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Nonprofit Radio for January 18, 2021: The Hot Sauce Principle

My Guest:

Brandon Smith: The Hot Sauce Principle

With a catchy book title like that, how could I call the show anything else? The author, Brandon Smith, shares his wisdom and advice on applying hot sauce in your career and at home. He also reveals how to protect yourself from getting burned. It’s all based on his many years of coaching and consulting with CEOs, leadership teams and boards.



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[00:02:19.14] spk_0:
hello and welcome to 20 martignetti non profit radio big non profit ideas for the other 95%. I’m your aptly named host of your favorite abdominal podcast. Oh, I’m glad you’re with me. I’d suffer the effects of vibrio Sys, which is what I should have suffered last week when I missed a pronounced it Mr When I Mr pronounced it vibe Bro Sis, if you infected me with the idea that you missed this week’s show so you know that you’re stuck with a lackluster host, You know, you know this, it’s this is not even news to the most casual listener the hot sauce principle with a catchy book title like that, How could I call the show anything else? The author Brandon Smith shares his wisdom and advice on applying hot sauce in your career and at home. He also reveals how to protect yourself from getting burned. It’s all based on his many years of coaching and consulting with CEO’s leadership teams and boards. Antonis, take two our nation is counting on you were sponsored by turn to communications, PR and content for nonprofits. Your story is their mission. Turn hyphen two dot CEO and by dot drives Prospect to donor. Simplified tony-dot-M.A.-slash-Pursuant for a free demo and a free month. It’s my pleasure to welcome Brandon Smith. He’s the workplace therapist, expert in leadership, communication and cure. Cure of workplace dysfunction. He’s been featured in The Wall Street Journal, fast company, CNN, fox news dot com, NPR, Forbes and many other outlets. His book is The Hot Sauce Principle. How Toe Live and Lead In a world where everything is urgent all of the time and that’s what brings him to non profit radio. He’s at the workplace therapist dot com and at the w P Therapist. What a pleasure. Welcome, Brandon Smith.

[00:02:21.01] spk_1:
Tony. Really glad to be with you today and on your show.

[00:02:24.53] spk_0:
Thank you. And it’s a pleasure to have you. And you’ve got all these media credentials fast company, CNN, Fox News. You realize, though, that those have all led you to this moment on non profit

[00:02:37.03] spk_1:
moment? All this is the pinnacle. This is all those things got me here today and I’m excited about it.

[00:03:04.44] spk_0:
Exactly. This is your you’re zenith your pique your day normal. Uh huh. It’s non profit radio. It’s of your of your exposure. Thio Media is here on non profit radio. So welcome, Thio. The best moment so far. All right, So obvious question. What’s the hot sauce? What’s the hot sauce principal? Lead us into this and then we’ll talk about how folks can employ it to help themselves and their families even.

[00:04:03.44] spk_1:
Yeah, absolutely. So I’m gonna go back in time a little bit. I’m gonna go back five years or so And what was striking me and all the clients I was working with, folks. The non profit space for profit space. It could be university schools, public sector. It could be a big companies, small companies. It didn’t matter. What was true was 22 things. Time was everyone’s most precious resource. It wasn’t money. It was time, and everything felt urgent all the time. And in that world, it was causing us all to operate more like firefighters. And I’m sure your listeners can relate to that experience. And so what hit me was it was like hot sauce. Everyday urgency by itself is like hot sauce and a little bit of hot sauce. I love hot sauce. Frankly, um, you put a little bit on on something that’s bland and adds a little focus, a little flavor, and as interest it gets you concentrating on it. But if everything that comes in on our plates that comes out of the kitchen is covered in hot sauce, the appetizer, the salad, the entree, the brownie, the ice tea, we’re gonna be overwhelmed and curl up in a ball. And that was what so many of the folks that I was working with were experiencing was this feeling of burnout. And so the book really came from that idea of how do we manage the right amount of hot sauce in life, both when we’re leading others or and or when others are kind of guiding us? How do we manage that flow of hot sauce? So it’s it’s adding more interest in focus and not just burning us out. And so that was the impetus for the book, tony. And that’s really the the whole idea behind the concept.

[00:04:51.44] spk_0:
Okay, I want to thank you very much for being a guest. Uh, we’re wrapped up. Wait a minute. You told

[00:04:58.26] spk_1:
me that interview I’ve ever done in the history of interviews. Tony,

[00:05:27.14] spk_0:
we’re having fun, So yes, you talk about uncontrolled urgency, that’s what we’re. That’s what we’re we’re victim of. We’re trying to avoid creating this uncontrolled urgency in our in our lives and our teams. Right? A ZX, you say. Too much hot sauce. It’s no good. It ruins its its ruins. Its impact. It’s not. It’s not interesting and flavorful anymore. Overwhelming and burning and hurting us.

[00:05:50.24] spk_1:
Yeah, absolutely. That’s exactly that’s exactly right. So it’s It’s both a byproduct of people stress and anxiety. Right? So, you know, if I’m putting pressure on you to get something done right away, and then you might put that pressure on somebody else that they’re on your team, right? You kind of push it down so it can complement stress. And anxiety can also come just from a simple lack of prioritization. You’re feeling like we’ve got to do everything. Everything is important.

[00:05:57.64] spk_0:
Yes. We’re gonna get to the importance of proposition. Yes. And you tell these you you you unravel the mysteries of urgency and the hot sauce through lots of lots of stories opening with Kate, who is, uh, listen, you’ve got to get the book because you gotta hear you got a little stories of Kate and Kate and her boss, uh, the it improves. It ends very nicely, but, uh, it’s a it’s a tough. Especially that opening scene with Kate 5 30 in the morning. Um, that’s rough. It’s It’s hard to read, you know? It makes

[00:06:27.93] spk_1:
good. Used to be hard to read. It’s supposed to hurt. Yeah,

[00:06:31.09] spk_0:
makes your heart race while, uh, while you’re reading about this one dimensional story. Alright, Um, but we can master this. We can master the urgency we can. We can apply the hot sauce sprinkled appropriately and be of great benefit to ourselves. Our careers, even our families

[00:06:49.77] spk_1:
absolutely sure can. Okay, that’s what that’s what the books all about, how to get a master,

[00:07:11.34] spk_0:
it. That’s where we are. Um, you talk about good bit about trust and and vulnerability. Expand on that a little bit. And maybe we’ll even say a little more about I love vulnerability. I think vulnerability is a sign of strength, not weakness. To be vulnerable is to be strong. I think not. Not cowardly and weak, but you roll that into trust. Yeah, and and so explain. Explain where you’re coming from with trust and vulnerability and credibility

[00:08:01.24] spk_1:
in the in the book. I talk about my trust formula and and And the reason why I talk about it is because if we’re going to create urgency and others, yeah, urgency is a stated discomfort. So you’re intentionally making other folks uncomfortable. You’re taking folks, they’re comfortable and you’re making them uncomfortable on purpose. And that’s advanced leadership stuff. Sometimes we have to do that with our teams. Sometimes we have to do that with our kids. That’s just part of the nature of kind of leading others. Um, and in that moment they’re gonna ask themselves, Do I trust this person enough to allow them to make me feel this way? Which is why trust comes in and it’s so important. We got to start with a foundation of trust. So now I already went back in time. Five years. I’m going back in time a little over 10 years now. So about 10 years ago, I was

[00:08:07.48] spk_0:
teaching have a sound effect for time travel that I used once years ago on this show. Maybe I’ll maybe I’ll insert a little

[00:08:13.61] spk_1:
need to bring it back would be perfect right now. Time travel music. So So a little over 10 years ago, I was teaching at Emory University in Atlanta, Georgia, in their business school. I

[00:08:22.63] spk_0:
see you’re Emory University diploma on your wall.

[00:08:55.74] spk_1:
It’s behind me up. So and I was teaching MBA students and, you know, MBA students typically think in terms of numbers. And I was trying to think of How do you take a concept like trust and make it mathematical? And I ended up coming up with this trust formula. And it’s in the book, and the trust formula is authenticity plus vulnerability in parentheses. Okay, so you got to kind of think about kind of basic math principles, authenticity, plus vulnerability in parentheses and some of that multiplied times. Credibility gets us trust and the reason why I did it that way. Originally, I did it a straight up addition formula authenticity, plus vulnerability plus credibility. But in that version, you could have zero credibility and come out with positive trust. And that’s not how trust work

[00:09:07.76] spk_0:
that case. All three are equal, right?

[00:10:32.64] spk_1:
Yeah, it’s how it works. And so the reason why I had to put the multiplier in there is because whenever you multiply anything by zero. What do you get? You get 00 Credibility, zero trust. And the same is true on the other side. If authenticity and vulnerability go to zero, you got zero trust. So what we’re saying is you gotta show up is credible, you know, which means you’re reliable, predictable. We could talk more about that. But, you know, you deliver on your expectations, you do what you say you’re gonna dio um, but you also gonna show up as a real human being, which is the authenticity and vulnerability side. You know, you’ll be transparent about your thinking and your motives. That’s authenticity. But vulnerability. You gotta be okay to ask for help, Okay? To say, I don’t have all the answers, okay, to say I was wrong. You were right. Okay. To share a little more about your own personal story and journey with other people. That’s that’s That’s how we build trust. And the good news is you don’t have to be perfect on all those, but you just can’t go to zero. You go to zero and you got problems. So it’s a good reminder for us when we’re sitting in that leader seat and by the way, leader. When I talk about leader, it doesn’t have to be by title. We could be leading appear, leading a donor leading, Ah, volunteer, whether we have a title or not, Um, we’re leading others if we’re trying to influence them. And this is this is how we need to build trust. So then we could be effective in those roles. And part of what makes a non profit space so challenging is sometimes there isn’t really clear role clarity. Sometimes there’s a lot of informal leadership that occurs in that world. And so, you know, making sure we’ve got enough in the trust bank account to be able to do what we need to do effectively is really important. So that gets a little bit of high level overview of the formula. I’m happy to riff in any direction you’d like to go.

[00:12:00.14] spk_0:
It’s time for a break. Turn to communications. The Wall Street Journal, The New York Times You wanna be in outlets like that? CBS Market Watch, The Chronicle of Philanthropy Turn two has the relationships with these types of media outlets so that when they’re looking for experts on charitable giving, non profit trends or philanthropy they call Turn to turn two calls you because you’re their client. Turn hyphen two dot ceo. Now back to the hot sauce principle. I I want to talk about using urgency appropriately to help yourself. So not Thio. Help you manage your own work life, maybe even your career. Certainly. If you’re doing this well, you’ll be promoted into leadership. You know, maybe you’re leading one person or something. But but mawr on the individual basis, you know, so using it and then protecting yourself from hot sauce at work. Also from protecting yourself from too much urgency. So that those sort of direction Then we’ll talk about the family. You have some good stories about your three kids. E hope their good. What? Pardon me, but

[00:12:06.24] spk_1:
I hope their good usually involves the making fun of dad, which is fun.

[00:12:20.64] spk_0:
Exactly. Right? Is there a little private stories? Yes, they’re private laughs. Um, so you talk about eso in with the individual? You talked about having a compelling Why, Yeah, What’s that about?

[00:13:57.04] spk_1:
So I think when we talk about for us one of the ways we can create urgency for ourselves At least in our career is have that compelling line that that sense of purpose. Why do we do what we dio and have that to kind of guide our decisions as we choose career opportunities and choose passed forward when we don’t have that sense of why that sense of purpose as we’re making career decisions we tend to default to shiny, shiny could be a shiny title or shiny brand or shiny paycheck? There’s nothing wrong with shiny, but that’s not what we want. The end all be all to be because, like most things that are shiny, the shine wears off pretty fast, and then we’re looking for a new shiny. So when the more we can use purposes were making career decisions that why the better? So that’s a good long term strategy. Now, going back to your comment around how to be urgency in our professional development and careers, a long term strategy would be a y. A short term strategy is, um, set deadlines and create some kind of accountability system. So I will tell you, tony, I’m really proud of this book that you’ve got a chance to read, and we’re talking about here today It took me about four years to write the darn thing, and the first three years was because I was trying to make it a priority. But there was always something that got pushed up higher. So I finally said to myself One day I said, Look, Brandon, this isn’t gonna happen unless you get some help And I went out and I hired a book coach. Her name’s Cathy Feedback, and Kathy has been wonderful because she created urgency for me. She would say, Brandon, you have two weeks Monday at 9 a.m. In two weeks. You owe me Chapter seven and all of a sudden I had a deadline.

[00:13:58.63] spk_0:
You know, you don’t want to show up empty handed.

[00:14:01.17] spk_1:
Also, it was like it was like I was back in college. I’m sliding the term paper underneath the door at 4 59 right? Um, and so it reminded me of of the of those days, and it gave me deadlines. And you can’t have urgency without deadlines.

[00:14:16.64] spk_0:
You say there were two types of urgency your type one and type two that you can use to your benefit those out

[00:15:02.94] spk_1:
eso these air particularly effective when you’re trying to create urgency with others, but they could be good with you to, um there’s two kinds worst case scenario and opportunity scenario. So worst case scenarios, like, you know, if I don’t change, you know, I’m going to die or something horrible is gonna happen to me. Yeah, on then. In the best case scenario is, I’ve got this great window of opportunity. And if I hurry now, I can make it in the window. But if I don’t hurry, the window is gonna close, and I’ll miss that opportunity. Maybe that’s a promotion or getting yourself up for promotion or some other opportunity like that. Worst case scenario. A good example of that in, um Anyway, uh is every year when I get close to my annual physical, my kids always know and they give me a hard time. Because about six weeks before my annual physical, I start really working out hard. I start really watching my diet because I’m

[00:15:13.40] spk_0:
trying to bring to the doctors. You have to bring down your heart rate, you

[00:15:17.13] spk_1:
know? Yeah, I do. All the

[00:15:18.23] spk_0:
things you started, your iron level is good.

[00:15:21.75] spk_1:
All the things. So then when I get in there? I want the doctor to say, Wow, you look really great. And then I could leave there and immediately go grab, you know, some french fries on the white home. Uh, but that that’s a great example of kind of urgency. That deadline creates urgency for me, right? And then I and then I don’t want to show bad. It’s kind of a little bit of fear factor. So then I I am motivates me. Thio get going.

[00:15:42.10] spk_0:
But the only way to keep yourself healthy throughout the years to have, like, eight doctor, eight physical e carry each one carries you six weeks. That success, you know,

[00:15:52.12] spk_1:
that would be good. I I could do that. Uh, but but that’s why people use things like accountability partners, accountability partners are, you know, essentially a form of kind of urgency. It’s like, Oh, my gosh, I got a call. I got a call with tony today. At one o’clock, I better make sure I’m ready. So it kind of sets me up for that. You know, you, accountability, partner is another great way you can. You could do that And that you can use that with anything you could be

[00:16:17.56] spk_0:
both with. You prepared for this call? Of course I prepared for this, Uh, prepared. I couldn’t tell. I’ve

[00:16:21.59] spk_1:
even got a bottle of hot sauce right here. You can see if I’m holding about a bottle

[00:16:49.74] spk_0:
of Macallan. Ease Tabasco alright? Yeah, of course I know you’re prepared. Yes. Well, this is all you know. You know this stuff? You’ve been working on it for four years. It’s the combination. This is the day Newman, of your four years. Congratulations. I should have said Congratulations on the book. Thank you. Thank you. Now. So you say in the book this book, you gotta get the book. Um, you can. So you can use these two types together. They don’t. They don’t have to be isolation. You can use them in tandem to motivate yourself.

[00:17:42.64] spk_1:
Absolutely. Absolutely. You can. So you know the way that you could do it is you could think about, like, change your disruption is a great way to look at it through both lenses. So, naturally, when change happens, we’re like, Oh, gosh, I hate this. Like, what’s it gonna cost me? You say, Say were part of an organization that’s undergoing a lot of change for lots of reasons. It could be that we’re searching for new funding. Resource is, it could be that we’ve merged with another organization. There could be a lot of reasons why we’re part of change. Well, naturally, the first thing we’re gonna say is Oh, my gosh, I could come out a loser in this. This could be bad for me. So that could be a motivation for me to make sure I’m really working extra hard and positioning myself. But it could also be a kn opportunity. Could be like, Wow. But this is also gonna open up new roles, new opportunities, and And my boss is gonna get promoted. And if I really show, I could do her job, maybe they’ll promote me into that job and then all of a sudden might become a director or whatever the role happens to be. So, you know, change of the great, um, event that occurs to us that we could both look at it from a motivator from you making sure that we’re surviving, but also that we could be thriving and opening up new doors.

[00:18:07.14] spk_0:
So your perspective is important whether you view this fearfully or as a challenge and an opportunity.

[00:18:45.34] spk_1:
Yeah, and I could be even more concrete. So in 2020 that great year that we love so much change that’s all changed. And so much of my work up to that point was in person, like when I would work with non profit teams, they would ask me to come on site or if I would be speaking engagements and asked me to come on site. Well, naturally, all that went away. But then all of a sudden, people begin to get more comfortable and learn how to do things virtually. And then that created new opportunity. Well, how can I serve the audiences? I want to serve in a different way. So it’s every every change brings opportunity. It’s just looking at it through that way and then and then creating some kind of urgency around it to keep us moving.

[00:19:02.94] spk_0:
The one thing I want to quote, I don’t quote often, but just this one little sentence I loved create productive action, not unproductive anxiety, and that that kind of subsumes all the things you’ve been saying in the past several minutes, you know, look at it productively and and opportunistically and I use I don’t use that pejoratively. It all used as as opportunity and not to be unproductive and cause you fear and anxiety.

[00:20:27.74] spk_1:
Right? Right, So So let’s talk a little about about that, too, if it’s OK, because urgency urgency is also anxiety. So what I’m prescribing here today is to intentionally put anxiety into the system. E. I wanna be clear, because that’s super, not what people would be thinking right now. They would be thinking, Well, I don’t like anxiety, Brandon, why are you making me ADM? Or but it’s it’s intentionally using it because anxiety in the right doses urgency in the right doses stimulates action. You’ve ever woken up until the night thinking about work. Well, one of the healthier ways to deal with it is to grab a pad of paper and write down the stuff you’re thinking about. So get out of your head or to just get up and start doing work. It stimulates action, so we want to use it so it stimulates us into moving forward. What we don’t want to do is just sit and let it spin in our head and paralyzes. That’s the unproductive anxiety is when we feel paralyzed. We’re not moving because that energy is not going anywhere. It’s just sitting in our head and and one of the ways the healthy ways we eliminate anxiety is either through activity and action, whether that’s doing work or exercise or those kinds of things. Or it could be through meditation and calming our mind. E I could say I was great at the second one. I’m probably not as good at the second orders. I wish I was a little better the first, um, but those air, that’s how we get anxiety to kind of release is either through meditation and prayer or coming our mind or by actually taken action. So this is a way for us to take action and use it productively.

[00:21:53.44] spk_0:
And if you’re not being productive at it, then Thio deal with you’re not dealing with it productively. Then you’re talking about releasing your releasing cortisol into your bloodstream and cortisol and adrenaline. These things negative, harmful, um, hormones, cortisol. You know it. Tze that that’s that feeling, that of warmth that you warmth and anxiety you get when you’re waking up at three in the morning thinking about work, and all of a sudden, you know, you get like, this hot flash. These hormones are bad for you. So do something productive. Meditation. Get up and work. Just your notes down like you’re saying. You know everything. I’m just I’m just repeating your wisdom. You know, I’m just like a bulletin board here. You post something on my forehead and then you could read it back or hear it back. That’s all. That’s all you’re talking to. A podcasting bulletin board S o U. All right, let’s move to protecting yourself. When folks were pouring too much hot sauce on you at work, there’s too much urgency. And one of the things you mentioned is prioritization. And you’ve got other tips. You got other ideas strategies to. But let’s start with the one you already mentioned prioritization. How does that help protect you?

[00:23:26.74] spk_1:
Yes. So what prioritization allows us to do is eso when we’re talking about prioritization apartment is us prioritizing our own events, our own activities. But more importantly, where this becomes an issue is when our leader or boss shows up and says, Oh, I want you to know no stop doing what you’re doing. I want you to work on this new thing and they keep changing the priorities or they make everything a priority. Then that’s going to create a tremendous amount of anxiety for us. Um, it’s interesting piece of research. About three or four years ago, they asked the question of what’s the worst kind of boss to work for, and I have a clinical therapy background. I thought they were going to come back with the yelling and screaming, angry boss that pounds their fists on the table. That was not number one micromanager. Wasn’t number one ghosting boss wasn’t number one. Number one was the highly unpredictable boss, the one that you never knew what you were going to get on a given day, because that creates a lot of unfocused anxiety. Uh, and so we sometimes get that experience. We have bosses constantly changing priorities or constantly adding a new thing to the plate. So where this is really important is sitting down with your boss and forcing her him to prioritize, basically saying to them, I love all the ideas you’re giving me. What? Or maybe the top three I need to focus on this week and and doing that is proactively and preemptively as you can on then constantly kind of keeping them in the loop on the things you’re working on, um, so that you could be focused so that you could move down a path and you’re not allowing them to add more hot sauce to your plate.

