Category Archives: Tony Martignetti Nonprofit Radio

Nonprofit Radio for November 29, 2021: How Much To Spend On Ads In 2022

My Guest:

George Weiner: How Much To Spend On Ads In 2022

“The Nonprofit Advertising Benchmark Study” will help you decide what’s the right amount for you to spend on advertising if you want to be comparable to your peers. At the very least, it’s a place to start your research on ad spending. George Weiner explains the study. He’s chief whaler at Whole Whale. Does that make him the Captain Ahab of nonprofit tech? Listen to find out.

 

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[00:02:18.04] spk_1:
Hello and welcome to Tony-Martignetti non profit radio big nonprofit 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 with odo toxicity if I heard that you missed this week’s show How much to spend on ads. In 2022, the nonprofit advertising benchmark study, we’ll help you decide what’s the right amount for you to spend on advertising if you want to be comparable to your peers at the very least, it’s a place to start your research on ad spending George winner explains the study. He’s chief whaler at whole whale. Does that make him the captain ahab of nonprofit tech. Let’s find out on tony state too. It’s the holidays and fourth quarter sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o. It’s a pleasure to welcome George winner to nonprofit radio He is the chief whaler of whole whale, a digital agency that leverages data and tech to increase the impact of nonprofits and for benefit companies. He’s also a co founder of power poetry, the largest teen poetry platform in the US A safe creative free home to over 500,000 poets. George was chief technology officer of do something dot org. He managed the site overhaul twice. Winning a webby award and helped build a community of over a million and a half young people taking action. He’s an evangelist for democratized data and measuring success. The company is at whole whale dot com and at whole whale. Welcome chief whaler. How are you George

[00:02:21.24] spk_0:
wow, incredible intro. Thank you so much. tony Thanks for having having me on

[00:02:26.63] spk_1:
my pleasure, my pleasure. What’s what’s behind the company name? Whole whale which which leads you to be whole whaler. What’s that about?

[00:03:23.44] spk_0:
Yeah, we found it a decade ago and at the time the thought that struck me was ultimately the way that the nan, you know the Nantucket whalers in the massachusetts whalers in the 18 fifties would look at a whale and they would basically bring back lamp oil and throw the rest away in times of abundance. We tend to be a touch wasteful instead of using everything from the bluebird of the bone. And I took that lens and said, I felt like many social impact organizations weren’t looking at the opportunity to leverage data and technology and the rising web in that way. And they simply said, hey, hey, here’s the internet and the most powerful tool we’ve ever been given. Let’s put a donate button on it and call it a day. And so I kind of gave rise to how we view this time of abundance with an eye toward the best ways of leveraging data intact to increase the impact.

[00:03:57.64] spk_1:
Very interesting, very interesting. Uh you uh you drew that analogy between the two interesting. All right. Um, so are you the captain? Ahab, do you have a deep revenge? I’m trusting you know the story of Moby dick. Do you have anything deeply uh hurting you that you need revenge for? That’s going to drive the the ship of what was it the uh um The pick, watch the pick what it’s going to drive your whole whale peak watt into the ground.

[00:04:11.14] spk_0:
I’ve got a few white whales. Maybe I chase, you know, I got a few white whales maybe that I chase. Yeah. The other reason I found it all whales. Because of the nautical puns. I mean, you’re virtually swimming in them anywhere you turn and with regard to the things that chase, you know, the nonprofit ad study is one, but we like we go after interesting projects along the way. In addition to our our day to day work as consultants. We also develop products and try to put things out there in the ecosystem that help others do their jobs better. Or learn more about whatever field they’re wandering and so I can get distracted by a white whale or two.

[00:04:48.64] spk_1:
Okay, I see the navigate your helping folks navigate. Yes. The of course, the nautical you’re right. The uh nautical puns are are abundant.

[00:04:52.84] spk_0:
Yeah, they have to be they have to be

[00:05:05.44] spk_1:
navigate navigate the waters. All right. All right. So, we’ll see if your captain Ahab flush that out. See if you’ve hopefully you’re not going to do to uh to hold whale. What what the captain did too

[00:05:07.82] spk_0:
Made it 10 years so far. But I think that’s mainly because of an amazing team that basically just puts me in the right direction. Okay. It’s

[00:05:18.64] spk_1:
very gracious of you. All right. What is this this uh, nonprofit advertising benchmark study? What’s this thing all about?

[00:06:18.54] spk_0:
We wanted to answer a simple question and you know, never underestimate the power of a simple question because it can lead to, you know, a lot of, you know, threads essentially how much should a nonprofit spend on ads? This idea of advertising and promotion, it’s available technically informed nine nineties and with the help of cause I. Q. Which is a, you know, been a great partner in this. We analyzed seven over 7000 organizations to get that answer. And we chose organizations with a number of filters because clearly, you know, there’s 1.8 million nonprofits out there depending on how you’re sort of measuring the five oh one C threes and they’re like, oh that’s too many. And also, uh, you know, a third of them are not necessarily even over the threshold for reporting to the I. R. S. So we wanted to find 1 to 10 million in revenue organizations between one Million and 10 million and also met other certain criteria. And then we just sort of just, we dove in headfirst to to answer that question, how much should non profit spend on paid ads.

[00:06:36.34] spk_1:
Okay, so among your sample size of 7100 or so you you were you looked to see there’s I guess there’s a, there’s a line on the 9 90 that where folks where organizations report advertising expenses and that’s what, that’s what you were looking for,

[00:07:08.64] spk_0:
correct. It’s, you know, publicly disclosed because that’s, you know, the game and we look at that. So, you know, there are certain assumptions there that, you know, we note in the study of what that line is and what it isn’t. So it isn’t necessarily saying All right, this is the amount that people spent just on facebook ads or google ads. It’s advertising and promotion of the organization. So, you know, that could extend to people Paying for print ads. It could even in some cases, but we filtered it out for the most part include the cost paid to advertising firms to run ads. Uh, though many according to, I think the analysis, we didn’t hear only about like five or 10% in that range actually incorporated in there. And those are the outliers.

[00:07:43.14] spk_1:
Okay. Okay. And this specifically, thank you. Cause I was going to ask you about, you know, how, how we define advertising or how you define advertising this study and it specifically doesn’t include google ad grant money. Right? That’s, that’s different.

[00:07:58.84] spk_0:
Super important. Thanks for bringing that up. And it’s one of those sort of, you know, expert pieces there that it’s an in kind amount that doesn’t get reported on that line. Right? The google ad grants and you 10-K per month in money spent is something that would show up on your in kind value, not actual dollars out the door.

[00:09:03.04] spk_1:
Okay. Right. So it’s captured elsewhere. So it’s not part of the study here. Okay. Um, and so I was struck, you know, I’ve I’ve known that these that the vast majority of nonprofits are are smaller, you know, smaller revenue amounts. But I guess just reading it again, reminding me refreshing my recollection that uh, 93 a half percent of nonprofits are under $1 million dollars in revenue and and only 1.5% are over $10 million dollars in revenue. So that this this, you know, our universe of nonprofits, that this is not related to advertising, although, I mean, it is in terms of big words spend more on advertising, but that’s not my point. My point is just it just drives home that so many of our of our colleagues in nonprofits are organizations that are under $1 million dollars in revenue, 93 93 a half percent are under a million dollars, vast majority. Again.

[00:10:11.74] spk_0:
Yeah. And it’s important to note that, you know, because I think maybe in our minds or because of the narratives, we see large organizations and assume that they’re all like multimillion dollar, but like, this is the truth of it and that’s Yeah, that 1.44, exact five oh one c three nonprofit organizations and, you know, there’s a very, very small fraction of them that kind of live above that line, You know, like roughly speaking the same is kind of true in business ecosystems as well. You know, it’s hard to get to a million dollars. You realize that. But also when you look at the market how, how much of a long tail there really is. And we wanted to sort of remove that and say like once an organization has kind of, I mean not saying you’ve made it, but you were in rarer air, certainly after crossing $1 million you were running something that certainly has enough residents to to reach that level. And then we also filtered by age to be like, well, wait a minute. Maybe they’re like one night, you know, overnight successes or pieces like that. So we looked at organizations over under this century funded founded in uh, and and took a look at that as well. But it is, it is a curious point. We wanted to start with that context because I don’t think it’s given enough in the sense of nonprofit industry and you like immediately sort of have this availability heuristic meaning like I remember the last thing I saw and either it’s the red cross or you know, you know, pets down the corner saving one pet at a time.

[00:10:41.44] spk_1:
The availability heuristic. Thank you dropping that tech guy. You know, you have to, uh, well you, I’ll keep you out of jargon jail because you you explained it immediately

[00:10:47.03] spk_0:
go to

[00:10:51.64] spk_1:
The availability heuristic now it’s a good one. I love it. Uh huh. And you uh you flushed it out so folks understand what you’re talking about.

[00:10:56.23] spk_0:
I still will probably end up in jail though, won’t you

[00:11:10.64] spk_1:
didn’t do it? Well that could be we’ll see how we’ll see how the conversation goes. But you didn’t do it pretentious li like you know the all you would have available, all you, all you would have within your within your thinking at that point would be subject to the availability heuristic.

[00:11:13.34] spk_0:
Yeah. And then just leave it. Didn’t just leave it

[00:11:47.74] spk_1:
there and then make me ask and then make you flush it out. Which would have put you in jargon jail. So all right now because your availability heuristic. Thank you. This is a technology guy. Data data data guy, expect those things. I have a book like that. What’s that way out of this cool book from college. Alternative interpretations of data based conclusions. I think availability is in there. You know, uh confusing correlation and cause and effect. That’s a very common one. This is cool book. Can you show it to you

[00:11:50.24] spk_0:
what’s strong? I like that

[00:12:07.34] spk_1:
rival hypotheses. That’s what it is, rival hypothesis. Alternative interpretations of data basically. Okay, so enough pretense for now let’s talk about the study a little more. Yes. What stood out for you uh findings. What what what was most informative to you that and you think our listeners need to know?

[00:13:12.84] spk_0:
Yeah. The top line, I feel like we have that that cliffhanger is like how much should number I would spend. It’s like how much should we spend already? What’s the number? So I felt like we owed it to the audience to give them a number with a lot of asterisks and the number which is the median spend for our sample was basically $12,070. Which roughly equated to 5% of the median revenue as a as a ratio. So you know, knowing nothing else turning off the podcast right now you’re like, all right, we should be like at least considering that. and 60% of This sample, 60% were actually spending on ads or spending on advertising and promotion. I’m going to use that interchange of advertising and promotion and add but advertising activities 60% did and 40% did. Not. That actually surprised me. I actually really believe that there would be a lot more organizations spending. So you know that that was a bit of a surprise to me.

[00:13:16.87] spk_1:
Okay. Right. Not even not even 2/3

[00:13:20.04] spk_0:
are spot on your Yeah, exactly. Exactly on

[00:13:22.59] spk_1:
Advertising. Okay. And the median spend is 12,000 between friends. We can around the 70 away.

[00:13:29.35] spk_0:
So 12 spot me 70 12,000

[00:13:31.94] spk_1:
dollars. There you go. That’s that’s your

[00:13:34.30] spk_0:
feet for being option.

[00:13:48.14] spk_1:
Um uh And the average was, you know, it was interesting. The average was quite the average of like 4.2 million wasn’t the average was very highly skewed. Do you remember that? Right? It was it was something very huge.

[00:14:37.04] spk_0:
Oh yeah. I mean you had to throw out the average because of these outliers. There’s like these massive positive outliers and there’s some nonprofits out there that are spending quite significantly. And you know, you sort of begin to touch on lobbying. There’s like um, you know, there was a pro life America group up there and the millions of dollars and you know, that’s that’s not data that necessarily is going to help you, right. If Bill Gates suddenly walked into your boardroom, you’d all be average billionaires. Not helpful. Right. That that kind of insight is not helpful. So that’s why we chose the median. I’m sure it’s in your book of trying to avoid those mistakes. And you know, we we went through and tried to explain why we chose the numbers we did and also give access to the full data dashboard if people are interested in it.

[00:14:51.34] spk_1:
Alright, so, well, since you mentioned access to this, how do how do folks get the summary and I’ll be sure to say at the end, you can remind me if I don’t, how do you get the, get the, get the summary of the study.

[00:14:55.14] spk_0:
So it’s at a whole whale dot com slash advertising tried to make it pretty simple. We have a nice infographic there and the ability to download the entire report.

[00:15:05.74] spk_1:
Okay. And there’s a little fee there’s a $5 fee if you want if you want

[00:15:08.89] spk_0:
All this. So yeah the full data and dashboard if you want to go digging into it. Um and getting access to that. Yeah that’s the $5 fee. But you get the whole study which is you know 21, pages of awesome. That’s you know that’s available

[00:17:05.14] spk_1:
right? That’s free. That’s absolutely free. Okay. Hold well dot com slash advertising it’s time for a break. Turn to communications. Are you making your plans for 2022 for fundraising? Marketing communications. Do you need help Look at turn two? If you’re like if you’re thinking about fundraising you need to raise more money in 2022 marketing and communications. Your content, the stuff that goes out all that that you’re creating for your donors for general awareness. If you need help with it, think about turn to because that’s what they do. They have a background in non profits. They understand the nonprofit community so you’re not you’re not hiring an agency that only works with you know cos they understand the nonprofit space. They can help you develop your content, help you hone those messages, Get those messages out like you’ve been hearing me talk about, right? So if you need to raise more money or if you need to go to the next level in marketing communications In 2022, think about turn to because your story is their mission turn hyphen two dot C o Now back to how much to spend on ads in 2022. uh, the, the 80 20 rule applies here is one of your, One of your takeaways that uh, the top 20% spend about 80% of the ad revenue. Yeah.

[00:17:06.54] spk_0:
It always seems to happen and I always seem surprised when I find that power law, right? The 80 20 shows up on like

[00:17:21.64] spk_1:
how again does it keep happening time after time after time for in a wide variety of applications, 80 20 applies. How is our world,

[00:17:57.74] spk_0:
especially in actually, especially in financial distribution. But I was actually, I did the analysis. I was like, it probably won’t in this case show and I was like, you gotta be kidding me. So it wasn’t exactly 80 20 it was 24 76. So that’s about 24% spent 80% of that ad spend coming back to your point on average is being like much higher than in a potential bit misleading. So you do have that handful of organization spending quite a bit and the top 13 organizations in our study spent over a million dollars. So you kind of see that heavy, heavy waiting. And if it’s like, all right, you know, the purpose of our organization is the public awareness of this particular issue. And the way we do it is just turned donations into advertising and they’re nonprofits that just do that And they skirt the line awful close to lobbying, but they stay this side of fair.

[00:19:23.04] spk_1:
Okay. All right. Um, and you know, it occurs to me to this is, um, you know, you’re stuck with a lackluster host who is, whose thinking is not, uh, completely linear at all times, uh, if ever on that. But, uh, this is not, this is not a survey. So we’re not, we don’t have biases across people giving what they think is a good answer. You know, we don’t have those. So that just goes back to my book, the rival hypotheses, you know, self reports, not self reported data. Um, you do have the problem, like you said, you had to correct for whether people use agencies to produce their ads, but you were able to sort that out. So there’s, there’s some potential differentiation in, in the way people report organizations report advertising on their 9 90. But overall this is more reliable than survey data.

[00:20:13.84] spk_0:
Yeah. And I’m glad you brought that up. This is, you know, reported. So, I mean if you get back down to it, Yes, there is a human somewhere in the financial department of this non profit making that decision, but they’re doing that at a very macro stage and we’re pulling raw data were not wandering in and saying, Hey, how much do you spend on ads and you know, looking at, You know, 250 random nonprofits that decided to randomly fill out a survey with limiting information or you know, not being wanted to be fully transparent for whatever reasons. This is you know, this is source data from the organization according to the I. R. S aggregated by cause I. Q. And then we analyzed it to really find those answers and it’s something that we just felt was lacking. We felt like there was a lot of uh, we’ll call it a qualitative As opposed to quantitative type of research out there being like, Oh, here’s the official number. And then you look at the fine print and realize it was the opinion of 60 people not problems. And I’m like, I don’t know

[00:20:33.14] spk_1:
a lot of the answer. A lot of times people say, well it depends, it depends. So you’ve drilled down more than it depends.

[00:20:58.94] spk_0:
We’ve drilled down more and also been able to look at individual cause areas. So not just lumping one of my, one of my watchwords is being careful of lumping together the entire industry into one tidy bucket and assuming they all behave the same way. And if you know one nonprofit, you know one non profit and so we actually have, you know, in one of our findings divided up The type and cause focus of the organization to kind of get a better idea in that distribution, which tells, you know, another different story, which is all the more to say. I, I hesitated but knew we dessert we we owed the audience an answer of $12,000. But even that can be misleading depending on the industry and sub industry weren’t

[00:21:34.94] spk_1:
well, like arts organizations for instance, spend the most right. That’s what you’re, you’re, you’re teasing us a little bit. But I don’t do that to nonprofit radio listeners. You can, you can attempt it, but I won’t allow it. So, uh, let’s, uh, so arts organizations spend the most on advertising, right?

[00:22:15.54] spk_0:
Organizations were the highest spender. Again, surprising to me because I actually thought it would be health, I thought would be the health industry spending, you know, more to research awareness and pieces like that. But you know, frankly at the end of the day, you need to get people to attend to show up to, you know, go to these, you know, one time events to museums on location and so these, these were the highest highest spenders for sure. And promoters of performing arts sports and similar events were at the top and then the lowest, you know, because you look at the high and low, we’re less surprisingly the grantmakers and giving services like if you’re giving grants, guess what people find Jack, If you’re writing checks, people, people

[00:22:42.04] spk_1:
find you events, you, you you, you teased out what ad spending does too event income and I’ll let you, I’ll let you reveal what was found.

[00:22:46.44] spk_0:
Yeah, this is a bit of a nothing burger on the face of it because I had, here’s a case where I went in with maybe a touch of an agenda. I had an agenda. I’m going to admit it that I thought if a nonprofit was spending research, going

[00:23:03.00] spk_1:
back to my book, researcher bias.

