The Nonprofit Hero Factory: Episode 51
New Report: The State of Nonprofit Donor Support, with Tim Sarrantonio
In this Episode:
There’s a new individual giving report, and the good news is that household charitable giving is on the rise. The bad news is that over 80% of new donors don’t give to the same nonprofit again the following year. The biggest difference maker? Treating donors as individuals, understanding their motivations, and reinforcing how your work connects to their personal identity. In other words: personalized, story-based communication.
Today, for example, people are generously donating in support of Ukraine, which is on our minds because of the invasion, violence and humanitarian crisis we are witnessing. For Boris, the crisis in Ukraine goes much deeper than what we are seeing on TV, but how likely are most people to continue giving when another crisis dominates headlines? Are we just locked in a cycle of emergency response giving?
Tim Sarrantonio, the Director of Corporate Brand at Neon One, an integrated network of products and support for nonprofits, knows that finding accurate data and making connections between data and the broader story is the key to successful nonprofit fundraising. Neon One’s data report, Donors: Understanding the Future of Individual Giving, was released on March 8. He’s here to talk about what they discovered.
Listen to this Episode
Read the Transcript
[00:00:05.690] – Intro
Welcome to The Nonprofit Hero Factory, a weekly live video broadcast and podcast where we’ll be helping nonprofit leaders and innovators create more heroes for their cause and a better world for all of us. Da Ding!
[00:00:21.930] – Boris
Hi, everybody. Welcome to another episode of The Nonprofit Hero Factory. I am your host of this show, and I am the chief storyteller and Nerd for Good at dotOrgStrategy. My name is Boris Kievsky, which today is a kind of topical name. As we record this, there is a lot of uncertainty around what’s going to be happening in the city that my family is named after that I’ve visited many times. My thoughts and hopes are with those people, and I’m encouraged by the fact that shows like this and guests like the one we have today are here to help more organizations do more good, to create a better world for all of us, to hopefully minimize this kind of disruption, violence, and, frankly, evil in the world.
[00:01:11.370] – Boris
With that, thank you for listening to my little intro there. But let me introduce the guest for today’s show. He is the Director of Corporate Brand at Neon One. His name is Tim Sarrantonio, and Tim has more than 10 years experience working with and volunteering for nonprofits. He’s raised over $3 million for various causes, engaged in enhanced databases of all sizes, procured multiple successful grants and formulated engaging communications and successful fundraising campaigns for several nonprofits.
[00:01:43.560] – Boris
He has presented at international conferences, and is a TEDx speaker on technology and philanthropy. He volunteers heavily in his community around… I should have asked him how to pronounce that before, Niskayuna, New York. And he describes his superpower as finding the connections between data and the broader story we all want to tell. Let’s welcome Tim onto the show.
[00:02:06.990] – Tim Sarrantonio
Hi, Boris. Thanks for the warm welcome. And you did get it, Niskayuna. That’s correct.
[00:02:11.800] – Boris
Awesome. It’s always a priority for me to pronounce things correctly, and then if I don’t rehearse it, you never know. But at least I got your name right, I hope.
[00:02:20.880] – Tim Sarrantonio
Yes, you did. Absolutely. It’s like San Antonio, but roll some r’s into it.
[00:02:26.330] – Boris
Well, we could get into the Russian “r” rolling.
[00:02:30.030] – Tim Sarrantonio
No, thank you. Right? But yeah. Thanks for having me on the show. Really excited.
[00:02:34.810] – Boris
It’s my pleasure. I’m glad to have you on. And we’ve been chatting a little bit about what you have to share with us. I’m really excited to get into it. Before we do, though, why don’t you share a couple minutes. What’s your story? Why do you do what you do? How did you get here?
[00:02:50.570] – Tim Sarrantonio
How did I get here? Okay. My story: I was born in New York City and grew up where my father was an author. My mom worked in the city, so my dad was home. My mom would go into the city for work. And so I always had a really interesting childhood in that way where eventually I thought, I wanted to be a lawyer, trust and estates lawyer, actually, growing up, because that’s what my mom did. And then I went to college and said, I don’t want to be a trust and estates lawyer. But I love storytelling. I love hearing what the average person is going through. So, I actually wanted to be a labor historian and tell the stories of the average working person and the things that they did. Very Studs Terkel-like in terms of what was the experience that people would go through.