[00:23:54.34] spk_0:
At several spots in the book, you give actual language that you can use in an email or in a conversation, you know, acknowledging that there’s a lot of priority and urgency or there’s a lot of urgency and that that it’s important for our success. But for for me to be successful or for our team to be successful, we need Thio prioritized. But you you’re more eloquent. So that’s why you gotta get the book, you know? Yeah, you want the eloquent version, you gotta get

[00:24:14.17] spk_1:
the book and you have several statements you can actually use. Yeah, it’s all there for in the in the simple way to do The simple reason why we’re doing that is because if everything is a priority or everything is urgent, we’re just gonna be spinning every day whenever actually gonna make any progress on anything really doesn’t want that, and we don’t want that. So you know, if we could help manage her him a little bit and force them to prioritize it, allow everybody to win Well, actually make progress on dhe. That’ll be more fulfilling for all of us.

[00:24:26.94] spk_0:
The ghosting boss. You mentioned that just as an aside, but I don’t know that one. What’s the

[00:24:55.34] spk_1:
ghosting boss? It’s so it’s a It’s a common term. When you can’t find a boss, you can’t find a leader. They ghost you. So you know, you’re you’re like, Where are they? Can’t find him like I need this decision made. Well, I thought they were Well, I don’t know where they are on That’s, That’s, um, It isn’t one of the patterns of of less than healthy bosses that I’ve uncovered in my career. The boss you could never find. We need to make a decision. It’s

[00:26:48.74] spk_0:
time for Tony’s Take two. Our nation is counting on you. You are among the institutions that the country needs toe have hold the folks who are supporting you, who love you. They don’t want to see you probably even hesitate, let alone end. You’re among the institutions. It’s not only law enforcement and the media and the judiciary and the military. You’re an institution of the United States and the folks who know you and love you. They want your work to continue. You need to continue it. Americans are counting on you, so please keep doing your critical work. Keep your head down. It’s I you know, we all know what we’re going through, but there are folks who are counting on you, and I don’t even just mean that’s annoying. Next time I’ll put my phone on airplane mode like I’m supposed to when I’m recording, and I don’t even just mean the people who you’re serving, if that’s your work and if you’re serving people, I mean your communities. Whoever they are, however they’re comprised. They’re counting on you. You are an institution of the United States. We need you to keep up doing your work. Keep standing for your values. We’re counting on you, and non profit radio is behind you. I’m behind you. That is Tony’s. Take two. Let us return to the hot sauce principle with author Brandon Smith. You can lower the heat as a as a way of managing managing hot sauce and urgency at work. What’s there,

[00:27:11.34] spk_1:
Lauren? The heat is another way of saying kind of prioritization. Like what? What is the most urgent here, or when do you need a pie? So you know, if something’s high heat, they’re going to say I need this by tomorrow, or I need this by yesterday. It’s like ghost ghost pepper heat. Okay, if if if you

[00:27:15.59] spk_0:
ghost peppers I gather are very hot peppers. Peppers tell a story about ah, video. You watched about hot pepper eating contest. You mentioned Ghost Peppers last. So they must be the most extreme.

[00:27:27.95] spk_1:
They are one of the most. I I think there’s, like, a grim Reaper Heat one in like a North Carolina Reaper. That’s ah really really, really bad. Yeah. So scale. Yeah. Yeah. How you measure the hotness of those peppers,

[00:27:41.59] spk_0:
e It goes into the tens of thousands. Doesn’t

[00:27:44.48] spk_1:
Oh, yeah goes into Yes. Yeah. It could be further than I can handle, tony. That’s all I can tell you.

[00:27:51.02] spk_0:
Are you hot pepper eater? I

[00:27:52.33] spk_1:
love I love hot sauce And hot.

[00:27:53.55] spk_0:
Not just that hot dog. Do you eat the peppers. Do you use the

[00:27:55.85] spk_1:
radio? But But I will tell you while I love them, I will. Um I just start dripping and sweat almost immediately. Well,

[00:28:02.81] spk_0:
the Grim Reaper scares the hell out of me that I wouldn’t. I just wouldn’t even touch anything.

[00:28:07.44] spk_1:
Called. Probably called the thing. I would want to try a

[00:28:09.68] spk_0:
food food called the Grim Reaper.

[00:29:32.44] spk_1:
Yeah, something I want to try. Um, okay, I think I think the idea of eso it was interesting. I was getting ready to do a talk right before Kobe hit. And I was supposed to be doing going to Vegas. And I was talking to all these auto auto shop owners, 15,000 auto shop owners, and I was going to talk on urgency. These are small business owners and they run their run mechanic shops, take your car to get it fixed. And one of them told me the story is I was going to prepare, and I was interviewing some of them. He said, You gotta watch out for the hero trap. He said, you know, when you jump in and you’re rescuing all the time, um, that’s another way that we perpetuate urgency because we’re always rescuing each other. That’s a real common were kind of relational orientation, we sometimes holding the non profit space because we’re such close teams that sometimes we could end up rescuing each other. It can perpetuate a lot of urgency on Then. He also added, He said, You also have to be real careful. You don’t over promise when you don’t need Thio And you gave the example. He said, You know, you might have a customer come in And, uh Mr and Mrs Jones and they come in and they’ve got a problem with the car and you promised to get him to the car by the end of the day. Um, and all of a sudden, by making that promise, you made it urgent. Well, they never said they needed it by the end of the day. Maybe they’re going out of town for the weekend, and they’re not going to need it till next Tuesday. But you didn’t ask him that. You just promised by the end of the day, all of a sudden creating urgency that didn’t need to be there. So hero traps and making promises that we don’t need to make our always that we inadvertently create more urgency in our life that we probably

[00:29:42.34] spk_0:
need to We could just say no.

[00:29:44.14] spk_1:
Oh, yes, you could. Yes, you could. Uh, that’s a really, really hard thing to Dio.

[00:29:50.74] spk_0:
You have it in the book.

[00:30:27.04] spk_1:
I know it’s really, really hard thing to Dio, and I will tell you it’s hard for all of us in general. But you can’t be strategic whether you’re talking about your own career or you’re talking about your organization. If you can’t say no and I and I will say working with in the non profit space, its’s one of the more challenging things because no often means we’re shutting down a program or service or some kind of way. We’re helping others, and that’s really hard. We love to start up a new one, but that often means we got to prove something that it’s so hard because it’s like a baby to us and, you know, and that’s doing something in the world that is meaningful to us. But learning how to say no is really important, a ZX. We try, navigate the urgency and and sending boundaries. So in another way, we could say this is all about setting healthy boundaries in life

[00:30:41.64] spk_0:
boundaries. Yes, let’s talk about boundaries and the importance of enforcing them.

[00:30:48.64] spk_1:
Yeah, so it’s one. So I think you may. You hidden on something really important just by the way you said it. It’s one thing to say what your boundaries are. It’s another thing to actually uphold them.

[00:30:54.74] spk_0:
I got that idea from you.

[00:32:53.14] spk_1:
Tell you, tony, it’s hard for me to I’ll give you Ah, great example. I know for my life. My rhythm that works best is when I do all my work, which is typically a lot of coaching, a lot of like cons, therapy sessions. A lot of that. We’re working with teams intensely doing that between 94 every day because it’s pretty emotionally draining work. And then I used the time before nine to do administrative stuff in the time after four to do administrative stuff. Well, they’re caught a point towards the end of last year where I was having a lot of demands on my calendar, so I told my wonderful assistant Nancy, I said Nancy, let’s go ahead and open up 88 to 9. Let’s open up 4 to 5. So she did. And she did a wonderful job of booking me down to the minute. I mean, I was I was just, like, 30 minute calls back to back to back to back to back, back, No room for lunch. I mean, I was just going all the way through and about two weeks of that, I realized I was burned out. I stretched too far, and it was causing me to have ah, lot of anxiety and just stress in my life. So I went back to Nancy and said, All right, Nancy, we gotta go back to 94 because this is not working for me. Well, the next time she scheduled a meeting at four o’clock, I had a choice. In that moment, I could have just accepted it and said, Well, Nancy is looking out for the best. My interest And there was no other place. I’ll just take it or I could say no, I set the boundary. I gotta I gotta push back on that. Yeah, and there’s a part of me that said, You know, I could just I’ll just do it. It’s not gonna be a big deal. One time just one time. But if I do that one time now, I just told her that’s really not a firm line. So I had I had to send an email and copy Nancy and said, I’m sorry, Nancy. This time is not gonna work. It’s after four o’clock. She was your apologized profusely. But that’s that’s important to us in life. When people, you know get when we send a boundary, we’ve got to make sure we hold it. If we tell our boss we’re not gonna be available after seven o’clock at night because we spend time having dinner and putting our kids to bed. Well, we gotta stick to that way. Whatever boundaries we set, we gotta we gotta hold.

[00:32:59.44] spk_0:
We’re gonna get to the family. But let’s let’s turn it over to Brandon. What? What would you like to talk about? Hot sauce. Principal related. That I haven’t asked you yet. We’ll get to the family. But what would you like to talk about?

[00:33:20.84] spk_1:
You know, I think when we were talking about this show today, part of the angry, willing to take with professional growth and development, how to help people kind of grow in their careers and and really become amazing kind of rock stars in

[00:33:35.58] spk_0:
there and and thank you for reinforcing for listeners that we do talk in advance. This show is prepared. It doesn’t just come together slapdash. That’s prepared because there’s none of the stuff With the lackluster host was a mere bulletin board, you know, they may think that’s just you know, you and I talked like 20 minutes ago, and here you are, but does not like that. It’s not like so thank you for reinforcing, for validating unsolicited. Thank you. Thank you very

[00:34:42.64] spk_1:
much. Of course. So I wanna it ties in what we’ve been talking about a little bit about even managing urgency. One of the best things you can dio that will help not only set boundaries, manage your time, but also, um, please your leader that you’re supporting is to be really, really clear up front on expectations. If you can clarify expectations, not only your expectations, but your bosses expectations you can prevent 50% of all work related people dysfunction. So imagine that 50% of all people related dysfunction at work goes away. Yeah, managing expectations by clarifying expectations on dhe When we don’t do that, we allow people to guess, and inevitably they’ll guess wrong and someone gets upset. So if you’ve ever had a family member get upset Thanksgiving, it was probably because somebody didn’t clarify expectations with her

[00:34:46.17] spk_0:
him. Guess, Guess to your disadvantage.

[00:35:25.24] spk_1:
Yeah, they came in thinking one thing. It didn’t meet their expectations. They threw a big temper tantrum, and all of sudden, Thanksgiving wasn’t quite so happy. Well, the same thing is true work. So one of the simplest, um, activities. But the most important is make sure you’re regularly clarifying expectations with your leader. And when you do that, you also are forcing them to manage their urgency because you’re not allowing them to just operate like they’re suffering from a d. D. Every day because you’re forcing them to set priorities. You’re forcing them to tell you what matters. Um, and then you allows you a way to kind of follow up with them s Oh, that’s so I would say that’s a really important thing we haven’t talked about yet. That is a great career strategy.

[00:35:49.74] spk_0:
Okay, cool. Cool. Um, so how about we talk a little about family and home okay. Using this, uh, sprinkling some hot sauce. Appropriately. You like thio prayer? You get sort of a 90 10 rule. Talk about prioritizing the 90% of the 10% at home.

[00:38:00.72] spk_1:
Yeah. So for lots of reasons that we probably don’t have time to go into today, Um, what has happened in, particularly if we’ve got kiddos growing up right now is that everything seems to be urgent all the time. They’re travel sports team makes acts as if that’s the most highest priority. Their teachers act like everything that they’re doing in that class is their highest priority. There’s a lot of pressure on kids demands and our demands. His parents, um and and then, of course, there’s all those volunteer activities that are coming our way. And as everyone on this call knows also well, Andi, all too well that it’s the people who are the volunteers that got asked. The Vulcan volunteered the most, right. The person who’s volunteering three or four places is being asked to volunteer for five places, get things done, tap on the people that get things done, and we keep tapping on them, right? And so all those were demands So I want you to imagine, like, a hub and spoke. You’re in the middle, and all these things are spokes coming into you. Okay? And if we don’t prioritize, they’re all gonna feel equal. Travel Baseball is gonna feel just as equal as replacing the air conditioner. Our house, it’s broken. It’s all gonna feel equal. And so we need to create that rather than have been spoke. Um, circles we need, like, a bull’s eye. We need the circle of the stuff. That’s 10% attend the focus of our time, that is our family is that stuff that we don’t ever want to compromise. And and that’s however you define it. That might be time having dinner every night with your family, Or might be time on on Sundays where you connect with relatives or whatever happens to be or or time where you exercise. It’s time you never want to compromise on using that old analogy. If you put the big rocks in first pit those big rocks in first there are smaller rocks and then our sand last. So putting those in first and then you allow the other things toe other things to come in when we when we’re not intentional, we we become reactive and we allow other people’s urgency to become our problem. And so then we re re we react just because we’re essentially playing tennis with things that come our way. You know, we want out of our court. So we hit back in the other court. But we’ve got to make sure we’re attention about putting the important stuff in. First.

[00:38:05.62] spk_0:
The family health. Your partner? Exactly. Exactly. So.

[00:38:37.12] spk_1:
I mean, there’s no there’s no right or wrong answer to that. But those are the categories you already listed. Some really important categories are our relationship with our significant other our family, our health, Um, rest rest is really important. Making sure you’re getting enough sleep. Doctors used to say seven hours was the target. Now they’ve moved it up to eight. They want all of us having at least eight hours of sleep that’s going to be protected, Um, a time down time for us to wind down just those things that are important to our rhythm and pace of life. So we always show up at our best.

[00:38:55.72] spk_0:
You got some other ideas, like delegating in the family or delegating in the home? Um, outsourcing. Yeah, you got some other ideas, you say No, you could say no at home, too.

[00:39:25.22] spk_1:
You could say no at home. Out. So you mentioned outsourcing for folks that don’t know what that means. Outsourcing is a fancy way of saying, What’s the stuff that happened? I do during the week or on the weekends that I’d really rather use that time doing something else. And I can pay someone to do that for me. So maybe that’s mowing your lawn. Or maybe that’s your dry cleaning. Or maybe once a month, you have somebody come in and do a good once over into your apartment or your house. Um, it’s just finding those activities that you would rather not spend your free time on. Andi. There’s more higher and best use of your time until you find folks that could maybe support you in that so you could be using your time the way you really want.

[00:40:40.41] spk_0:
Thio Time for our last break. Quote. There’s nothing as simple as dot drives. Our executive team meets once per week to sit down and go through our dot drives pipelines. It’s fun to watch them have a healthy dialogue and to see them get excited about their numbers rising toward their goals. That drives has allowed us to take those key relationships and bring them to a deeper level. End quote. That’s Wendy Adams, director of donor engagement at Patrick Henry. Family Service is prospect to donor. Simplified. Get their free demo For listeners, there’s also a free month. It’s all on the listener landing page at tony dot Emma slash dot We’ve got but loads more time for the hot sauce principle. Now I’m the guy who does not have Children, but you could, UH, it seems, if you did have those those child units you could delegate absolutely could absolutely could. That’s the reason for raising them. Thio. Manual labor age you have. If you are smart, you’re doing that. You can see why I don’t have Children because e economic units,

[00:41:57.61] spk_1:
I I will tell you, and it’s just like with delegating at work, right, because what happens is we delegated work. We see ourselves, you know, it’s so much easier if I just do it myself because the first couple times this person does it, it’s gonna be slow. It’s not gonna be good. But if you go and invest that time, then pretty soon they’re doing it without you in my house. What that has taken the form of tony is laundry. So I’ve got my oldest. She’s now Ah, freshman in college and I’ve got two boys and teenagers. They all do their own laundry. Okay, there were many, many, many a casualty in the process. Tony the girls Lulu lemon workout pants got shrunk down to doll size on more than one occasion. Lots of lots of casualties. But now everybody knows everybody knows how to do laundry. They know how to do their own laundry and they even know how to do other people’s laundry. So my boys know if it’s girls workout pants, we’re not gonna dry those. We’re gonna hang them and they hang them and they’re doing all the laundry. Well, I’m not and and so absolutely. But there is. I want to acknowledge the fact that there’s, Ah, there’s there’s just like anything delegation. There’s a learning curve that

[00:42:07.10] spk_0:
happens, right? You sounded make it sound pretty good. Maybe I should have had Children after all. E, think of the time I

[00:42:11.22] spk_1:
started about. It’s not a banking, although they end up with once they get to become teenagers, they end up with very creative nicknames for you.

[00:42:24.40] spk_0:
Oh, nice. Yeah. You see, that’s the But I wouldn’t be able to handle the, uh, mom and dad are stupid stage after everything I’ve done for you for the past 15. 16 years. Now, you could You think I’m ignorant and embarrassing? I wouldn’t be able to. My ego couldn’t handle it.

[00:42:33.38] spk_1:
It gets more creative than that. So you’re you’re seeing me. Your listeners aren’t seeing me. But what my kids like to call me now is they said one of my many nicknames is off brand Obi Wan Kenobi.

[00:42:43.70] spk_0:
All right. You’re all white. Your beard in your hair. Always

[00:42:46.10] spk_1:
all white looking. So I kind of look like Alec Guinness from the original New Hope Star Wars A little bit. Yeah, they say, but I’m off brand like I’m like the cheapo versions. I’m like the dollar general version of Obi Wan Kenobi. OK, Cie creative created insults,

[00:43:10.90] spk_0:
creative, insulting. Yeah, Yeah, I don’t think I’d be able to handle it. Um and so All right, you can Let’s let’s just round up this family. This home family discussion with how you could turn up the hot sauce. Turn up the urgency a little bit to your to your benefit at home.

[00:44:02.99] spk_1:
Yeah, so turning up the urgency is necessary as your raising any kind of fully formed adult is trying to get them to realize, Um, sometimes they’re too comfortable. And most parents probably had the experience where you you walk into your kid’s room and you told them two or three times that they need to clean their room and you go in and they’re laying on the bed and the room is filthy and they’re watching some show on their phone. They’re too comfortable. So we use urgency to create a healthy state of discomfort. So you say I want your room clean. You have two hours to get a clean. If you don’t have a clean, that phone is mine for a week. That’s a form of urgency. Yeah, we’re setting a deadline. We’re ramping up the hot sauce, and we’re giving kind of a worst case scenario. If they don’t do it,

[00:44:16.49] spk_0:
what about with spouse or partner? Can we can we go there is that you don’t mention you. Don’t mention that the book. But you got me thinking about it now because well, you

[00:44:22.61] spk_1:
can. You can You can. You wanna be real careful on that.

[00:44:25.50] spk_0:
Yeah, let’s talk about it. Sounds like fun.

[00:45:35.79] spk_1:
Sounds like Fine. Uh, this is playing with fire. So the easier one with the spouse and partner is opportunity scenario Thio. You create some kind of reward system like, Hey, honey, let’s do like, a workout challenge and let’s see what if we could hit this goal in six months? And if we do, let’s reward ourselves with a trip to Hawaii. So that’s a form of opportunity scenario. Like, can we work out together, support each other, create pressure with some measurable goals with a reward at the end? Yeah, Zed, that’s happy stuff Now, when you might want to use hot sauce on. The worst case scenario is when you’ve been asking your significant other to do certain things, um, that you feel like are reasonable. And then, uh, this is now the fifth or six or seven times, and then you create some kind of a deadline with a punishment system like you know if if you don’t make this change, you know, then I’m not going to do these things for you anymore on this side. Yeah. So, um and then you have to stick to it to show them that you’re serious. So this is this is one where so when we do worst case scenario urgency with a spouse, we’ve got to be ready to really, really play some, uh, some some tough hot sauce games.

[00:45:51.29] spk_0:
So hardball and then stick to it, as you say. All right. All right. Um, something you alluded to. And you said, Well, you’re not sure we’ll have time for it. But this is non profit radio. We don’t We don’t skimp on our listeners. Um, you spent a good amount of time, Uh, took off a few things that that got us here. How did how did we end up with this master of this uncontrolled urgency? How do we all get here?