[00:23:38.74] spk_0:
Yeah, this was researcher bias. But I left it in because I was so surprised that the ad spend of a nonprofit did not correlate. Uh, mind you even causation that didn’t even correlate in any meaningful way to hire event income. So event income is another thing technically reported by non profits in the 990 that you can pull aggregate and analyze. I’ll put an asterisk there, there are problems with that reporting which may be impacted this. But ultimately there was no correlation at all with this idea that or eggs without ads and with ads had any meaningful difference in the amount raised with event fundraising.

[00:23:56.54] spk_1:
Okay, Alright. Clearly you had, you had a hypothesis because that’s why you pulled the event income Data off the 1990s.

[00:25:03.44] spk_0:
Yeah. I mean, my hope was to show like I had, I had to hope that we would show that guess what if you’re spending to promote your event, your event does better And therefore an aggregate. They should be the folks that are making more money, you know, when in fact, you know, the of our, I can give some context with the data size. Uh, about 68% of our group had listed event fundraising expenses and 58% of that group reporting event fundraising revenue from their form nine nineties. So right in there, you’re like, wait a minute. They didn’t all make money, nope, just events that happened. Right? So I think it’s important. Not all events have maybe the purpose of fundraising, but that’s where they get listed. There’s also the question of in the accounting department, did that gift of $100,000 that came in five days after the event? Did that go to the capital campaign or did that go to the fundraising event? There’s a lot of mushiness there. So, you know, I’ll blame it on the data, but I wanted to report it because it was something that sort of keep us honest moment.

[00:25:09.32] spk_1:
Yeah. Okay. But it’s valid. You reported as a finding. So

[00:25:13.12] spk_0:
like we. Did you believe it? Believe it. Ok.

[00:27:30.84] spk_1:
It’s time for Tony’s take two. It’s the holidays and it’s the fourth quarter. The holidays. I hope you enjoyed your thanksgiving time with family, friends. Time for yourself. These things are important. You’ve got to take time to rejuvenate yourself to relax however you you know what’s best for you, however you do that for yourself. However you relax. It might be some people, some people relax by, you know, adrenaline rushes and uh, you know, zip cordon however you relax. I hope you did it over thanksgiving and I hope you will continue it throughout the holiday season. We’re in the midst of Hanukkah right now christmas coming up whatever your holiday is. I hope that you will be good to yourself as well as of course your family, loved ones and friends that you’re getting together with and it is the fourth quarter. So there’s a lot of pressure. I know vast amounts of, of fundraising revenue come in, not only the fourth quarter, but even in just in december. I know. So I know you’ve got those pressures. What am I talking about? Balance, balance, take care of yourself so you can take care of your non profit Please do both please for the holiday season this year. That is Tony’s take two. We’ve got boo koo but loads more time for How much to spend on ads in 2022, the older organizations, older organizations spend more then then I’m sorry older organizations spend, uh, less likely to spend. I was thinking of larger. I was thinking of size, not age, older organizations spend less. That that seems to make sense. There are, when we presume that older organizations have have greater, uh market awareness because they’ve been around longer.

[00:27:59.74] spk_0:
I guess the, I love this take away, this was actually, I have to give credit to Kobe on our team who ran the ranch and manage this analysis. He just, he was like, I would love to look at the date funded because the underlying hypothesis here is that older organizations that were incubated and created in a time frankly pre web 12. Oh, would see less value in their operating less value in paying to play in creating ads and creating advertising. Oh, that’s

[00:28:14.34] spk_1:
the hypo that you think that’s the car. They haven’t adapted to our digital ad environment.

[00:28:15.80] spk_0:
I mean it’s, we call the rising generation digital natives. Right? How much time do you spend on Tiktok? Like there’s, I think there’s a fundamental reality.

[00:28:24.88] spk_1:
I’ve never, I’ve never been there. But they can hire people, I don’t need, I can hire somebody to do Tiktok for me to watch you George. That’s so cynical about older organizations. But let’s all right.

[00:28:40.44] spk_0:
You’re right. Let’s, can we, we can tell them the numbers though. It wasn’t that massively off. I will always say that. Um, the,

[00:28:41.84] spk_1:
alright, let’s start with, what’s an older organization. How did you, how did you group or cluster or how did you define age?

[00:28:48.66] spk_0:
How did I unfairly categorize this poor lined group of nickel. They

[00:29:03.74] spk_1:
Are capable of even hiring people to do something post 1950. I mean these these folks are still watching black and white television and some of them are still listening to silent movies in your mind.

[00:29:07.04] spk_0:
Uh, that side, the set with this century. So it’s over under year 2000, which I thought was an interesting inflection point and also it’s nice and round. So

[00:29:17.86] spk_1:
There’s a whole bunch of before 2000. Okay.

[00:30:20.54] spk_0:
Oh yeah, no, no, I think That, I mean it’s a long swath of time to look at and you know, the difference is really that this uh in last century 41% had no ads versus in this century 37%. So you know, 4% points total difference in just the binary decision. Should we have that ads, advertising and promotion? Um and then the median spend of this century was not that much higher, but it’s about 400 ISH, $400 higher uh simply by nothing else controlling for everything else, right? Like nothing else. You just, you’re just going to spend a little bit more if you are going to spend and you’re more likely to be spending on that. So it wasn’t mine, I kind of wish there was a bigger differential. So it’s actually much tighter than, and I have to, I have to say the counter narrative here is that do something dot org, one of my alma mater’s uh what Founded in 1993 and still had a well well above average as fund. So they are like the outlier that I didn’t even have to take that long to find.

[00:30:38.34] spk_1:
It’s impressive that you were the chief technology officer and do something that’s uh that’s a, that’s quite a renowned organization for What, what’s their sweet spot, 14-17 or 14-18 or 14-20 year olds taking, taking action and all the data that you gathered from them. That’s uh that’s quite a, that’s quite a job to have had. It’s impressive.

[00:31:17.44] spk_0:
It was an interesting time to have that role. I’ll say that for sure because there was a lot of, you know, a lot of tech being just sort of introduced web to, oh, just becoming of age, you know, you look at facebook pages and that existing for the first time in that period of time being like, what do we do with this now? I don’t know, what do we do? Like there was a lot of like, have you used this thing, you’re like, oh God, what is this thing now that I have to go figure out and then building our own platform as well and then sort of, you know, data privacy and protection and jumping in? I’d say the biggest piece we figured out was SMS in that period of time, the power of text messaging, which is still, you know, widely under appreciated, I’d say in the social impact sector. I do take, you know, huge nod of the hat to twilio dot org and what they’re doing out there, but it’s a, you know, it was an interesting time to be the cto

[00:31:49.34] spk_1:
and what was the the prime age group for? Do something? I was trying to guess, I was like 14 to 18 or something. Yeah, it’s

[00:32:15.14] spk_0:
extended, you know, I think they would extend it to through college age, but there’s like different sort of calls to action along the way. While I was there, we were predominantly focused on teens and tweens and that sort of intro level to volunteerism and engagement to foster a lifetime of social engagement. And and since then they’ve really evolved because guess what? You know, if you know, if you have half a million people that are of this age, it’s silly to say like, all right, goodbye, Good luck. I’m like, yeah, we can still provide services. We can still provide ways for them to engage. So it’s kind of an interesting quandary. I think for a lot of youth focused organizations to be like, where do you draw that line?

[00:32:53.54] spk_1:
Well, and because eventually those folks are gonna turn over 45 and then they’re just gonna be dinosaurs. Like like you hypothesized about the older organizations so you better get all the data you can now or you know, do something better because once, they once they turned 45, I mean they’re practically dead and they can’t adapt. Their their minds

[00:32:55.86] spk_0:
are impossible.

[00:32:57.15] spk_1:
Yeah. Their brains are neck roast it.

[00:32:59.63] spk_0:
Well actually, no, not completely, but maybe 4% more of them. Like 4% points. four

[00:33:04.59] spk_1:
percent. Alright. Yeah. Good. Thank you for bringing us back to the survey study. So we’re not a servant to the study, definitely

[00:33:11.63] spk_0:
stepped in it. I’m sorry.

[00:33:22.84] spk_1:
So uh let’s talk about what I what I had confused with that larger larger organizations. What did you find out about that? That’s that’s it.

[00:34:56.04] spk_0:
Well, I think the interesting thing is not that hey, surprise larger people with more money, spend more money. This just in from things you probably already knew uh is that it’s the same ratio. So that sort of golden ratio of 5% of revenue just paired out for small and large organizations. My assumption there that I went in there with a sort of hypothesis was that The smaller organizations would probably disproportionately spend at a higher ratio, but it didn’t turn out to be true. So in fact, that sort of 5% of revenue held across large and small organizations, albeit yeah, large organizations spent more. So if you do like if you just take away a quick thing, you could accidentally assume that oh, large organizations got big by spending more. You’re like, well no, they’re larger and they still spend at that ratio, which is in and of itself interesting because it is a much bigger number. And between those two groups where we divided it between large and small, which was over under I should note small organizations being 125 million. So small and 5 to 10 million. So we just basically through the line down the middle and it just equated to the large organizations had a median those three X. In terms of revenue three X. The amount that the 1 to 5 did and that was the same ratio three X more in ad spend. So you know, if you were doing lazy reporting, you say like large organizations spend three times the amount you’re like, Yeah, but that’s just a symptom of numbers. Okay, okay.

[00:35:04.24] spk_1:
And employees, you also, you also tracked the number of full time employees at, at organizations.

[00:35:06.54] spk_0:
Yeah, this was a bear. Would

[00:35:08.42] spk_1:
you find related to? Why is it a bear?

[00:35:17.44] spk_0:
It was a bear. It was just really difficult to do to like segment based on, you know how many employees and they’re simple.

[00:35:18.71] spk_1:
Isn’t there a simple question on the 9 90 I’m not an accountant. So I don’t

[00:36:07.13] spk_0:
know the total number of employees is technically available. So we were able to grab that number and then parse it out. It’s just parsing it between under 55 to 9, 10 to 14 employees, 15 to 19 employees. Uh and sort of scaling that up. The biggest jump happens really from, you know, organizations with less than five employees just aren’t really spending on ads. And the hot take there is that, you know, surprise, it takes people to run the ads running ads and promotions takes dedicated, you know, person or part of a person to truly run. And then as you sort of scale up, you have like random ebbs and flows, but the biggest jump really is that like if you have an organization with under five people, um, they’re really, they’re nowhere near that median ad spend because they come in at like uh 500 bucks versus immediately get to $2000. Um, once you get 5 to 9 and then the next biggest jump, you know, happens once you’re over 24 people, just larger organizations

[00:36:42.33] spk_1:
acquaintance with what goes into this, what why it takes you just said it takes a person or at least a part of a person for organizations that aren’t doing this for the, for the, Well for the 60% that that aren’t spending, what what did they have to devote time to?

[00:36:47.93] spk_0:
It is the most valuable asset of nonprofit has its not the revenue, it’s the time of the people working and to run an ad on facebook to place an ad in the paper. Let’s say if you’re running to place an ad on this very podcast, it takes time for someone to email setup, established the price, manage and test the R. O. I.

[00:37:34.53] spk_1:
It’s not create uh an obstacle where it doesn’t exist. All you have to do is email tony at tony-martignetti dot com. If you want to be a sponsor of nonprofit radio it’s quite a fluid process. George’s referring to George is referring to a university is not that well acquainted with right. This study is not on podcasting advertising When, when he does that one. I hope I will be a part of it. But uh, the, the, I don’t know about the podcasting universe, but if you want to be a sponsor of nonprofit radio it’s a very fluid, easy process. You’re talking directly to the host of the ceo. Just

[00:37:44.47] spk_0:
email you, do it right now. We can do it right now.

[00:38:00.62] spk_1:
Yes, you can do it right now. Whole whale. If whole whale was a sponsor, you would know how fluid and simple it is. But you haven’t taken, you haven’t taken that leap. So all right, let’s not go outside the bounds of the study as we’re, as we’re trying to draw conclusions. So

[00:38:16.22] spk_0:
We take, you know, we sort of take it as sort of maybe a core number that, Oh, you know, we can spend $12,000. A median number, but it doesn’t happen by itself. I mean, nothing simply does. So that that type of ad management was in the back of our mind saying like, you know, you have to track the R. O. Y. You have to create the report for the boss. You have to set up the landing page or whatever it may be that you’re running ads for. It’s not just as simple as saying like, oh cool, no problem. You know, through your credit card over there and you know, let it run. So that’s the thought that it takes labor to implement ads

[00:38:39.72] spk_1:
and your study makes the point that even if you’re hiring someone to do the ads for you. You need someone to oversee the work of the consultant or the firm.

[00:39:07.32] spk_0:
Yeah, I mean the numbers bear out that, you know, it definitely tracks as you go up in a number of employees, um that you’re, you’re able to see a higher spend. Now. That’s also corollary to the amount of revenue. But we also show that along the way, which, you know, incrementally increases but doesn’t necessarily follow along with the differences that you see. So, you know, I don’t purport that this study will show you how to set up your advertising department. But it will tell you that you can’t assume this thing happens in a vacuum and without labor.

[00:40:03.11] spk_1:
Yes. Okay. Well, and you’re a digital uh, advertising agency in at least in part, how much of a full time employee would you do you estimate it would take for? Well, it doesn’t really well for a smaller organization, let’s say they let’s say someone has just 10 employees or fewer like what, how many, what percentage of a full time employees time would that size organization Spending on ads if they were gonna move themselves from the 60% that don’t advertise at all to the 40% that do

[00:40:20.81] spk_0:
an interesting framing there. If you had 10 employees according to a study, you’d have an average revenue of roughly call it 2.3 million your median ad spend for that cluster would be $2100 and You know, oh, that doesn’t require a full time employee. But it’s gonna take about, you know, 2100

[00:40:28.61] spk_1:
That’s in a year. That’s 2100 a year. Yeah. So you’re just spending a little under $200 a month.

[00:40:40.21] spk_0:
I mean, Yeah, I mean and and and 2000. Yeah,

[00:40:42.12] spk_1:
22,000, exactly. 200 a month will be 2400 a year. So you’re saying 2100. So

[00:41:49.21] spk_0:
Yeah. So for that number that’s, that’s easily managed in 10% of somebody’s time depending on the type of Advertising activity that you’re doing. The hope is that that allows you enough to test where there’s value and increase that number, ads can be spent for a number of different reasons. And this is getting back to maybe why my assumption on fundraising was so flawed is ads may be spent to spread awareness of a topic a theme to increase public awareness. I don’t know for vaccines for health research, it’s not necessarily direct 1-1 ratio with fundraising. However, and if you are able and you are trying to turn one ad dollar into two donated dollars and you figure out a way to do that. It’s the hope that spending that and having somebody paying attention to it may figure out a way to get a bit of a little bit of a money engine going for you, spending adds to increase donations to the organization. And that Is a hope of this study. It is a hope that you’re saying, you know what it is worth, frankly 20% of someone’s time to play around with some amount of money that would let us learn and then do more of what works.

[00:42:29.30] spk_1:
Okay. Okay. That’s a pretty good wrap up actually. But I’ll give you a chance to to make it official because we’ve, you’ve covered all your explicit findings in the, in the study which folks can get at whole whale dot com slash advertising very appropriately named simple. Uh, simple U. R. L. Whole whale dot com slash advertising. What would you like to leave folks with George?

[00:42:33.10] spk_0:
I think that point lands hopefully. Well, and I haven’t offended any older organizations out there from which only only older,

[00:42:41.44] spk_1:
only older people. You haven’t offended any organization, not just the older people

[00:42:45.18] spk_0:
For 4% of them. Right.

[00:42:48.60] spk_1:
Well, that was, that was a differential, but it seemed

[00:42:51.50] spk_0:
Like it was 100% of those people were offended before.

[00:42:56.31] spk_1:
No, no, no, no. The way you did it, it was, it was wider.

[00:42:59.55] spk_0:
It was

[00:43:00.19] spk_1:
good

[00:43:00.78] spk_0:
differential. I

[00:43:07.30] spk_1:
understand the differential was 4%. You didn’t offend only 4% of People over 45. Now you offended most of us.

[00:44:35.79] spk_0:
That’s, that’s pretty good. Well, I’ll be joining you shortly so I can, I can join in the offending club. I uh, I will say that there is a lot to, to dig into here, but it is really meant to be an asset for anyone making the case in an organization to say, Hey, why don’t we try this? Why don’t we try to spend? It seems like our counterparts that are in this field are doing so in learning and so if you’re not spending, you’re not learning. And when I look at platforms, social platforms, that purport to be, you know, ways for you to get this organic traffic that will magically come to your site. So if you are posting, for example, on facebook, on instagram, frankly on most social platforms, you are losing money because the platform truly for for non profits for companies. Social media platforms are advertising platforms first and social platforms. Second, one more time. If you are a company, if you are a non profit Social Media is an advertising platform 1st And in an organic social network. 2nd, possibly distant second. Depending on which one we’re talking about. And so it’s like sending somebody in your communications remarketing department to work without a computer by not saying, hey, here’s a bit add money to play with and learn what might be possible for us. So that’s, that’s the thought I want to leave you with. I think.

[00:45:10.89] spk_1:
All right and not just me. All our listeners. Thank you. He’s George wegner He’s the chief. Well, at whole whale, whole whale dot com hotmail dot com slash advertising for the nonprofit advertising benchmark study. If you’re on twitter there at whole whale, thank you, George. Terrific. Thanks for sharing and thanks for being a good sport captain. Ahab. Mhm.

[00:45:11.69] spk_0:
Thanks Tony. Thanks for having us

[00:45:42.49] spk_1:
next week purpose driven marketing. If you missed any part of this week’s show, I beseech you find it at tony-martignetti dot com. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o. And let me remind you how simple it is to be a nonprofit radio sponsor. Just email, tony up, tony-martignetti dot com. Our creative producer is Claire Meyerhoff

[00:45:57.79] spk_2:
shows social media is by Susan Chavez. Marc Silverman is our web guy and this music is by scott stein, thank you for that. Affirmation Scotty be with me next week for nonprofit radio big nonprofit

[00:46:15.59] spk_1:
ideas for the However, go out and be great.