[00:03:44.230] – Tim Sarrantonio
And so I did what every budding academic would do, which is I just dumped a bunch of money into more school. I went to live in Ireland. I went back to New York City and got a degree there, too, and then moved to the Midwest because that’s where all the great labor programs are, is in the middle of a cornfield.
[00:04:03.230] – Tim Sarrantonio
And what happened was I didn’t get into any of the programs that I wanted. And my dad said, “Get a job.” And so I still wanted to help people. And there was a nonprofit day labor center in Chicago that was hiring for a grant writer. And so I got that job. And it was 2008. So, I promptly stopped getting grants, pivoted to individual fundraising and that job didn’t work out. It was a weird organization, but I learned a lot for working for something that had $90,000 in their entire budget. Worked for a few other nonprofits, including a pretty big Catholic school in the north side of Chicago, Rogers Park neighborhood.
[00:04:49.630] – Tim Sarrantonio
And then there was this company that did a database for nonprofits. And that was very intriguing to me because I had used things like Raiser’s Edge and tried to build my own databases—unsuccessfully, I might add. And that was about ten years ago, actually, when I first joined them. And I’ve been with them ever since. And finding the ways that people tell stories through data has been my journey there. It’s been an interesting ride. People are like, “Oh, so you have a background in data?” No, not at all. Liberal Arts, but it works out, kids. It does work out.
[00:05:26.350] – Boris
That’s a cool and circuitous journey. Not too different from my own, although I started more on the tech side of things in New York, then went into the storytelling side of things all over the place, came back, and now combine everything that I know and love in the service of nonprofits, similar to you. Definitely fascinated by the data side, still focused on that a lot of times, but story for me is paramount. It’s the most critical thing to actually make the connection between data and people. And I think you and I are on the same wavelength on that.
[00:06:01.990] – Tim Sarrantonio
And what’s interesting, by the way, just because I was so excited about your show, in particular, Boris… I helped found a comic books in literacy nonprofit, so heroes and just even the intro and all that type of stuff, it really resonates with me. And especially as a father of three young kids, we need that type of light more now than ever. And so, again, really excited to be here.
[00:06:27.610] – Boris
I appreciate that. And we can geek out about comic books and stories of all sorts later on.
[00:06:34.290] – Tim Sarrantonio
Later on. Yes.
[00:06:36.070] – Boris
But let’s go ahead and get into why we brought you on the show, frankly. And that is to talk about your point of view sitting at Neon One. For those of you who aren’t watching this video and are listening, Tim, as the director of corporate brand, is wearing the merchandise. He’s got his Neon One hat on. I’m pretty sure that’s written into his contract somewhere. So what is going on? What are you seeing from your point of view? What’s happening?
[00:07:05.900] – Tim Sarrantonio
So, yeah, it’s been interesting because since the onset of the pandemic, a lot of things have changed, but a lot of things have stayed the same. So Neon One provides connected fundraising. And what that means is that we look at things from what’s happening in a CRM, what’s happening with email and online payments and events, arts and culture giving days, peer to peer, a lot of different perspectives.
[00:07:30.760] – Tim Sarrantonio
And so what was frustrating to me when I stepped back is that a lot of the narratives that we were looking at in the broader world around charity were things like, ‘Edelman Trust says that nonprofit trust is down’ or ‘household giving is down in the United States according to USA today.’ And they’re citing data and things from 2019 or before! And that still is happening. I can go on Twitter and people are still citing data that’s from before the pandemic. So what we wanted to do in our partners at Fundraising Effectiveness Project, which is an initiative between the Association of Fundraising Professionals and GivingTuesday, which has data from us, Bloomerang, DonorPerfect, Keela, lot of different data sources, very, very objective, probably the most objective understanding of individual giving and largest data set of individual giving in the world.
[00:08:34.940] – Tim Sarrantonio
And so we wanted to say what’s actually happening from March 2020 onward, right? We’re coming up to two years. Amazing, right? It doesn’t seem… It seems like way more than that. This is probably what the last week as we’re recording this, the last week of normalcy that happened two years ago. And so what we wanted to actually understand is what has changed with donor giving behavior. A lot of times we hear it from the perspective of what maybe a board member thinks is happening or what we feel as fundraisers or marketers should be done. And what we wanted to set out and answer was, what are actually donors doing? What’s changing in their behavior? So we’ve been researching that heavily, both with Fundraising Effectiveness Project as well as the report that I’ve been working on forever, basically that we’re about to release.