[00:46:12.98] spk_1:
There’s a lot of reasons for it. Probably the the number one reason to just start with the first one on the obvious one. And I’m holding up for you to see it. But our phones thing

[00:46:23.79] spk_0:
that you threatened to take away from your child for you

[00:48:24.37] spk_1:
threaten to take away from your child what this did. While we love the fact that we can communicate with anybody at any time, anyone else can communicate with us anywhere at any time. So all our natural boundaries of work disappeared as soon as this became part of our life, cause it used to be one day, not too long ago that when you left work, you left work. All the things you did at work were at work. All the filing cabinets, the computers, all the resource is were there. When you went home, you couldn’t work. Now we can work anywhere, anytime. And in many ways Kobe is kind of reinforce that even more so because we’ve had to learn how to do that. So now we go back. Employers know God’s tony can work anywhere, anytime. So therefore, I can call him anytime, anywhere. So our phones broke down natural boundaries. So what’s that? What’s happened is now we all have to set our own boundaries. We have to do that as employers and leaders. We also have to do that with our own leaders on dhe Co workers, um, creating kind of the rules of the game that we’re gonna work for us. So that’s probably the most important. The number one reason, um, the other. There’s many others, but I would say if we even go back to 2000 and 8, 2009, when we had that kind of economic recession, Um, it created a lot of force, a lot of organizations to go very lean, and so they operated with a lot less headcount. It was almost like a fear of adding on too much headcount, cause I don’t wanna have to go through the process of letting people go again. And so it created more work than than a normal full time employees can dio on dhe. That’s I don’t think there’s been one non profit that I’ve worked with. It hasn’t had that as an issue where they said, you know, there’s there’s I’m not working 30 hour weeks or 40 hour weeks and working 60 hour weeks working long hours. There’s more work than anyone of us can do. We don’t have enough people. And so that’s another factor that just created Mawr urgency, because you could never feel like you’re getting ahead like going using an old Seinfeld reference. At one point there was Newman, who was the postal worker, and he said, He said, The mail, it just keeps coming and coming and coming and and and that’s kind of what it’s like a work. It’s like we could never quite get ahead. So, on top of never being able to get ahead and not have enough resource is, you know, there’s no natural boundaries. We could work anywhere, anytime. That’s just that’s created an environment of hot sauce being put on us every day.

[00:48:56.57] spk_0:
Hello, Newman. There used to say, Um, cool, you’re in. You’re in Atlanta, right? I am. I’m in Atlanta at Emory University. Uh, is that where you teach? Also, Yeah,

[00:49:03.59] spk_1:
I I still teach their adjunct when I’m not out and about in the world working with other folks. I’m still I still there with the business school there in both their executive MBA and their executive education arms. So, yeah,

[00:49:32.07] spk_0:
what’s it like to be in in Atlanta? What’s it been like the past month leading up to the January What? What was the January 3rd, 4th, 5th? Something like that election highly unpleasant. What was it like? Yeah, share. Well, why was it unpleasant?

[00:50:02.30] spk_1:
Imagine every other commercial being the worst political ad you’ve ever seen in your entire life. Um, that was what was happening on every radio station in every TV station. And the extremism on both sides for for the candidates was just ridiculous. I mean, after watching these commercials, you would say, Well, why are even these people not in jail? It was just just the worst kind of dragging a made up

[00:50:03.41] spk_0:
stuff for them are so bad, they

[00:50:30.46] spk_1:
and all extreme statements and all my doctor kind of videos and and and none of it, you know, you almost not not only want to throw the candidates in jail if you believe that stuff, but you definitely wanna throw the producers of the commercials in jail because of the way they just butcher any real information. So it was just a lot of really unpleasant angry noise, hard to just keep a positive attitude when there was that much negativity. So that was definitely not a talking about emotion and energy. Um, not a pleasant time. Thio kind of be consuming any kind of media that had any access to political campaigns, which is pretty much all of it

[00:50:44.04] spk_0:
amping people up, you know, the, you know, getting to talk about urgency. You know, getting people whipped up into a frenzy over how bad all the other the other candidates are. The other candidate is, I guess, in

[00:51:07.16] spk_1:
the Yeah and extreme polarization Extreme polarization s. So then? So then people scratch their heads and wonder why It seems like everybody is so polarized. G How did that happen? Yeah, right. Eso eso I’m glad it’s over. It’s finally quiet.

[00:51:18.16] spk_0:
Yeah, Should quiet that right. Alright, Brandon Smith, you’re terrific. Thank you,

[00:51:21.37] spk_1:
tony. Thanks for having me on. I really

[00:51:56.06] spk_0:
need another conversation today. Genuine pleasure. I did too. Thank you. Thank you very much. The book is the hot sauce principle. How to live and lead in a world where everything is urgent all of the time I got my copy. My, uh, decimated Copy I when I when I get a copy of a book, I the first thing I do is break the spine so that I can open it up and it won’t close on me as I’m reading. I just I like that. And then I could make my notes on the page with out on the right hand page without the left side collapsing on it. So I So I’ve beat up your book. But that’s because I was reading it. It’s

[00:51:56.62] spk_1:
to be beat up. I’m glad you did

[00:51:58.04] spk_0:
it. I did. All right, Brandon, Thank you again. The folks just just get the book. And, Brandon, thank you so much for sharing,

[00:52:06.05] spk_1:
tony. My pleasure. Thanks for having me on the show. Keep up all the great work.

[00:52:55.95] spk_0:
Oh, thank you very much. And you, you as well. Next week, peer to peer fundraising in 2021 with David Hezekiel. If you missed any part of this week’s show, I beseech you find it at tony-martignetti dot com were sponsored by turn to communications, PR and content for nonprofits. Your story is their mission. Turn hyphen two dot ceo and by dot drives Prospect to donor. Simplified tony-dot-M.A.-slash-Pursuant a free month. Our creative producer is Claire Meyerhoff Shows social Media is by Susan Chavez. Mark Silverman is our web guy. And this music is by Scott Stein. Thank you for that information. Scotty, be with me. next week for non profit radio big non profit ideas for the other 95% go out and be great.

Nonprofit Radio for January 11, 2021: PPP 2.0

My Guest:

Gene Takagi: PPP 2.0

Gene Takagi

Gene Takagi returns with the ins-and-outs of the second round of Paycheck Protection Program help for your nonprofit. He’s our legal contributor and managing attorney at NEO, the Nonprofit & Exempt Organizations law group.



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[00:01:50.04] spk_1:
non Hello and welcome to tony-martignetti non profit radio big non profit ideas for the other 95%. I’m your aptly named host of your favorite heh abdominal podcast. Oh, I’m glad you’re with me. I’d suffer the effects of Vibe bro Sis, if you infected me with the idea that you missed this week’s show P P P to zero Jean Takagi returns with the ins and outs of the second round of paycheck protection program. Help for your non profit. He’s our legal contributor and managing attorney at Neo. The non profit and exempt organizations law firm Antonis Take two. I’m still optimistic, were sponsored by turn to communications, PR and content for nonprofits. Your story is their mission. Turn hyphen two dot ceo and by dot drives. Prospect to donor, Simplified tony-dot-M.A.-slash-Pursuant demo and a free month. What a pleasure! Genuine pleasure to welcome back Jean Takagi. You know him, for God’s sake, but let’s do the formalities he deserves. Gina is our legal contributor and managing attorney of Neo, the non profit and Exempt Organizations Law group in San Francisco. He edits the wildly popular non profit law blogged dot com, and there’s the American Bar Association’s 2016 outstanding non profit lawyer. He’s a part time lecturer at Columbia University. The firm is that neo law group dot com, and he’s at G Tack g T a k. Welcome back, Jean. Happy New Year.

[00:01:52.04] spk_0:
Happy New Year, tony. Great to be back with you. It’s

[00:01:54.34] spk_1:
good to have you. Thank you. It’s outstanding, lawyer. Now, that’s five years old now.

[00:01:59.14] spk_0:
Yeah, I think that that probably has to go down the wayside.

[00:02:25.54] spk_1:
Take that. Actually, Is it more embarrassing now then? It always has done What? What’s he done in the past five years? Exactly. I’ll take that. Alright, we’ll take that out from starting next time. All right, Um, so the paycheck protection program is is back version 2.0. Um, what what’s your what’s your overview of it? The p p p re ducks.

[00:04:28.64] spk_0:
So it’s a good thing, of course, and it comes in sort of within the broader context of a kn appropriations act that’s to help stimulate the economy. And we know how hard co vid and, um, all of the shutdowns that have been caused by the coronavirus, all of the health care issues we have presented a huge challenge for our economy and for the nonprofit sector as a whole. I think back in August, The Washington Post had written some article that suggested one third of nonprofits could ultimately shut down at the end of this crisis. I think that might have been a little overblown. Hopefully, the vaccine is going to contribute. Thio Um, the development of several vaccines contributes to a little bit more of a recovery, but we still seem to have a long slog through this. And that’s why more money needed to get out to stimulate the economy and particularly nonprofits who are impacted two ways. One by just less money coming in. Less revenues, less donations. Andi the greater need for so many people who need the service’s of non profit. So the good part of the second kind of draw of the P P P loans is that there’s more money been made available. Um, it’s still not enough in my personal opinion, and hopefully we’ll see more, but 11 of the really good things about this second draw, the P P P loans is that you can go in for a double dip now, So if you are a kn organization. One of the I believe it’s 180,000 non profits that applied and received the first round of loans. Who came, actually, which came into parts? Um,

[00:04:29.30] spk_1:
180,000. Sounds low to me. I’m not I’m saying that I heard it was more. But of the 1.51 point six million or so only 180,000.

[00:04:40.14] spk_0:
Yeah, I believe that’s the number that that I I have that that actually received loans

[00:04:45.13] spk_1:
12% or something like that.

[00:04:47.94] spk_0:
Yeah, on dhe. You know, so out of those, the original set of loans under the Cares Act on day one of the amendments to that so you could only come in once, so you get one loan out of them. You can’t go back in for another loan. Um, so this second draw actually allows a nonprofit that took out a loan, used it up, or is going to use it up to come back in for a second loan. And that’s really important with the covert crisis dragging out.

[00:05:47.84] spk_1:
So, um, let’s see, just I know you You introduced a second raw, but let’s let’s talk about the folks who maybe did not get a p p p low in the first time. So that so for nonprofits, That s so they they certainly are eligible this time to, um, let’s talk about like, you have to have fewer than 500 employees, which I’m sure all our listeners do. Um What who else is what? Like what else you have to do to be eligible for for a loan first time through.

[00:05:50.64] spk_0:
So I think that the numbers actually 300 or fewer on that

[00:05:54.93] spk_1:
isn’t that for the, isn’t it? For the second draw?

[00:06:59.74] spk_0:
Yeah, I think this whole thing is sort of called. I’m sorry. You’re right, tony. So that that refers to the second draw for for, um, organizations that have received a P P P loan. So it’s 300 or fewer. The original draw was 500 or fewer. Um, and demonstrating at least a 25% reduction in gross revenues between the same quarters in 2020 and 2021. So you took a look at the first quarter. You measure first quarter versus first quarter, second quarter versus second quarter. You can’t mix and match. So the same quarter in two years if you experienced at least 25% reduction in gross revenues. And that’s how you had reported in the 1990 year gross revenues figure, then you would be eligible for for that, that second draw. And I believe that’s the standard for the first draws. Well, um, and it’s subject to a maximum of 2.5 times. The average monthly payroll costs up to $2 million in this round.

[00:07:10.94] spk_1:
Okay, Okay. And those payroll costs, you can choose, right? A period between eight weeks and 24 weeks. Correct that. You want that you want to be compensated for And that and, uh okay, that you wanna be compensated for, right? So, between to two months and and six months,

[00:07:26.84] spk_0:
right, starting on the origination of the loan. Okay. Yeah.

[00:07:37.44] spk_1:
Okay. But but to be eligible, you have to demonstrate a decrease in gross revenue of 25% or more. Correct. Incomparable quarters. Okay. Okay. Now for folks who again, this first draw the first time through it at this point so far, um, they should be going to their bank. Right? You need a bank. That’s that’s s B A Small Business association approved, but it seems like your bank will be the place to start at least looking for where you can find a lender.

[00:07:59.74] spk_0:
Yeah, absolutely. That’s that’s the place to go to get the application forms. And yes, the S B A operates the loan through the sort of approved banks that

[00:08:09.88] spk_1:
the bank. Yeah, And in my experience, if your bank isn’t an S b a approved lender, I had heard that your your bank can help you find one. You can also just search for them in your area. But you might be able to get a referral from your own bank if they’re not a S B A lender.

[00:08:28.06] spk_0:
Yeah, and you can, I think, find that out on the Web as well. If

[00:09:18.64] spk_1:
it’s time for a break, turn to communications. The Wall Street Journal, The New York Times You wanna be in papers like that? What about CBS Market Watch? The Chronicle of Philanthropy. Turn two has the relationships with outlets like these. So when they’re looking for experts on charitable giving non profit trends for philanthropy, they call turn to turn two calls, you turn hyphen two dot CEO now back to P P p. To point out now all the all the money you get, even though it’s called paycheck Protection Program does not have to go to a paycheck. There’s other things that you can spend what up to 40% on

[00:10:53.34] spk_0:
that’s That’s exactly the number tony. So 60% has to be payroll related expenses that that you are using the funds for but up to 40% could be used for other things. And in the first round of the Cares Act sort of payroll protection plan, program loans or forgivable loans, they had things like mortgage, certain qualified mortgage payments and rent and utility expenses. They didn’t offer a lot more. So this round, this second draw, whether you’re taking it for the first time or not, I’m just going to refer to it is the second draw. Okay, he BP loans. You can use it for four other covered expense areas, and they include operations expenditures, which sort of refer to software and cloud computing service’s for businesses and have to do with payroll H R. Accounting all of those things. So if you need that, you can use it for those things property damage costs if they happened in 2020 and they were not covered by insurance and that might be related to looting or other public disturbances. UM, covered supplier costs which are for purchase of goods that are essential to the operations of the business, generally made pursuant to a contract that was in effect prior to the covered period of the eight or 24 weeks. Ah, nde covered worker protection expenditures, so that’s really important. So that includes the PP, eat of personal protective equipment, face masks and everything else, and also operating and capital expenditures that air related to meeting worker or customer safety requirements. So if you need to put barriers up, you know those plexi barriers between things like that,

[00:11:22.27] spk_1:
maybe upgrade your h v a c so that Z Okay,

[00:11:23.04] spk_0:
okay, so you want to take a look at what the requirements are in your area. If you need to spend on that, um, this is also going to be available for those type of expenses up to 40% so again, 60%. This is mostly focused on payroll in keeping people in jobs. Andi organizations operational, but 40% realizing that you do have some other costs that you need to have to be able to run the business. It’s not just employees, so this was a little bit more thoughtful in sort of creating that that those uses for P p p loan funds.

[00:12:39.04] spk_1:
Let’s talk about forgiveness because that’s a big advantage to these p p p loans that if you do it right, your loan could be 100% forgiven if you do it right. So what do you have to do right now? I know we don’t know about, like, forgiveness forms that even for the first round. I mean, I in my business got a P p p low in the first round, and I’m still waiting for guidance on forgiveness. It Z S B A has gone back and forth many times, and so my bank doesn’t even have the forms ready yet for forgiveness from the first loans, which I got like in March or April or something. So but there are guidelines about what you’re supposed, how you’re supposed to spend to be eligible for the give nous for the forgiveness when the forms and the process do ultimately come out. So what’s What’s what is s b a saying there,

[00:12:56.34] spk_0:
So yeah, first, just a comment on whether we’re going to see those forms out soon

[00:13:04.68] spk_1:
so we could get the loan forgiveness from from March or April. Yeah,

[00:13:09.24] spk_0:
yeah, eso It’s been a long time. The S b A actually has some forms out, and they did come up with a little bit of guidance in December. But the individual financial institutions, the banks haven’t yet developed all of their own forms on DSO. Yes, it’s a combination of looking at both of those forms, and we haven’t seen much happening there across all banks. Yeah, so that I think will be coming pretty soon, but we haven’t seen it just yet.

[00:14:03.94] spk_1:
I guess I should be kinder to the S B A to I think overall, they managed a new emergency program pretty well. Eso you know, clearly their priority was getting the money out, not worrying about the forgiveness at the back end. So, uh, not trying to be harsh against SB A. They’re working under short deadlines and people in great need, So they focused on what’s more important getting money out. All right, so what do they say about how you should spend if you wanna have your loan forgiven.

[00:14:08.44] spk_0:
So one of the things is what we talked about earlier. About that 60 40 split. Well, that is the requirement for loan forgiveness. So if you don’t want the loan to be forgiven, you don’t actually have to look at that 60 40 split, right? You could just pay back the loan at the interest rate, which I believe is 1%. Um, but I think nonprofits have taken out this loan, have taken it out with the very intent that it be forgivable loan and to use it for those purposes. So in order for it to be forgivable against, 60% must be used for payroll related expenses and 40% for those other covered categories that I mentioned. So, you know, the mortgage, the rent utilities and those four new categories that came out with this second draw that would apply only to the second draw amount. So amounts coming out of this 900 billion that that was part of this new act that came off this new relief act. Um,

[00:15:25.04] spk_1:
you wanna make sure you keep your documentation so you can prove when it does come time for the forgiveness application, because you have to apply that you can prove that you spent the money on the bona fide expenses that are allowed. And you didn’t spend more than six more than 40% on the on the non payroll. Correct? Yeah, to be documentation.

[00:16:20.94] spk_0:
And what I’m hearing back is from the first application, which you’ll soon see tony. The reports that they asked for are pretty complicated on dhe tough, and they’ve gone back and forth on like what to include and what not to include. But it can be pretty tough. The good thing is about this second draw. This new act that that was signed into law the just a few weeks ago at the end of the year is that if the loan was for 150,000 up to $300,000 or less, it’s going to be a one page one. So they’re going to make it super easy, and it’s really gonna you know, they haven’t released what that form exactly looks like. But they said what they’re going to ask for is the number of employees that you were able to retain the estimated amount spent on payroll costs. So did you meet that 60% basically, the total loan value and an attestation? So you basically you’re signing saying, I attest that I complied with all the requirements of the P P P loan program. So rather than documenting every single thing out, if it’s $150,000 or less, get most of the listeners. They’re probably going to fall into that category. Um, they’re going to be able to do with the one page form. But there are several larger nonprofits that they’re gonna have to file the more complicated forms. And to get you know, to your point, really good records really critically important for this because you do want to get this loan. Forget

[00:19:54.44] spk_1:
it’s time for Tony’s Take two. Yes, I’m still optimistic. Even after what happened last Wednesday at our nation’s capital and the Capital building I still am. The optimism is for the whole year. It’s not just for the first 10 days, so I still feel good. Look, they’re already started arresting people for the trespassing and the unlawful entry into the Capitol. They’ve already arrested folks. So and there’s gonna be many more coming, so that gives a little bit of short term, uh, solace. I think that people face justice for their transgressions against our capital. But beyond that, beyond that, I just look forward to new years and I am feeling good that the country will be in a better place. The world will be in a better place this year. Then it was last year 2020. I mean, think about the pandemic to look how much further we’ve come in. Just what? The past 4 to 6 weeks with vaccines rolling out. Okay, Not as fast as they were supposed to have, but vaccines air rolling out. I think it’s gonna be a good year. 2021. I say. It’s gonna be a good year. That is tony Steak, too. Let us return to P P. P to zero with Jean Takagi. There’s something that you and I talked about, um, earlier in 2020 when the first paycheck protection program loans were offered was it was a little complicated Then if you had gotten another kind of loan, the e ideal economic injury disaster loan and you if you gotta an advance on that, which I’m not sure those advances really went out the way they were supposed to, but they were supposed to be, like, up to $10,000. You get in, like, within three days for the e i d l. But I know in my own case, I applied for that. But, um, didn’t didn’t it didn’t end up really being needed. And it was nowhere near the three days. Um, it was more like three months, and it all just came at 11 time. That’s a separate. But so that was related to you know that advance if you if you got it was related to paycheck protection program forgiveness, the S B A. Wasn’t gonna allow you toe be forgiven on ah e ideal loan advance. Now, you don’t have to worry about that anymore, right?

[00:19:57.31] spk_0:
Yeah, that’s I mean, that’s one really good thing about this

[00:20:01.09] spk_1:
two minutes set up for something that doesn’t matter anymore.