Nonprofit Radio for November 15, 2021: Bitcoin & The Future Of Fundraising

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That’s the new book by Anne Connelly and Jason Shim. They share the potential in cryptocurrency donations and explain simply, how to get started. Private keys; public keys; wallets; and exchanges. It’s time to learn what’s inevitably in your nonprofit’s future.

 

 

 

 

 

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View Full Transcript

Transcript for 567_tony_martignetti_nonprofit_radio_20211115.mp3

[00:00:02.84] spk_1:
Hello

[00:00:10.84] spk_2:
and welcome to

[00:03:09.04] spk_1:
tony-martignetti non profit radio Big nonprofit 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 embarrassment of hydrogen itis security Eva if you rubbed me the wrong way with the idea that you missed this week’s show, Bitcoin and the future of fundraising. That’s the new book by ANn Connolly and Jason shim They share the potential in Cryptocurrency donations and explain simply how to get started private keys, public keys, wallets and exchanges. It’s time to learn what’s inevitably in your nonprofit’s future. I’m tony state too, Veterans Day, We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o here is Bitcoin and the future of fundraising. It’s my pleasure to welcome co authors to nonprofit radio and Connolly is faculty at singularity University. She’s worked at Doctors without Borders and been a member of their board. As director of fundraising at Dignitas International. She set up one of the world’s first Bitcoin donation programs and is certified in strategic disruption from Harvard business school, Which sounds like a degree in anarchy. We’ll talk a little about what that what that’s about. She was named one of Canadian broadcasting corporations. 12 young leaders in changing. Canada and one of the 50 most inspirational women in technology in Canada. She’s at an underscore Connolly and welcoming back Jason shim he’s director of digital strategy and transformation at pathways to education. Canada his experience spans the nonprofit and academic sectors helping organizations stay ahead of the technology curve In 2013, he led pathways to become the first charity to issue tax receipts for Bitcoin donations. He’s an editor at ledger, a peer reviewed scholarly journal at the University of Pittsburgh Pit, publishing original research on Cryptocurrency and Blockchain technology. Jason is on the board of intend where amY sample ward, our listeners know her is Ceo and Jason is at Jason shim together they wrote the book Bitcoin and the future of fundraising. A beginner’s guide to crypto, crypto currency donations and welcome to non private radio Jason. Welcome back.

[00:03:12.14] spk_0:
Thank you so much.

[00:03:13.50] spk_2:
Thanks for having us.

[00:03:52.24] spk_1:
It’s a pleasure pleasure to have both of you. Uh and let’s start with you, the the Cryptocurrency is like a new technology like at one time the telephone and talking movies, right? Talkies and the T. V. And internet and cell phones. Uh these technologies all had their their naysayers and those who thought it was just a fad, you know, talking movies, those will never last. So what do we what do we say to folks who are naysayers. Uh thinking that Cryptocurrency maybe it’s just a fad or it’s too dangerous. How do we allay those concerns about this new technology,

[00:04:43.64] spk_0:
It’s very reasonable for people to be nervous about new technology. I mean I can remember my parents talking about the Internet back in, you know the early to late 90s and saying, you know anyone will be able to look up the recipe for a bomb like we need to stop this, this is dangerous. And you know, that’s true in today’s world, anyone probably could look up the recipe for a bomb, but no one would ever consider saying we should stop the Internet. It’s a bad thing for society. Um And I think that’s where we’re at with cryptocurrencies as people are still in that phase where they’re learning about maybe some of the scarier elements. Uh and they haven’t quite gotten to realizing just how powerful and incredible this technology is, both for themselves, but also for society and people around the world who might not have access to the same financial services that some of us do.

[00:04:53.64] spk_1:
Yeah, that’s a very interesting point. Uh let’s say a little more about how this can be liberalizing for a lot of folks, a lot of parts of the world where banking infrastructure is not something they take for common or, or financial infrastructure broader than just banking is not, is not something that they take for granted the way those of us in the, in the west do.

[00:05:43.04] spk_0:
Yeah, I think there’s two sides that really is for many of us in North America, we have easy access to banking services and um but even in the states, more than 25% of people are unbanked, they don’t have access to that. And when you look around the world, those rates are even worse and so many people just operate in a cash economy, it means they’re locked out of any sort of loan systems or being able to better themselves through more formal financial services and then there’s a whole set of countries where people can’t even trust their national currencies. So if you look at places like Argentina, Iraq Venezuela, sorry Iran where inflation is astronomical Even right now in Canada, inflation is more than 4.5%. But if you look at Venezuela in 2018, their inflation rate was hundreds of millions of

[00:06:08.39] spk_1:
was not more hundreds of millions or billions of percent. Yeah,

[00:06:53.04] spk_0:
it was wild. And so you know if you can imagine your life savings disappearing overnight simply because the government is printing too much money or isn’t a good custodian of the national financial system. That’s the reality for a lot of people. And so I think when I think about Bitcoin more than anything, it’s not. Its goal is not to replace national currencies. Its goal is to provide people with choice so that you know, if they’re really happy with the currency their government is providing, they can certainly use that. But if they don’t have access to it, they don’t have access to banks or they don’t trust their government to do a good job of managing their money. They have another option. And that’s what for me is so exciting is it’s this global permission list system where anybody can take part um and use it to fundamentally change their lives.

[00:07:10.44] spk_1:
So Jason is it is it as simple as just needing an internet connection for anyone in the world to to participate in in cryptocurrencies?

[00:07:12.44] spk_2:
Yeah, I mean that’s pretty much the foundational building block that you know, if you have access to an internet connection and you can download, you know, the uh you know, there’s a few different approaches of accepting Cryptocurrency. But yeah, it starts with an internet connection in terms of getting getting access to that that wider network for sure.

[00:08:05.44] spk_1:
Okay. Um uh the uh I did a quick search of just comparing the us and Canada and adoption rates are much higher in uh in Canada than than in the us. I found like 13% of Americans Have bought or traded Cryptocurrency but it’s it’s like 30% of Canadians. So much much wider adoption for our well for your country, for our neighbors here, for me, for our neighbors in the north, for for your country, for the two of you, any any explanation as to why it might be 30% in Canada vs just 13 in the us.

[00:08:09.94] spk_0:
I think what might be Oh sorry, go ahead.

[00:08:12.24] spk_2:
Go ahead. And

[00:08:12.63] spk_1:
I

[00:08:48.84] spk_0:
think what’s even more exciting really than comparing the United States and Canada is looking where it’s growing globally. You know, some of the greatest adoption rates are in places like Nigeria or South east Asia. Um and that’s really demonstrative of, you know, when you have locations that maybe aren’t providing the financial services that we have in north America, the rates are exploding um from a Canadian perspective, I know people are really keen to explore new technologies and we also have a massive immigrant population that wants to send money back home. Um so trying to find mechanisms that enabled them to do that without paying fees of 8-12% through Western Union. The coin is a really great option for a lot of those people.

[00:09:28.14] spk_1:
Mm hmm. Alright. Uh now and I was, I chose you but you didn’t answer. You didn’t answer the question. So I’m gonna try Jason although it was anarchist. Uh that is that the degree in anarchy. I knew it. Um what is what we call it? A strategic disruption. Alright. The anarchy degree or certification. So uh, Jason any, any, do you have any insight into why so much more widely adopted in Canada than the U. S. Not that what I said was not valuable. I, I appreciate what’s happening in *** et cetera. But I just wanted to bring it, I don’t want to try to bring back to to the north America here.

[00:12:01.94] spk_2:
Yeah. In terms of adoption rates like what I found over the years is that, you know, when, when tech companies in the past have been looking for like pilot areas that I, I know that Canada has stood out as being, you know, the place where, you know, um, initial kind of rollouts or pilots that have happened. So, you know, when I know that when, you know, folks are testing out like new apps, you know, for their organizations, it’s a multinational organization, it’ll tend like what I’ve observed is that it has tended to be uh tested in Canada first and I, I imagine, you know, that may reflect, you know, that it’s a fairly, you know, uh text avenue connected, you know, uh population, but also uh there were some hotspots for Cryptocurrency, you know, in its early days, I mean, ethereum was born out of Toronto battalion, peter in is, you know, Canadian the founder of ethereum and uh there there are several clusters in Canada that, you know, a lot of the initial developments encoding around, you know, Bitcoin and ethereum and subsequent projects uh I think really grew out of that. So I think what we’re seeing in terms of the increased adoption rates is an extension of that where uh you know, not unlike, you know, early silicon Valley where, you know, a lot of, you know, tech development happened there that, you know, for, I think the early 20 tens, um uh Toronto really served as kind of, that, that initial hub in those communities that really got engaged, so no surprise that, you know, subsequent, you know, companies emerged and uh, you know, adoption uh may have been a bit quicker here. Um, but you know, I think that we are seeing that definite dispersion where there are multiple uh you know, crypto hubs that have emerged in the last 10 years for sure. But yeah, I mean Canada is also a wide place of you know being able to send uh send payments um easily and by a practical example and this isn’t particular to Canada, you know specifically, but you know when when working in international context, you know, hearing from, you know developer contacts in the local community that when you’re considering paying developers overseas and all the options that available like Bitcoin is emerging as you know uh when uh when when speaking to folks about you know how they’re managing payments, you know, Bitcoin is often an easier way to pay um developers in other parts of the world than it is going through traditional payment mechanisms um because of that the lesson administration and at times even just the availability where you know trying to pay someone, we’re banking systems are limited, you know, as I mentioned earlier. Uh so I think all these things combined have contributed to higher um you know, Canadian adoption as you pointed out.

[00:12:39.04] spk_1:
Yeah, interesting. All right, thank you. Um so you mentioned ethereum or ether being the the second most popular Cryptocurrency behind Bitcoin, Jason was was Bitcoin originated in in the States or was that was that also in Canada? That’s uh interesting somewhere else. Well no, I’m sorry, it was another country, wasn’t it? Uh, Bitcoin,

[00:12:47.04] spk_2:
I location wise, I think it’d be best described as um kind of Bitcoin emerged online that, you know, to this day, the, the, the founder, founder or founders of Bitcoin. Um, you know, uh, so in terms of like a specific location, videos created, uh, you know, Bitcoin would have been online and then, you know, Ethiopia, many of the major players who are known were based out of Toronto.

[00:13:34.64] spk_1:
Right, okay, okay, that’s right. You say in the book that the founders of Bitcoin are still unknown to us. Right, okay. All right. Um, and with some trepidation go back to you. Uh, so since I made fun of this, tell me about what a certificate and strategic disruption is. What is that? I

[00:14:48.64] spk_0:
think the key element about it is it helps you develop a mindset about how to think about moving forward with your organization or your company, where you try to essentially disrupt yourself. And that’s why companies like Apple were so successful is, you know, they had a product and a product that worked, they could have just, you know, kept producing that same product for many years until some other company came by and beat them out and the company would go under, but instead of waiting for someone else to come out with a better product, like she said, hey, we’re going to actually cannibalize our own offering. We’re going to make a better product. So you know, we’re not going to just make the ipod, We’re now gonna make the iphone, Um, and our customers are gonna buy that instead. And so they were constantly creating new and imaginative things and changing the lives of their customers and so strategic destruction is really that. And you can apply the same type of mentality in the nonprofit sector and say, listen, you know, we’ve got a pretty good fundraising program. We’ve got major gifts that come in. We’ve got direct mail that goes out and um, we can sit here for 20 more years and raise money this way. But the nonprofits that are going to do the best in the long run are the ones that really look at their program and say, hey, let’s, let’s actually shake up the way that we’re doing things. Let’s try some really new and innovative stuff. Some of it will fail. Some of it will succeed spectacularly. And that’s actually gonna help us future proof the organization, um, and help us be, you know, essentially a stronger longer lasting organization moving forward.

[00:17:06.64] spk_1:
It’s time for a break. Turn to communications. Communications. It’s in their name. So they don’t only do the public relations and the media work that I’ve talked a lot about communications is so much more vast than that. So think about documents, documents you used to communicate case studies, your annual report, white papers turn to, can create these documents for you. They’ve got a journalism background, a writing background. They know how to understand your, your tone, your core messages and how to bring those out in your written documents. So you got this content that needs to be created and it’s not getting done. You need help think about turn to because your story is their mission there at turn hyphen two dot C. O. Now back to Bitcoin and the future of fundraising. Let’s uh, let’s, let’s bring it back to Cryptocurrency and north America. Give us give folks some motivation uh, in terms of raw numbers and potential growth. Uh, so we can help allay fears because you know, aside from it being a new technology, you know, lots of folks get the, uh, pay me $2500 in the US in Bitcoin or else I’ll release these bad things about you on the internet, you know, and I’ll share your contacts with their, you know, etcetera. So there’s some that contributes to some of the fears, these, uh, these um, uh, you know, email scams. So help help allay some fear with some hard numbers about where crypto is and where Bitcoin is maybe specifically and about the future.

[00:19:00.64] spk_0:
Yeah, I think the best numbers I can help relay are really numbers around donations that have already happened. And so you know, last year, the talent veteran who is the founder of ethereum, He gave a billion dollars to Covid relief, a billion with a b. So tell me about any other billion dollar donations that you heard about last year, you know, in any country around the world. And so, and that’s just, that’s, you know, it’s not the only one we had. The Pineapple Fund gave away $55 million borders Australia just got a $35 million dollar gift last week. Um, so the numbers that I really want to convey our, that, you know, there’s a community of crypto donors that are waiting to make these gifts that have just enormous amounts of money and a real passion for changing the world. That’s why they got into crypto because they want to make a difference. And so now they’ve got all this money and they’re trying to find organizations that they can actually give this money to. And right now that’s, that’s a challenge. Like right now there’s some incredible organizations accepting. But in order to find charities that are accepting crypto, most donors will google, they say which charities accept Cryptocurrency and then they pick one off the list. And so there’s this amazing opportunity for charities that are out there are nonprofits to actually uh, connect with this donor group that’s really being ignored by most of the community and really make deep relationships with them because they’re very different from traditional donor groups, how they like to give, what interests them, that type of thing. But the potential for their giving is just astronomical and the potential to create change together. Um, is what really gets me excited

[00:19:02.91] spk_1:
about cryptocurrencies

[00:19:04.01] spk_0:
in the space.

[00:19:30.44] spk_1:
Yeah. At the end of every chapter, you have a little call out box about a donation, a big number donation that was made in Cryptocurrency. Um, but yet the penetration rate, I think in the States, there’s only three or 4% of charities only are accepting, uh, Cryptocurrency donations. Uh, and some of them big ones that you name our United Way Red Cross. Do you want to, do you want to shout out a couple in, uh, in Canada that are accepting.

[00:20:58.14] spk_0:
Yeah, absolutely. I mean pathways to education of course, which is Jason’s organization was one of the first war child has been accepting for a long time. We have organizations like the Mississauga Food Bank, which is a, you know, a major site pita United Way up north as well as accepting. So it’s not the case that there aren’t, you know, well recognized organizations with good brands and, and that are well trusted. There are many names. Um, I think what sort of holding some organizations back is just, is education, You know, we’re at the stage where Bitcoin can be a little bit scary. Um, people don’t necessarily feel comfortable, They’re not sure whether it’s gonna be worth it. Um, and, and that’s really just a small hump to get over, you know, you can watch a lot of great videos online to learn about it. You can, you know, get the book that Jace and I put together, which is specifically written for fundraisers who don’t know anything about crypto and want to get started. Um, but more than anything, the best way to kind of get excited and start learning about cryptocurrencies and is just to buy some And you don’t have to go out and buy, you know, a $10,000 worth or anything just by a dollar’s worth of Bitcoin. Um, think of it as, you know, investing in evening of your time and learning something new and fun. Um, and that will really help you understand, you know, how it works, what it’s like, what you could do with it. Um, and uh, it’s a great way to get your foot in the door.

[00:21:29.44] spk_1:
Yeah, and Jason you in the book, you to recommend that as also establishing credibility with the crypto donor community is buying some, buying some on your own even before your organization has a, has a mechanism has set it up so that you’re not, you’re not just testing your, your own organizations, uh, infrastructure for accepting these gifts, we’ll get to that, but just buying and buying some on your own sounds like gives credibility to you, gives you credibility among the donor community

[00:23:52.64] spk_2:
for sure, and I think that many who are involved in the Cryptocurrency community, You know, I think it goes to really, how do you build that deeper relationship and have a conversation with folks that it’s it’s not just, you know, solely talking about, you know, the, you know, yes, there’s a donation part, but it’s also, you know, I think, you know, being able to speak knowledgeably about it, um, and, you know, as as people are involved in it and interested, you know, it, um, showing up in the communities as well. And I mean, that that that’s another kind of tactic that, you know, we do mentioned, you know, in the book and, you know, have seen used to to get the fact that, you know, if if you’re going to engage, you know, communities of donors that are very interested in, you know, something that they have self identified that, you know, before folks get into it. You know, folks typically, you know, do a lot of research and um, and you know, form, you know, uh, in person communities are online communities around it and just showing up in those spaces and being like, yeah, you know, I’m often, what I found over the years is that, you know, when participating in, you know, those Cryptocurrency spaces and everyone’s doing introductions, it was a few years before I was, you know, for a long time, you know, was the only charity in the space of reasons like, hi, you know, I work for a charity. So what brings you here and immediately there’s a way to connect over that and focus get really interesting. It was a few years before a second charity arrived. And you know, that was an indication to me that, you know that this was growing in awareness and such. But you know, I think that having that background of even having purchased a small amount, you know, gives that it gives that experience and credibility around, you know, it’s not just you know, saying, hey, you know, uh can you make a donation? Okay thanks, bye. It’s you know, how do you cultivate that longer term relationship where we’re part of something bigger here? Like there there’s um Cryptocurrency, you know, emerging as uh as a new asset class as a way to facilitate transactions that, you know, uh bigger, bigger possibilities. And in terms of, you know what we’re seeing with um uh with the ways that people are transacting, interacting, you know, uh, N. F. T. S around the corner. We haven’t touched on that yet, but it’s uh it gives more surface area for to connect with people on and you know, I think that, you know that one building a relationship, you know, having having more of those commonalities is also important.