[00:09:30.150] – Boris
So I’m excited about all this because I have looked up data and I have tried to look up trends in the past. And I do see papers from before 2019 referencing data from even before that by a couple of years oftentimes. And so it’s difficult to get a pulse, if you will, on how people are behaving today. And so I’m really excited to learn what it is that you guys figured out in this report. Can you give me the highlights? What’s happening?
[00:10:00.730] – Tim Sarrantonio
For reference for folks, a lot of times when you see these trends, it is also frustrating because sometimes they’re referring to panel data. And panel data is a very fancy term for, ‘it’s a survey.’ And so I actually I don’t mind that if it’s helping inform what’s a larger understanding of actual transactions. Because donors can lie, too. People lie on surveys all the time or they misremember information. Let’s maybe put it a little bit more positive.
[00:10:31.540] – Boris
Self-reporting always needs to be taken with a grain of salt.
[00:10:34.040] – Tim Sarrantonio
Exactly. So what we do and what we did was look at the actual transaction data. So Neon One alone had over $2 billion from 2020, 2021 to look at each year. So billions upon billions of dollars to analyze this. And what we’re seeing across the board is that when we look at how donors are actually acting, there was a long trend happening year-over-year of household giving going down. But that appears from March 2020 onward to be reversing, to be reversing, that people are coming back, people are being more generous.
[00:11:13.120] – Tim Sarrantonio
And also beneath the surface, from a data nerd standpoint, I actually don’t think that people were being less generous. They were showing it in different ways. They might be doing things on Facebook, they might be doing things in mutual aid groups or other GoFundMes and things like that. But what we’re seeing in the nonprofit space is people are coming back to nonprofits. They’re saying, I trust this with my money to actually make impact in my local community, in the world at large. So that’s a good trend.
[00:11:47.830] – Tim Sarrantonio
The concerning trend, though, is that retention continues to still be a problem. And that is, somebody’s given, and now they trust you again and again. And retention, especially of people who gave to you for the first time, is as low as 20% overall. I’m rounding a tiny bit, but 80.8% of your donors in the first year are likely to not come back. And so that is a concerning data point that we need to reconcile. If more people are coming back, but then we’re immediately losing them, what’s happening there? And especially given that data shows the cost per acquisition of a new donor is about $1.25 to obtain $1. If you lose that person, that’s trouble. But if you retain that person, it actually cost you 20 cents for that dollar. So retention is the way.
[00:12:46.760] – Boris
Absolutely. Yeah. And I’ve had several guests and conversations on this show about donor retention and how it is so much cheaper to keep a donor than it is to acquire a new one. And there’s only so many donors you could keep cycling through before you eventually burn out. Americans are generous, and this is a large country, and if you’re overseas, I’m sure there’s generous people everywhere, but it’s a little exhausting to keep trying to get new donors all the time and keep losing them.
[00:13:15.010] – Tim Sarrantonio
And it can be demoralizing, too. The thing is, that I feel what the opportunity we truly have here is to invest in an abundance mindset because people are generous. It’s that we need to look at them not as a transaction, but as a person. View them as somebody where we want to shift from a situational-giving moment to a transformational, identity-based giving moment. And that is ultimately where data and storytelling come together for that ultimate team up, right? Like it’s the Avengers of fundraising, if you will.
[00:13:55.230] – Boris
Sure. So you don’t need to twist my arm or sell me with metaphors on that. I’ll preach that all day. But let’s come back and break it down a little bit what you said in those big headlines, because there’s a lot there. So first of all, amazing that the trend is up in terms of household giving. I do wonder—and I don’t know how easily it is to test and so how deeply you guys were able to get into it, but response giving—emergency response giving is always higher than average, you know, everything is calm and OK giving. And we all faced a giant emergency. I talk a lot in storytelling where you’ve got your heroes and you’ve got your villains. And the bigger the villain, the more people can identify that villain as being horrible, then the more they’re going to rally around it, right?
[00:14:46.150] – Boris
To touch a little bit more on what I introduced before I brought you on in terms of Ukraine. Right now, the entire world is suddenly rallying around Ukraine. How much they’re doing is a whole other issue that I don’t want to get into right now. But Putin has made himself very clearly the villain to the Western world. And now there’s hardly a place in the Western world where you won’t find demonstrations and rallies and governments trying to figure out ways to support, right? Whereas he was the same person a couple of months ago and nobody did anything. And once this situation is over, which I hope it won’t take too long for it to resolve and in a positive way… how much is that going to be in the forefront versus a new thing coming up?