[00:21:00.74] spk_0:
But it is important because some some of your listeners may be out there thinking, Oh, I can’t You know I can’t get this. Um uh, advance if I want loan forgiveness on Now it’s like, No, you can you can get both. So that’s really important that they repeal that former restriction on DSO. Now you can get both. Just a reminder for that the ideal stands for economic injury disaster loan on dhe It is alone, except when it’s called an ideal grant, Um, or advance. In which case, the idea is is that you’re going toe Qualify for it If you’re located in a low income community, you suffered an economic loss greater than 30%. So this is a little bit more stringent. And the second drop TPP loans

[00:21:04.31] spk_1:

[00:21:05.09] spk_0:
Yeah, and the same requirement that you employ not more than 300 employees. So it’s it’s a different program. I misspoke earlier and talked about $900 billion being the P P. P program, but that 900 billion was actually the total

[00:21:19.48] spk_1:
that was the fullest

[00:21:47.34] spk_0:
package. Yeah, eso of that 284 billion roughly was for the P P P program. Second draw loans that were coming out again, Whether you’re taking it for the first time or second time again on 20 billion for the e I. D. L grants those ran out very quickly on DSP. A page has still not been updated. Web page has still not been updated. So it will currently say we’ve run out. We don’t have these available, but we’re waiting for the update as a result of this new act, so you have to just keep looking for it.

[00:21:56.04] spk_1:
Okay? Okay. The money is there for the the ideal grants,

[00:22:10.54] spk_0:
but it’s 20 billion versus 284 billion for the P P P second draw loan. So it is a smaller pool of money. So just toe, be aware that that yeah, you’ll have to go in pretty quick if you’re going to qualify

[00:22:21.04] spk_1:
in the second drawer. Loans got, um, expanded with 501 C six is now now eligible. Which they weren’t before.

[00:22:31.34] spk_0:
Yeah, you know, I think non profit that’s really wanted, like a za sector. They said, why is it restricted? Just to 501 c three. There’s lots of other types of nonprofits that air doing important work here that are going to get tremendously impacted and small businesses are allowed toe sort of get the benefits of these loans. What about like chambers of commerce, especially for, like small regional areas that could really impact multiple businesses, and not just one or organizations that are focused on the travel business industry. So if you’ve got a trade association of related to travel, they can impact a broader industry and to lose them, um, could be really detrimental thio an entire industry and not just to a single business. So the idea was, let’s get other nonprofits involved or eligible as well. So 501 c six. That was kind of the lobbying for the 501 c six is specifically on. Yes, they become eligible for this P p p round A ZX well, but they have some of the same requirements, so they can’t employ more than 300 persons. But they also have some lobbying limitations. Um, that air there, so s

[00:23:42.90] spk_1:
so if you’re a C six, you gotta look closely.

[00:24:08.64] spk_0:
Yeah, and one other thing just about this and I won’t go into the details of C six. But generally speaking, um, the government said, if you are a lobbying or political like organization, that was principally into lobbying and political activities. A lot of five but one C four organization social welfare organizations would fall into that category. Um, then you are not eligible for the PP, and that remains still a restriction on participating in this. So the 51 C six is that that participate? They really they’re all sorts of lobbying number restrictions that are involved. But generally speaking, if you’re principally a lobbying organization or political action organization, you will not qualify for these

[00:24:31.91] spk_1:
and see fours are not eligible.

[00:24:34.24] spk_0:
Yeah, so by and large, yeah.

[00:24:54.84] spk_1:
Okay. There was a lot in the press about the deductibility of the expenses that you use the money for. I’m talking now about the the 40% That’s non payroll. Um, initially, you weren’t allowed to deduct what used to be deductible if you spent P p p money on it, which was kind of, Ah, a clawback. You lost the deduction. They have the money was forgiven if you did it right, but you had a but you couldn’t deduct the expenses that you spent it on. So it was like it was like giving and then taking that’s that’s been changed. Those expenses, air now deductible.

[00:26:23.41] spk_0:
Yeah. Although let’s sort of frame it to tony that most nonprofits, that we’re talking about our tax exempt in the first place so they don’t have to worry about deductions except with respect to their unrelated businesses. And so, for taxable and for taxable entities. Yeah, Or if, if a non profit does have unrelated business income resulting coming from a specific business and that gets a little bit more complicated, it is really important to know that if you receive the P P p loan and you spent money on some of those expenditures that you can actually deduct from it. So the rationale before is that the government is giving you money so you shouldn’t be able to spend it and then get another tax benefit of a deduction with it, because the government just granted that money to you. But overall, in terms of stimulating the economy, it was just too popular. And just to important to the overall goal, Thio restrict that from happening. So yes, now you can get a P P p loan and you can spend it on legitimate business expenses within that sort of that that range of qualified expenditures that we talked about and you could get a deduction for those things as well. So yeah, good point.

[00:27:39.34] spk_1:
Thank you. Thanks for clarifying to time for our last break. Quote. There’s nothing as simple as dot drives. Our executive team meets once per week to sit down and go through our dot drives pipelines. It’s fun to watch them have a healthy dialogue and to see them get excited about their numbers rising toward their goals. Sounds exciting. That drives has allowed us to take those key relationships and bring them to a deeper level. End quote. That’s Wendy Adams, director of donor engagement at Patrick Henry. Family Service is prospect to donor Simplified. Get the free demo from DOT. For listeners, there’s also a free month. Go to the listener landing page at tony dot Emma slash dot We’ve got but loads more time for P P p two. What else? What do you wanna talk about? Tpp Wise way didn’t cover.

[00:28:11.94] spk_0:
Well, I thought I’d talk about something a little bit fun just to start off with E. Sure. So there’s the three martini lunch deduction, Um, which is a kn interesting deduction. Um, but basically, you know, I think it’s been since the eighties, where that if you had a business expense and this is again mostly for for profits. But it’s one that puts a little bit of a smile on my face, although there’s some serious consequences that can flow from it. But

[00:28:14.03] spk_1:
we’ll go ahead and smile. Gene, allow yourself to smile. Yeah, you have to qualify your given unqualified smile.

[00:28:31.04] spk_0:
So since the mid eighties, I think if you are I in our separate businesses tony took somebody out, took each other out for lunch, You know, 50% would be deductible if it was a legitimate business lunch. Um Well, um, President Trump and the outgoing administration really felt important to give back um, Thio 100% deductibility. Eso business lunch is going to be deductible up to 100% for two years s. So this is sort of received the nickname the three martini lunch deduction. Um and yeah, I mean, there implications to this because obviously this will have a tax impact. And I believe the final document that put into the PDP loan in the whole stimulus package in late December with somewhere around 15,000 pages, So I can’t imagine that somebody has read all of this yet. Um, but the impact the economic impact of this will eventually be sort of a judge. But this could cost, you know, the government a billion or $2 billion in lost revenues. So it does have implications there.

[00:30:00.14] spk_1:
Can this also have impact for, um, employee of a non profit? Who lets, say, does a ah business lunch and their employer does not reimburse that expense. So then when they’re deducting, they can then deduct that expense if they itemize, and it would now be fully deductible instead of only 50% deductible. Is that is that true for non profit employees?

[00:30:32.64] spk_0:
I don’t believe tony. So generally I think, you know, the best interest would would be for the non profit to reimburse, employ. Um, but if the employee is going thio state that it was, ah necessary business expense, it’s going to be a little bit more difficult. Thio do so for them. And I don’t think that they would get um

[00:30:33.23] spk_1:
Yeah, like if they took a donor, Suppose they took a donor to a lunch?

[00:31:18.14] spk_0:
Yeah, for that again, I would think it would be the nonprofits responsibility. Thio to to reimburse them if they individually took them out. I’m just wondering how that business expense would work out where they don’t have a sole proprietorship. You know, as I think about it a little bit more, tony, I guess the rules would still apply. So it is just a question about whether they could get the deduction in the first place. They can get the deduction in the first place, and it’s possible that the 100% rule might apply. But I’m not sure that it would in this case, because it’s not necessarily their business expense. So I don’t think I have anything definitive for you, but it’s kind of like, you know, the auto expense deduction. So if you know if your business

[00:31:28.31] spk_1:
car for business purposes right, you get 57 cents per mile or something like that, whatever it is,

[00:31:34.92] spk_0:
yeah, gets adjusted every year. But if you’re doing it for ah, non profit organization, your deduction rate is much, much smaller. It’s I can’t remember the number, but it’s like 14 cents, um, so you don’t get the same benefits when you’re doing it for another organization?

[00:31:53.82] spk_1:
Is that for a volunteer or that applies to employees. Also,

[00:31:57.84] spk_0:
it would apply to anybody who’s taking that deduction on their own s. Oh, okay. Okay. Yeah. Best for the non profit to reimburse.

[00:32:34.54] spk_1:
Yeah. Spitballing. Okay, um, I’m glad you’re smiling over the three martini lunch. That’s good. Let’s go. What? Well, we could cynically say that was a gesture A KN award for focus on Well, doesn’t have to be Wall Street, but we could be most cynical and say it was for the president’s Wall Street friends to now deduct all there all their fancy meals in New York City at 100% instead of only half.

[00:32:40.54] spk_0:
Yeah, that’s right. And I I think that’s the cynical viewpoint

[00:32:50.54] spk_1:
e. There’s no question of that. That’s time. But then there’s the

[00:32:51.25] spk_0:
other side of that. Well, can stimulate the restaurant

[00:33:11.14] spk_1:
well, and they stimulate the restaurant economy. Yes, industry. And also there are small businesses. Everybody does not own a Wall Street business in New York City. Of course. All right. Onley only only holds 80% true. Um what? Anything else? Anything else that you think non profit need to know about P p p two point. Oh,

[00:33:16.64] spk_0:
well, I think out of the same kind of act where the pee pee pee loans came out of was important provisions regarding the charitable contribution deduction. So as long as we were talking about deductions, I thought it might be important to know that

[00:33:30.57] spk_1:
for your donors,

[00:33:48.44] spk_0:
Yeah, so for donors. So when we talked about deductions and itemizers, you know, as a result of the Trump Tax Act, um, some years ago, now a tw the start of his administration, we ended up with having, you know, itemizers, um, mhm being reduced from, I think, something like 35% of all taxpayers, down to about 10% of taxpayers. Meaning that 90% of taxpayers would not get the benefit of a charitable contribution deduction because they would take the standard deduction rather than itemize. It would be better for them. So the vast majority of taxpayers, the math, vast majority of small organization donors are not going to get a tax benefit from giving a charitable contribution anymore. So, you know, we’re still relying on them to do it because they believe in the organization and its mission and the people there, and you know what it’s doing but the tax benefits not going to be there anymore until the cares Act provisions last year that said, Well, even if you’re non itemizing, you can deduct up to $300 Is an individual $600 for a married joint filer? Um, above the line, basically. So you can you can get that deduction even if you’re not itemizing.

[00:34:55.48] spk_1:
Take the standard deduction, but you can add another up to $300 per person,

[00:36:21.13] spk_0:
Right? So what this bill does is it Extended it out. So now we will. The previous bill was going Thio run out and we’ve got now an extension of this for another year, so that is a good thing. So that was only gonna last through 2020 Now, Now we have it for 2021 A ZX well, and and, uh, another thing or are somewhat related thio that are just sort of other relief provision. The measure provides an additional $300 per week and unemployment benefits through March 14th is gonna be helpful. Um, there’s a moratorium on evictions that was going to expire December 31st, 2020. And now that’s, um, uh, going to be extended out for a month. Not very much, but every little bit helps right on $25 billion available in additional federal funding for assistance to renters. So we will see if that if that actually plays out. And finally, there’s an extension of the Cares Act employee retention tax credit through July 1st. So that’s a credit. So versus a deduction, which you take after you figure out what your taxable, you know, um, in determining your taxable income. I’m sorry. And the credit after you figured out what your taxes are that would apply against your taxes. So there’s an employee retention tax credit. Um, that’s been made a little bit simpler. It’s a little too complicated for probably people’s interest on this radio program. But take a look at it as a tax credit might be really valuable to some organizations that might not otherwise qualify for PDP. Forgivable

[00:36:46.96] spk_1:
long. Okay. For employee retention. Yeah. Okay. Okay. How about we leave it there? Gene Sound. Okay,

[00:36:54.03] spk_0:
That sounds great, tony.

[00:37:58.63] spk_1:
Okay. Thank you again. Thank you for doing P p p re ducks. Two point. Oh, uh, course. Gene is managing attorney of Neo. You’ll find the firm at neo law group dot com. He’s at G Tack, and you should be subscribing to the wildly popular non profit lob log dot com. Thank you very much, Jeanne. Always a pleasure, tony. Thanks Next week. The hot sauce principle. If you missed any part of this week’s show, I beseech you find it at tony-martignetti dot com were sponsored by turn to communications, PR and content for nonprofits. Your story is their mission. Turn hyphen two dot ceo and by dot drives Prospect to donor. Simplified for a free demo and a free month. Our creative producer is Claire Meyerhoff Shows Social Media is by Susan Chavez. Mark Silverman is our Web guy, and this music is by Scott Stein. Thank you for that affirmation. Scotty. Be with me next week for non profit radio big non profit ideas for the other 95% Go out and be great

Nonprofit Radio for January 4, 2021: New Year, New Charity Navigator

My Guests:

Michael Thatcher & Elijah Goldberg: New Year, New Charity Navigator
The rating site Charity Navigator has taken on impact reporting and vastly expanded the number of nonprofits evaluated. What does all this mean for your nonprofit? How do you get in on CN’s Encompass rating system? Michael Thatcher and Elijah Goldberg, both from Charity Navigator, chart your course across the freshly open waters.




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[00:02:42.94] spk_0:
Hello and welcome to tony-martignetti non profit radio. Big non profit ideas for the other 95%. I’m your aptly named host of your favorite abdominal podcast. Happy New Year. I hope you enjoyed the heck out of your New Year and the holidays. I hope you took time off. I hope the new year meant some time for reflection for you. Reflection backwards. Reflection. Looking ahead. Um, yeah, it’s a good time for reflection on. I hope you enjoyed the heck out of your holidays. Oh, I’m glad you’re with me. I’d be forced to endure the pain of neo and a phobia if I feared that you missed this week’s show. New Year New Charity Navigator. The rating sight charity Navigator has taken on impact reporting and vastly expanded the number of nonprofits evaluated. What does all this mean for your non profit? Have you get in on CNN’s encompass rating system? Michael Thatcher and Elijah Goldberg, both from Charity Navigator, chart your course across the freshly open waters. I’m tony is take two New year optimism. I can’t help it were sponsored by turn to communications, PR and content for nonprofits. Your story is their mission turn hyphen two dot ceo and by dot drives Prospect to donor. Simplified tony-dot-M.A.-slash-Pursuant for a free demo and a free month. Let’s kick off 2021 New Year. New Charity Navigator It’s my pleasure to welcome Michael Thatcher and Elijah Goldberg to the show. Michael Thatcher leads Charity Navigator in its efforts Toe make impactful philanthropy easier for all by improving evaluation methods so that more charities get rated. More potential donors view the ratings and all the stakeholders arm or engaged. Charity Navigator is that charity Navigator or GE? And Michael is at M. Thatcher. Elijah Goldberg leads the development of Charity Navigator’s impact ratings. He’s the former executive director and co founder of Impact Matters, which charity Navigator acquired this year. 2020 to incorporate impact estimates into its ratings. He’s at Elijah Goldberg. Michael, Elijah. Welcome to non profit radio.

[00:02:48.34] spk_1:
Delighted to be here, tony. Thank you.

[00:02:50.12] spk_0:
Thank you for

[00:02:50.64] spk_2:
having us.

[00:02:51.17] spk_0:
Pleasure to have you. Thank you. Michael. Why don’t you get us started? Um, just since July, Charity navigator is evaluating. Ah, lot more charities than you were earlier this year.

[00:03:29.24] spk_1:
Yeah, and essentially, we’ve made a pretty big step change going from rating annually. About 9000 charities a year to reading 160,000. So exponential shift. And that’s primarily due to the fact that we have a lot mortuary teas now that our e filing their 1990 which is the tax form they use and were able to process that information with greater automation than we were in the past.

[00:03:46.04] spk_0:
Yeah, well, I don’t I don’t want to quibble with with a numbers person, numbers and technology, person. But you say it’s exponential. 9000 to 160,000, but 9000, just 9000 just squared would be 81 million.

[00:03:51.54] spk_1:
So it zig

[00:03:53.79] spk_0:
to what’s sad, Elijah exponents could be fractions, right? Oh, Could be a fraction. Okay. All right. So it could be okay. Yeah. The point is, thank you. There’s a numbers person. All right. Thank you very much. So it doesn’t have to be a whole number. All right? So you’re Yes. Thank you. Um, I already got myself in trouble. We’re not even, like, two minutes into this. All right?

[00:04:18.09] spk_2:
Uh, all the time.

[00:04:18.75] spk_0:
All right. But I’m thinking at least I’m thinking about what you’re saying. I’m not I’m not just glossing over. All right, so, you know, from 269,000? Yeah. So I think a lot of people are still thinking you’re in there, like, eight or 9000 range. So we’ve got to dispel that misconception. Right away. 160. All right.

[00:04:35.34] spk_1:
Yeah. Three other thing. Just. Well, the other thing that to say on that is what this is allowing for is it’ll. It’s opening up to smaller, newer in a very different set of nonprofits. And we’ve been looking at in the past

[00:05:19.24] spk_0:
because of this automation I gather when it was I mean, I remember when it was just a few 1000 then it grew to several 1000. That was big news. Um, I don’t give a shout out to Ken Berger when Ken Berger was CEO. He’s been on. He was on the show a few times. Um uh, you have charity navigator. Um, but eso now, automation, you’ve you’ve scaled up considerably. Um, that’s which. Which benefits more charities. Which benefits more donors and potential donors. Um, yeah. So at the end of our conversation, we’re gonna get into what should a charity do just to get rated for the for the many that aren’t How did they get You know what we’re gonna talk about and encompass rating? How do they get an impact and result rating we’re gonna get? So we’re gonna hold that off till the end. Like, what do charities do to get these to get to the next level from where they might be? Um, but so, Michael, acquaintance with the Encompass rating system, which is also new.

[00:06:55.74] spk_1:
Sure. And I think that’s really the key to the significant growth in the number of ratings. So encompasses looking to leverage, leverage, automation, where we can bring in information from through partners and then also directly from the nonprofits. It’s a system that’s broken up into four beacons or topic areas. And what we launched in July with was wth e financing accountability beacon, which is very similar to the ratings that we’ve been doing for the last 20 years through the star rated system In October of this year, through the joining of impact matters to Charity Navigator, we also launched the impact and results speaking, and that is adding a component of oven impact assessment to the ratings Now there is a smaller number that actually have that impact rating today. Coming next will be the culture and community beacon, which is going to be looking at things like how you engage with your constituents or, you know, beneficiary voice. Ah, diversity equity and inclusion with other elements of how the nonprofits engage with their community. And then lastly, we’re gonna be looking at leadership and adaptability, and that’s the fourth kind of real topic area. So it’s trying to give you a much more holistic view of a non profit that you would consider investing in as a donor.

[00:07:16.14] spk_0:
Okay. And these air four beacons, right? If you’re

[00:07:18.69] spk_1:
calling the beacons to stay in the navigation theme.

[00:07:50.14] spk_0:
Oh, very clever. You see, I didn’t even realize. Okay. All right. You’re our compass, Jerry. Navigators are compass. Um, all right. So, Elijah, let’s let’s bring you in, eh? So what? What impact matters has added to charity Navigator’s ratings is the impact and results beacon. Uh, this is notoriously difficulty, but I saw you in one interview Say that you don’t really find it as difficult as you think. It often is considered to be this measuring of impact.

[00:08:43.44] spk_2:
Yeah. Uh huh. I think there are different types of difficulty or their different difficulty could refer to different things. So e think the overall process of saying okay, we’re going to try and figure out take any non profit out there. What? What is its impact? And we try and do that at some degree of scale has proven a pretty difficult problem. We’ve been working on it now for for about five or six years on dhe, we’ve made some significant headway. We’ve, you know, we started with about 10 nonprofits. We got up to about 50 now worked about 1000 eso. There’s been Cem Cem progress there, but it remains a challenging issue on mostly that’s because of the wide sort of diversity

[00:08:44.25] spk_0:
of diversity, of missions. Right, diversity. Education is a lot different than the impact of a soup kitchen is a lot different than the impact of a domestic violence shelter.

