem with that is that the motivations are different. When I'm doing Disney Plus, it's because I need to get Bluey in front of my kids. That's my reason that I'm doing it. There is a ultimate selfish element on it because this is economically what I need. When I give on a monthly basis is because I want something to, as a catalyst, to change. And so psychologically, if you even follow some of the research from the Institute for Sustainable Philanthropy in Philanthropic Psychology, the strongest motivation is identity when it comes to giving. It's not a situation.

00:38:06 Tim: So that's like Netflix stuff is like I'm giving because it's convenient. That's not what keeps people doing it. And it's not even, I'm giving because I like the executive director. That person leaves. Where's your money? People ultimately maintain relationships with the organizations and there's a lot of data. And again, I want to be very careful about making a direct correlation between, like our research and some of this stuff. This is an emerging field. This is an emerging set of data. But there's very strong indicators that show that identity is driving a lot of these decisions. And especially the donor notes data. It is like my favorite part of the report, because I think it gets to the heart of what you're talking about there. I hope that helped answer the question. I know I went on a bit of a journey there.

00:38:55 Maria: Oh sounds good. Okay, so the reports, coming out, when again, April?

00:39:01 Tim: April 8th is the public release. We will not be charging for the report. The access is, give us your email to download it. Okay. Sorry. We gotta do that. The reason that this is important is the success of reports like this demonstrates that tech companies don't have to go to the lowest common denominator in order to educate that it doesn't always have to be a shill. And that's very important to who we are. And our brand philosophically, is that this is a service. This is a gift almost, that we want to make sure people are given. So I'm very grateful for you allowing me to rant about data today.

00:39:48 Maria: No. So excited. Okay. So where can people get the report? We'll have the link in the URL. Is there going to be a one pager as well? What's that look like? Is it–

00:39:58 Tim: Yeah. Yeah. We, if I told everybody you have to download 97 pages.

00:40:03 Maria: Yeah.

00:40:05 Tim: People are going to go, I'm not going to do that. So we're going to have a few things that tell that story in a few different ways. So we'll strip it down. We'll have some charts that you can quickly have. We'll have, you know, webinars. We'll have shorter things. I mean we're going all out, I… Maria, I just printed and I know at the time of this when it, release or when this drops, you know, it's still… might be out of date in terms of getting one of these, but I'm doing scratch off cards for, AFP icon.

00:40:37 Maria: Yay.

00:40:38 Tim: Where it has five different prizes for people to hand out. I printed a thousand of these. Spoiler. Most of them are. You've won knowledge turnover and it's a QR code. But like I'm giving. I'm, we're doing donations that basically equal the total of the average monthly gift times 12. I've slotted two of those.

00:41:02 Maria: Nice.

00:41:04 Tim: Some hats. So there's a hat that's going to say spoiler, let's be besties.

00:41:08 Maria: Yes.

00:41:10 Tim: So we're going to do some fun things to kind of spread the word and make it easy and accessible for people. We'll have a live stream show about it too in April. So that's going to be, theme of our monthly live stream show Generosity Experience Live.

00:41:24 Maria: Nice. Awesome. And then if you can leave our audience with one key takeaway from this report, what would it be?

00:41:30 Tim: People before money. What that means is that if we prioritize the affluent over the affinity of people, we ultimately will lose both because donors of all economics, all demographics, all, ultimately, motivations are there because they see themselves in the cause, ideally, and they stick around because of that. So if you prioritize your revenue streams with a people first approach, you can build a community, not a pipeline. And that's ultimately what we need to do here to turn all of this around.

00:42:10 Maria: I love that. Thank you so much for sharing. Where can people find you if they want to continue the conversation?

00:42:15 Tim: I'm on LinkedIn. That's my preferred social media channel. You can kind of find me if you look hard enough on Instagram, but like it's just mainly pictures of my kids there and cats, or me taking pictures of what I'm watching on TV and commenting on it. My wife hates that, but that's something that I'm like, I miss Twitter, so I actually am. I want to show you the shirt that I'm wearing.

00:42:41 Maria: I still call it Twitter. Yes.

00:42:43 Tim: With the old font, with the old font. And so, yeah, I'm on LinkedIn and I have like a weekly newsletter that I put out called the Generosity Compass and try to, you know, look at the history of things and really demystify the data. That's my biggest passion. So yeah. And neonone.com for the report. The show notes will have the direct link but it'll be on the home page. So you know.

00:43:06 Maria: Yeah. Well thank you so much for joining me today. This was great. I loved it.

00:43:10 Tim: Well thank you. I know you usually want like, a half an hour. We went over but like it's meaty. It's meaty.

00:43:16 Maria: No no. It's so great. It's so good to hear about all the work that you're doing, because there's definitely not enough data that is being aggregated. We work in such silos, so just having a little bit of a better understanding, plus, that 31% stat of 31% of giving happens at the end of the year.

00:43:34 Tim: It's 18. It's like it's important, it's good. But it's like, let's like, use accurate data, please.

00:43:41 Maria: I didn't know it was 18.

00:43:43 Tim: Yeah.

00:43:44 Maria: But yeah, having, like, accurate data is like, so important in making decisions. So I really appreciate that. Thank you again for joining us today.

00:43:51 Tim: Thank you for having me. Very, very grateful for the opportunity to talk.

00:43:55 Maria: And thank you everyone for tuning in to this episode of the Small Nonprofit. I will have all those links in the show notes below. So the past two reports and also the new one that's coming out on Monthly Giving, but yeah, this was super interesting. I love talking about the data, and with the power of AI, as being integrated into a lot of our platforms and into a lot of our systems, I think we'll get more and more interesting data coming out in the future. So definitely stay tuned into what Tim is doing and we'll see you at the next episode. Bye for now.

00:44:32 Maria: Thank you for listening to another episode of the Small Nonprofit. If you want to continue the conversation, feel free to connect with our guests directly or find me on LinkedIn. Let's keep moving money to mission and prioritizing our wellbeing. Bye for now.

Maria

Having come to Canada as a refugee at an early age, Maria developed a passion for human rights that now fuels her drive to help locally and make a difference in the lives of people of various marginalized and often inter-sectional groups. After being assisted by many charities and going through an arduous 12-year immigration process to become a Canadian citizen, Maria devoted herself to working in a charity setting to give back to the industry, which drastically and undeniably improved the course of her life. As a woman, a racialized person, an immigrant, and a member of the LGBTQ2+ community, Maria works diligently every day to ensure that she can make a meaningful difference in the lives of these and other often underrepresented groups.

https://www.linkedin.com/in/mariario/
Previous

700K Growth: When Everyone is a Fundraiser with Tammy Ebuen
Next

Nonprofit Burnout: Why Fundraisers of Color Are Leaving with Marisa DeSalles