[00:15:28.480] – Boris
So the pandemic, and, in this case, so many organizations are getting a windfall of donations for Ukraine and for the work that they’re doing there. Is it normal to just expect that these are going to be spikes and then, well, people aren’t interested in the long run about supporting this kind of program? So they’re going to then drop right back off?
[00:15:51.970] – Tim Sarrantonio
Fascinating question. And there is data that dives into this, and we touch on this in the report, because we did see obviously there were spikes around the pandemic. There were situations around social justice and racial justice that happened around George Floyd. There’s more localized elements that might happen, such as Tennessee natural disasters that we saw just even a few months ago, or things that are happening with wildfires, so environmental disasters. So there is data that… And we will see it. I guarantee that we will see this happen in the Ukraine situation, too, where there will be that initial spike and then there’s going to be a sharp drop off.
[00:16:40.570] – Tim Sarrantonio
But then what happens, though, and this is where the light comes in, is that especially for organizations who are cultivating that relationship and keeping people in the loop that the people who especially are giving maybe over the course of their relationship, $500 or more, they’re coming back. They’re sticking around. That’s what we are seeing in the data. If we start getting into kind of the buckets… I don’t like thinking about people as transaction buckets, but it is a good starting point for at least wading through all of this.
[00:17:11.200] – Tim Sarrantonio
And people that are investing $500 or more, they’re staying around. Their retention is actually very healthy. It’s the folks under $500 where we’re seeing a lot of pretty concerning drop off there. And that’s regardless of different things, regardless of different missions. Though there are different impacts depending on the type of mission itself. But overall, there is that cyclical flow. And what we need to do is recognize that and anticipate that and adjust our strategy for that, too. Because once we drill even deeper, there are some really fascinating impact elements and strategies there, tactics there. But I still am confident that depending on the organization, if you stick with it, those people will stick with it too for you.
[00:18:06.230] – Boris
Awesome. And I obviously agree with everything you’re saying, especially when the data shows these things. It’s interesting that people who gave over $500 during the course of whatever the campaign or lifetime of the emergency was, that they’re the ones who are most likely to keep coming back. I talk a lot about this concept of donors feeling invested. The more they give of themselves, whether it’s their time or their money or their voice, whatever it might be, then the more invested they are. So the more they identify—and you’re leading to this, so I really want to do dive in—the more they identify themselves with your cause as someone who cares about that cause, as someone who is going to take action for that cause.
[00:18:50.420] – Boris
So in the case of Ukraine, is it that we care about Ukraine, or is it that we care to stop despots? Or is it that we care to stop all wars in general, right? And then how do we, I guess, as nonprofits hook into that sense of identity and keep that connection going?
[00:19:10.850] – Tim Sarrantonio
So just like humans in general, philanthropic identity is multilayered. And we do get into this in the report. There’s a whole chapter on the why of giving, and it talks about philanthropic psychology, which is an emerging field of analysis, primarily driven by Professor Jen Shang from the Institute for Sustainable Philanthropy out of the UK. I had the pleasure of taking a certificate course—and passing, thank goodness—otherwise I wouldn’t be talking about it. But I was really fascinated because they talked about the different elements of identity. And what you even just talking about there hit on several different types of identity that people might be drawn to depending on who they are and the organization that might be articulating that.
[00:20:03.950] – Tim Sarrantonio
Some people are going to identify because of their national identity, geographic identity. “I have a tie to Ukraine because my family is from there, because I know people there.” So there’s relationships. But then also they might be drawn to it because of the religious undertones that are definitely happening there, the antisemitism that is rearing up in some of it.
[00:20:31.230] – Tim Sarrantonio
But then it’s also going to be, some people might be drawn to it for more what it represents in the larger world: there is an attack on democracy, liberal democracy around the world that we’re seeing. So those people might actually not care too much about Ukraine itself. It’s more the larger thing that they’re worried about. So it’s not an easy answer because people are not easy, ultimately, other than the fact that people are generous. And that’s the underlying thing that is baked into our DNA, that philanthropic psychology understands that biology understands is that our brains are activated better—there’s more dopamine that comes in—when we’re generous as opposed to buying something on Amazon or something like that. So if we understand that core base, then we have a lot of things that we can do together.