[00:09:24.14] spk_2:
Exactly. And they all have different activities as well. And so you could have you have two missions that have two different sets of activities causing them, and and you have to understand the impact very differently. Even though the mission is the same similar you have to activities that have different outcomes, you know, So so s so that I think that that challenge is hard. I think the part that I was referring to that that I think is made out to be harder than it needs to be often is for it individual non profit to invest in understanding its own impact. Ah, nde the it’s not, you know it is a. It is a process that requires effort and attention and so forth. But often the standard is the, you know, something that came to the academic standard of proof, which is a which is a very high bar on dhe. There’s a lot of barriers and and sort of impediments that are placed in front of a non profit thio to go down that path. And what we realized is not for every non profit but for ah you know, a large chunk of them, uh, they can understand their impact in kind of a meaningful way through a much more simple process, much more simple way.

[00:10:10.34] spk_0:
So how have you ratified this? Simplified this so that charity navigator could begin the ratings an impact evaluation. The key thing

[00:10:11.15] spk_2:
that we’ve we’ve sort of hit on is this idea of we call them kind of program types. But this idea that you could look at a kind of, ah collection of activities that an outcome together and determine that they are, uh, that they could be used Thio to create a pretty straightforward calculation to figure out the impact of that organization. So, uh, in other words, like, if we look at, uh, you know a filter program, you know something is distributing clean water filters. We can look at the type of filter from that. We understand the efficacy of the filtration. We understand the longevity of filtration. We could know something about the, you know how many are distributed in a particular area, and we can understand what the coverage rate of clean water was in that area and how quickly it’s growing year over year. All of those data points are fairly easy to get. I mean, they’re not, you know, they’re not. You don’t just walk off the street with them, But most nonprofits are able to get that information, and we can then combine that with a ZX needed estimates from the literature and, you know, academic publications. And, you know, great literature like the U. N. Reports and so forth. Um, in a equation that will come to a cost effectiveness, come to an impact estimate number.

[00:12:30.54] spk_0:
Okay, Right. So and we’ll get to that. That’s part of what you’re alluding to is the counterfactual. What? What would have happened if the organization hadn’t been providing service? Um, so So you’re talking about it. So it’s a mixture of reported data directly from the nonprofits and publicly available data. Exactly. Yeah. Okay. It’s time for a break. Turn to communications. The Wall Street Journal, The New York Times? You wanna be in papers like that? I suppose. How about CBS Market Watch? The Chronicle of Philanthropy? Turn two has the relationships with outlets like these. So when they’re looking for experts on charitable giving, non profit trends or philanthropy, they call turn to turn two calls, you turn hyphen two dot c o. Now back to New Year, new charity navigator. And

[00:12:30.88] spk_2:
you know I mean the typical kind of the best in class, so to speak, the gold standard is Okay. Let’s run a large, expensive long term trial that looks at specific outcomes for this population. This activity, it

[00:12:45.27] spk_0:
requires a couple of PhDs or at least a couple students a couple of years, right?

[00:12:51.40] spk_2:
Yeah. Yeah. And so and that’s gonna give. I mean, that’s definitely gonna give the quote better answer. But the trade off, as you say in terms of the staffing of the time of the money and so forth, is usually not worth it. I mean, it’s much better for most nonprofits. Get a number that’s not quite as accurate, but is actually much faster, much cheaper, therefore, much more actionable. Okay, He’s

[00:13:17.34] spk_0:
okay. Um, and your well, let me ask that. I do wanna do a basic question, Michael. How does how do these encompass ratings relate to the star ratings that people I think are very familiar with 0 to 5 stars? Uh, yeah. What’s the relationship there, if any, or how did they coexist?

[00:14:22.94] spk_1:
So right now, they’re co co existing in parallel. And if you think about it, the encompass rating is what in the accountability and or the finance and accountability Beacon is a subset of what goes into the star rating. The star rating has a eligibility criteria which is a bit. It’s a higher bar in that we’re looking at organizations that air over a million dollars in revenue, seven years of tax filing and 40% of the revenue coming from individual donations. Encompass doesn’t require we need three years of continuous data, uh, and file data. So we’re we’ve reduced that to three years. We’re also the only four were only requiring that it be a 9 90 that we used to base that information over time. The goal is to harmonize the two systems and and bring them together so that we don’t have to systems running in parallel. The reality is, encompasses a fast moving growing system. It tze leveraging software development techniques like agile to reiterate relatively quickly with something that’s, you know, good enough or, ah, minimal viable product. And then we’re gonna iterated on time. So a big part of our development process right now is gathering feedback from donors, nonprofits, other users on How is this working for you? And in that spirit, you know, we’ve we ran a survey across about ended up about 1500 responses in the at the end of September, and we’re right now we’re tracking at about 84% satisfied or more than satisfied in terms of how people are receiving the new system.

[00:15:24.94] spk_0:
What’s your goal for the end of 2021 for how many will have the encompass rating? Um, it part of that

[00:15:26.95] spk_1:
is gated right now by E filing. And so the number is going to go up significantly as more and more organizations consistently e file,

[00:15:35.70] spk_0:
you know, because

[00:15:36.68] spk_1:
legislation So it will, you know it’s gonna grow by itself.

[00:15:48.34] spk_0:
Because the organization needs three consecutive years of e filing of the 1990. This

[00:15:48.82] spk_1:
may be getting into too much too much into the weeds way, non

[00:15:55.28] spk_0:
profit radio listeners. Very savvy group we can we

[00:15:57.50] spk_1:
can handle. No. But what’s happening now is that you’re going to start having organizations that may not have a 1990. But they do have an impact impact and results score or one of the other beacons will fill in. And so that’s gonna still result in some scoring and basically information for donors to look at in there giving decision,

[00:16:17.34] spk_0:
Okay, But they will be penalized no for not okay,

[00:16:21.35] spk_1:
Okay, It just won’t be counted. It won’t be factored in.

[00:16:34.14] spk_0:
Okay. All right. Um, Elijah s o. A basic question for you. I feel like we should distinguish between outcomes and impact. I’m not sure that that’s clear in everybody’s minds. I hear them used interchangeably, and I try to be careful not to do that. You make that distinction, please.

[00:18:34.94] spk_2:
Well, it’s a It’s a good question. I will say that we we have got We’ve gotten to the point internally where every word we use, we kind of define it ourselves because of that exact problem that that so much of the so much of the lingo is intermix that if we just assume people know what we’re saying, then then we’re gonna be in trouble. So I don’t think that that that’s just to say, like, I don’t think there is, like, a clear, universal answer the way that we distinguish it. Is that an outcome, you know, refers to, uh, typically, uh, like a change in in something that we care about What? The user. So it might be a change in their salary Or so I mean, I was talking users. I should be talking beneficiaries or participants. Okay. Uh, you know, change in salary, you achievement of a job so forth. Then we want to think of counterfactual outcomes. So those air what would have happened without the program? So, you know, without the program, would they have done the job? That’s the counterfactual outcomes, you know, Maybe without it they wouldn’t. That’s the counterfactual outcome with the program they did. That’s the outcome. And then when we when we take the difference of those those air the net outcome. So those were like, What? What is actually being caused by the program? We actually to get to impact, then take those outcomes and divide them by cost. We think of impact we define impact is being actually out cost, not just outcomes. Um, and that’s like That’s That’s kind of our definition. That’s not a, you know, ah, universal definition. I think the reason we we settled on it is because you know, the notion of outcomes without cost is is a little meaningless. It’s it’s difficult, you know. Even organization said we save five years, five lives last year that could be a large number of small number. I mean, if it’s a if it’s a community health center. That’s a large number. If it’s the Red Cross, I don’t know. I mean, that’s that’s Z. You know, there’s been a couple billion a year, so we have to understand, you know, we have to add costs of that equation to really understand what the outcomes mean. Okay. All right.

[00:18:52.14] spk_0:
Well, again, you know, you guys spend your days thinking about this. Uh, e think the more common understanding is that but it is not to supplant what you just described. I’m just saying, You know, I think most people understand that is like using your water filtration example. The outcome would be we distributed 150,000 water filters. But the impact would be lives saved or cholera avoided, or other insect born what waterborne diseases avoided or something like that?

[00:19:57.84] spk_2:
Yeah. I mean, that’s a That’s an interesting point. I mean, I think that a lot of I think you’re writing often that the distinction, you know, is between the sort of, you know, to two factors. One is like the tempo temporal ity of it is that, like a non upstream or downstream out outcome like that happened right away to happen later and also like the significance Is that something we really care about or we care Onley instrumentally about we We sometimes use the term or often use the term intermediate and final outcomes Thio to distinguish between those two. Um, or we use the term proxy to say that it’s actually it shows that the outcomes moving, but not the actual. But all of this again is like it Z There’s never gonna be in agreement, right? Like, way put the flag in the sand of like what we’re calling things that were internally consistent. But we recognize that that’s that’s just

[00:20:07.34] spk_0:
us. Okay, Okay. Alright. Aggression, impact. Versace’s a sort of a

[00:20:12.42] spk_2:
lot of confusion, I think because people use the same term but mean different things and don’t kind of get to the point of of that exact clarification that you ask for. I

[00:20:33.04] spk_0:
think it’s definitely true. Yeah, yeah. Um, all right, so there’s a lot of social science methodology at the heart of this at the heart of these things. Impact rating. Can you Can you say what we’ve what? We’ve what you’ve transported from social science research methods, thio, non profit impact evaluation readings.

[00:21:13.34] spk_2:
Yeah. I mean, I think that at a fundamental level, we’re following, you know, the, uh you know, the science of causal inference. Right? So how do we understand that A actually causes B? Ah nde? And there’s been, you know, a lot of work in the academic world over last couple 100 years to build both the theory and the methods of doing that on dhe largely. You know, there’s a lot of different pieces of that, but like one of the major pieces that that kind of you know, crops up again and again Is this question of the counterfactual right? Especially what would have happened? Um, had we not intervened had, you know, had had this ruler stayed in power for that? I mean, anything that happens in the world, we could say, Well, what would have happened if that didn’t happen on dhe? Sometimes that’s more of an academic exercise. But when it comes to social programs, it turns out to be a very important one because we’re making choices over shared resource is social resource is of some sort. We’re making a choice to do something with those to try and solve a problem we could have done something else. And in the future, we’re gonna have the choice. Usually Thio do one or the other again. A

[00:22:11.24] spk_0:
question of how much does the charity deserve credit for? Exactly. And and And also, I mean, how much this would have happened on its own. And I think

[00:22:12.39] spk_2:
that partially it’s it’s about, you know, that that framing. And it’s also about from the non profit perspective. Okay, I did this the last year. Should I do it for the next year, You know, or should I Do you know plan B? It’s that type of decision making, and so so a sign. I mean, the social sciences have built a kind of a large edifice of theory and data and and best practices around how to do that. We have basically, like, picked some of the key points and intentionally ignored from the other points in order to build something that’s sort of usable within the nonprofit world, which is very different than the academic world. Um

[00:22:51.80] spk_0:
oh, yeah, Well, yeah, the academic world is the, uh, longitudinal sir study that we’re talking about a few minutes ago. Yeah, all right. And and so

[00:23:01.82] spk_2:
I mean, I will say so. There are some non profits out there that are doing really high quality academic studies, often in partnerships with academic institutions. And that’s been a huge explosion of the last couple decades. But that’s still like the 0.1%. I mean, it’s a small fraction. It’s important for action, but it’s a small

[00:23:41.44] spk_0:
um yeah, on those air. Not our listeners. Our listeners air small and mid sized shops. You know, they’re they’re probably not affiliated with the academic institution. They might be one themselves, but not doing the kind of research we’re talking about. Um, so we try to keep it. Really? Um, so now I guess I think this is better for you, Michael. Uh, eso the impact of results. Score is still in beta. Is that right?

[00:23:47.64] spk_1:
It’s It’s already live. No, it’s You know, technically, this with encompasses a beta system, as as we build out the beacons. But we have What’s the number of larger? The total encompass ITT’s about 6 700 right now.

[00:24:05.74] spk_2:
Yeah. We have 700 on way, have 700 on the compass profiles, and then about 300 on the, um seeing 2.1 that are not part of the score there. Just

[00:24:32.94] spk_0:
informational. Okay. All right. So do they have to be, um, direct service organizations? Still is that I saw three criteria direct service and and receiving private charitable contributions. Is that still the criteria for, uh, getting an impact? The results score that your your direct and your service.

[00:25:20.64] spk_2:
Yeah. Yes, that that is. And I think we’re, uh you know, the type of analysis that we dio just doesn’t work for groups that are doing things like advocacy that that we don’t have. I mean, again, we talk about social science, the causal inference, tools. They break down with a with a program like advocacy because, you know, we it’s a single shot the, you know, three of changes longer and so forth. Um, so we’re really limiting it to that, because that’s what we think that we can say something meaningful about with the current system. There’s a perpetual desire, and like I’ve had, I’ve been in a conversation every two months for the last six years, where it’s come up about doing advocacy. We definitely want to do it. You know, I will say that we’ve said that for every two months for for six years. I think that we don’t have a good way of doing that. And not to say we never will. But we haven’t figured out a way that does it in a way that’s kind of fair and meaningful.

[00:25:39.20] spk_0:
Okay, well, you get there. I mean, this is E. I’m feel like I’m talking to the musk’s off charity evaluation impact impact.

[00:25:48.45] spk_2:
I also planned to be 100 billion here also. This. Yeah.

[00:26:10.24] spk_0:
All right. Well, if I was, if I could buy stock and Charity Navigator, I probably would, because i e I wish I had bought Tesla at 200. You know, pre split. Um, so So you know, I understand it’s something you’ll get to, but I just want to make it clear that, like education is not is not Doesn’t fall within your definition of of service, because the beneficiaries they’re supposed to be paying little or nothing for the service that they’re getting. And education is a tuition model. So education doesn’t fit yet either

[00:27:08.09] spk_2:
some of it doesn’t. Some of it doesn’t way have a basically we’re looking at It’s okay. If the participants based some, we just don’t want them to be. We don’t want it to be mostly a service that is like essentially mirroring a for profit service, but with kind of a non profit structure in terms of how you know how the money flows. So we have done like scholarship programs that are, you know, or their interventions like de worming that actually do increase educational outcomes we would do. But like what we won’t necessarily do at this point is something like a like a private school. Um, you know, we may do the scholarship program of the private school if that was a separate entity and doable, but we wouldn’t do sort of the main. But we would do, for instance, like a high performing charter.

[00:29:21.84] spk_0:
It’s time for Tony’s take two. I am always optimistic at the beginning of a new year. I can’t help it. Of course, last year’s optimism was misplaced. Nobody is 100% s O. That one didn’t work out so well, but I’m still optimistic. I can’t help it. At the end of the recession, I was still optimistic the year after, So I am optimistic about 2021 as I mentioned earlier at the open. Hope it was a time for reflection for you. I know it is for me. I just think good things are gonna happen. Um, I’m launching plan to giving accelerator. We’ve got our first class for that excellent and non profit radio feeling feeling, you know, less constrained now. Yes, it’s been since. I think, since August, I’ve been doing these outside the studio and deviating from the district one hour format. It’s not necessary. It’s not necessary. So, like, today’s show is about gonna be roughly 45 minutes or so, Um, so feeling a little freer about non profit radio? The guests are still awesome. You know, the hostess still lackluster. You know, the core principles don’t change. We’re not not fooling with those things that folks rely on. What would you call something that you rely on on those, uh, foundations? Those bedrocks of non profit radio? Those those don’t change but a little tinkering, you know, the time doesn’t have to be an hour. I realized it could be we could be having our non profit radios. So don’t don’t think that long format is being abandoned. It’s not. But as I said, Just feeling a little less constrained. And how about you? How about you for 2021? Optimistic. I hope. I hope that is. Tony. Take two. I’m optimistic. What can I say? Let us return to New Year. New Charity Navigator with Michael Thatcher and Elijah Goldberg.

[00:29:47.04] spk_1:
It’s worth noting in the star system that z similarly been applied that we tuition based schools. We haven’t been rating where we stopped rating, and then we work. We did continue rating those that were like the Harlem Children’s Zone or other schools that were fully subsidized by their donors. And there was not. Tuition was not an element.

[00:30:10.24] spk_0:
Okay, so it’s still still a possibility. Okay, um, So before we get to the nuts and bolts of how nonprofits get to the next level in Charity Navigator, based on whatever they are now, what else do either one of you want us to know about about encompass or impact and results?

[00:31:21.14] spk_1:
The one thing I’d add is, Is this idea of, you know, particularly you have the impact discussion. It’s It’s oftentimes described in the element of the the social change. One is seeking to to arrive at and charity Navigator really is looking at, and that would be the result of program program effectiveness of a non profit and charity Navigator’s ratings have always, you know, over the years been looking at the non profit as an entity and less the less the programs, particularly given the star rating, which was looking at the finances and then the accountability and transparency. And so there’s an element of that where we’re trying to evaluate, and what encompasses trying to do is give you an impression of how is this organization as a potentially impact making machine? But not, you know, the impact is a key part of that, and we clearly that’s why were we make gifts to charities into the non profit. But it’s also you want to know that you have a strong organization that’s gonna grow, evolve and learn and continue to do better as it goes forward. So it’s more. It’s a progressive system that’s really trying to help move folks to an idea of investment in an entity that is making impact.

[00:31:54.44] spk_0:
Do we have any proof that knowledge of impact changes donor donor outcomes, donor behaviors? I mean, it’s it’s intuitive, but do we know that this enhanced knowledge changes donor giving decisions?

[00:31:58.04] spk_2:
I mean, I think that that’s that would be be a topic for like, a fairly dry I’m interesting chapter book. There’s a lot, a lot there, Thank you.

[00:32:07.78] spk_0:
Well, you’re stuck with a lackluster host. I didn’t think the question was bad. Book. The book may be dull, but my question was decent.

[00:33:47.41] spk_2:
E. I think it’s the reason why it is just because it’s so There’s no there’s no, like, really good crisp answer to that. That’s that. I mean, it’s a very important question. We just don’t quite have the answer. I mean, there have been probably, at this point, about a dozen, you know, depending on how you count studies have been done over the last five or 10 years. That that a probe, that question, um, you know, a handful of our data, often with other other data. It’s a pretty mixed bag, like we’ve seen results that show that presenting impact information really does boost donor behavior pretty significantly. There have been other findings that have found that it has little effect. It seems that matter a lot about framing, you know, that’s a level, I will say that the major donor level, it’s a It’s a somewhat of a clear split. Basically, there’s sort of two camps. There’s the three camps. There’s like we don’t ask anything about impact. There’s the We want you to say something about impact in your grant application. But does that. And then there’s the camp that takes it very seriously. On Dhe, that camp is still pretty small, but they do command, you know, substantial resource is it’s like give well on its donor base. Robin Hood Foundation malago Foundation groups like that on DSO. There is like a pretty hefty sort of institutional a group of donors there. Uh, so that’s the ZX like, kind of a broad rose, but the bottom line is, it’s a pretty murky, messy answer.

[00:34:29.44] spk_1:
But the other data point I could give you tony more from sort of the general public, which has been traditionally charity Navigator’s audience, and the donor base is it’s probably the most demanded thing. We want to see impact in our donor surveys, but how that gets articulated in their actual behavior. It’s harder to tell right so that we have less good data on. We know they’re asking for it, but they’re also asking for low overhead ratios, right? And so you have this kind of conflicting, um, Senate demands in many cases, and but being able to show it to be able to show it with some form of clarity, I think would really help people get their minds around it. You know, we spent a lot of time just defining it in this call. Eso That’s part of the problem,

[00:34:43.44] spk_0:
right? Right now, you just mentioned the overhead ratio. Is that still? Is that still out there? Is that still people still looking for 95% to go toe program? And they’re considering overhead and investment? Ah, bad thing

[00:34:58.84] spk_1:
it’s It’s probably the most you know, particularly when you know, if I get into, you know, talking to mainstream media or you know that that’s the first question that asked, You know, you want to know that all your money is going to program, so unfortunately, it’s still it’s a very prevalent question in a very prevalent focus.

[00:35:32.74] spk_0:
Okay, non profit radio has a little part in that history I had the three CEOs on the eso is Ken Berger from charity Navigator, uh, Jacob from Guidestar. And gentlemen, who is our Taylor? Thank you very much from the Better Business Bureau. Wise giving alliance. So I had the three of them on together when they signed the letter that said, Stop doing T the American public. Stop doing what we suggested you do on DSS. Stopped looking for 97% program because, you know, there could be it could be a very legitimate I mean, overhead is important. Overhead is technology and salaries and CEOs and program people and and infrastructure and security and accountants building maintenance And

[00:36:05.81] spk_2:
what accountants? Who’s gonna tell you how much money you’re setting?