[00:24:41.14] spk_1:
So, and mentioned the the fact that a lot of lot of crypto donors now are just Googling, you know, where can I make a crypto donation, but we wouldn’t expect that to continue as the penetration rate becomes higher among charities. Mean, so it is going to be building relationships and, and eventually it’ll become just another way of making a gift from folks that know, you, you know, like, like writing a check or transferring stock, eventually they’ll be the world will be just, you know, it won’t be, where do I make a donation by, through crypto?

[00:25:03.94] spk_0:
It’s no different really than, you know, when charity started adopting online donation platforms and, you know, website donation forms in the early days, there weren’t that many that had them and people wanted to use their credit card to donate online would have to figure out which charities made that possibility. But today, no charity would ever think of not having an online form. And so really it’s just, it’s just a timing thing, we’re just still in the early days and very exciting days. And because of that, there’s an incredible opportunity for the organizations that do get on on board early

[00:26:20.14] spk_2:
and, and, and to that point, like, I I think that, you know, when, when we think about, you know, early days when there were opportunities to donate online that, you know, I think there was a period in which organizations would have, you know, um competed on, you know, features that even just having the ability to accept credit cards online would have set you apart and, you know, as more people, you know, adopt online credit card payments, then you have to, um, you know, compete on a different kind of, uh, on like service provision. So, you know, the, the ease for which someone can make it right. And you know, I think we’re seeing that similar transition where, you know, right now, it’s still that, that phase where it’s like, okay, you know, does someone accept it? Yes or no? And that, you know, as that, um, as that number increases, then it’s going to be a different proposition where it’s like, alright, who, who does it with the most ease or who provides that additional added experience? That is, you know, absolutely fantastic. Um, and you know, as we look into, you know, how, um, how folks are engaging. Like, you know, it is there a future in which, you know, folks, you know, have some sort of representation on, you know, the Blockchain that’s like, you know, this certifies that, you know, you have donated to this organization or you know, you, you can unlock, you know, uh, different online, you know, possibilities, you know, through your donation that’s embedded on the Blockchain or opportunities like that. So, you know, I think that that’s kind of a possible feature that, you know, things can move in that direction as well.

[00:27:27.44] spk_1:
Jason, let’s make sure everybody understands the Blockchain. Uh, it took me a good amount of reading and many guests before you or well give myself a break a few guests before you. Maybe not many, uh, you understand what Blockchain is but it’s really it’s really something very simple once I once I once I understood it was simple but it took a little I’m trainable I guess I’m trainable. That that that’s the good news but uh you know so every every Cryptocurrency is on a Blockchain and you the book is a very good primer about all the, about the whole world of Cryptocurrency not just about Blockchain but I found your book to be a good primer use good analogies, I mean simple analogies that are easy to understand. So well let’s make sure everybody understands what a Blockchain is and and why each Cryptocurrency has its own Blockchain. Can you explain that Jason since you just mentioned Blockchain?

[00:29:06.64] spk_2:
Yeah yeah so so when we’re making a transaction you know there there is a record that has kept it and traditionally you know there may be like you know 11 record that is kept but what’s different about a Blockchain is that as a transaction happens on the network uh everyone who is participating in the network keeps a record of um of all the transactions that are happening. So you know the three of us right now that um you know uh tony Jason and that you know if I were to transfer Uh you know $5 you know worth of Bitcoin over to end That the record that has kept. You know imagine all three of us scribbling that because we we witnessed that happening. And so, you know, it’s between, you know, uh someone could claim it’s like, oh you didn’t actually give and you know $5 you gave her three and be like, no, no, wait a minute. Like you had seen that transaction, you had written it down. And so that is kind of a really basic explanation of, you know, what, how the Blockchain operates except instead of three people, imagine that with 30,000 people or more like, you know, just every single person who’s participating, the network keeps their own, you know, extremely detailed ledger of everything that is happening within the network and that that’s, you know, in part what keeps it secure that instead of trusting, you know, one single party that, you know, could, you know, alter, you know, those those records. It’s like you you have the collective that, you know, everyone sees everything that’s happening simultaneously in electronic format.

[00:29:45.94] spk_1:
And you to explain in the book why that’s enormously secure, secure from, from hacking from financial fraud and theft, uh, secure from mistakes. So, you know, listeners, you gotta get the book to get to go into the depth of the security of of the Blockchain. Um All right, so let’s let’s let’s start getting into the nitty gritty of of how to and can you start us off with, I think it’s important to explain what the keys are, the private key and a public key and then we’re going to get into how folks get their own are going to buy and maybe sell their own Cryptocurrency but you started off with the keys and.

[00:31:25.64] spk_0:
Yeah no problem. So if you think about your wallet um that you have in your purse or your back pocket and you store your cash in their Bitcoin uses something called the wallet as well. Um And it’s where you store your Bitcoin but it’s digital. Now if you think about your house, every house has a public address so 123 any street and you can give that address to anybody in the world they can send you a letter. They can you know show up and look in the windows but they can’t actually open the door to your house and take any of your stuff. And so your Bitcoin wallet also has a public address. And what you can do with that public address is give it to anyone that you know wants to send you money and they can send you money and it gets deposited into your wallet. But your wallet also has something called a private key and it’s kind of like the key to the front door of your house. And so if you give that key to anybody um they can open the front door of your house. They can come in and take all your furniture and all your electronics and whether they’re legally allowed to or not they can do it And the same sort of thing applies to your wallet’s private key if you give them that private key, anybody can then open up your wallet, take your Bitcoin and there’s really no recourse. And so, um, essentially what that means is you want to always keep your private key safe, always keep your private key backed up in a number of secure locations. Um, and what’s really nice about that is if you ever have any issues with your wallet, like let’s say you lose your phone or you know, something happens where the company making the wall, it goes under and you’re suddenly like, where’s my money? As long as you have your private key, you will always have access to your money. And so that’s what’s really amazing about it versus say if your bank went under, you might not have access to your money ever again. If Paypal froze your account, you wouldn’t be able to access your money with Bitcoin. As long as you have your private key, you always have access to your money.

[00:33:39.24] spk_1:
Okay. And again, as I said, the book, such simple analogies that the public key is like your address and the private key is like your house key very very, very comprehensible. It’s time for Tony’s take two veterans Day was last week and I was remiss in my show planning for last week’s show. So I don’t want to let it go. Unmentioned. I’m grateful. I’m thankful. I thank the many millions of people who have served our country in the military and also my gratitude to families who have lost folks because of their military service families that made that sacrifice and the military members themselves, that made those sacrifices. I’m thankful to those people as well. And if there’s someone in your family who died in the military, died supporting and defending our nation, I thank you. I had my own service. I was in the Air Force uh Military services is a calling and I I admire those who continue to answer that call. That call to to service duty to our country. Thank you. Thank you. Mhm. That is tony stick to Veterans Day. We’ve got boo koo but loads more time for Bitcoin and the future of fundraising and you know, you want to continue. It seems to me like the next step is, or the way you lay it out is the next step is getting a wallet.

[00:34:00.54] spk_0:
Yeah, so there’s lots of different ways to get a wallet. Um There’s most, the most easiest ways just get download a mobile wallet on your phone. Um There’s ones on the web as well and there’s a number of different companies out there now. Um

[00:34:01.66] spk_1:
and just explain what the wallet is for.

[00:35:27.24] spk_0:
Oh yeah, the wall is just restoring your Cryptocurrency, that’s it. So it’s kind of like the wallet you’ve got in your purse or in your back pocket. Um it’s just where you keep your crypto and it enables you to send it to other people. So if you have like Venmo or something like that, it feels a bit like Venmo um you just open it up and you can send your Bitcoin to someone else. The difference is there’s just no centralized company behind it, the way there is with Venmo or Paypal, um so you know, there’s a number of different wallet companies out there, some of them will enable you to hold on to your private key. Like Blockchain dot com is one example of a wallet that I use, that enables you to hold on to your private key. Many of you probably heard of coin base coin base is a little bit different because they actually hold on to your private keys. So it’s probably less secure from that perspective because it’s always good to have your key, but if you’re afraid of losing your key, coin base is probably a good option for you. Um So once you pick the wallet, you download it onto your phone um and then you can use an exchange to actually buy Cryptocurrency. So typically you would either connect your bank account or use a credit card um and just trade some of your usd or eur Canadian dollars for us northern folks and they’ll give you something corny return kind of the same way, like if you were going on vacation to Mexico, you would take your usd to an exchange booth at the airport and they would just trade you some usd for mexican pesos here. You’re going to get usd and get some Bitcoin back.

[00:35:34.14] spk_1:
So and if it’s a, if it’s a wallet like coin base, you said they hold your private key, you can also hold your private key. I mean like they can’t have it and you have it.

[00:36:17.53] spk_0:
No, because at the end of the day it’s like your house key. You know, if two people have a copy of the house key and all of a sudden the contents of the house are gone. Who stole them? You don’t know, you fundamentally need to have, you know, one person that, that’s responsible for the contents of the wallet and that’s either gonna be you as an individual or the company will take on that responsibility for you. Which has its pros and cons. Um, and so yeah, for a lot of people that’s, that’s a huge plus having someone else manage that responsibility for um, others in the crypto space. It’s really important for them to manage and own their own money.

[00:36:22.73] spk_1:
Can you name any other of the more popular wallets you mentioned Bitcoin dot com coin base

[00:36:29.96] spk_0:
coin bays bread wallet. Um, there’s electra. Um, there’s Jason. What other ones can you throw in there?

[00:36:37.93] spk_2:
I think that that, that covered off all the big ones, the

[00:36:47.23] spk_0:
metal pay exodus. Yeah, there’s, there’s a number a number of different options out there for folks to choose from these days, which is great.

[00:36:52.57] spk_1:
Okay. And it’s just a matter of googling right. What what are the top 10 wallets or what what’s a wallet for my, is it is it country specific? Do you need a wallet that works in your country, Jason?

[00:37:21.43] spk_2:
No, it’s uh it’s pretty cross border. So you know the song is that you can download it from uh you know, your respective app store and it works, you know, just uh you know, making sure that you’re finding a reputable wallet that you know has solid reviews and but you know, there’s uh no country specificity aside from, you know, uh if it is attached to a certain provider, a company that accepts a certain currency. So I know that there are some wallets um on the international side that are particular for um deposits, that you know, if uh if you want to deposit in a certain currency, then that may be the only kind of particular about it. But otherwise, you know, it’s pretty uh pretty universal.

[00:38:08.22] spk_1:
Okay? You make the security point in the book about not keeping your private key on your phone. But you both have mentioned the phone and using a phone app, but you’re supposed to just write your private key down and keep it somewhere secure. Like uh I get like a safe deposit box or something.

[00:38:44.82] spk_0:
Yeah, safe deposit box is a great spot safe in your house somewhere where you’re keeping really important documents. The way to think about it is you know that key will fundamentally open access to all the money in your wallet. So if you had $500 in cash where would you store that? Would you store it in your desk drawer? Would you store it in your bedside table? Probably not. You probably store it somewhere a little more secure. So based on how much money you have in your wallet, that’s sort of where you want to think about storing your private key if it’s 20 bucks, yeah, maybe put it in your desk if it’s $100,000 you definitely don’t want to leave that lying around.

[00:38:48.12] spk_1:
Um And Jason can you say a little more about exchanges?

[00:40:30.41] spk_2:
Yeah. So in terms of exchanges um you know we talked earlier about, you know while it’s exchanges are where the many of the transactions are around the world, you know take place. And really that it functions you know similar to regular kind of currency exchange or a stock market exchange where you know there’s it establishes a market where there you know those buyers and sellers and so you know um uh as I mentioned earlier, you know if you’re looking to exchange something like us dollars for you know. Bitcoin that um you know you’re you’re usually gonna be working with an exchange in order to uh to do that and on exchanges, you know, depending on on the exchange. You know, they may list a whole bunch of um different currencies, cryptocurrencies, you know, uh So you know, they may list in U. S. Dollars, you know, Canadian dollars, you know, Bitcoin ethereum, you know, if folks are looking at things like, you know, dodge coin um uh and it’s going quite quite extensive. I mean, you know, some of the larger ones are definitely, you know, listing uh many many different cryptocurrencies. Um but you know, if those who are looking for like, you know, the major ones that you don’t have emerged, you know, primarily, you know, Bitcoin in theory. I mean those are pretty standard almost across all exchanges these days. And uh they they the exchanges are really the mechanisms for which um you know, as a release back to two nonprofits that uh you know, after someone does make a donation of of Cryptocurrency um you know, having that exchange, you know, connection or um and some providers, you know, have that baked into their uh their services. That’s how you convert the Cryptocurrency back into, you know, a currency that the uh charity can use, you know, so if you s you know, how do you get that big pointed us dollars, you know, you’ll you’ll be working through an exchange in order to convert that so you can deposit into your bank account as well,

[00:41:05.61] spk_1:
Jason, let’s make something explicit because you know, when we’re recording Bitcoin a single Bitcoin is around $55,000 roughly a single ether is around $3500. Let’s make explicit that you don’t have to spend $55,000 if you want to participate in the in in buying some Bitcoin.

[00:41:08.31] spk_2:
No, absolutely not. So you know the uh it goes up to eight decimal places and I think that that’s something that is uh that’s helpful to to be aware of. So you know it is possible to buy like you know 0.00000 won worth of Bitcoin or ethereum. So um you know they’re uh definitely do not have to participate entire Bitcoin or entire. Either in order to participate in the in the ecosystem.

[00:42:15.20] spk_1:
Okay. And so you have in the title of your book you you you you you say Bitcoin but non profits could be accepting any of the any of the coins that you mentioned. But does it become so when you when you stray from Bitcoin and ether which are the two most popular, are you are you taking a greater risk if you get into like stellar and you mentioned dodge coin and by finance does it become riskier for for you personally if you’re doing your your experimental purchase and your credibility building purchases or or for your non profit if you’re accepting those other less popular like all the old coins.

[00:44:43.99] spk_2:
Mm it’s similar to I would say like you know in kind donations or stock donations that charities would ordinarily receive. And so you know, I think that when considering Cryptocurrency donations, like the vast majority of them are being transacted in Bitcoin followed by either in that order. However, when looking at all the coins, you know, what’s worth kind of thinking about is you know, imagine a prospective donor who you know may have, you know, picked up Dodge coin when it was valued at 0.0001, you know, sense and held onto it. And you know, now I think the last I checked it was like 26/27. And so you know what with regards to risk, I think it’s more helpful to assess like, you know what what’s the conversation that’s being had. You know, is someone approaching your organization with, you know, uh a donation was like, hey I like to contribute, you know, 100 $100,000 worth of dodge coin. You know, generally speaking, I would hope that, you know, a charity that is approached with that kind of um offer. You know, it’s okay, let’s, you know, let’s find an exchange that that will, you know, help us convert, you know that that amount of dodge coin, you know, into uh into U. S. Dollars to allow us to to accept it. And and so um, you know, I think it really depends on the audience. Um and so you know I think that’s what drove some of the early adoption where, you know, as Bitcoin started, you know, rising in price, you know, more offers of donations were emerging and you know, I think that you will see, um, you know, similarly with the old coins that are out there that, you know, definitely for folks who have gotten in early on some of the old coins and you know, um, it, I think it still remains to be seen which ones will, will take off. You know, we’ve already seen, you know, the emergency, you know, Bitcoin and ether. But you know, five years from now. You know, who, who knows, you know what, maybe up there. And so, um, what I have observed is that many of the exchanges are responding accordingly as well. So as as a, uh, all coins or other cryptocurrencies are taking off. You know, they get added to exchanges, which does make it easier and simpler for, um, for organizations to uh, to exchange and transact in that. So, um, you know, there, there have, there have been instances actually of folks donating, uh, you know, all queens, I think dodge coin, you know, definitely has a lot of fun stories about how, uh, how supporters have, uh, have donated their, um, their, their rapidly rising uh, currency.

[00:45:49.99] spk_1:
Yeah. Because you know, like you’re saying dodge coin, someone could have bought it for uh, tens of thousands of a penny. And at one point, I think it went up to like 60 cents or 65 cents in value. So if someone had spent like $100 or even a foul, all the more of 200 or 500 or $1000 buying millions of shares and then the price went up to 60 cents. You know, they’ve got, they’ve got a lot of money in dodge coin all of a sudden and if they then converted it to dollars Canadian or us, uh, they’ve got a lot of money potentially to give. And, and the, the book points out a lot of folks who are very, very generous with their, with their Cryptocurrency windfalls,

[00:46:34.98] spk_0:
Jason correct me if I’m getting the numbers wrong, but if something approximately where if you had, you know, invested $100 in ether at its launch, you’d have over a million dollars today for $2 million dollars today. Like it didn’t take a lot at the beginning. If you were really passionate about this project, you put a little bit of money in um, to suddenly have this astronomical wealth that would be almost impossible to generate in any other way in our society. And so it’s, it’s really what you end up getting is fairly ordinary people, you know, that came from ordinary means that that now have this wealth that, you know, they’re not interested in buying gold plated sneakers, you know, they want to create change and that’s where the nonprofit sector can really help them do that.