[00:21:23.970] – Boris
Right on. I think identifying those reasons of why someone in an emergency situation, like coming back to the pandemic, is giving. What is it that they want to support within your work and within your mission, within your community? How do they identify with it? And we can ask them. And I know surveys aren’t always great, but in this case, self-reporting is probably the best way.
[00:21:52.640] – Tim Sarrantonio
Yes. Yes. And we see this all the time in situations because we see it with things like GivingTuesday. We see it with community giving days. We see it with peer to peer fundraising, where the initial connection might be light. But then you can cultivate that relationship by zeroing in, even with something as simple on your donation form online. What inspired you to give today? Make it unrequired—this is a tactical suggestion—make unrequired. And if somebody fills it out, even if it’s like, not that useful, they filled it out. So it shows a bit of a hand raiser there. And then if they actually put something useful in it, that can help inform your engagement strategy with them.
[00:22:38.460] – Boris
Yeah. And I think you can make it—you don’t have to make it required, of course, but you can make it even simpler. Leave an open-ended question, because open-ended questions give you a lot of interesting qualitative data. But make it a checkbox list of what are the things that you are most passionate about? And let them check off some of the different things that you’re working on. And then start to segment them, start to talk to them, because… there’s this disconnect where people think segmenting is very cold and analytical, when in fact, segmenting is a lot more personal because you’re able to talk to people about what they’re interested in rather than about what you are interested in.
[00:23:19.230] – Tim Sarrantonio
One of the interesting trends that I think we’ll start to see is that underneath the surface, the data is actually showing a really interesting spike in investment toward environmental and animal conservation organizations. A lot of different trends interfacing there, but ultimately that’s a fascinating one to explore. And in that situation, an example I like to use is, I went to an animal shelter and I adopted a cat, a dog, something like that. The segment could be as simple as adopted? in your CRM. Adopted, yes? And that’s it. That’s your segment. Then you can actually segment and say, “You, how is your furry friend doing?” Right? Like, you can personalize things because you know that person has a deeper relationship with your organization and that can be with any type of organization, any type of mission has a version of that. Segmentation is actually one of the most intimate things that you can start with from a tactical standpoint.
[00:24:23.490] – Boris
And also it shows that your donors that you care. That you are not just interested in getting their money and moving on, but that you are interested in them and building relationships with them.
[00:24:34.360] – Tim Sarrantonio
The term that Steven Shattuck at Bloomerang used that I was so jealous that he came up with it first: “seglumping” where it’s, “thank you for your donations/membership/volunteer interest/newsletter sign-up,” where it’s just you just shove all the engagement points into one kind of prey and spray situation. And that’s one of the worst things that you can do. A lot of times, donor retention is directly correlated with the communication strategy. Some of the top reasons people stop giving, if not all the top reasons, are communication centered.
[00:25:11.370] – Boris
So let’s then talk about this communications issue. What is it that organizations can do? What should they be doing? How is it done right?
[00:25:25.410] – Tim Sarrantonio
I would say that you start with that foundation of good data on a person, right? I remember working at one of my jobs where we had a donor-cultivation event, thanking people, and I printed out the name tags and a woman had crossed her name off that we had printed off and wrote something else. And I stared at it and she used her nickname, and I ran up and updated the database immediately like I was helping clear the wine glasses and stuff like that, and I just ran upstairs and entered it.
[00:25:58.870] – Tim Sarrantonio
Now, luckily, with cloud-based databases, you don’t have to run upstairs anymore. So what you start with is a good foundation of data hygiene. And then you start to build into what we were just talking about, Boris, that cultivation and personalization strategy. If you start there, then the data foundation bleeds into inspiring those stories. You have to then marry that with storytelling. If you just use data, you’re going to miss the soft skills that people and donors respond to. But if you just solely focus on just the storytelling, you actually might be telling the wrong story to the wrong people then, too. So it’s combining those two, and any size nonprofit can start with that.
[00:26:44.350] – Boris
And then how do we then best steward those relationships? So we’re identifying people, we’re segmenting them, we’re figuring out what stories to tell them. But then what do we do with that? How do we steward our new donors to keep them, to retain them much better than the average rate that’s currently out there?