[00:36:33.53] spk_0:
Accountants? You know, it could be investment in a long term program that reward us for five years, so Okay, well, whenever it comes up, I get on a soapbox. But I we tried, you know, we, uh, we had Well, of course, we’re talking to non profit. So the nonprofits understood that all along, but we did have the three CEOs on for a little bit of a mea culpa. Uh huh. Thio when they signed the letter saying, Stop doing this. Stop looking only at overhead. You

[00:36:38.75] spk_1:
know historic that there was the second letter that got sent out. I don’t know if you’re aware of that, because that first letter went out to the donors to the to the public. And then the second letter went out about a year and a half later, saying to the non profit, You got to report on your impact.

[00:36:53.83] spk_0:
Yeah. This is the first letter that went to the American public. It wasn’t that literally, but yeah, yeah,

[00:37:01.87] spk_1:
Tell us what you did.

[00:37:44.03] spk_0:
Yeah, Still hypocrisy there. Uh, or these some dissonance. All right. Um, okay, So if we’re not, I assume this is for you, Michael. If we’re charity, that’s not rated at all non profit. I’m sorry. It was not rated by non profit radio was what I was about to say. Not rated it all by charity Navigator. Because the world revolves around this show. And me, you know, it’s center of the universe is all your all your your your careers, to this point of driven you to this thing. This pinnacle, this zenith, I I know it because I because that’s it. I just know that that’s exists. It’s just assumption. It’s just a known, so I I know it’s just a given. Its it’s not even, uh, there’s no counterfactual. Can’t be argued. So any case, um, if our non profit is not at all evaluated, we’re not even on the charity navigator radar. How did we just get to that level?

[00:39:10.92] spk_1:
So the simplest is you gotta e file and that soon going to be law that that will be your only way of filing that Just get your 9 90 into the system. Once we have three years worth of 19 nineties, we will. We will have enough information to to issue of some form of a rating. The other thing is, if you’re a registered registered 501 C three charity, we already have you in our database. So the ways of getting additional information in there are to submit information to guide. Start now candid, particularly looking at things like the There is how we listen. Optional component of the GuideStar profile that is going to be in part, something we use for the constituent voice evaluation that’s going to be going live in, probably in March of 2021. So you want to get your data into the different data platforms. We’re also working on a portal right now that will allow charities to submit information to us directly. So that will be another means on dhe that is in process. Right now, it’s not built. Um, the other thing is, um, yeah, make yourself known to the to the different portals that collect information. That’s the best way of getting your information other than just your 9 90 information into the hands of evaluators like ourselves.

[00:40:17.81] spk_0:
Time for our last break dot drives relationships, not with journalists. Now we’re talking about relationships with prospects. Your challenge is engaging prospects so they become engaged donors. If you want to move the needle on your fundraising relationships, look at dot drives. The simplest donor pipeline fundraising tool Move folks from prospect to donor, get the free demo for listeners. There’s also a free month. You go to the listener landing page at tony-dot-M.A.-slash-Pursuant. We’ve got a butt cheek, more time for New Year new charity navigator, and if we want to go to the next level now, if we want, uh, if we want a encompass rating, how do we get to there? So that will

[00:40:20.31] spk_1:
get you when I was just speaking to will get you the information that would get your finance and accountability

[00:40:25.44] spk_0:
school financing account. But right, the 33 consecutive years. Okay, if you wanna go broader with the other beacons,

[00:40:31.51] spk_1:
do you want to speak to that with the what we’re doing in the forgetting?

[00:40:59.01] spk_2:
So for impact, we we have, ah, sort of, ah, early version of the portal that zone impact cherry navigator dot or GE It will eventually grow into the broader portal that Michael talked about, but that that’s the place to start. If you you know, if the non profit goes there and goes to the process, will take a look at that data. Uh, we’re still, you know, from from our perspective, we were doing a lot of work right now to invest in sort of as efficient a system as possible for rating. Um, the problem with impact rating that we’ve struggled with for our entire existence is that it could be very time intensive. Andi, even if even as we kind of cut down the time intensive ity as we try and increase the scale of ratings and kind of keep our team not. Not too much larger, uh, than you know it. It fast becomes impossibility. So that’s what we’re hoping to do with the portal. And, you know, well, you know, usually goes now, impact on trade navigated a torque. Either they’ll they’ll have, you know they’ll qualify for rating now, more likely, given where our methodology is, we’ll ask them questions and we’ll get back to them soon. Once we have kind of mawr coverage for different types of programs, I can talk a little bit more about that. That’s a little bit of nuance,

[00:42:22.50] spk_0:
but so the goal is whole number. Exponential growth. Yes. Okay. Okay. Yeah, at least a square. Okay. Uh huh. And all right, so And the the site again is impact charitynavigator dot or ge. Right. And you can submit data there. Okay. Okay. All right. You leave it there. What do you think? I would just add

[00:43:44.20] spk_2:
one thing, you know, that I was gonna mention before, but it’s a little bit of a tangent. I think it’s always worth mentioning is one of things that we’ve found in our work, which was, I think, actually fairly surprising. Kind of given our Prior Tze when we really started this back in the day. But most groups that we that have gone through this process we found have actually been cost effective on many of them have been have been highly cost effective. So of the of the about, you know, you know, out of 100% about 87% of the group’s we’ve worked with have have, you know, have been sort of been determined to be cost effective or highly cost effective. I think that’s just an important message to share kind of Ford on profits in general. Because, you know, there’s there’s, ah, there’s often, uh, uh huh you know, a perception or ah kind of Ah, a sort of, ah assumption among the public that non profit, they’re not efficient, that that the private sector, the free markets are efficient, non profit, they’re inefficient. Sure, they’re doing good things, but we should be We should be kind of concerned about how they do them on the data shows. That’s that’s really not the case. They there pretty good at achieving, you know, unless unless you as a donor, choosing very, very poorly about which non profit you’re giving, Thio odds are the non profit you’re giving to is pretty effective. It

[00:43:44.27] spk_0:
sounds like the way I buy stocks. Buy high sell, buy high, sell low. That’s my If you look at my portfolio, you’ll see, uh, you see that lesson, uh, come to fruition? Um Oh, and since I’m talking to data scientist, I want to correct myself. So the objective is not necessarily whole number. Exponential growth, but exponential growth greater than one?

[00:44:08.09] spk_2:
Yeah, we’re looking for, like, adding in order. Yeah. I’m sorry. We’re looking at an order of magnitude at another zero. Okay.

[00:44:13.79] spk_0:
Okay. All right. Michael Thatcher leads Charity Navigator, charity navigators at charitynavigator dot or GE and Michael’s at M. Thatcher. Elijah leads the development of charity Navigator’s impact ratings. He’s at Elijah Goldberg, Michael and Elijah. Thanks very much. Pleasure.

[00:44:30.99] spk_2:
Thanks so much for being on

[00:45:28.49] spk_0:
next week. P p p. Two. It’s the paycheck protection program reduction with who else? Jean Takagi. Naturally, if you missed any part of this week’s show, I beseech you, find it at tony-martignetti dot com were sponsored by turn to communications, PR and content for nonprofits. Your story is their mission. Turn hyphen two dot c O and by dot drives Prospect to donor Simplified tony-dot-M.A.-slash-Pursuant for a free demo and a free month. Ah, creative producer is Claire Meyerhoff. The social media is by Susan Chavez. Mark Silverman is our Web guy, and this music is by Scots. Tony, thank you for that affirmation. Scotty, be with me next week for non profit radio. Big non profit ideas for the other 95% go out and be great.

Nonprofit Radio for December 14, 2020: Zombie Loyalists

My Guest:

Peter Shankman: Zombie Loyalists
Peter Shankman is a 5x best selling author, entrepreneur and corporate keynote speaker. His book “Zombie Loyalists” focuses on customer service; creating rabid fans who do your social media, marketing and PR for you. This is our annual rebroadcast of a show with very smart ideas for you to think about over the holidays. It originally aired December 19, 2014.


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[00:02:38.04] spk_1:
Hello and welcome to tony-martignetti non profit radio big non profit ideas for the other 95%. I’m your aptly named host of your favorite abdominal podcast. Oh, I’m glad you’re with me. I’d be hit with tinny accrue if you made me itchy with the idea that you missed this week’s show. Zombie Loyalists. Peter Shankman is a five times best selling author, entrepreneur and corporate keynote speaker. His book, Zombie Loyalists, focuses on customer service, creating rabid fans who do your social media marketing and PR for you. This is our annual rebroadcast of a show with very smart ideas for you to think about over the holidays. It originally aired December 19th 2014 on tony Steak to my December Webinar were sponsored by turn to communications, PR and content for nonprofits, your story is their mission. Turn hyphen two dot c o and by dot drives Prospect to donor simplified tony-dot-M.A.-slash-Pursuant for a free demo and a free month. Here is Zombie loyalists. Peter Shankman is a well known and often quoted social media marketing and public relations strategist. His latest book is Zombie Loyalists. He wants you to create rabid fans who do your social media marketing and PR for you. He’s got super ideas and very valuable stories. I’m very glad Peter Shankman is with me in the studio. He’s the founder of Harrow. Help, a reporter out connecting journalists with sources in under two years from starting it in his apartment. Horror was sending out 1500 media queries a week to more than 200,000 sources worldwide. It was acquired by Vocus in 2010. He’s the founder and CEO of the Geek Factory AH, boutique social media marketing and PR strategy firm in New York City. Peter is on NASA’s civilian Advisory Council. You’ll find him at shankman dot com, and he’s at Peter Shankman on Twitter. His latest book is Zombie Loyalists, using great service to create rabid fans. I’m very glad his book brings him to non profit radio and studio Welcome, Peter. Good to be here, tony. Thanks pleasure. You live on the West Side of Manhattan and you and you, there’s a There’s a pretty well known five star steakhouse. Uh, I’ll get Wolfgang’s not far from you, but you pass it to go to a different steakhouse. Correct? Morton’s correct. Why is

[00:04:37.04] spk_0:
that more. I am a zombie loyalist to Morton’s. What does that mean? I love the service, the attention to detail, the quality, the the sort of where everyone knows my name mentality. When I walk into that morning or any Morton’s around the world, they have a tremendous, uh, customer relationship management system. When I call one number, uh, in New York or anywhere in the world, it they know who I am by my cell phone. And, uh, I’m treated with just, you know, phenomenal, uh, happiness. Thio here, from me and my wishes are granted is aware I we have a happy hour holiday party coming up at Morton’s next couple of days and, uh, you know, as always, I forgot toe calling, make a reservation. And, you know, I called yesterday and said, Hey, I need a, uh, a chance to get a reservation for seven people. Um, you know, Thursday night at 7 p.m. Which is, you know, the week of holiday party. And they looked and they said, Oh, well, and then I guess their computer system kicked in it. Of course, Mr Shankar, not a problem at all. We’ll get that for you. right away. You know, we’ll have a great booth for you to do that. Um, you know, and we’ll tell us names that people attending and you know, you don’t know, you know, they’re gonna have specialized menus for them and their names on they Really? They have, ah, really high level of service that they provide, Not just to me. That’s the beauty of it. You know, it is one thing, everybody. Yeah, it’s one thing that they just provided to me, but they do that for everyone. And that is huge because, you know, being able to call when a normal person makes reservation. And not that I’m special. I’m actually rather abnormal. But when a normal person makes a reservation and says, uh, no, Martin says Okay. Great. Are you celebrating anything? So yes, my wife’s birthday. Always ask anyone who calls right. He said, Oh, you know what tze my wife’s birthday. Great. What’s her name? Her name is Megan. Whatever. And you you go in and they and you sit down on the on the on the menu. It says Happy birthday. Make it. And then Megan, whoever she happens to be will spend the next 45 minutes. You know, taking 50 selfies with her menu and that’ll go online. And when her friends, you know, want that same experience, they’re gonna go.

[00:04:52.44] spk_1:
Morton’s you say in the book, you get the customers you want by being beyond awesome to the customers you have. And that’s why I want to start with that Morton’s story, which is in the middle of the book. But they do it for everybody, and then they have the VIPs as well. And there’s the terrific story of you tweeting tell that story. That’s a good story. It’s a good story. I love stories.

[00:07:21.94] spk_0:
I was flying home from a day trip to Florida and was exhausted and starving, and you’re flying down down at 6 a.m. Lunch meeting flew back the same day. You know, one of those one of those days, and, uh, I jokingly said the tweet Hey, Morton’s, why don’t you meet me at Newark Airport when I land with a porterhouse in two hours? Ha ha ha ha ha. Um, you know, I said it the same way you say, Hey, winter, please stop snowing things like that on I landed, uh, find my driver. And so next my driver is a is ah, waiter in a tuxedo with Morton’s bag. They saw my tweet. They put it together. They managed to bring me a a steak and, you know, as great of a story is it Is it za great stunt and it’s a great story and it wasn’t a stage, and it was completely amazing. But, you know, that’s not what they’re about. They’re not about delivering stakes airports. They’re about making a great meal for you and treating you like world when you come in. And you know, if they just did that, if they just delivered the state of the airport, but their quality and service sucked, you know, it wouldn’t be a story, you know, Look what they did for Peter. But, you know, my steaks cold, you know? So what it really comes down to is the fact they do treat everyone like kings, and that’s that’s really, really important, because what winds up happening, you have a great experience importance. And then you tell the world you know Oh, yeah, great dinner last night. That was amazing. I would totally there again. And as we move to this new world where, you know, review sites are going away, and I don’t I don’t need to go to yelp reviews from people I don’t know. You know, if they’re shills or whatever the case may be, I don’t know. Or trip Advisor. Same thing. I want people in my network quite trust and and people in their network who they trust by default, I trust. So that’s gonna be that’s already happening automatically. You know, when I when I land in L. A and I type in steakhouse, uh, you know, not me. I know I know where the steakhouse. But if someone types into Google Maps or Facebook Steak House in Los Angeles, you know they’ll see all the steak houses on a Google map. But if any of their friends have been to any of them, they’ll see those first. And if they had a good experience, only if the sentiment is positive, will they see those first. And that’s pretty amazing, because if you think about that, the simple act of tweeting out a photo Oh, my God, thanks so much more in love. This that’s positive sentiment. The network knows that, and so if you’re looking for a steakhouse, you know, And your friend six months ago, I had that experience. Oh, my God. Amazing state. This is a great place. The sentiments gonna be there and and And the network will know that network will show you that steakhouse because you trust

[00:07:29.04] spk_1:
your friend. And this is where we start to cultivate zombie loyalists. Exact this through this awesome customer service of the customers. You You have same or about zombies.

[00:07:36.88] spk_0:
Yeah. I mean, you have so many companies out there who are trying to get the next greatest customer. You know, you see all the ads, you know, the Facebook post, you know where at 990 followers are 10. Our 1/1000 follower gets a free gift. Well, that’s kind of saying screw you to the original 990 followers who you had who were there since the beginning. We don’t care about you. We want that 1000. You know, that’s not cool. Um, the the companies who see their numbers rise and you see their fans increase and their their, uh, revenues go up are the ones who are nice to the customers they have. Hey, you know, customer 8 52. It was really nice of you to join us a couple months ago. How? You know, how are you? We noticed that you posted on something about a, uh you know, your car broke down. Well, you know, we’re not in the car business, but, you know, your your two blocks from our our closest, uh, outlet or whatever. And you know, once you if you if you need to come in, have a cup of coffee will use the phone, Whatever. You know, those little things that you could do that that that really focus on the customers you have and make the customers. You have the ones where the zombies who tell other customers how great you are.

[00:08:38.98] spk_1:
And this all applies to non profit, certainly as well. The question,

[00:09:16.14] spk_0:
but even more so, I mean, if you you know, non profit, they’re constantly worried about how toe make the most value out of the dollar and how to keep the dollar stretching further and further. And you know, you have this massive audience who has come to you who is a non profit. Who said to you, You know we want to help here we are volunteering our help and just simply treating them with the thanks that they deserve. Not just a simple Hey, thanks for joining, but actually reaching out, asking what they want, asking how they like to get their information. Things like that will greatly increase your donations as well as, um, making them go out and tell everyone how awesome you are, letting them do your PR for you.

[00:09:20.28] spk_1:
And that’s what a zombie loyalist does. And this is for this. Could be donors could be volunteers to the organization who aren’t able to give a lot. But giving time is enormous.

[00:09:47.22] spk_0:
And if you know if they have such a great time doing it, they’ll bring friends. You know, zombies have one purpose in life. Really. Zombies have one purpose in life that’s to feed. It doesn’t matter how the Mets are doing it doesn’t matter, you know, because chance that they lost anyway. But it doesn’t matter how how anyone’s doing, you know, or what’s going on in the world. It doesn’t matter what matters with zombies where they get their next meal because they feed and they have to infect more people. Otherwise, they will die zombie loyalists of the same thing. All they have to do is make sure that their customers, they tell the world we all have that friend who does it. You know, that one friend who eat nothing but the olive garden because oh, my God’s greatest breadsticks everywhere, you know and they will drag your ass the olive garden every single time they get that chance. That’s a zombie

[00:11:19.84] spk_1:
loyalist, and you want them to do that for your non profit. And there’s a big advantage to being a smaller, smaller organization. You could be so much more high touch, and we’re gonna talk about all that. We’ve got the full hour with Peter Shankman. Got to go away for a couple minutes, stay with us. It’s time for a break. Turn to communications. They have relationships with journalists. This is what you’re looking for when you get a PR firm to do your public relations in your media. For you. They’ve got the relationships because of the trust that they’ve built with reporters and editors at places like The Wall Street Journal, The New York Times, CBS Market Watch, The Chronicle of Philanthropy. You get the first call When these outlets are looking for sourcing on charitable giving a non profit trends on philanthropy they’re calling Turn to turn two refers to you because you’re their client. You get first crack at first class media the right turn hyphen two dot c o it tze your life No, you check him out. Turn hyphen two dot c o Now back to zombie loyalists Peter, it doesn’t take much Thio stand out in the customer service world doesn’t

[00:11:24.59] spk_0:
it really doesn’t you know? And the reason for that is because we expect to be treated like crap. You know, if you think about that, I I I love this example. Whenever I give speeches, I asked I asked everyone the audience and, like who here has had a great flight recently, like at least one personal raise their hand. I’m like, Okay, what made it great and without failure. And I said, Well, we took off on time and I had the seat I was assigned and we landed on time and like so you paid for a service. They delivered that service and you’re over the freaking moon about it. Like that’s the state that we have become, You know, that’s how bad customer service has been that you are just beyond thrilled that they did exactly what they said they were gonna do with nothing more.

[00:11:57.85] spk_1:
Less than 20 minutes in the post office line. Exactly. And I’m ecstatic.

[00:12:16.74] spk_0:
Exactly. You know, it’s so we really are at a point where we only have to be one level above crap. I’m not even asking my client to be good. Just one level of crap. You know, if everyone else’s crap and you’re one level above that, you’re gonna win. It’s my favorite. One of my favorite jokes wth E. Two guys were out in the woods hunting in the woods, and we’re just jogging. It was the first one sees. Ah, bear. And they see these bearings. Bears raised up. He’s about to strike, and the first one reaches down and tightens up his laces on his running shoes And say What? The studio Don’t be. Don’t be an idiot. You cannot run a bear. And guess what? I don’t need to. You need to outrun you. You know, I love that joke because it’s it’s so true. That’s the concept. You know, all you have to do is be just a little bit better than everyone else and you’ll win the whole ball

[00:12:38.29] spk_1:
game. Now we have to set some things up internally in orderto have the structure in place. No question about it to create these. The zombie loyalists.