[00:47:23.18] spk_1:
And let’s stay with you and move to the organizational level Now. Let’s talk something about getting, getting buy in uh, in the book. You make the point that you’re not even sure the board should be approving this, they shouldn’t be involved. It’s more like, should we start accepting credit cards? You know? Uh, so it’s more um, asking for support rather than permission. But let’s talk about, you know, Ceo by in or maybe vice president of development by in uh, what are some of the reasons you might you as a crypto advocate in your organization? Might might start putting forward for why your organization should get into this. So

[00:49:16.07] spk_0:
the reason that I used when I was convincing my Ceo back in 2014 was I said, look, you know, it’s really what we can do is accept it, we can sell it immediately. There’s no fluctuation, there’s no currency risk, anything like that. And fundamentally that’s no different than accepting a stock. Like we already accept stocks and other securities. So if we do exactly the same treatment as we do with stocks, there’s really no risk to the organization and I think this day and age, there’s no brand risk, there’s, there’s no another stigma that used to exist around Bitcoin is really not there anymore. We’re seeing it adopted by not only charities, but major organizations and companies Microsoft, IBM, all kinds of different companies are heavily involved in cryptocurrencies. So I think that’s, that’s the key one is saying, okay, we already do this with another volatile asset on the stock market. Here’s another opportunity where we can essentially bring in A whole new set of young donors. And I think that’s probably my favorite argument for Cryptocurrency is most of the donors and most of that community are between the ages of 24 and 40. Um, and so if you’re really looking to bring on a whole new set of the younger generation of donors, this is a great way to do it. And you won’t be cannibalizing any of your other activities. You’ll have this whole new set of donors with no risk. Um, and for any organization that fundamentally says, hey, we want to be innovative. We want to be new here is a great way that you can do that. That is not only exciting and innovative, but it’s also a revenue driver. And so it’s pretty hard to say no to something where you say, okay, you know, we’re gonna, we’re gonna give this a try. It’s going to cost us essentially nothing to set up. We can set it up over the course of the week. There’s no risk and it might make us some money and bring in new donors to me. That’s an absolute hell, yes.

[00:49:56.87] spk_1:
Okay. There was like four or 5 very good reasons why, you know innovate, prepare for the future, expose yourself to do constituents. Uh, it’s becoming mainstream. There’s no stigma. Um, and and help you raise more money just in a different format. Um, let’s just make explicit. And is it is it your your recommendation that non profits would sell their their Cryptocurrency right away as you would with stock or what, what is your recommendation for? What to do with a crypto currency gift once you have received it,

[00:51:17.86] spk_0:
I wouldn’t recommend it. But that’s my risk tolerance. And so what’s really most important is to look at, like, what is the risk tolerance of your organization? You know, And I think, um, every organization should really sit down and say, okay, how much cash do we have on the balance sheet? You know, how much money do we have every year to play with? And what percentage of that Are we willing to put in a high risk investment? So maybe we decide that as an organization, we want 99% of our money that we raised to be there at the end of the year, and that’s totally fine. Um, but take that 1% and hold it in a Cryptocurrency and see what happens. Um, and say, look, this is a microscopic risk that we’re going to take for the potential upside of making a lot of money. Um, or maybe your organization might be a little more risk friendly. You say, look, we’re gonna we’re gonna have safe, secure investments or just keep our money in cash for 75% of what we bring in 10% we’re going to put in, you know, uh index funds with the stock market and the rest, we’re going to put in Cryptocurrency something a little bit higher risk, like I think really at the end of the day it’s not so much, you know, should you sell it or not, it’s how much of your portfolio are you putting in high risk versus low risk assets? And I think the thing to keep in mind this day and age is with inflation, where it is putting your money in cash is not safe, You’re losing money every year by holding that money in cash. So if you’re trying to maintain the amount of money that you have by the end of the year, you need to be doing something with it. So is that something high risk, low risk, what percentage is it? Um That’s up to the organization to decide. But I would really recommend that every organization actually take a critical look at what they’re doing with their money um and reserve at least a tiny portion of that to take a look at holding cryptocurrencies for the longer term.

[00:51:49.66] spk_1:
And the reason you say you’re losing money if you’re holding cash is because of inflation.

[00:51:53.89] spk_0:
Absolutely, yeah,

[00:51:55.76] spk_1:
Jason anything you want to add to the organizational policy.

[00:52:00.85] spk_2:
Yeah, I think from just looking over a trend lines, you know to the point that that and made about risk, it’s you know really aligning overall organizational strategy with what organizations looking to achieve and how you know their asset holdings maybe um may reflect that and that their risk tolerance and I think when looking at trends like it was as early as I believe it was 2014 at the time that Canada was looking at digital currency programs and you know, although that program at the time that it was called the mentorship program, you know didn’t proceed, you know uh

[00:52:32.83] spk_1:
I’m sorry Jason who would you say was looking

[00:53:11.45] spk_2:
at? I’m sorry the Canadian government or the Bank of Canada was looking at a program called the uh the mint chip program and that was really a Canadian digital currency that was being explored. But now there’s been a resurgence I think just in the past week, you know the G seven group of nations you know agreed upon, you know a set of standards to examine, you know digital currency. So I think when looking at, you know overall trends, you know digital currencies and cryptocurrencies are not if but it’s a when and you know for organizations are preparing for the future, strategically it’s it’s really you know do are by by participating in the ecosystems. Now you’re especially future proofing organization for that future which is going to come of, you know as governments are seriously looking at digital currencies that the same principles that govern you know, how do you treat you know, cryptocurrencies that this is all going in the digital direction and you know that much is evident. And so, um, it’s more of a timing consideration now. It’s, you know, would you like to do it now or later? It’s

[00:54:24.84] spk_1:
coming right. It’s it’s not, it’s not if, but when I think that’s a terrific place to wrap up. You know, there’s, there’s a lot more in the book. There are checklists for how you set this up at your organization. But I wanted to focus on the basics a person venturing into this because with the statistics that that I mentioned, so there’s still 87% of Americans are not involved in crypto and still 70% of Canadians are not involved in crypto. So I want to, I want to overcome that and then move to the organization level. And as I said, the book is a very good primer, lots of easy to understand analogies. The book is Bitcoin and the future of fundraising. A beginner’s guide to Cryptocurrency donations. The co authors are an Connolly at an underscore Connolly and Jason shim at Jason Shim and Jason, thank you very, very much.

[00:54:32.94] spk_0:
Thank you so much, appreciate it.

[00:54:34.68] spk_2:
Thanks tony

[00:55:08.54] spk_1:
pleasure thank you for sharing and and doing it in a simple way next week. Mission uncomfortable. That’s a working title with stew Swinford, that’s not a working name. He’ll he’ll stick if you missed any part of this week’s show, I Beseech You find it at tony-martignetti dot com. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o. Our creative producer is Claire Meyerhoff

[00:55:10.73] spk_2:
shows. Social media is by Susan Chavez. Marc Silverman

[00:55:14.50] spk_1:
is our web guy

[00:55:15.65] spk_2:
and this music is by scott. Stein.

[00:55:30.94] spk_1:
Thank you for that. Affirmation. Scotty You with me next week for nonprofit radio Big nonprofit ideas for the other 95%. Go out and be great.

Nonprofit Radio for November 1, 2021: Risk Management II

My Guest:

Gene Takagi: Risk Management II

Gene Takagi

Gene Takagi returns to complete our coverage of the risks lurking in your employee relations; facilities; events; and vehicles. Also, what to do to keep those risks at a minimum, so incidents don’t hurt your nonprofit. Gene is our legal contributor and principal at NEO, the Nonprofit & Exempt Organizations Law Group. (Part I was on October 4th.)

 

 

 

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We’re the #1 Podcast for Nonprofits, With 13,000+ Weekly Listeners

Board relations. Fundraising. Volunteer management. Prospect research. Legal compliance. Accounting. Finance. Investments. Donor relations. Public relations. Marketing. Technology. Social media.

Every nonprofit struggles with these issues. Big nonprofits hire experts. The other 95% listen to Tony Martignetti Nonprofit Radio. Trusted experts and leading thinkers join me each week to tackle the tough issues. If you have big dreams but a small budget, you have a home at Tony Martignetti Nonprofit Radio.

Nonprofit Radio for October 25, 2021: The Time For Endowment Building Is Now

My Guest:

Deborah Kaplan Polivy: The Time For Endowment Building Is Now

That’s Deborah Kaplan Polivy’s new book. She’s with me to explain why that title is a simple truth.

 

 

 

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Board relations. Fundraising. Volunteer management. Prospect research. Legal compliance. Accounting. Finance. Investments. Donor relations. Public relations. Marketing. Technology. Social media.

Every nonprofit struggles with these issues. Big nonprofits hire experts. The other 95% listen to Tony Martignetti Nonprofit Radio. Trusted experts and leading thinkers join me each week to tackle the tough issues. If you have big dreams but a small budget, you have a home at Tony Martignetti Nonprofit Radio.
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[00:01:00.54] 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 and oh, I’m glad you’re with me, I’d suffer the effects of Takayasu says arthritis if you inflamed me with the idea that you missed this week’s show. The time for endowment building is now. That’s Deborah Kaplan policies new book, She’s with me to explain why that title is a simple truth. I’m Tony state too planned giving accelerator. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot C o. It’s my pleasure to welcome Deborah Kaplan Pahlavi and before I continue with her official bio, I should have asked you before we started recording, but you’re suffering a lackluster host. Am I pronouncing your last name correctly?

[00:01:14.10] spk_0:
I was just going to commend you, you were one of the few people that have pronounced it correctly. Good for you.

[00:01:56.24] spk_1:
Oh, good. Thank you very much. All right. Deborah Kaplan Pahlavi ph D consultant and author. Her third book published in 2021 is the time for endowment building is now Why and how to secure your organization’s future. She’s been a frontline endowment fund raiser researcher, university teacher. She’s trained numerous boards and development professionals to achieve fundraising success. Her consulting practice is at Deborah Pahlavi dot com. Welcome to the show, Debbie,

[00:01:57.74] spk_0:
thank you. My pleasure

[00:02:10.24] spk_1:
to have you on nonprofit radio Yeah. Endowment the title of the book end out the time for endowment building is now why is that So

[00:02:44.54] spk_0:
Well, we’ve all heard about the transfer of wealth uh, from baby boomers to whomever baby boomers choose to transfer their wealth to. And if we don’t capture that money now there is going to be, I don’t know, very little opportunity in the future. People are my age and younger, older are dying. We’ve made more money, particularly in the stock market and real estate than ever before. And if not for profits work hard. They can certainly do a good job in capturing this money for their own sustainability.

[00:02:56.24] spk_1:
This transfer was originally documented by two, two professors at Boston College Havens and Schervish. Right,

[00:03:00.57] spk_0:
yes,

[00:03:19.74] spk_1:
I’ve had paul schervish on the show. I don’t know, I don’t know Professor Havens um say a little about you know, just summarize you you, by the way I admire as a former tony I love all your footnotes and thank you for putting them at the end of a chapter and not end notes at the end of a book where I have to flip all the way back there. Thank you for deciding to put footnotes at the end of each chapter

[00:03:22.55] spk_0:
and author. An author makes no decisions. I have to, that’s what the publisher did not. Alright, well my graduate it,

[00:03:32.34] spk_1:
my gratitude to them, I appreciate either the bottom of the page or um or the end of a chapter. So you you cite havens and Shellfish just say a little about their, about their research, the magnitude of this wealth transfer and, and we’re, you know, the trillions of dollars that were anticipated to see and we are starting to see,

[00:04:54.14] spk_0:
right? Yeah. I’m not as familiar with their actual research. I’m quoting like other people quoted them when I began this book. It really wasn’t about the transfer of wealth. It was about trying to get people away from the language of planned giving toward endowment development. And then when I began to read and do my own research, I came across this study. I had heard about it years ago, but I was refreshed and doing or the research for this book and I realized that the timing was the factor. It wasn’t necessary, the language. It was, hey guys, and they say in their conclusions, nonprofits are going to get a lot of money from this transfer and then they say, if not for profits, work harder and are more aware and don’t do it in a serendipitous fashion, but do it in a very conclusive weigh in the decision making way that they’ll do a lot better than they ever imagined. And so that’s their conclusion. And I incorporated it in my book and in the book’s title.

[00:05:11.14] spk_1:
And wasn’t the magnitude of that, something like 50, $59 trillion dollars

[00:05:17.64] spk_0:
or nine trillion somewhere somewhere in that I have The numbers, but it’s 57, It doesn’t matter. It’s a lot of money, right?

[00:05:25.01] spk_1:
What’s $2 trillion between friends? All right. It’s not in the thirties? It was I thought so. There was 50 59 you know,

[00:05:31.54] spk_0:
hi

[00:05:32.62] spk_1:
double high double digits of trillions of dollars.

[00:05:49.04] spk_0:
And that was before the huge increase in the stock market and the huge increase of what’s happened in terms of asset value because of Covid. So the money really as you’re you’re right, who knows what we’re talking about?

[00:06:42.44] spk_1:
Yeah. Yeah. Their research was like early 2000s was 1990s, early 2000. So it’s at least 20 years old. And yeah, the way the way asset values have increased since then I mean, I don’t know what you’re talking. A $100 trillion dollars from baby boomers to the next generation. I don’t know. But It’s huge. Even even if it was flat, it would still be 59 trillion, which is enormously big. So, uh, you know, as we as we sit here today, uh, Congress is debating whether to spend $1 trillion 20 times the order of magnitude, the larger end of that scale. So that spectrum, So a lot of money, let’s leave it at

[00:06:43.78] spk_0:
that. You’re with that observation when you compare it to the congressional numbers.

[00:06:59.54] spk_1:
Yeah. You know, the magnitude is enormous. Um All right. So let’s talk about, uh, types of endowment. Can we, can we make sure everybody’s got a baseline understanding of quasi versus permanent endowment. Can you take care of that for us please?

[00:08:34.94] spk_0:
Yes, a permanent endowment is that in which money is invested and there is a spending policy. In other words, a certain percentage is distributed every year. The donor, according to the law, the donor determine what goes into a permanent endowment. The donor decides, hey, I don’t want my money spent today. I wanted to go into the permanent endowment and I have set up my gift and the verbiage in my gift accordingly. Now, many donors either are unaware that they have that choice or they don’t choose to put their money into the permanent endowment. So they say, okay, not for profit, you do with my money, what you want. And many organizations will spend that money doesn’t go into any endowment or they’ll put it in what’s called a board directed endowment or a quasi endowment, which means the board can use that money as it sees fit. What happens for the most part when boards pay attention is that they say, okay, we’ll put that money into a quasi endowment or aboard directed endowment, but we need X, Y Z votes in order to take it out. In other words, the board itself makes it difficult to spend that money so that it’s done quite judiciously as opposed to just spent every day and regular expenditures.

[00:08:57.14] spk_1:
So we have different thresholds of spending capacity. So in one and we’re gonna flush this out, there’s a state law governing that you cannot spend principle of the endowment without going through enormous hurdles usually, or versus the board being able to approve spending of the principal or some folks, you know, you might call it the corpus. I don’t like to get too technical on nonprofit radio but the principle that, uh, so bored mechanism for spending

[00:09:36.24] spk_0:
that, your first example, the law says, if a donor determines, uh, indicates that he or she wants the money or they want the money to go into permanent dominant. This is what the law subscribes. It’s the second one that’s really kind of equivocal because sports have great discretion over what they do with particularly a state. Yes, that come in without any their owner direction.

[00:09:42.64] spk_1:
Yeah. All right. Let’s talk about that law a little bit, uh, to the uniform prudent management of institutional funds act. I wasn’t gonna ask you to the site of the acronym, but I like,

[00:09:53.55] spk_0:
I can’t even pronounce it. I call it now. But

[00:10:21.04] spk_1:
so it’s uniform prudent management of institutional funds acts. But it depends on whether your state has adopted. You have to, if you’re gonna embark on having a permanent endowment, you need to know what your state law says about that because this uniform law is not necessarily adopted in all the states. It was, it was a recommendation, uh, and, you

[00:10:22.94] spk_0:
know, I think at this point in time it’s adopted by all states. Yeah.

[00:10:28.45] spk_1:
On some states though,

[00:10:30.22] spk_0:
modify

[00:10:31.23] spk_1:
Based legislature might modify it. So it may not be identical? It’s probably not identical in all 50 states.

[00:10:54.64] spk_0:
Right. But for more or less it is identical and it’s don’t correct it. And it was an attempt by state governments to, um, oversee the way in which non profits were using their requests in particular. But other future gifts,

[00:10:55.72] spk_1:
endowment money, right? Money is placed in these permanent endowments.

[00:10:59.62] spk_0:
Exactly.

[00:11:27.04] spk_1:
Uh, you know, the basic state laws basically saying keep your promise correct. You got to keep your promise to the donor. And here’s a law that enforces that exactly forces your promise. Okay, Okay. And then the quasi, the board has some flexibility as you described. And I guess if they want to be very restrictive, then they would say like it takes a three quarters vote or maybe 100%. Maybe every board member has to agree to take money from our principal of our endowment.

[00:11:35.74] spk_0:
But there’s a real difference in that in the former, the myth flower the uniform prudent management of institutional funds

[00:11:41.29] spk_1:
there.

[00:12:37.74] spk_0:
That’s a law Board has great discretion in terms of the board endowment. And that’s where I really focus. My book is hey, board, have you really analyzed what you’re doing with these monies? And do you have policies and guidelines? Do you have a preference whether you want permanent endowment or quasi endowment? And, and the most important thing, I think is once you have really determined what you want, really thought about it, talked about it, have you communicated your preferences to the donor and communicated to the donor? Why you prefer one model versus the other. So I’m really asking for boards to address this issue and not just let it go by as they receive money.

[00:12:39.45] spk_1:
Right. Okay. We have an endowment. So we’ll just put it in a savings account. You know, there’s a lot more to it. All right. You said a lot there. We’re gonna unpack some of that first. Doesn’t, it doesn’t have to be one or the other. Couldn’t, couldn’t a nonprofit have both couldn’t have a permanent endowment and a quasi endowment

[00:12:59.44] spk_0:
and most do, yeah, it’s time for a break.

[00:14:24.54] spk_1:
Turn to communications. Crisis communications, you want to keep turn to in your back pocket so that when you have a crisis or if certainly I’m not hoping it on you, wishing it on you. Not at all. If you have a crisis, then you know, you need to be communicating consistently, but not identically with your employees. You’re bored, donors may be volunteers and possibly the public through the media. Now, all those messages are not the same. I’m sure your board doesn’t get the same message that the public gets. So you’ve got to be consistent, but different right turn to can help you. They do crisis communications. So if you need help in a bad situation, that’s why I’m suggesting you keep turn to in your back pocket, you’ve got something bad has gone down. You need help communicating with all your different constituencies turn to turn to right turn hyphen two dot c o. Now back to the time for endowment building is now. Now in terms of the policies, let’s talk about just how endowments generally both kinds are generally treated right the way the way we spend just a little and you know what, what, what, what do you see there? What are your recommendations around how much to spend each year?