[00:27:03.170] – Tim Sarrantonio
Continue to communicate with them. What we see is that people are not communicating enough. If you think that people are receiving too many communications from you, you’re probably not doing enough. And if you think that people are not wanting to give to you again, if you are properly communicating with them from a foundation standpoint on impact, on storytelling, you can ask them more. They will respond. Recurring donors, for instance, are more likely to give another gift than certain other segments. So somebody might even be giving you $10, $20 up to $60 plus a month. And then you can ask them again. Or they might leave you a legacy gift, for instance.
[00:27:50.070] – Tim Sarrantonio
In the report, we actually have time period analysis too—moments of giving—really geek out on that, even down to like, what day of the week and what time people are giving online: 11:30 a.m. Central on a Thursday, but that’s a random data point. But ultimately it comes down to, we’re not engaging our donors enough, actually, because our donors are not our donors. As Mark Phillips from BlueFrog Consulting in the UK likes to say, “Our donors are not our donors, we are one of their charities.” Average donors giving up to seven different nonprofits. So ultimately what we need to do is realize that we have to stand out to them on why we as a nonprofit will identify with them.
[00:28:45.310] – Boris
So, so on point. There’s this concept that people are people, and we need to relate to them as people. But then there’s also this mistaken viewpoint, I think that a lot of organizations have, which is this ownership of a donor that they are their donor to ask money from, versus this idea that as individuals, donors, human beings in general, we have so many different ways to spend our money. We could be shopping on Amazon, as you said before, we could be donating to I don’t know, what is it one and a half million different nonprofits now in the U.S. that are currently filed. Right?
[00:29:28.470] – Boris
So what is your unique value proposition to the donor? What is your relationship with them that’s going to tell them, yes, this is the right way to spend and continue spending their money, that this is the right investment for them to see the kind of change they want to see in the world. And if you’re not giving them that reinforcement, then there is either buyers’ remorse if it happens pretty quickly that you drop off, or there is basically just this disconnection of, well, that’s something that I did, but that’s not necessarily me because, well, that was just then and now I’m moving onto something else.
[00:30:03.150] – Tim Sarrantonio
There’s a lot of data that shows that even if a nonprofit received a donation from a donor, they might many times receive a follow-up communication that said, “Why am I on your newsletter list? I never had a relationship with you.” And it’s like, how many nonprofit fundraisers then look back and see them, “you gave to me last year.” When, actually, what you should be doing is not blaming the donor in that situation. You should be looking inward and going, where did things fall off? It’s not always your fault, but you should at least stop and go, what could I have done better here from a communication standpoint?
[00:30:39.950] – Boris
Yeah, I get emails all the time that seems like I’ve signed up to their list and I don’t remember because I haven’t heard from them. I haven’t gotten value from them. And so I assume that they’re just spamming me. And sometimes I’ll actually mark it as spam if I’m pretty sure that it is. Other times I’ll just unsubscribe because I don’t have a connection to you anymore.
[00:30:59.020] – Tim Sarrantonio
Absolutely. And so that’s where we need to identify the gaps in communication and start to fill those through. And you can do that in a wide variety of ways. You can use video, you can do webinars. Nonprofit fundraisers need to think about content production a lot more going into 2022 and beyond.
[00:31:20.600] – Boris
Yes, please. Thank you. So we’re at the half-hour mark now, and I don’t want to take up too much of your time and our listeners’ time today. I’m really looking forward to diving into this report. By the time that this episode airs, the report will have been out, whereas at the moment I haven’t seen it yet. So I’m actually super excited. This is a great teaser for me to get into it. But what are some of the metrics, I guess, that organizations can be looking at? Do you guys get into some KPIs, some Key Performance Indicators?
[00:31:52.120] – Tim Sarrantonio
Absolutely. So retention—we’ve mentioned that a few times. And one of the resources that we always fall back on for inspiration, here, is the Fundraising Effectiveness Project. And so again, that’s the largest analysis of individual giving in the world. And so there’s 200 different metrics that they pay attention to for their data scientists. But the reality is that a nonprofit professional can zero in on things like retention, acquisition. So how many new people are you bringing in? Are you keeping them? How many recurring donors are you setting up? That’s a really big one that nonprofits, especially in our research, we found small nonprofits in particular are very effective at setting up recurring giving programs and helping automate some of those processes off your plate.