[00:16:01.34] spk_0:
Yeah. I mean, you haven’t. You have, ah, company where the majority of people in your company are afraid to do anything outside the norm, you know? I mean, look at look at the cell phone company. You know, they call them cause you have a problem, right? 18 T or T mobile. You call them, you have a problem. They’re actually the customer service people that handle your collar, actually judged and rewarded based on how quickly they can get you off the phone. You know, not on whether or not they fix your problem, but how fast they could get you off the phone. Which means how many more calls again? Remember, I worked when I worked in America Online. We all had to do a day of customer service every month just to see what it was like. That was a brilliant idea. But you know, again, it’s this. It was a system called Vantive where you’d sign on and as soon as you signed on, If you weren’t a call, you know, that was tacked against you. If you were in a call and and it went over a certain amount of time, that was tacked against you. So the decks were stacked not in the favor of the customer. There are some companies out there who allow their customer service employees to simply be smarter about what they dio and do whatever it is they need to do to fix the problem. Um, you know, my favorite story about this Verizon Wireless I went overseas was in Dubai, and I landed to buy and I turned on my phone. I had gotten global roaming on my phone, which, you know, 20 bucks for every 100 megabytes. Okay, so I land and I turn on my phone and it says, um, like before I’m even off the plane. I get a text that you’ve used $200 in roaming charges. I’m like, What the hell? You know, $300 by the time I get off the plane like something’s up here. So I called Verizon on a nice guy answer the phone and Oh, yes. I mean, the first thing that was Yes, or you do have global roaming, but it doesn’t work in Dubai, E. Okay, well, that’s not really global. That’s more hemispherical. Roaming, I think, is the issue. And so he, uh I said, Well, look, I’m gonna be here for a week. I said, you know what? You have my credit card on file. Build me like you, like 1000 bucks and just let me have the phone for, like, the week and, you know, you know, 500 bucks I won’t go over two gigs, but it just do something for me. Sorry, sir. I’m not authorized to do that. Um, you can. I’m like, So what do I have? He’s like, Well, you can pay $20.48 a megabyte. I’m like, I’m sorry. Seriously, which equates essentially to I will be charged $20.48 seconds. $20. 48 cents. For every I think the time for every four seconds of the video Gangnam style if I decided to watch on my phone like this is pretty ridiculous. So I simply hung up, hung up on Verizon. I went down the street to the Dubai. The Mall of the Emirates, which is the largest mall in the world, has a freaking ski slope in it. And I’m not joking. It has a ski slope in the small, and, uh, went to one of the 86 different electronic stores in this mall, bought an international unlocked version of the same exact cell phone. I have went next door to the local SIM card store, but a SIM card that gave me 20 gigabytes of data and 1000 minutes of talk for $40. I then put that in my phone because it’s an android phone. I simply typed in my user name and password for Google and everything imported. And Verizon did not get a penny on that trip. Um, how easy it would have been for Verizon to say. Okay, you know what? We’ll cut your brake. Uh, they still make a lot of money off me. And I would tell the world how great Verizon was to work with and how wonderful how helpful they were. Instead, they guaranteed that I will never that they will never make a penny from any international trip and I take what, 15 of them a year. Because now my cell phone, um, by international cell phone that I bought all I do is pop out the SIM card in my land wherever I am putting a new SIM card. So

[00:16:07.18] spk_1:
you’re speaking and writing and telling bad story, of course.

[00:17:10.14] spk_0:
And and every time I tell the story about Verizon, I make it a little worse. Apparently, Verizon, uh, tests out the durability of their phone by throwing them a kittens. I read this and then it must be true, you know? So not necessarily. But you know, the concept that that all they had to do, all they had to do was in power mark customer service. And it wasn’t Mark’s fault. Mark was a really nice guy, but he was not allowed to do that. He would’ve gotten fired if he tried to do a deal like that for May. And so it’s this concept, you know. And the funny thing is, it comes down to if you really want to go down the road in terms of a public company like Verizon of where the issue is, you could even trace it to fiduciary responsibility because the fiduciary responsibility of any company CEO all the way down to the employee is to make money for the shareholders. Okay, thats future responsibility means by not allowing me non allowing Mark the customer service agent to to help me on and take a different tack. He’s actually losing money. Too many CEOs think about the next quarter. Oh, we have to make our numbers. Next quarter, I’m fired companies in other countries. 10, I think the next quarter century. And they make a much bigger difference because they think, Okay, what can we do now that will have impact in the next 5, 10, 15 years, you know, and really implement the revenue that we have and an augment and companies Americans don’t think about them. That’s a big problem.

[00:17:24.84] spk_1:
I buy a product line, has a lot of natural and recycled materials. Seventh generation and their, um, their tagline is that in in our every decision, we must consider the impact on the next seven generations. It comes from an American Indian. It’s a

[00:17:41.70] spk_0:
great it’s a great line. I mean, just think about how much money would have made for me in the past three years just to my overseas,

[00:17:47.62] spk_1:
you’d be telling a story about like them about Morten like the one

[00:18:11.94] spk_0:
look, a lot of people listen to me and they went for a time when you Googled roaming charges variety when you Google, Verizon roaming charges. My story about, however, how I saved all this money because came up first because I did the math. And if I had not called Mark and bought my own cell phone and done this, I would have come home with $31,000 cell phone bill and your damn authorizing wouldn’t know anything about that. There have been up to bad. Sorry. Should read the fine print

[00:18:16.22] spk_1:
and plus the employee who sold you the quote International plan, right? I’m sure you told her. She said, Where you

[00:18:23.05] spk_0:
going? I’m going to Canada and I’m going to Dubai. I’m assuming she didn’t know where to buy Waas. She probably it was near Canada, but long story short couldn’t use

[00:18:30.26] spk_1:
it. Alright, so employees have to be empowered. There has to be we have to be, but changing Ah thinking too. I mean, the customer has to come first. Donor, the volunteer

[00:18:51.94] spk_0:
don’t volunteer. You get at the end of the day, where’s your money coming from? I don’t care if you’re non profit or Fortune 100 where your money coming from, you know? And if you we see it happening over and over again, we’re seeing what you’re seeing right now. Play out every single day with company uber, um, and uber. It’s so funny cause uber makes you know their value of $40 billion right now. But that doesn’t mean anything that doesn’t mean anything. If people are running away in droves, which people are, there’s a whole delete your uber app movement. People are Oh God, yeah, people are leaving the problem. Well, it’s several number one that uber is run by a bunch of guys who honor the bro code. The company was actually started by a guy who, on business in business insider, said he started the company to get laid. Um, his goal was to always have a black car. When he was leaving a restaurant, uh, to impress the girl he was with that he came out and said that and you see that culture run rampant throughout uber from their god mode where they can see they actually created. There was, uh, don’t read this my business insider as well. There’s a they created a hookup page that showed or or or walk of shame Page that showed where, uh, women were leaving certain apartments, like on weekends going or leaving certain place on weekends, going back to their home. Um, it was obvious that they, you know, met some guy like they did that. And then, of course, just their whole surge pricing mentality, which is, you know, two days ago there was a couple days. There was, uh, the terrorists of the figures, a terrorist attack in Sydney at that at that bakery and Sydney, uh, uber and Sydney instituted surge pricing for people trying to get out of harm’s way, you know, and they later refund it always a computer glitch. You know, I’m sorry. You have a stop button, and you can when you see something happening like that, this has to be someone in the office, because you know what? Not cool. We’re gonna take care of that and and hit the stop button. And it was Yeah. Bad tons and tons and tons of bad publicity. you know, I was having an argument with one of my Facebook page facebook com slash Peter Shankman Because they said, Oh, you know, Eh? So what they don’t they don’t turn surge pricing, don’t have enough cabs there, and you know, people can’t get home. I said I’m pretty sure that the Onley come, but I’m sure that no one had cab companies there. I’m sure that there wasn’t anyone who had enough cars, their private cabs, uber’s whatever. Yet the Onley stories I read about companies screwing up during the event where uber not Joe’s Sydney cab company. You know, I didn’t see him screwing up because he didn’t turn on surge pricing. You gotta You gotta respect your customer. You have to,

[00:20:55.14] spk_1:
as we’re training for that, then not only, uh, trying to change their mind ships. Well, in trying to change that mindset, rewards for for customer, for employees that do take, go, do go the extra

[00:22:04.04] spk_0:
mile. Well, first of all, if you give the employees the ability to do it to go the extra mile and I understand they won’t get fired, you’re not gonna get into I always tell every one of my employees. You’re never gonna get in trouble for spending a little extra money to try and keep customer happy. You’ll get fired for not doing it. You know you get fired for not for seeing an opportunity to fix someone and not taking it, not doing everything that you could know. Ritz Carlton is famous for that. Ritz Carlton hires people not because whether they could fold the bed sheet but for how well they understand people. Because in Ritz Carlton’s mind, it’s much more important to be a people person and be able to be empathetic and that it’s such a key word. Empathy is just so so sorely lacking. You know how much you’ve called customer service? Yeah, you know, I have to have to change my flight. My, my my aunt just died. I really need the Oh, okay, great. That’s $300 e. Just wanna go an hour earlier. You know, you show up at the airport, your bag is overweight by half a pound. That’s $75. I just can you just cut me some slack note, You know, so empathy and giving the custom, giving the employees the ability to understand that the customer that sometimes you can make exceptions and it is okay to make changes.

[00:22:11.22] spk_1:
And this is where a smaller organization has huge advantage. It’s easier to change.

[00:22:21.54] spk_0:
That’s what kills me. You know, I go to these try to frequent small businesses when I can. I go to some of these small businesses and they won’t they they act like large businesses, you know, in the respect that they don’t have ah, like

[00:22:27.68] spk_1:
they wanna be respected almost. They don’t have,

[00:23:06.44] spk_0:
like, a 6 6000 page code that they have to adhere. Thio. They can simply, uh, do something on the fly. And yet for whatever reason, they won’t do it. And it’s the most frustrating thing. Like, guys, you’re acting like a big. You’re acting like Mega Lo Mart here, you know, and you’re not Mega Lo Mart, and you’re just Joe’s house of stationary, whatever it is and you know, not be able to help me. You’re pretty much killing yourself because you don’t have 85 billion customers that come through the door after me, you know, But I have a pretty big network and for small business to get killed socially as social becomes more and more what? How we communicate, you know, it’s just craziness.

[00:23:16.04] spk_1:
It’s, you know, we’re pretty much in the world. I think we’re something almost hasn’t happened to you unless unless you share

[00:24:46.44] spk_0:
it. E joked that, you know, if I can take itself, it was I really there. Um but it’s true, You know, we do live in a world where you know, I remember God 10 years ago. Maybe not even not even 10 years ago. I was one of the first people have a phone in my camera, you know? And it was like, That’s what I said. Yeah, Camera on my phone. Right. And it was like a, I think a 0.8 megapixel. You know, it looked like I was taking a picture with a potato, but it was It was this. I remember it was 2002 and I was in Chase Bank and there was a woman arguing with the teller, and I pulled out my video. You know, it was the crappiest video you ever seen, but I pulled it out and I said, You know, I started recording and the woman behind the counter one behind the counter was going, The woman behind the counter was talking to the customer, saying, You do not speak to me that way. You get out of this bank right now and the customers saying, I just wanted my balance and you and your manager comes up and I get the whole thing on my little crappy three g Motorola for phone And I remember I posted online and Gawker picks it up. I gave him E mail that, you know, my headline I put on my block was, you know, Chase where the right relationship is that. Go after yourself, you know? And it was It just got tons of play. And then Gawker picked it up. It went everywhere, totally viral. So it’s one of those things you just like, you know, this is in 2002. It’s 12 years later. How the hell can you assume that nothing is being that you’re not being recorded? You know, I I e remember blowing I sneezed a couple weeks ago and, uh ah, that to get too graphic here. But e needed a tissue big time after I was done seizing E remember going through my pockets looking for desperate looking for a tissue. I’m looking around making sure it wasn’t on camera somewhere that someone didn’t grab that. Give me the next viral sensation. You know, e wait. God, I went to high school with a block from here, right? If the amount of cameras that Aaron Lincoln center today were there in 1989 1990 be having this conversation entirely, I’d be having this conversation behind. Bulletproof on. Yeah, so you know, you’d be you’d be talking to. You have to get special clearance to visit me. Probably the Supermax in Colorado. So, you know, it’s it’s one of those things that you just like. My kid who’s almost two years old now is gonna grow up with absolutely no expectation of privacy the same way that we grew up with an expectation of privacy. And I’m thankful for that because she will make a lot less stupid moves, You know, I mean, God, the things that I thought, you know, in in high school I thought the stupidest in the world. Thank God there wasn’t a way for me to broadcast that to the world in real time. Jesus. Thank God

[00:25:45.54] spk_1:
creating these zombie loyalists and we’ve got to change some. We’ve got to change culture and thinking and reward systems. Let’s go back to the cost of all this. Why is this a better investment than trying to just focus on new donors?

[00:26:38.84] spk_0:
I love I love this analogy and I’ll give you a fun analogy. Let’s have in a bar. And there’s a very cute girl across the across the park and she catches my eye catcher. I go up to her Go. You know you don’t know me e m amazing in bed. You should finish your drink right now. Come home. Let’s get it on. I’m gonna impress. I’m that good Chancellor. She’s gonna throw a drink in my face. Go back talking to her friends. I’ve done a lot of research on this. That’s probably now, let’s assume let’s assume an alternate world. I’m sitting there on my phone. I’m just playing like, you know, some no words with friends like that, and she’s over there talking to friends, one of her friends. Holy crap. That’s Peter. I think that’s Peter Shankman. I’ve heard him speak. He’s in this fantasy world. I’m single, too. E think he’s single and he’s having this amazing guy e No, he has a cat. You have a cat. You should totally go talk to him. The very least. I’m getting this girl’s number. That’s PR. Okay. And what do we trust? More me with my, you know, fancy suit collar going over the seventies. Leaders do. Hi. I’m amazing. Or the girl saying, Hey, we’ve been friends since third grade. I’m recommending that guy. You should trust me on this. You know, obviously that that’s where, uh, good customer service comes into play. And that’s where corporate culture comes into play. Because if I have a great experience with you and at your company, I’m gonna tell my friend when they’re looking and I will stake my personal reputation on it. There’s nothing stronger

[00:27:18.22] spk_1:
than that. And these are the people who want to breed

[00:27:21.10] spk_0:
as stronger than advertising stronger the marketing,

[00:27:23.04] spk_1:
and they’re gonna share. People want to share

[00:27:48.24] spk_0:
the think about the Internet runs on two things. It runs on drama. Drama and bragging are bragging and drama. And if you if you need any proof of that, you know, go and look at all the hashtags with crap that’s happened. You know, bad customer service, bad, whatever. But then look at all the good Hashtags. You know, when our flights delayed for three hours and we lose our seat Oh, my God. Hate this airline. Worst airline ever. But when we get upgraded right hashtag first class bitches or whatever it is, you know something stupid like that on the whole, because we love to share its on Lee a great experience if we could tell the world. And it’s only a bad experience if we could make everyone else miserable about it as

[00:29:35.94] spk_1:
well. It’s time for tony Stick to I am hosting a new free webinar plan to giving five minute marketing hosting my own. As I said last week, this feels very good. No shackles, no, not being shackled and drawn by by those others who host no grateful to the others who host me and we’ll be hosting in 2021 lots more webinars coming up. I’m grateful to them, but I’m doing my own too. So no more shackled and drawn. Um, and we’re doing this in, uh, this this month, December. It’s on Thursday, December 17th, 3 p.m. Eastern. It’s a quick shot another 1 45 minutes only on planned giving marketing. How to promote the idea of planned gift to your prospects? Who are the best prospects to be promoting to? What’s the message you should be sending to them and how do you get it out? Multi channel. I’m gonna do this all in 45 minutes, plus time for questions, which is my favorite. I have fun with the questions, tells me where you’re focused. I like the question. So we’re doing all this. Thursday, December 17th you register at plan to giving accelerator dot com slash webinar. That is tony. Stick to Let’s Let’s take two of 2020. As a matter of fact, come to think of it now, back to our annual rebroadcast of zombie loyalists. Peter, you have a golden rule of social media that that a good number of customers like to share and people are gonna keep doing it.

[00:29:41.14] spk_0:
People will always share again. It goes back to the concept that if you create great stuff, people want to share it because people like to be associated with good things. If you create bad stuff and buy stuff I could meet. I mean anything from, like a bad experience. Too bad content. People not only won’t share that, but we go out of their way to tell people how terrible you were. Um, you know, how many times have you seen companies fail horribly? Uh, you know, after major disasters when companies were tweeting, um, you know, completely unrelated things. Uh, after after a random school shooting? Uh, no, it was after the shooting at the theater in Aurora, Colorado. The dark knight, Um, the tweets. Hey, shooters, what’s your plans for this weekend? You know, and I’m just going, really, you know, but And of course, the thing was, the thing was retweeted millions of times, you know, with a sort of shame on the A so way we’re a society. Like I said earlier, that loves to share when when great things happen West, but loves to tell the world when we’re miserable because we’re only truly miserable, we make everyone else miserable. Um, it’s funny you mentioned the generosity Siri’s, uh, the one of my favorite stories, which goes to sort of a bigger picture of culture and somehow when you’re just doing your job, because that’s what you’re supposed to do your job, but you don’t realize there are ways to get around that. I listened to your podcast, among others, When I’m running through Central Park on Dhe, more like if you know my body type more like lumbering through Central Park. But I get there. I’m an iron man. I e have that. And so I go to Central Park and it’s super early in the morning cause I usually have meetings and I don’t run fast. Um, I run like I really don’t run fast, but But as I’m running,

[00:31:20.03] spk_1:
But let’s give you the credit that you have done a bunch of iron Man,

[00:33:04.29] spk_0:
I have e Do I do it? You know, my mother tells me that I just have very poor judgment in terms of what sports I should do. But, um, on the flip side, I’m also a skydiver, which is with my weight is awesome. I fall better than anyone. Um, but so I’m running through Central Park. Last year it was February, February of of 13 and 14 of this year, and it was probably about 4 45 in the morning because I had an 80 a meeting. I had to do 10 miles. So 45 in the morning, I’m running about but around 96 79th 80th Street on the east side, in the park and a cop pulls me over and I said, What are you doing? I look at him, you know, I’m wearing black spandex. I have a hat. It’s five degrees that only what? Playing checkers. You know what you know. And like I’m running and he’s like, Okay, can you stop running? I’m like, Okay, he’s like in the parks closed like No, it’s not like I’m in it. Look around. There are other people who know part does nobody else exam like he’s like, Do you have any idea on you? I’m like, No, I’m running. He goes, What? Your name? I’m like, seriously, like I’m writing you a summons. I’m like you’re writing me a summons for exercising for for I just want to clarify that you’re writing music. And sure enough that I wrote me a summons for exercising in Central Park before it opened. The charge was breaking the violating curfew. You know, I’m like I get the concept of the curfew is to keep people out after 2 a.m. It’s not to prevent them going in early toe exercise to be healthy. I’m like, I’m not carrying, you know, a six pack. I’m not drinking a big gulp. I’m not smoking. I’m you know, I’m doing something healthy, and you’re writing me a summons for it. Um, I said, you know, I’m gonna have a field day with this. I said I I kind of have some fathers. It’s gonna be a lot of fun. I’m not. You know, I know you’re just doing your job serve even though you have the discretion not to. But Okay, so I go back home, take a picture of my ticket, I email it to a friend of mine in New York Post. You know, front page, New York Post next day. No running from this ticket, you know, for great New York Times covered it. Runners world covered it. I mean, I went everywhere. Gawker covered it, you know, And And my whole thing was just like, Dude, you have discretion. Look at me. You know, I’m not I’m not even going super fast, for God’s sake. I’m just I’m just trying to exercise here, you know, And of course, I went to court and I beat it. But how much money that cost the city for me to go to court? Fight this thing? You know, every employee you have to give your employees the power of discretion, the power of empathy to make their own decisions. If you go by the book, bad things will happen.

[00:33:32.16] spk_1:
And again, small shops so much easier to dio flatline flat organizations.

[00:35:06.94] spk_0:
I work with a non profit, um, animal rescue non profit. A friend of mine was a skydiver and shot him out. No, I can’t. There’s nothing but But there’s a friend of mine was a skydiver and she was killed in a base jump several years ago. And her husband asked to donate in her memory to this non profit. So I said, I’m a check. And about three months later, I get a coffee table book in the mail and I was living by myself the time I didn’t own a coffee table. It was more money to spend on my flat screen, and I remember I call I look at this coffee table book I throw, I throw in the corner. I look at it over next couple days. It pisses me off That How much? How much of my donation did it cost to print? Melon produced this book to me, and so I called them up. Well, sir, we believe most of our donors were older and profit. Prefer to get ah, print version as opposed to, like, digital, You know where they throw it away. And like, you don’t throw digitally, but Okay, um, I’m like, So So you’ve asked your you’ve done surveys and you’ve asked, you know, we just assume that most of our older I’m like, Okay, so I open my mouth lineup joining the board and spent the next year interviewing customers, interviewing every current and past donor about how they like to get their information and shock of shocks. 94% said online. And so over the following year, we launched Facebook page, Twitter page, uh, Flickr account, YouTube, everything. PS the following year. For that, donations went up 37% in one year in that economy is right around 0809 Donations went up 37% in one year and they saved over $500,000 in printing mammalian reproduction. Imagine going to your boss, Boss. Revenues up 37%. And we saved a half million dollars you’re talking about. You’re really good beer. You know, All they had to do was listen to their audience, be relevant to the audience you have, and they will tell you what they want.