[00:15:37.54] spk_0:
There are averages that most organizations use. They come out of national organizations and what have you? I’ve seen them as low as 3% as high as six per 77% particularly during covid times they really increase because people wanted to get more money out to the respective communities and clients patrons however you want to call the users of the monies. Um, but what mostly happens is there’s a rolling average and the rolling average it video rolling average and that allows you or the organization to think about ah ha. We don’t want to take the most one year. When are we have great proceeds asset management. We’ve got great returns in the next year. We have bad returns. So they don’t do it according to the return. They do it according to a percentage and it evens out the kind of money that is going into the budget as opposed to high, low, high, low, high, low this way with a rolling average, you’re much more aware and you can be futuristic in terms of your budget allocations and creation of budgets.

[00:17:16.54] spk_1:
So what we’re talking about is, you know, uh, let’s say a small mid sized organization has a $1 million. I like round numbers. They were, they’re easier for me to figure out as a $1 million endowment. And let’s say it’s a it’s a it’s a permanent endowment the way we’re describing. Yeah, it’s permanent endowment. And, and, and in in year one they spend they decided to spend 4%. So then $40,000 comes out of the endowment and that can be used for, You know, there may be restrictions on how it gets used if if people have like named programs that are part of their endowed that are they’re endowed funds, then part of that 40,000 has to go there to honor your promises to those donors. But then other other money may come out and be unrestricted. And so you’re you’re the presumption is that you’re spending less than what you earn Through investment management each year. So maybe you earned seven or 8% in the year, But you spent only 4% in year one so that the balance of what you learned goes back, in Does that sound right?

[00:17:53.14] spk_0:
Yes. And the balance of what you were. And so in your example, 3% goes back into the corpus and 4% of the new number because now we’ve grown By 3%. So the next year you get that much more and that’s why it’s a rolling average because the corpus let’s say you don’t make 7% you make 2% and you’re spending 4% then you have a minus number. So the purpose of all of this is to somehow get what you receive every year to be predictable and not go up and down and down and up.

[00:18:25.54] spk_1:
That’s a huge advantage to having an endowment. Exactly. You’ll know, you know, you’re trying to diversify your revenue streams and this is another revenue stream for you that you can count on. So when you do have a bad year and you lose money or only earn one or 2%, like you’re saying you still can count on The 4% or 5% whatever your board has determined for that year is going to come out and it will support you in the bad years and you’ll be profiting your end out. You’ll be growing your endowment in the good investment years.

[00:18:58.94] spk_0:
But that is also a board decision. The board has to also mhm address that spending policy. It can’t just be, well, let’s see the CFO says this year, we’re going to spend 4% and now gee it’s wrong, let’s spend 5% next year. And so what if it’s going down. So in order to keep that money coming, we’ll do 6% again. The board has to wrestle with this decision making and not just let it be haphazard

[00:19:22.44] spk_1:
and a lot of times they, the boards will board will get advice from the investment manager, what, what they predict will happen in the, in the next year or two. Uh, and how confident they are in that prediction, what we’ve learned over the past several years And what that tells us perhaps about the future, you know, so you can the board can get input often from an investment manager and you know, and this applies if you have $100,000 endowment and you’re looking at $4,000 or $5,000 coming out each year. You’re

[00:19:37.98] spk_0:
still, you know, it

[00:19:49.44] spk_1:
doesn’t matter the scale, the principles that you’re describing are all the same. The board needs to decide. It’s not just Let’s decide in December, what we’re going to take out on January 1st. There needs to be right. There needs to be a board evaluation of this and a policy around how your endowment is treated

[00:19:58.24] spk_0:
Exactly 100%.

[00:20:47.44] spk_1:
Okay, cool. Um let’s take a little higher level view. You you have, first of all, you have a chapter why we need an endowment or maybe we don’t. And I thought, well, I look back at the title of the book because the title of the book I thought was now is the Time for endowment building. So, alright, But it’s mostly a pro probably 90% of pro chapter. But let’s talk a little about some other advantages and then you you name a disadvantage and maybe maybe I missed other disadvantages in terms of equity across the years but acquainted. So aside from having a steady revenue stream, one of many, hopefully that we can count on through in the year. Why else might we want to have uh, an endowment either quasi or permanent

[00:21:54.54] spk_0:
first. Let me go back to that title of that chapter. Do we need an endowment or maybe we don’t or whatever. A favorite chapter in the whole book. And I’m so glad you picked that out because I think that’s a very important issue. Do we even need an endowment with the Sunflower, the uniform prudent investment act there. It says you have to have it at the donor directs it. But what about all this other stuff? Do you really need an endowment? And I always believe you do because you can have a really bad year in the market or you can have donors? You can have a donor who’s really supported you for ages, especially if you’re a small or middle size organization. And all of a sudden that donor either has a bad economic year or the donor can have said, you know, I don’t like you anymore. I don’t like your exact or your development director really insulted me and didn’t handle me well. So you know what you’re done, You’re out of my gift giving. And if you or look at the federal government, it changes its allocations on a regular basis. So if you don’t have an endowment

[00:22:14.84] spk_1:
and I just add one more foundation priorities, Foundation priorities change too. Or foundation may agree to fund you for three years and then that’s it. And that’s what they would extend another three years. And but they’re not, they’re keeping to what they said. So foundation can change as well.

[00:23:31.64] spk_0:
Any donor. Let’s just look at it as any supporter, whether government, whether private, whether stay, it doesn’t matter can change their minds. And if you don’t have a fallback because it’s going to take time to recuperate the kind of money that you’re losing, then you’re in big trouble. So the endowment provides you with maybe not the total replication of the gift, but certainly it keeps you from losing sleep at night because, you know, as the board and exact that you have a cushion to help you through bad times. The other reason I like endowments. And this was what I always used when I worked with potential donors is we in the not not for profit sphere, particularly for a smaller mid level organization. We have no money for research and demonstration that’s really icing on the cake. And yet it’s fundamental to the work we do. So I like an endowment to give us a little leeway in the kinds of programs that we want to experiment with, I call that money risk taking, it allows us to think about what we’re doing in alternative ways. And if we lose, we don’t succeed. Okay. At least we tried a different pathway or we took took some risks and we’re not always being so safe in the not for profit sector, we have to change the way in which we do things. And an endowment allows us the wherewithal to do so

[00:24:04.34] spk_1:
take a little risk. You know, we we we see a different way of doing something or something new that we can try uh $1000 behind a project project.

[00:24:31.74] spk_0:
And as you say, hire an investment manager, want to go into some strategic planning or hire a new officer employee to do something in a different way. Anything that we want to do that isn’t in accordance with the way in which we’ve done it over the past. And the domino allows us the leeway to try new things.

[00:24:38.14] spk_1:
How about the intergenerational Equity rationale, which cuts both ways. But let’s let’s deal with the pro the pro first you talk about it in the book.

[00:27:01.64] spk_0:
Well, intergenerational Equity is really brought up by um Tobin, who is, I forget his first name, who is a Nobel prize winner economist at Yale and what he says is an Endowment provides the same services to the generation today as for the generations in the future. So that’s what’s called intergenerational equity. Well if I go to the Y W. C. A. And I can use the pool or I can have daycare or I can have services because I’m homeless. That those same level of services will be available for the next generation of women because the endowment will be growing and the value of the money will be equal. So that’s the intergenerational equity. Others argue that this generation is going to be richer than the next generation. So why should this generation supply for the future or the opposite? No one really knows who’s going to be richer and who’s going to be poorer. There was some like Henry Hanson who is I think now an emeritus professor at the Yale Law School and it was his work that really got me started and thinking about the economics of endowment and his thinking says, hey look at Harvard Yale, these big universities, these big museums are holding on to so much money in their endowments. Wouldn’t it be better that they spend more today? And some people say, yeah, he’s right. And others say no we have to have intergenerational equity and make sure there is there for the future what’s available today. So you can argue it either way. Um and of course the favorite argument is the impact argument, do we want impact today? Do we want to spend all the money we get today and get the biggest impact today, are we pushing the can down the road and saying, okay, if we don’t spend the money today, we’re just continue waiting the problems down the road. And so what is the impact? So that’s why they’re question is, do we want an undamaged for intergenerational equity or no? Should we spend all the money today and try to solve all our problems today? And that’s a decision that organizations have to make.

[00:27:49.54] spk_1:
That was very interesting. I had never thought of it this way before. I read the book that that there are folks who say that uh, preserving endowment is actually, uh, antithetical to intergenerational equity because you folks now are doing what you just said, they’ll be pushing the can down the road, kicking it down the road. You’re you’re not investing enough and you’re you’re forcing the next generation to deal with the problem that you could solve if you would spend more so by spending less and preserving it for us, you’re actually hurting us because you’re levying a problem on us that you probably that, you know, the belief is you have a better chance of solving if you put more money toward it.

[00:28:29.04] spk_0:
Exactly. And there’s another issue in this, we keep talking tony about the organisational to organisational decision making, that’s also a donor decision. I dealt with many, many doctors who said I don’t want my money put away for the future? I want to see impact today. So that’s why a board has to discuss what they really want. And once they make that decision, they have to be able to communicate the wise and the wherefore to the donor. But ultimately, it’s a donor decision as to how the gift is made.

[00:32:11.84] spk_1:
Let’s talk a little about that donor. That’s, that’s, that’s excellent having these conversations with donors. You know, you said earlier, a lot of times, donors don’t even know that they have the choice to give a gift to endowment. A gift of, uh, yeah, that will last in perpetuity. And listeners, you’re just gonna have to get the book because Deborah talks about the phrase in perpetuity and what she learned about learned about it. But you know, we can’t, we can’t probe everything. Uh, you got, we scratched the surface, you gotta get the book. Um, but let’s say, but it is valuable to talk about, um, well, it’s all valuable to talk about, but we only have so much time. So, uh, your lackluster husted host is choosing to talk about the donor conversation, having, having a discussion with donors about an endowment gift. It’s time for Tony’s take to plant giving accelerator. So here we are talking about endowment building, right? Planned giving can be a great help in building your endowment. Lots of planned gifts come in unrestricted. I encourage you to put as much of that unrestricted money as possible into your endowment. The plan, gifts that come restricted. Those have to go into your endowment by law. So, uh, you could even take the show today. The time for endowment building is now, you could swap out endowment building with planned giving time for plan giving is now, which actually is ironic because something that, uh, Deborah and I are going to be talking about, you’ll hear the irony, just keep on listening. But for now, um, so you want to build endowment plan Giving an ideal for this Playing giving accelerator, I will help you get started in planned giving in 2022. The next class starts in January. I’ll teach you step by step, everything you need to get started. It’s a six month course, used to be a year now it’s down to six months learning exactly the same stuff exactly the same curriculum, but condensed and still only one hour per week, an hour a week. But I’ve taken out some of the free time and aside from learning from me, there’s this incredible peer support and peer learning. The existing class, the current classes existing sounds so jeez, existing sounds so I don’t know, So sterile the existing classes, the current classes, The members right now, you should hear the way they’re supporting each other, helping each other with questions about their board or individual board members. Um, donors, leadership questions. It’s a great supportive community and I have every reason to believe that the january class will be the same supportive. So there’s a lot of peer learning as well as learning from me. So you’ve got enormous support by no means are you on an island starting your planned giving? That’s, that’s antithetical to planned giving accelerator. So if you’d like to check it out, think about joining the january class, it’s all at planned giving accelerator dot com. I hope you will and I hope you’ll be with us if you want to get your plan giving program going next year. I hope youll be with me in planned giving accelerator. That is tony state too. We’ve got boo koo but loads more time for the time for endowment building. Planned giving is now

[00:32:21.04] spk_0:
froze. Yeah,

[00:32:43.54] spk_1:
we did freeze. Okay. Yeah. I made a little joke about lackluster host and I didn’t see, uh, you didn’t smile, was disappointed, but you’re frozen. So I’ll take that as a, as an, as an implied smile. So please, I’ll maybe I’ll edit this out or maybe not. It’s not really that bad. But talk about that donor conversation regarding an endowment gift. Mhm

[00:33:38.84] spk_0:
There are all kinds of donor conversations. The point and I and you read about it constantly in the chronicle of philanthropy is the necessity to have the conversation because oftentimes people make a state gifts and they don’t even talk to The people in the development office. That’s one. So they’re really two conversations. There is the personal one on one conversation with the organization to which the donor is giving the money, but there’s also the printed conversation or the website conversation. And that’s why I feel it’s so important that organizations make the preference and tell donors either verbally or through written material what they want and why. But back to your question on the verbal conversation. Uh huh. I think it’s very important to listen to the donor first. Everybody in this field, you have to listen to the donor and hear what the donor wants and you said something earlier in this interview where I did not interrupt you, but I did. Um,

[00:33:54.57] spk_1:
I’m like me. I just did right this second.

[00:35:43.24] spk_0:
I did get the chills when you said if the donor has directed where the money goes. I think the biggest and the most important conversation that a donor can have is how they want the money used and the most important usage is unrestricted and what we have to explain to donors is what they sail it. See as a usage today may not even be in the cards in 20-50 years. We may have conquered breast cancer. We may have conquered homelessness. That would be wonderful. But and asked me very, very clear to a donor that they, they have to think broadly in terms of how they want to direct their money if they want to direct their money at all or if they do want to direct their money that they have to have a second purpose, which could be unrestricted if the first purpose becomes obsolete. So I was always the endowment officer, the fundraising officer to try to get the most money to be unrestricted because then we would have the flexibility if we wanted to use it for experimentation or if we wanted to use it for a particular program. And I’m not sure that we talked to our donors in a generic fashion. We listen to what they want. And then we fashioned the gift accordingly as opposed to communicating what this money is really going to be used for over time. And that’s an important conversation

[00:35:50.24] spk_1:
about what our programs may look like in the future. Uh, but, but your point that we may not have some programs in the future.

[00:36:53.43] spk_0:
Yeah. And you can direct your program, your direct. I remember a woman came to me and said, you know, I wanted to defend. My father was a violinist. I wanted to have an endowment for musical concerts. And the last thing we needed was any more money for musical concerts. We needed money for Children that were challenged and needed some educational programs. And I was real clear to her that that was the need. And I brought in our educational professional and we talked about it and she completely understood and was willing to make the change and educational programming couldn’t go on forever because it changes over time. But it’s broad enough that the function is not restrictive or just broadly restrictive. and her father’s name still went on the named endowment, but it was for something that the community needed as opposed to a program that we didn’t really need it all nor want.

[00:37:01.43] spk_1:
And some of that unrestricted money could be put into endowment to,

[00:37:05.13] spk_0:
oh, this is the endowment get.

[00:37:39.03] spk_1:
Well, that was, yeah, that was, I’m going back to something you said earlier about, um, restricting restricted gifts, you know, being part of endowment, but, but unrestricted gifts, you know, you can put some of that into. I’m always advocating for clients put as much as possible, You know, I understand, you know, and it’s always a tension, of course, there are immediate needs. We got to keep the lights on, we got to pay the rent and the salaries. But you know, can we peel off anything? We peel off 15 2025% and put that into the endowment and, and spend 75% this month.

[00:39:02.92] spk_0:
That’s a different conversation. That’s a different conversation. There’s the convert endowment conversation, which is the permanent endowment conversation, which could be through an estate gift, a future gift or a current gift. This woman was making a current gift, which is another issue. We don’t think, I think, um, widely enough about talking to donors about a permanent current endowment gift. So that’s a um, let’s say you have a capital campaign. I always want to peel off a percentage of a capital campaign gift to go into the permanent endowment for maintaining that which we are building because otherwise what happens is you put all this money into the capital into the building. Now, all of your costs have gone up, but you have no wherewithal to maintain those costs and you put the organization at some kind of risk. So it’s a very wide that’s the beauty of endowment conversations. They can be very, very wide. They can be very, very creative. And the less you restrict your fundraisers imagination and your donors imagination, the more impact current and future that a gift might have.

[00:39:23.82] spk_1:
Let’s have a little fun with the phrase planned giving. I have a company called martignetti planned giving advisors. I run an online class called planned giving accelerator. But I mean, uh, there may be a common ground or maybe not, you know, that’s fine, but share your, your, the guests. So you go first. You share your thinking about the phrase planned giving.

[00:40:23.71] spk_0:
As I said in the book, I never allowed either my staff or hopefully my consultant clients or even a donor to use the word plan giving. We all plan are giving whether it’s our annual distributions or our future distributions. So planned giving as it is perceived or understood by the experts in the field are primarily future gifts. And I, my my my problem with the language is a we all plan our gifts. So it’s a, it’s the phrase is really only for the expert experts in the field. And it’s sometimes more often than not turns off boards and donors because they don’t know what you’re talking about and they think it is so convoluted and so expensive and you need fancy you should excuse me, consultants to help you go through this.

[00:40:39.24] spk_1:
You’re a consultant.

[00:43:39.50] spk_0:
Yeah. And but I don’t ever use the word plan Giving in my consultancy. I use endowment development. So that’s my first issue with the words Plan Giving. The second issue with it is plan giving is a tool. And what we don’t say is why do we want to use these grand gifts? What is the ultimate purpose of the planned gift? Do we want the planned gift to be used today? Okay, so I’m going to make a quote unquote. I’m going to set up a charitable gift annuity. It’s a future gift when you the organization received the principal after I pass away. What are you going to do with it? So my feeling is that we should concentrate on the use of the tool. What do we want the gift to be used for as opposed to the tool itself? So that’s two, three fancy dancy plan gifts, charitable lead trust, charitable remainder trust? Charitable. What have you trust? Those are going to come to most organizations through a professional advisor. They’re not going to go from the donor to the organization. So I concentrate on the book in the book with what kinds of gifts are easy for an organization to do to pursue where no attorney is needed. And then on the other hand, I think it’s very important to have outside counsel so that if you do receive as an organization, they’re kind of two ways to look at it. If the organization is the trustee of the gift that the professional advisor constructs, then the organization needs an outside counsel to make sure that the organization’s interests are protected through the document. But we don’t need all these fancy attorneys in house and what have you, especially small to medium sized organizations. There are lots of things that they can get current and future endowment gifts that have no relationship to these trust gifts. But again, my my my argument is a, the language is scary to the non professional and even fundraisers get scared by the language so they don’t discuss these kinds of gifts with their donors and ultimately, what is the purpose of the sophisticated, so called tools and what do we want to do with it in the organization? And that comes back to the board discussion.