[00:32:41.570] – Tim Sarrantonio
And then overall growth in giving, which is a metric that basically is the revenue increases and revenue decreases being reconciled. A lot of this stuff you can find on the AFP website, for instance, for Fundraising Effectiveness Project on how to calculate these things, too. There’s a lot of great resources there. But ultimately we need to move from thinking about things from solely a profit and loss, a P&L standpoint in our QuickBooks or what have you, and move into that overall abundance growth of projected revenue over multi-year capabilities. And that’s where we’re going to start to see success. Because then, you’ll know, this channel or this relationship approach is working. Let’s further invest in that.
[00:33:31.210] – Boris
Absolutely. And you started mentioning some resources. I always ask my guests for resources. You mentioned the AFP Global Project, the Fundraising Effectiveness Project. What are some other tools and resources that you recommend organizations check out, nonprofit professionals check out to dive into this stuff further?
[00:33:49.650] – Tim Sarrantonio
So definitely the work that Fundraising Effectiveness Project is doing. I mentioned the philanthropic psychology course, especially if you’re interested in copywriting or understanding the deeper motivations of your donors. That’s a really good and valuable investment that I found. And I like that that covers the data side and the storytelling side. But there’s a great book, and I do have it here because we’re on video, so I can actually show: Hooked on a Feeling by Francesco Ambrogetti, and he is a fascinating guy, works for UNICEF. And he is kind of taking both of those sides and merging them, thinking deeply about data, but then thinking about feelings and storytelling. And so I love that book. I base a lot of my research that I did ultimately about the soul of what that book represents. Our report is just basically coming in and saying, “here’s billions of dollars of analysis that help round this out on all the different facets of donors.” But I love those three different resources because they guide me in my own work, too.
[00:34:57.120] – Boris
I’m looking forward to checking all of them out. I’m always looking for great books to read and courses. I love online courses. So I’m going to check out the certificate in philanthropic psychology, is that correct?
[00:35:09.140] – Tim Sarrantonio
That is correct, yeah. And they have a copywriting certificate, too. Really interesting work that’s Adrian Sargeant, Jen Shang, a lot of great, smart folks over there.
[00:35:16.540] – Boris
Phenomenal. I’m excited to add those to my own inventory and, of course, to share them with everybody that’s watching and listening. They are all going to be linked up in our show notes, so you don’t have to go looking for them. The other thing we’re going to definitely link up in our show notes is, of course, your report. When does that come out?
[00:35:34.980] – Tim Sarrantonio
So the full public launch of Donors: Understanding the Future of Individual Giving is going to be Tuesday, March 8, and that’ll be free to download. And it’s 87 pages of goodness. But then we’re creating a lot of supporting content for people to kind of guide through their own journey and kind of break that into smaller digestible chunks for people who are like, ‘that’s great, but I don’t necessarily have time to wait for an 87-page report. Can you give me something just on this?’ We’re going to be doing all of it.
[00:36:10.270] – Boris
I can’t wait to see it all. And I’m definitely going to download and do my own deep dive into all of the data and conclusions that you guys have come up with. If I have a chance, I’ll even do my own little summary and pitch for it.
[00:36:23.270] – Tim Sarrantonio
I would love a recap of your thoughts on it. I think you’d bring some really awesome insight to it.
[00:36:28.580] – Boris
Amazing. Thank you so much for sharing all that with us today, Tim. If people want to follow up with you, what’s the best way to reach you? Are you into getting in touch with folks?
[00:36:37.300] – Tim Sarrantonio
I love talking to folks. I love talking to folks. So LinkedIn—good spot. I’m very active on LinkedIn and on Twitter, but LinkedIn is a good, easy one because it’s just my name, Tim Sarrantonio. Pretty unique. But then, firstname.lastname@example.org, drop me an email. Let’s connect. I don’t care if you’re using our product or not. That doesn’t matter to me. I just want to help. I want to help fundraisers become more connected, and that’s my mission.
[00:37:04.750] – Boris
Fantastic. And I hope people take you up on it. You and I connected on LinkedIn, and I’m so glad we did. I appreciate everything that you’re doing with this report and in general for the nonprofit space. And thank you so much for joining us today.
[00:37:17.600] – Tim Sarrantonio
Thank you. Thank you for having me. It was an absolute pleasure.