[00:35:13.37] spk_1:
We have tons of tools for segmentation. My God, you gotta listen to what segment? That you want. People wanna be in.

[00:35:52.24] spk_0:
You know, someone? Someone asked me today. Show what? What’s the best and knew nothing about their company. What’s the best, uh, social media outlet for me to be on? Should be on Twitter. Should be on Facebook. I said, I’ll answer that question. If you can answer this This this question to ask you is my favorite type of cheese Gouda or the number six. They said I understand. That’s not a real question. Like neither is yours. Like I can’t tell you where the best place to be your audience can. I said, go ask your audience. Believe me, they will tell you there’s a gas station in the Midwest. Come and go. I just love the name K u m and G. O. And their tag tagline is always something extra e. Come on, the jokes just write themselves, for God’s sake. But

[00:35:58.40] spk_1:
they don’t take themselves to say, Really love that coming just knowing the name of the company

[00:36:12.13] spk_0:
gas station. And I remember there in Iowa and I went to visit a friend in Iowa and I was like, You got to get a photo of in front of come and go inside. And the beauty of this is that some of their employees actually look at their customers when they’re on their phones and stories go, you know, what do you use Twitter or Facebook? And they say, Oh, I use that and they record that information and they know it. God, customers will give you so much info if you just ask them, because then they feel invested. They feel invest in your company. They feel like they that you took the time to listen to their non profit request. So their their their questions and they feel like they’re I did it for Harrow. Every month. We have a one question Harrow survey, you know, harrowing question survey, and it was like 1000 people respond and I’d spend the entire weekend emailing Everyone responded, thanking them personally took my entire weekend. But it was great because it would wind up happening. Is that you know, if we took their advice and launched on Monday with the new thing, they go, Oh, my God. How did this review? They took my advice. Well, yeah, I was your advice to 100 other people advice, but we took it and they’d be like, Oh, my God, this meat And it just It just made them so much more loyal. And they tell hundreds and hundreds and hundreds of people we get I mean, there were days. My God, they’re days. I was in Temple one morning, the Garment Center synagogue and my phone. I feel my phone getting really hot in my pocket, which is not normal. And I started to hurt and I look at it. It’s almost on fire. It had frozen because we were mentioned in Seth Godin’s morning blogged, and at that time I was getting emails. Every time we get a new subscriber and the phone is actually frozen and was locked and and was like overheating, I take out the battery and like, reset the entire phone because we just got so many new, like, 14,000 subscribers in, like, three hours I’ve seen.

[00:37:30.68] spk_1:
I’ve seen you say, Excuse me. You say that that customer service is the new advertising marketing NPR? Yeah, it

[00:40:01.00] spk_0:
really is. Well again. You know, if we’re moving into that world where so imagine a lava lamp. And I love that. I can use this analogy. Imagine a lava lamp. A lava lamp has water Oil on the heat source. Right. Heat source heats the oil. The oil flows through the water. It makes pretty colors. I’ve heard it looks really good when you’re high. Now I’ve heard. Now imagine if crystals imagine if you are, uh, everyone you meet in your network, okay, is a drop of oil. The water is your network. And what is your world? Everyone you meet in your network from from the guy you’re sitting during the radio interview with to the guy who serves you ice creams, local deli to the guy who does your dry cleaning to your girlfriend to your wife to not the same time to your kids. Second grade teacher to your second grade teacher years ago. Everyone you meet is in your network, you know, right now, when Facebook first started, I would see the same weight from a kid with junior high school with his posted at the same weight as like my current girlfriend. I’m just ridiculous. I don’t need to know about everything, my friend from junior high schools doing having talked to Kidd in 15 years, Facebook’s gotten a lot smarter, as has Google. Now I see the people I communicate with the most okay, and if I if I reach out and communicate with new people, they start rising in my feet in my stream. If I don’t they fall. It’s just like a lava lamp. Every person you connect with is a drop of oil. That heat source at the bottom that’s rising. Raising or lowering those drops of oil is relevance. So imagine the heat sources relevance. And the more I interact with someone, the more the higher they go in my network in the more I see of them, the more trust level there is. When I’m at a bar and I meet someone or a restaurant or conference, I meet someone I don’t need to, Um connect them. I don’t need to go on Facebook and friend request, you know, awkward friend. Requesting is when you stop and think The last time I friend requested some of the real world was second grade. Will you be my friend? My daughter’s doing that because you know she goes It’s like cat Will you be my friend like tony? The cat doesn’t wanna be your but you know, it’s this awkward thing. Who the hell friend request someone anymore? If I’m if I’m hanging out with you The bar and we connect again and we talk and we go out to dinner and we’re having a good time with friends I don’t need to first request that you, you know. So that’s going away. Friending following liking and fanning is all going away. What will interact is the actual connection. So if I meet with you, then I have a good time with you and we talk again. If I use your business If I go to your non profit, if I donate, if I volunteer whatever the network knows that the more I do that, the more interact with you. The more you have the right to market to me And the more you will be at the top of my stream and the more I will see information about you the less I will have Thio search for you. But if you do something stupid or we’re no longer friends So yeah, you’re gonna fade Don’t unfriend you you just disappear. Unfriending is also awkward. I dated a woman, we

[00:40:06.44] spk_1:
broke up. It was nine months after we broke up. There was one done friend, the other one because it’s just awkward until I woke up with a

[00:40:11.28] spk_0:
friend of me. But anyway, But you know the concept of not having to do that of just, you know Okay, I haven’t talked in a while. I

[00:40:17.85] spk_1:
don’t see your post anymore. That’s the real world. That’s how it should be. And if you’re not feeding zombie loyalists, they can start to defect. No question about it. I wanna I wanna spend a little time on. If you’re

[00:40:29.29] spk_0:
not talking to them giving them what they want talking about their information, helping them out, they will gladly go somewhere else to someone who is. You know, if I have a great experience of the restaurant every week for three years and then

[00:40:39.42] spk_1:
all of a sudden, over time, I’m noticing less and less that restaurants doing less

[00:40:44.71] spk_0:
and less Thio take care of me, you know, And maybe management change. And I don’t feel that, you know, I’m ripe for being infected by another company. I’m right for someone else to come to. You know, Peter, because if I tweet something like, wow, I can’t believe I have to wait 40 minutes for a table. This didn’t used to be like that. If someone else is smart restaurant, they’re following me, and they’re gonna great. You know, there’s no wait,

[00:41:01.49] spk_1:
no way over here. Why don’t you come to block storms will give you free

[00:41:03.54] spk_0:
drink, you know, You know, and that right there, that’s first sign of infection. And I might become infected by another by another company. Become zombie loyalist

[00:41:21.91] spk_1:
for them. And so let’s let’s take you have a lot of good examples. Let’s take ah, one on one situation. How can we start to cure that? The simple act of realizing following your

[00:41:38.21] spk_0:
customer’s understanding when they’re not happy and fixing the situation before it escalates? Um, you know, you can contain a small outbreak, a small outbreak, small viral outbreak. You could contain that by getting the right people finding out what the problem is getting into one room, fixing their problem, healing

[00:41:38.61] spk_1:
them. You have a good united story. Right back when it was Continental,

[00:42:07.20] spk_0:
I was a frequent flyer and booked a trip to Paris on Dhe was very angry because they charged me $400 in looking for you. Remember what it was And I called the CEO. I’m just just for the hell of it. I’m like, I’m gonna I wrote a letter or an email. So this is before Social wrote an email to the CEO. I’m like this Ridiculous. I’m freaking like, 30 months later, my phone rings. Hello, Peter. Please hold for Larry Kilman, CEO of airlines. I’m like, Oh, crap, you know, and get on the phone. He’s like, Peter, how you doing? Mr. Doing started letting thes fees their new We sent that note. I’m guessing you don’t see it. We’re gonna waive them for you. But if you have any more problems, you know, feel free to call me. And I hung up the phone the next 40 minutes to sort of staring at it like holy crap. Larry Kellner, the CEO of United, just called me and talk to me, and it was like it was like, God coming down and say You now have the power to levitate your cat. It was just ridiculous. And so, you know, I have been faithful to Continental now, united ever since on, and they continue to treat me with respect and and do great things. And they’re they’re improving. They were getting a lot of crap over the past several years, and they really are starting to improve. It’s nice

[00:42:48.50] spk_1:
to see and not only, of course, your own loyalty, but

[00:42:50.41] spk_0:
you’re my God

[00:42:51.84] spk_1:
loyalist for them and how many times how much it’s

[00:42:54.83] spk_0:
unquantifiable. It’s unqualified. Dragged, dragged so many friends to united. I’ve made so many friends. Uh, I mean, my father, you know, uh, he only plays united now, which means he only drag. He dragged my mom only in the night and only drag my wife United States. There’s a lot of a lot of work that way. Yeah,

[00:44:16.39] spk_1:
we’re gonna go away for a couple of minutes when we come back. Of course, Peter, and we’re gonna keep talking about his book comes out in January. Zombie Loyalists. Time for our Last break dot drives dot drives. Engagement dot drives relationships. Dot Drives is the simplest donor pipeline fundraising tool. They’ve made it customizable, collaborative and intuitive. It moves the needle on your prospect and donor relationships. If that’s what you want. If you want to move prospects along from prospect, potential donor to donor and then beyond, of course it’s stewardship. This is what dot does for you. For listeners. As you know, there’s a free month and a free demo. You go to the listener landing page at tony-dot-M.A.-slash-Pursuant. We’ve got but loads more time. That’s the last but loads of 2020 something. But there’ll be plenty of butts in 2021 but loads more time for zombie loyalists. With Peter Shankman, you have some examples of zombie loyalist leaving and mass like dominoes. Netflix. They’re both They’re both in the book, so it s so one leaving. If you don’t, you’re not starting to cure one leaving?

[00:44:29.54] spk_0:
Yeah, and then that’s the thing. You know, the the Internet with the hashtag, everything like that. You know, it doesn’t take a long time um, for those things to sort of blow up in your face and, uh, you know, the end of the day Mhm. Everyone said, Oh, you know Twitter is responsible for for us losing another, not you’re responsible for you losing, you know, And And if your product isn’t great and you’re your actions, don’t speak well of who you are. Then there’s no reason your customers should stay with you, you know? And it was so social media is really hurting us. Know you’re hurting yourself. The only difference is that social media makes it easier for the world to know

[00:44:59.27] spk_1:
about. They’re just telling the story. Dominoes and Netflix are good example because they bounce back. They took responsibility and

[00:45:43.00] spk_0:
they both owned the dominoes, came out and said, You know what? You’re right. Our pizza. We do have a problem. We’re gonna fix this. And they spent millions fixing it. And sure enough, they’re back with a vengeance. Now, I may or may not even have ordered them every once in a while, and I live in New York City. That’s a that’s a That’s a sacrilege. But you know, I have the app on my phone from over, You know, traveling somewhere being or whatever. And you know what, Do you get it? 11. 30 at night when your flight is delayed in the land? Donna, Um, which reminds me she probably go exercise on the flip side. Looks like Netflix. They also were screwed up. You know, they were losing, trying to switch between the two. They came up with a new name and everyone just like public man. And so and again. You’re watching the same thing happen with uber right now. So we really interesting to see if they’re able to repair themselves.

[00:45:48.99] spk_1:
Listening is important. Both Both those. Both those two examples. They listen to

[00:46:49.48] spk_0:
their customers. I think there’s a problem with listening because everyone’s been saying, Listen, listen, listen. For months and years and years and years now, but, you know, no one ever says that you have to do more than just listen. You have to listen. Actually follow up. It’s one thing to listen, you know, I use example my wife I could sit there and listen to her for hours, you know? But if I don’t actually say anything back, she’s gonna smack may you know, and go to the other room. And so you really have to. It’s a two way street. Listening is great, but you gotta respond, and look, I’ll take it a step further. E was like, Oh, Twitter is so great because someone was complaining on Twitter and we went online, and we we saw the complaint that we fixed their problem. And, yeah, how about if the problem did exist in the first place? You know, because the great thing about Twitter is that yeah, people complain on Twitter, the bad thing about it is there complaining about you on Twitter. So it’s like, What if the problem didn’t exist in the first place? What if What if you empower your front desk clerk to fix the problem so that I didn’t have to tweet? Hurts is my favorite story about all this? Uh, I used to rent from Hertz religiously. Um, And then I went thio Phoenix Sky Harbor Airport this past April, and I gave it, was giving a speech, and I go on. My name is supposed to be on the board, you know, so I could go back to my car and it wasn’t happens. I got upstairs. I wait 40 minutes on the V I P line. Um, after 40 minutes, they finally say, you know, there’s ah, on the one guy here. A lot of people might have a better chance. We go up the regular line, okay? Probably have told us that a little earlier. Go to the regular line. Spent 45 minutes waiting. The regular line that’s now been

[00:47:11.51] spk_1:
Are you tweeting? While this was happening?

[00:47:48.08] spk_0:
Well, I had enough. I was actually not only tweeting I had enough time to create a meme that should give you some idea of how long I was online with myself when I was quite enough. E get to the counter. Mm. How I can help you. Yeah, I was downstairs the V i. P. S and they told me Oh, you’re preservation downstairs like Yeah, OK, let’s Let’s put a pin in that, um they just sent me up here like right. They have to help you. Well, it’s not really they You guys were the same company. I mean, I could see the reservation on the screen. You you can help me. Sorry. So I can’t help. You have to go to V I p next. Like you just next to me. Okay, so if you know anything about Sky Harbor Airport in Phoenix, Um, all of the rental car company in the same place, eh? So I walked 50 ft.

[00:47:51.19] spk_1:
It’s a bus, takes you to the big the big pavilion, where they’re all next week.

[00:49:46.97] spk_0:
I walk 50 ft from the depravity that was hurt to the the wonderful Zen Garden of Tranquility That was Avis. And in four minutes, I had a nicer, cheaper or nicer, less expensive car given to me a woman named Phyllis who was 66 moved to Phoenix from Detroit with her husband for his asthma. I knew this because she told me. Um, she smiled at me. She brought her manager out and said, Yeah, that’s another refugee from hurts. And I said, This happens a lot. They’re like, Yeah, I’m like, Wow, you think they have done something about that? And so on the way out in a vis um, I I thank them. I walk past her, I shoot them this, you know, sort of Look at the look of the beast. I get my Avis car driving my hotel once I get to my hotel. I write a wonderful block post about my experience called Peter and hurts in the terrible. Horrible. No boat could really bad customer experience. Would you have a kid? You find your writing titles about your block post that have to do with kids books? Um, I do not like hurts, Sam. I am. And things and I included in this block post the five things I’d rather do than ever, uh, rent from Hertz again. I think number three was was ride a razor blade bus through a lemon juice waterfall, um, with, you know, and so. But, of course, the next day hurts reaches out. To me. This is the head of North American customer service. That’s all your body I’m like, They’re like, you know, we’d love to have that, Nick. No. Like you’re not gonna fix the problem. Number 17 Avis car. I’m never going back to hurt number two. There were five people yesterday. Five people interacted with all of whom had the chance to save me and keep me as a customer for life. A customer who have been so happy and I would have loved you five people blew it. So don’t waste your time trying to convert me back. You’re not going to what you want to dio is spend some of that energy retraining your staff to have empathy and to give them the ability and the empowerment to fix my problem when it happens. Because five people it takes every single employee to keep your company running, it takes one to kill it. PS Avis reached out to thank me personally. And, uh, I am now just this ridiculously huge, loyal fan of Davis and always

[00:49:56.07] spk_1:
will be. You have a pretty touching story about when you worked in a yogurt shop. You were really young way. Have a couple of minutes.

[00:50:39.85] spk_0:
Tell that. Tell that good stuff that was in the East Side, which again is yet another reason why I live on the West Side. Nothing good ever happens in Manhattan’s East Side. So I was I was working that I can’t believe it’s yogurt, which was a store that I think back in the 80 c b. Y. No, no TCB. Why was the country’s best I c B I. Why, it was a poor I can’t believe it. I can’t believe you, Yogurt. It was a poor attempt to capitalize on. I’m working at this store, and I go in every day and make the yoga to clean the floors. Radio typical high school job. And, uh, it was during the summer and thousands of people walking by, I think, like Second Avenue or something. And there were these brass poles that hung from, you know, there was an awning, right? It’s only that there and then the brass poles that held the awning up and they were dirty as hell, right? I’m sure they’ve never been polished ever. And I found I found some brass polishing the back, like always bear in the back. And one afternoon I went outside and I positive polishing the polls. My logic was, if the polls were shining, people saw them. Maybe they come into the store. Maybe they wanna, you know, by more screenplays. And the manager came out. What the hell are you doing? I said I told them what I thought. I don’t pay you to think. Get inside. You know, I’m like, there’s no customers in there, like, Okay, I’ll make sure the yogurt still pumping it full blast and I quit. I just quit that job. I mean, like, I couldn’t even begin to understand why someone would invest. I mean, own a franchise 50 grand to at least to buy that franchise. Why wouldn’t he invest in the two seconds it took a little elbow grease to make the polls claim that might bring in more customers? What the hell? You know, you’re not paid to think you’re not paid to think my favorite line. Yeah, I just I e encourage if any kids listening this teenagers, if you if you boss says that to you, quit, quit. I will hire you. Just quit it, Z. Probably the worst thing in the world that you could possibly do because you have customers who you have customers who every day could be helped by people who are paid to think. And that’s the ones you wanna hire.

[00:51:54.16] spk_1:
We gotta wrap up. Tell me what you love about the work you do.

[00:51:59.06] spk_0:
I get paid to talk. I mean, my God, that’s the same stuff I used to get in trouble for in high school. But on a bigger picture, what I really love about it is being able to open someone’s eyes and have them come back to me. Um, I run a series of masterminds called Shank Mines Business masterminded shank mines dot com, their day long seminar all around the country. And I had someone come to me. You know, I took your advice about X y Z and I started listening a little more. And I just got the largest retainer client I’ve ever had in my life by a factor of four. She goes, and I just can’t even thank you Never sent gorgeous politics like I can’t even thank you enough. Oh, my God. Being able to help people, You know, at the end of the day where I’ve yet to find another planet suitable for life, I’m looking So we’re all in this together. And if that’s the case, you know, why wouldn’t we want to help people just a little bit more? You know, there really isn’t a need to be, as do she is as we are as a society, we could probably will be a little nice to each other. And you’d be

[00:55:09.04] spk_1:
surprised that will help. The book is Zombie Loyalists. It’s published by PAL Grave. MacMillan comes out in January. You’ll find Peter at Shenkman dot com and on Twitter at Peter Shankman. Peter, thank you so much pleasure. Thank you Next week, as I alluded to, There is no show next week or for the week after. I hope you enjoy the hell out of your holidays. Although I know Hannah has already passed. I’m sorry. That’s sort of a set thing. I don’t have a lot of control over. If I did, I would do something about it. But there’s not a lot I can do about that. But you still have New Year’s. You got. You got that to look forward to, and I hope everyone enjoys time off time with family. In small, of course, small household size groups keep it safe. There’ll be a 2021 on Take time for yourself yourself. You need it. You deserve time for yourself. Rest recovery, recuperation, naps, Highly underrated naps. Terrible. I did a whole block post years ago on naps. Uh, I admire Nah, I’m more than admire. I thrive over naps. I exult in naps. Yes, way beyond mere admiration of naps. I exult in naps. It’s been a rough year, so However you take care of yourself, you know what’s best for yourself. Do it. Do it. Please take good care of yourself and I will see you in 2021. If you missed any part of today’s show, I beseech you, find it at tony-martignetti dot com were sponsored by turn to communications, PR and content for nonprofits. Your story is their mission. Turn hyphen two dot ceo and by dot drives Prospect to donor simplified tony-dot-M.A.-slash-Pursuant for a free demo and that free month. Our creative producer is Claire Meyerhoff shows Social Media is by Susan Chavez. Mark Silverman is our Web guy, and this music is by Scott Stein. You people have application. Scotty, be with me next week. No, no, no, not next week. Be with me next year for non profit radio Big non profit ideas for the other 95% Go out there and be great

Nonprofit Radio for December 7, 2020: Your Annual Report As Marketing Channel & Project Management In Fundraising

My Guests:

Josh Kligman & Jeff Rum: Your Annual Report As Marketing Channel
You’re producing an annual report, why not make it less boring and more engaging? Why not make it digital? Josh Kligman and Jeff Rum show you how. They’re from Yearly.

Josh Kligman

Jeff Rum






Jonah Halper: Project Management In Fundraising
Jonah Halper wants you to apply project management principles as you raise money. He’s from Altruicity.



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