[00:44:39.89] spk_1:
Okay. Yeah. I think we, I think we largely agree. You know, my, my use of the phrase planned giving is exclusive to those who are, I’m not even gonna say plan giving experts because I, I work with startup programs. So they’re not playing giving experts that they may never be, but they can have a, they can have a plan giving program. So I’m talking to folks who are inside nonprofits, but I understand your point to your right and I agree that it’s an off putting phrase for a lot of people. It’s just so well ingrained that my message constantly is don’t be intimidated by planned giving. Debunk the myths of planned giving. Planned giving is not a black box. You don’t, you know, I’ve got five myths, you don’t need an attorney. Like the things you ticked off debunked of top five minutes. You don’t the myth that you need an attorney, the myth that you have to offer complicated gift options, the myth that you have to spend a lot of money. I can’t remember the other two of my own debunked myths, but there’s a lot of mystique and mysteriousness and it does, it absolutely intimidates lots of non plan giving professionals and that those are the folks I’m talking to because I want to start up programs where its

[00:45:20.89] spk_0:
endowment building. See again, the plan keeping is the tool, right? It’s that is why that’s my primary Um, complaint is AIDS, the tool. We don’t talk about the purpose of the planned gift, how it’s spent when we actually receive the proceeds a and b. I love Doug whites comment to me, he calls the phrase planned giving calcified. He was using it what 30 years ago. It’s old. It’s time for us to change that.

[00:45:37.79] spk_1:
I’ve had, I’ve had dug on the show every time he publishes a new book, I have him on the show. Um, the fascinating one was the Robertson case at was at Yale. It was Yale.

[00:45:39.69] spk_0:
I don’t think it was texas, I’m not sure.

[00:45:43.17] spk_1:
All right. Maybe wasn’t really there, but it was, it was some time ago. He’s working on a new book now. So when he gets that one out, I’ll have him

[00:46:36.88] spk_0:
again. My biggest compliment. tony was when, um, two things happened. I did write him about some of the ideas that I was thinking about and never dreamt. He would reply and he replied in this long, long email and supported everything. And what was even more interesting and what he wrote to me is even with that act that we began this conversation with the uniform prudent management act, that’s in all of these states, there’s so many organizations that don’t even pay attention to it. Even when they get donor designated gifts where the donor says I wanted to go into the endowment, the organization is either unaware of the act or tends to ignore the act. And that’s where I think consultants like you and me have even a larger role is to help the boards come to grips with what they are doing with these monies and what they want to do with these monies.

[00:47:11.38] spk_1:
Yeah, It’s a, it’s an important conversation and, and the policies behind it that we talked about. Um, right. I’m, I agree, I agree. We uh, we, I guess what I’m, so you have a few things, you, you have a lot of footnotes to eat my emails with Doug White, you’re crediting Doug White and lots of cases email

[00:47:21.44] spk_0:
with White.

[00:47:24.48] spk_1:
Uh, he’s a gentleman,

[00:47:25.27] spk_0:
he’s a gentleman, he’s starling, he’s the guru. And it was very important to me that he agreed with my arguments because my arguments are not run of the mill. They are outside of what we actually for most organizations actually operate today. And that’s the reason for writing a book because you’re trying to affect change in the way in which the field operates.

[00:48:23.77] spk_1:
I would disagree with with you and Doug and playing giving. Being calcified, I would say it’s well known. It has been around for a long time. I had 60, 70 years or something like that back going to Robert Sharp senior, he was an early practitioner, uh, I don’t know who coined the phrase, I don’t know, he claims that, I mean he’s no longer with us, but um anyway, it’s a, it’s a timeworn phrase uh, calcified, Yeah, calcified, overstating, overstating. Its uh, its utility or lack of its lack of utility. I think it’s just a well well well known, well understood phrase,

[00:48:33.17] spk_0:
professionals in the field, but not the people that really matters, which is the donor and the board decision

[00:48:34.19] spk_1:
maker. That’s where we agree. Yeah, I absolutely agree with, not talking, not putting on your website planned giving options. You know, you

[00:48:41.87] spk_0:
suggest a bunch of your professional. I am the director of planned

[00:49:18.97] spk_1:
giving because that is an outward facing like that’s an outward facing title. You can know internally that the person works on planned gifts you want if you want to call them them internally, but outward facing. Yeah. Endowment development, long term, long term giving officer. You know, I tend to not like the silos anyway because I think the long term giving officers should be working a lot with the annual giving officer who’s working a lot with the peer to peer fundraiser of course, in some organizations, that’s all one person. Um All right. All right. Deborah, Why don’t you leave us with a little, um, endowment motivation? I think we’ve, you know, I feel like we’ve given a good justice. Uh, you know, but you wrap up with some final words on Endowment.

[00:50:14.86] spk_0:
You didn’t warn me about that one. Come on, think about this for a year. You wrote a book about this for for 25 years. You’re going to book, Right? And that’s why I’ve concentrated it on it. And those of my colleagues through the field say it’s about time. You wrote about it because you believe in it so strongly. I believe in endowment is like a retirement fund. If you don’t put away money for the future, you’re not going to have a future and it’s the board’s responsibility to think, yes, we have to worry about today, but we have a responsibility to future generations and future clientele to make sure that this organization is healthy today and tomorrow. And that’s why I think endowment is so important

[00:50:21.36] spk_1:
today and tomorrow. If you you see it on all the social networks and the nonprofit communities, sustainability, sustainability, well, if you if you want to live sustainability and

[00:50:34.36] spk_0:
and be healthy and be healthy, it’s really not only sustainability but to be healthy and your sustainability to be healthy in your retirement, that’s why we have our iras we want to live a qualitative life and we want to make sure that our organizations have a qualitative future.

[00:51:12.36] spk_1:
Mhm irish thought healthy was subsumed and sustainable. I just thought that meant, you know, not just not just starving, getting by, but you know, you’re you’re healthy, just sustainable. So if you want to walk the walk of sustainability, talk about, talk to your board about endowment development, Endowment growth. Do it correctly. And uh the book will help

[00:51:15.59] spk_0:
you time

[00:51:48.46] spk_1:
for endowment building is now there’s other chap, there’s a great, there’s a case study on a program called Life and Legacy of the Grinspoon Foundation. We didn’t get into that, but there’s a there’s a chapter on that could help you get started um you know, who are your best, your best prospects for for endowment type gifts and more about the titles. Uh and then the jargon. Just that’s the book. And the author of it is Deborah Kaplan Pahlavi, you’ll find her practice at Deborah Pahlavi dot com. And the book, the time for endowment building is now Debbie, thank you very much for sharing. Really

[00:51:53.09] spk_0:
enjoyed it. Thank you Tony. It was a fun conversation.

[00:51:56.18] spk_1:
I’m glad. My

[00:51:57.05] spk_0:
pleasure. Good luck to you And your plan.

[00:52:08.05] spk_1:
Giving consultancy. That’s very gracious of you. Thank you. See, and you didn’t say it to snarky either. Just a little bit, got a little bit of a pejorative tone, but I’m willing to overlook it Because it wasn’t, it wasn’t much, is only 10 or 15%.

[00:52:10.75] spk_0:
It wasn’t snarking on. I detected a

[00:52:14.40] spk_1:
little, we’re gonna play it back.

[00:52:15.64] spk_0:
There was a little snarkiness, but it was a small percent.

[00:52:44.15] spk_1:
No, no, look, okay, wait, I gotta finish up for our listeners because next week Jeanne Takagi returns with Risk Management Part two. And if you missed any part of this week’s show, I beseech you find it at tony-martignetti dot com. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o Our creative

[00:52:44.64] spk_0:
producer is planned. Meyerhoff shows social

[00:52:47.09] spk_2:
media is by Susan Chavez.

[00:52:48.83] spk_1:
Mark Silverman is our web guy

[00:53:00.95] spk_2:
and this music is by scott Stein, thank you for that information scotty be with me next week for nonprofit radio big non profit ideas for the other 95

[00:53:14.05] spk_1:
percent go out and be great, mm hmm.

Nonprofit Radio for October 18, 2021: Engaged Boards Will Fundraise

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Michael Davidson & Brian Saber: Engaged Boards Will Fundraise

Michael Davidson, the board coach, and Brian Saber from Asking Matters, have teamed up to write the book that reveals how to get your board to fundraise: Engage them.

 

 

 

 

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[00:00:10.94] spk_3:
Hello and

[00:00:12.12] spk_5:
welcome to tony-martignetti

[00:00:20.54] spk_2:
Non profit radio big non profit ideas for the other 95%. I’m your aptly named host of your favorite abdominal podcast.

[00:00:27.74] spk_5:
Oh, I’m glad you’re with me. I’d be forced to endure the pain of

[00:00:29.56] spk_2:
cellulitis if you inflamed and

[00:00:31.81] spk_5:
irritated me with the idea that you missed this week’s show

[00:00:35.74] spk_2:
engaged boards

[00:00:37.14] spk_5:
will fundraise

[00:00:39.24] spk_2:
Michael Davidson, the board coach and brian Saber from asking matters have teamed up to write the book

[00:00:49.54] spk_5:
that reveals how to get your board to fundraise engage them

[00:00:52.04] spk_2:
and tony state too

[00:00:55.94] spk_5:
podcast pleasantries. We’re sponsored by turning to communications

[00:00:58.19] spk_2:
pr and content for nonprofits.

[00:01:03.14] spk_5:
Your story is their mission turn hyphen two

[00:01:11.44] spk_2:
dot c o. It’s my pleasure to welcome back Michael Davidson and brian Saber, Michael is a consultant specializing in nonprofit board development management, support,

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leadership, transition and executive coaching for nonprofit managers. He has over 30 years experience in nonprofit board and managerial leadership.

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Michael’s at board coach

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dot com.

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Brian Saber is a co founder of asking matters

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and one of the fields preeminent experts on the art and science of asking for charitable gifts face to face. He’s been working with boards for more than

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35 years

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to help unlock their fundraising potential

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brian’s company is at asking

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matters dot com and he’s

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at brian Saber together. Michael and bryan co authored the book engaged boards will fundraise

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how good governance inspires them.

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Their book

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brings both of them and back to nonprofit radio

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Michael and brian welcome back to

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the show what a pleasure great to be back very.

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Happy to be here

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Glad to have you.

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Yes, congratulations on the book. Thank

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you,

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Michael, your book title is emphatic. There’s no hedging no qualifications.

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Absolutely. How can you be

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so sure engaged boards will

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fundraise? Well, it’s a it’s a great, great question, tony and it really is the answer to that is in the title if if you’ve got a board that really does care about what the mission and the vision is of the organization, that’s why they’re there. If they have that personal motivation to be involved in your organization and to care about the impact that you’re having in the, in the world and are engaged in the ownership of that impact, in managing it. They care enough to do this. What are our whole premises? We can teach board members how to fundraise, brian has been doing that forever. Our job is to figure out how do we make board members want to fundraise and making them want to fundraise is engaging them, engaging them with their fellow board members, connecting them with their fellow board members and deeply connecting them with the vision and the passion that brought them to your board in the first place. That’s the simple, really the simple answer for this. If they’re engaged, they’re gonna want to, they’re gonna want to make this organization happen, which includes raising the money for it

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and much of the book is getting that engagement doing it properly. We go from details like the board meeting, which we’re gonna talk about two to broader engagement. You want

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Yes. In fact, you say

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fundraising must be

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fully integrated

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with the active engagement

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of the board

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in its, uh, fiduciary and leadership roles.

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Right

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flush that out for us a little bit. Uh, you know, we got plenty of time together. You don’t have to, you don’t have to pack it all into one answer. But why are we starting to get into their fiduciary in leadership roles? And, and there that relationship with fundraising?

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Well, let’s look at the budget for example, and often a budget is presented to the board. The staff puts together a budget and if it seems like it adds up the board approves it often it’s maybe just slightly incremental from the last one. Not a lot of explanation, sometimes a lot of detail without higher level explanation. And so the board is basically just, I hate to say rubber stamping it and that, that’s just that’s very passive if the board is involved in developing the budget and has really given a sense of what can be accomplished with a larger budget

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and get to choose

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and say yes, we’d like to do more. And we understand our role in that, that we can’t just tell the staff to raise more here is where the money comes from, here is our role. This is how we develop larger donors. It does take the board unless where university with a big major gift staff were it for most organizations. The board is the major gift staff. We get that we want our organization to do more. We’re going to agree to this budget, knowing all of that, then they’re in it together. Everyone around the table is a knowing, a willing participant very different. And we don’t see a lot of that happening. And yes, it’s hard on, especially smaller organizations to get all of this done. But it’s critical. It’s critical not to shortchange the process. If we short change the process, we can’t expect the board too enthusiastically go out and fundraise. This reminds me

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of that

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old conventional

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wisdom, you know, ask for if you want money asked for an opinion, your, if you want to, if you want an opinion, ask for money, you’re, you’re, you’re saying you’re getting the board’s opinion, you’re calling an engagement. But it’s bringing in the board’s opinions about what the organization should be doing. What should be paring back where it should be heading. Is that, is that, is that essentially what you’re doing is getting bored getting bored opinions

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an ownership because it’s not just their opinion on the budget. They put their opinion into this budget, They work with staff on developing it. But at the end of the day they raise their hand and they say, I approve this budget with these particular fundraising goals included. It. I agree to this. They make that decision. You know, one of the things that’s interesting in connection with this, this puts a lot more work on staff. They got to spend more time on the budget. And very often stand said, oh my God, leave the board, we’ll do the budget. Don’t bother them, it’s going to take too much time to explain all of this to them. They may disagree with us on our priorities, they may think other things are important. I don’t want to get involved in that. Let’s just give them a budget a quick five minute vote and done right. So it requires staff executive director to say, you know, if you want a board that’s going to fundraise, you’ve got to spend the time listening to them explaining to them engaging with them and they may come out somewhat differently than you do. You’ve got to live with that. You got to live with that. It’s not your organization, it’s your joint organization. That’s, you know, that’s a lot of work. So, you know what we’re saying may sound simple, you know, has for advice. You get money. But the reality is, there’s a commitment involved, Both on the part of board members and on the part of staff to make this, you know, staff comes to us all the time, but Brian and I’m here this 10 times a day. My board won’t fundraise. Oh, well, what are you doing to get them to do that right, just another

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piece of it, which we’ll get to it, having them do the right fundraising. So that’s the other half of the equation, which cover because it is a double edged sword there. Okay.

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Uh,

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Michael, can we at points then push back when, when it comes time for, for board commitments around fundraising and say, you know, you all agreed to the, to this budget, You took ownership of the budget, You held your hands up and voted well, now it’s time to fund what you all agreed to. Can you, can you sort of give it back to them that way?

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Absolute. And it requires one on 1 work with each board member. And for me, that’s the role of the Resource Development Committee. So let’s talk about it. We’ll get to brian’s magic number of, you know, what are you going to do? Well, And uh, yeah,

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well, before we get to the fundraising part, I want to, I want to spend time on the engagement part.

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Sure.

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Let’s not go anarchy economy. I wanna, I wanna, I wanna, I wanna get this. You talk about a, a culture that creates full engagement. Uh, who’s best for uh, I don’t know who to call on a Socratic method from law school, I don’t know. Uh, but I don’t want to go like ping pong either brian Michael, brian, Michael, death too monotonous. So, you know, who’s, who’s best for talking about creating this culture of engagement at, on

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the board. We love

[00:12:29.04] spk_0:
Michael. okay for me, you know, this came out of it, I did a workshop with a number of consultants on helping them learn how to do what I do. And one of the consultants brilliant actually, we’ve got a quote from her and Catherine devoid. Catherine said, you know what you’re talking about, Michael is a board culture and peter Drucker, the management bureau says, you know, culture eats strategy for breakfast. What we want to do when I talk about a culture is a culture is a team for me aboard, culture is a team. We see ourselves as a team. We understand we know each other, we’ve spent time with each other and we jointly want to do something. We jointly believe in this in this mission. Okay. And we encourage and support one another. So the culture at base has a system where board members know each other and work together on various kinds of things. Then you have the motivation and then board members can encourage and hold one another accountable for what they’re doing. So the culture starts with making sure that board members know one another personally personally know who they are, who they are and from that you can begin to build a sense of a team, we’re in this together, we’re not separate. It’s a very, it’s a very different notion of what the board is. You know, you and I tony were lawyers, right? So we start okay, this is the fiduciary responsibility. This is the board. This is what they’re supposed to do brian and I are asking the question, yes, we know what they’re supposed to do. How do we make them want to do it? And part of it is the mission, but part of it is their sense of responsibility to each other. Think about a sports team, right? What makes a good sports team? Not a collection of stars, Right? It’s a collection of individuals who don’t want to let one another down. I want to do my best because I’m with you were doing this together. You get the matter

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used to the metaphor, Michael of the rowing because you’re a rower and you had the coach boat and rowers have to be working in unison,

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right in unison. And there’s a great quote which I use in the book from the boys in the boat, in which the coach tells this roller, right? You know, you’re a good rower. Let me tell you what you need to do to be a great rower to be a great rower, you need to trust every other guy in the boat when you trust everybody else. You will be great. That’s interesting notion, right? Because I know if I know Tony, I know you’re pulling as hard as you can, I’m gonna pull as hard as I can. If I’m not so sure about you, Why do I kill myself. Right? But I know you tony You’re gonna pull with everything you got. And so I’m gonna pull with everything I got. It’s a very simple kind of notion, but to us it’s very, very important. It’s creating the board as a group, not as a collection of separate individuals as a team and they hold one another accountable and they don’t want to let one another down. It’s the experience we’ve all had brian. How do we start

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building this trust among board members?