[00:37:20.850] – Boris
Awesome. And thank you, everybody who has tuned in. Whether you’re watching this on YouTube, on our website, on any of the social media platforms that we share this on, or you’re listening to it on your favorite podcast player, we try to make this as available as possible to every nonprofit professional that’s interested in creating more heroes for their cause.
[00:37:39.780] – Boris
I hope this episode has helped you do just that. If you like the show, please do leave us a review. If you don’t like the show, send me a note. Let me know what you didn’t like about it so that I can make it better. I’ll fire Tim. No, I won’t. But if you also want to be on the show, send me a note. Let me know. I’m always looking for great fascinating guests like Tim, and others who are in different aspects of this amazing industry and doing the important work that really needs to be done. Thank you everybody. We’ll see you again next week.
[00:38:11.950] – Tim Sarrantonio
[00:38:12.870] – Intro
Thank you all for watching and listening to The Nonprofit Hero Factory. We hope this episode has given you some ideas and strategies for creating more heroes for your cause and a better world for all of us. Please be sure to subscribe to this show on YouTube, Facebook, iTunes, Spotify or your favorite podcast platform and let us know what you think by leaving a review.
Concepts and Takeaways:
- You don’t have to have a data background to focus on, and make connections with, data. (5:15)
- The narratives around charity too often cite outdated data, from before the pandemic. It is frustrating to try to work without an understanding of what has actually changed with donor giving behavior in the last two years. (7:32)
- The Fundraising Effectiveness Project combines data from multiple initiatives and data sources to provide an objective understanding of individual giving. (8:12)
- The Neon One report, Donors: Understanding the Future of Individual Giving, looks at transaction data more than “panel data” a.k.a self-reporting surveys. (10:34)
- The report examined billions of dollars in giving over the last two years.
- It found that while household giving had been declining, that trend has been reversing since March 2020.
- “People are coming back to nonprofits. They’re saying, ‘I trust this with my money to actually make an impact in my local community, in the world at large.’”
- Retention of donors is still a problem; the data shows that over 80% of first-year donors aren’t likely to come back for a second year. (11:49)
- To acquire a donor, it costs $1.25 for each $1 of donation. But to keep them only costs $0.20.
- Data and storytelling can combine to create the ultimate transformational, identity-based giving experience.(13:17)
- Emergency response giving is always higher than average. It is normal to expect that there are going to be spikes and drop-offs around events. (15:51)
- The data seems to show that people who give $500 or more over the course of their relationship with a nonprofit are more likely to continue to support that organization. (16:50)
- People give to charity for numerous reasons, but all of it is somehow tied into how that person identifies themselves. The more they identify themselves with a cause, the more action they will take in support of that cause. (18:26)
- Philanthropic psychology, an emerging field of analysis, identifies multiple layers and elements of identity, including national and geographic, familial, religious, and political identities, and any of these can be tied to why a particular human is generous. (20:03)
- Without asking people to self-report, it can be difficult to get useful qualitative data around which to build the stories that attract and retain supporters. (21:50)
- Tim believes that segmentation of your audience, and then personalization of messages, is actually one of the most intimate things that an organization can do from a tactical standpoint. (24:30)
- The top reasons people stop giving are centered around a failure of communication on the part of the organization. Successful communication requires 1) clean, precise data 2) a personalization strategy 3) impactful storytelling. (25:58)
- Organizations that offer a unique value proposition to the donor, frequent follow up and connection, and perform ongoing internal auditing of their own processes and messages will have more success retaining donors over time. (29:28)
- There are a number of key performance indicators for organizations, including retention, acquisition, overall growth, and how many recurring donors are being set up. The Fundraising Effectiveness Project, the largest analysis of individual giving in the world, looks at data through 200 different metrics. (31:52)
- Tim believes that calculating not just profit and loss but shifting to think about building and investing in relationships to secure overall abundance and growth over multiple years is where organizations will see the greatest success. (33:00)
Action Steps: What Now?
About this week’s guest
Tim SarrantonioDirector of Corporate Brand, Neon One
Tim Sarrantonio is a team member at Neon One and has more than 10 years of experience working for and volunteering with nonprofits. Tim has raised over $3 million for various causes, engaged and enhanced databases of all sizes, procured multiple successful grants, and formulated engaging communications and fundraising campaigns for several nonprofits. He has presented at international conferences and is a TEDx speaker on technology and philanthropy. He volunteers heavily in his community around Niskayuna, NY.