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Friend? Well, first we look at the time we, they spend together and how we’re using it. So I always say to people, it’s amazing the percentage of a board members time that is spent in board meetings and the percentage of the board meeting time that is not spent well.

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So

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if you’re going to have a two hour meeting every other month, that’s 12 hours and, and maybe they’re in a committee meeting once every two months or once every month or something. But almost all the time is spent together in these meetings. And the meetings have so much, uh, reporting, there’s so much happening there, that doesn’t have to happen. Uh, and, and, and so the meetings don’t allow for this team building where, where the board members are grappling with the big issues and wrestling with the future of the organization, uh, how the organization is presented where it fits in a big, important issues and they should be wrestling with those because they’re the board and they have the responsibility for moving this organization ahead, keeping it safe, making sure it’s doing the right thing. And uh, so many board meetings have very little discussion of program presentation of program reporting back from board members of what they’ve seen in the program. And lots of board members rarely even see the program in action. So the board meetings are very report central centric. No one wants to give up their their chairman’s report, their executive directors report this report, that report. And we try to move people towards these consent agendas where all the reports go out in advance are simply approved and you have to read them. You have to read them in advance because you can’t just come to the meeting and expect to have a conversation about them even. And even the action steps should be discussed. You

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even suggest in the book that questions about what’s in the consent agenda have to be submitted in advance of the meeting. You can’t come to the meeting with your questions about the previous the previous minutes or or everything or the reports that are in the consent agenda. You got to submit your questions in advance. So we know you’ve read them.

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It’s time for a

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break turn to communications. You want relationships with journalists than hire former journalists

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who know how

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to build those relationships, including one of them. One of the partners worked as an editor at the Chronicle of philanthropy. But both partners, our former journalists. So they know how to build those relationships. They know when it’s the right time to contact journalists. They know how deadlines work and they can coach you on talking to the journalists once they get you those relationships. So you want the relationships higher folks who used to

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do that work,

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turn to communications, they’ll get you set up. They have existing relationships that can help you build new relationships with journalists. And where are those existing ones? You’ve heard me regale you with the the litany of media outlets were turned to has relationships. So figure turned to communications, talk to them, turn hyphen two dot c o Your story is their mission

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now back to

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engaged boards

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will fundraise

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how many of us has been in board meetings where people, you can see, you see, you see people for the first time, they get there 10 minutes early and they’re poring over their board notebook and you’re just sure that that’s the first time they cracked it open 10 minutes before the meeting. And what’s really, they’re wasting

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their time at that point.

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And then you get one or two board members who hijack a meeting with questions and they shouldn’t be allowed to, no one gets to hijack a meeting. And if you have this, this structure in place, which is much more about discussion and moving the organization forward, building the team and such, Then there isn’t that time for the small questions. I mean I get driven crazy when budgets are presented and someone goes to one small line item and ask the question. It’s so bad. In many ways. We’re trying to move people away from

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that tony There’s another side to this and that’s the role of the executive director in this. Because what we’re urging is that there’ll be substantive questions, for example, on such and such a program. What is the impact of that program and how do we measure that impact? Right. That’s an important engaged, more discussion. Executive directors many say, wait, wait, wait, wait. I don’t want them getting into program. That’s my job. If they start talking about programs, it means they’re trying to manage how I do my my implementation work. Right? And we say we want we want boys to be faced with the real issues, as we say in the book, the good, the bad and the ugly well, executive directors don’t like to do that. They just want to give the board good news put out their report and go home and hope that they don’t bother them. So this partnership takes too right. You’ve got to have an executive director who is willing to engage with the board in these substantive discussions about the future of the organization about the problems that the organization is having about its challenges, not just a good news. So it takes it’s two sided. You can’t do this.

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What is the appropriate role for a board member? Board members

[00:22:15.14] spk_0:
around program Michael, for me it’s about impact, it’s not about how you do your program, it’s about what your program is designed to accomplish. And how do you measure what’s the vision, what are you trying to do? How do you measure that impact? I’ve got, you know, I’m on the selection committee for the Awards of Excellence and nonprofit management and one of the things that would look at his program impact. Let me give you one of my favorite examples and that’s the board involved in impact. Right? Um you know, I’m a rower. So this is it’s a rolling story. Okay, so wonderful organization, new york city koro new york no new york works with local high school kids, makes them into competitive rowers, which is really good for their college applications, works with them on college prep stuff and stuff. They were off the wall about the results of their program, 98% of their kids were getting into college. Fantastic. Right. Fantastic. Well. But they had also been collecting data on their kids and one of the things that they saw in their data is that their kids were not doing so great in college. And so the executive director and the board started to look at this data and said, you know, we’re focusing on the wrong end point. Our endpoint should not be college acceptance. Our endpoint, our impact point should be college graduation. So now what do we have to do programmatically to reach that? And we have to put resources, the different kinds of programs and the program to keep track of the kids once they’re in school, bring them back so on and so forth. But it was the board and the executive director looking at the data and looking at the question, what is our goal? What is the impact we’re trying to make? And by doing that, they jointly changed where they were directing resources, some of the staff that they were doing and stuff like that. So that’s an example for me of the board being involved in program, but at the right level at the level of impact and the level of data, not how do you teach? And that’s what executive directors tend to be afraid of. Once they start talking about program then they’re going to start talking about how do I teach you, How do I run my classroom and so on and so forth. And then to the board job

[00:22:26.84] spk_2:
brian, let’s talk a little more about nuts and bolts of

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meetings.

[00:22:57.44] spk_2:
If if this is the primary time that the board is spending together, whether it’s committee meetings or or full board meetings. Uh in fact, I’m imagining you two would advocate for social time for the board as well. But so we can, you know, we’ll get to the social part, let’s let’s talk more about some nuts and bolts meetings were trying to build a team, we’re trying to build trust. We want to focus on the right things. What, what more advice they have around meeting structure.

[00:24:32.74] spk_1:
Well, first of all, the agenda needs to be developed jointly by the executive director and board leadership. Sometimes that’s just the chair, sometimes that’s the entire executive committee and it needs to be developed in advance and everyone needs to know their role and be prepared, not just wing it. Uh, so that’s, that’s the first piece. I often hear boards talking about one hour meetings. Now this idea of making meetings very efficient and it reminds me of this issue with government and people want small government. It’s really better government that you want, right? You don’t want to waste the time. It’s not that you’ve got to make it smaller, but it needs to work. Right? And I think an hour is not enough time. I think an hour and a half to two hours gives you uh, the flexibility to dig into a topic. Uh, you have to have some sort of program presentation every time there’s, there’s no substitute for that. The more we connect board members program and give them an opportunity to ask questions about it to learn about it, the stronger their connection will be. So there needs to be programmed presentation, Michael and I prefer that board members are out there, uh, seeing program and are bringing back their own recollections and sharing those with the board. Uh so those those are important. Uh

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the

[00:24:55.54] spk_1:
uh we should not have a long executive directors report. We should be asking the executive director just as we ask all the committee chairs to submit their reports in advance. Uh The chair’s report should be very short at the very beginning, very high level, Michael, would you add to that?

[00:25:17.34] spk_0:
Yes, I didn’t do exactly. One is I love to time my agendas. I lay out, you know, we we lay out what’s gonna be and then I put five minutes, 15 minutes, whatever it is and that does a couple of things. No one, it focused the board, it makes us think about where we want big discussion and where we don’t want big discussion. And it also gives the chair of the power to cut things off. So if someone’s going off on a on a rabbit out, you know, at the minute, I know we’ve only got five minutes for this, we have to end discussion now because otherwise they’re not going to get to the I think so, timing the agenda is a big deal. You know, Michael, I’ve

[00:25:41.58] spk_2:
even seen where a board and I’ve seen this in other meetings as

[00:25:45.58] spk_5:
well outside the board

[00:25:46.67] spk_2:
setting, where

[00:25:47.80] spk_5:
there’s a timekeeper

[00:26:09.34] spk_2:
appointed so that the chair can keep the conversation flowing and relevant. And the timekeeper is the one who says, we only have three minutes left for this topic. you know, like mr mr and mrs board chair, there are only three minutes left on this topic, you know, it’s up to you to decide what you want to do, but I’m the timekeeper and I’m letting you know there’s only three minutes left, just another another

[00:27:34.74] spk_0:
enforcer. And it’s an interesting notion, I actually kind of like it he goes back to as you know, I spent a good part of my legal career as a prosecutor, you know, and the notion of good cop, bad cop, right? So so the board chairs the good cop or oh no, I’m not controlling this, right? Someone else is telling us we have to stop, I’d love to let you talk forever, right? Yeah, good. You know, so it’s a good thing. The other thing too is there’s a framework for board discussions which rob Acton is used in his uh in his writings and he’s you know, and he says there are three kinds of questions that boards need to be looking at generative strategic and fiduciary, Okay, generative is where are we going? Why are we doing this? What’s on purpose? Right. Strategic is how do we do it? And fiduciary other details. And you know, part of what happens is so much of board meetings tend to be taken up with fiduciary matters and not enough time on generative and strategic matters. So again, as the as the leadership team is thinking about the agenda, they should be asking, you know, are there questions of that nature, generative and strategic that we need to be thinking about, you know, so it’s the paradigm. Yeah, brian’s got his

[00:28:25.44] spk_1:
hand out and I want to add to that, that when we talk about developing these board meetings, a lot of boards meet, if not every month every other month. And I’ve always felt the more often you meet and it’s not something we talked talked about in the book, but it’s something Michael and I have talked about, the more often you meet, the the more likely it is you’re going to get into more details because less has happened in the two months you get out of the meeting. Everyone has one committee meeting perhaps than your back. And, and I don’t think boards have to meet as a board every two months. I think if they meet quarterly as a board, there’s it’s easier to see the big picture. It gives more time for committee work in between and and that alone could help lessen the focus on the new sha

[00:28:34.84] spk_0:
it’s an interesting question. Um I I go both ways, depending upon the organization and and the size of the board. But one of the things that’s interesting about another question about board meetings is how do we use board meetings to connect board members with one another?

[00:28:49.84] spk_2:
It was going to get to this. I wanted to get to the social side

[00:30:31.44] spk_0:
of this. Great. okay, okay. Yeah. So how do we, well, it’s very it’s really interesting because I think, and I’ve been thinking about this a lot as we emerge from covid, hopefully emerge from covid. Right? And, you know, very often would say, okay, you know, what we’ll do is we’ll have a cocktail party before the board meeting, have some wine and cheese, maybe after the board. Me, it’s interesting, but it’s surprise problematic because what’s likely to happen, what’s likely to happen is that board members will talk to people that they know people that they usually talk to write and they’re going to talk with them about the things that they usually talk about, right, your your your golf game, your your your your your other involvements, whatever things that they have in common they talk about. And what I’ve been trying to think about it, we mentioned in the book is how do we create, how do we structure the interpersonal connection so that it’s deeper. Um, I just did this yesterday. So whatever the most recent thing in my mind always helps. Right? So I retreated, I facilitated a board retreat yesterday, which actually was in person. Um, and but what we did was before the, before the meeting, and this can be done, we assigned pairs of board members. Everybody was in a pair of two and they had an assignment, what they had to do was to interview the other person, find out about them, what they like, what they do, what their passions are, what they care about, what they read, what kind of music they’re kids. They’re this they’re that find out about who they are as a person, and then each one had to then introduce the other at the board meeting. Okay, so this is something to take some time and you can’t do it all the time. But it’s a very interesting way. And I asked him, I said, what was this like you said, this was great. These are really interesting people. I want to work with these people.

[00:30:50.34] spk_2:
There’s no going back to your team. Team building.

[00:31:05.74] spk_0:
Team, yep. So if if we’re if we’re going to try to create opportunity social opportunities, we need to think about what’s the best way to do that to achieve our goals. I’m skeptical.

[00:31:06.89] spk_2:
I’m a little concerned about wine before the

[00:31:09.34] spk_0:
meeting. I get a little too uh a

[00:31:14.07] spk_2:
little too loose lipped maybe. But but I love the idea of introducing someone you don’t know, get you to talk to somebody that’s outside your comfort zone, but ought not be because their fellow board

[00:31:27.74] spk_0:
member. Yeah,

[00:31:53.14] spk_1:
I had a program at one organization where I was uh, where we, we had board members go out after the meeting together and we assigned the groups so that we had a good mix and people would, would meet each other and and they were, the goal was for them to do that twice a year. Uh It’s all about time. Right? But we thought that was important time to spend so that they’d at least go out to dinner with half the board. Some of it depends on the size of your board and what you can accomplish, right? But we didn’t want groups of more than six because we wanted people to be able to talk with each other. So what we might send two groups of six out in different directions.

[00:33:04.64] spk_0:
Yeah. You know, and it’s interesting. I’ve seen people do very simple things at the beginning of a board meeting uh consultant I worked with, she always starts out every board meeting with a question. So tell me about the kind of music you like. Right, two seconds. Tell me about the most interesting book you’ve read recently and why? It was interesting to you. Right? I mean, two seconds we can do that at a board meeting. It loosens everybody up. It enables people who are introverts to have to say something to get out there and talk. It puts a limit for the extroverts on how much they can talk, Right? But it’s a, you know, so you can do devices like this, recognize it because it’s important, it’s important to recognize the importance of the board culture that unless we have that sense of connection between people, none of this stuff is going to work.

[00:33:11.14] spk_2:
Okay. And now let’s bring it to the, to the book title,

[00:33:13.90] spk_0:
Okay, Will Will fundraise,

[00:33:16.58] spk_2:
shall shall engage board shall fundraise.

[00:33:19.58] spk_0:
How is No, no, no, no. We didn’t use the word shall know. I, I added shall because that’s probably that’s perspective. Okay. Prescriptive, prescriptive, I know,

[00:33:41.74] spk_2:
yes, contract, contract you shall versus well, um, no, the book title is engaged. Boards will fundraise. So how does having better board meetings and board members knowing each other better through these simple social devices? Social methods

[00:33:49.74] spk_5:
improve our fundraising?

[00:36:09.83] spk_1:
Right. Well, as Michael has talked about a fair amount, it creates a team and a sense of joint responsibility. You think that it exists just because they have all joined this same organization, but you can’t just accept that in fact you have to work on it. So, by building this team, this camaraderie by by helping people understand each other. Uh, there is a shared sense of of, of responsibility. Second, by really engaging the board in these discussions and having the board understand the organization at a more nuanced and important level. It is easier for them to talk about the organization to feel comfortable doing it to represent it properly and to do it passionately, which is key to fundraising right? Being an ambassador for the organization. So many board members, uh, say I I don’t know enough about the organization to go out and talk about it. I’m afraid I’m going to say the wrong thing. I don’t know the organization like the executive director does. And one of the steps here is to get board members more comfortable as ambassadors talking about it. Uh, and it’s funny because I always say to board members, you don’t need to know all the details. You don’t have to know every little thing and all the numbers and such. You just have to be passionate and authentic to tell a good story and get people excited about the organization. And it incense goes hand in hand with the board meetings, Right? And if we’re concentrating on Mnuchin the board meetings, then the board members think they need to know the menu. Sha if we stay out of the Mnuchin the board meetings, then the board members can feel okay, this bigger picture is what’s important. So, so we build a sense of responsibility and we build, uh, more of a comfort in talking about the organization. We also build an understanding of why the funds are needed and what they will do, right? It’s not just, we need money. Uh, will you give me money? I love this charity, but this is the impact we’re going to have. They can talk about that. So, okay, so that gives them a basis for going on fundraising

[00:36:48.23] spk_2:
and that’s sort of a perfect transition to getting now to the discussion of engaging the board in the right kind of funding in fundraising. So, you know, listen, you just get, you got to get the book to, to learn more about how to engage your board. Um, they talk about the different duties of care and loyalty and obedience that board members have an, uh, governance. There’s, there’s good talk about governance uh, that you know, belonging in in one place and management, belonging by the other management, by staff, governance by the word. You gotta, you gotta be the book to get more of that detail about engaging.

[00:36:50.13] spk_5:
It’s time for Tony Take two.

[00:37:02.03] spk_3:
Oh, can I tell you how much I love sending podcast pleasantries. Thank you. I’m just grateful that you are a

[00:37:02.21] spk_5:
supporter of the show

[00:37:03.67] spk_3:
listening, whether you sample or you

[00:37:08.63] spk_5:
subscribe however you do it. listen all at once to 12 shows or you are the first one

[00:38:03.82] spk_3:
after the shows get published each monday. The first one clicking Thank you pleasantries to you are over 13,000 podcast listeners in aggregate, but you, you’re the person I’m talking to, I’m talking to you right now. I’m thanking. I thank you and I’m thanking you. That’s passive, isn’t it? I’m thanking you. I thank you. I know that’s active. Thank you. Thank you for listening. I’m glad you’re with us. Glad you’re supporting the show. I’m glad the show brings you value. Otherwise you wouldn’t be hearing me hearing me right now. You want to shut me off years ago. So thanks, thanks for being with me. Thanks for being with nonprofit radio That is Tony’s take two. We’ve got boo koo, but loads more

[00:38:06.37] spk_5:
time for

[00:38:07.82] spk_3:
engaged boards will

[00:38:10.41] spk_5:
fundraise.

[00:38:15.32] spk_2:
So now let’s talk about engaging the boards, you know, specifically in fundraising. Um, you two

[00:38:18.11] spk_5:
have

[00:38:19.12] spk_2:
was, I think six different six things, you know, like make the case identify the resistance. Is that the best way to talk through the engaging the boarding fundraising? Or is there a better

[00:41:15.91] spk_0:
way for me? There’s another way to start it. And that is what brian has been talking about right now is giving the board members the basic tools, Right? Thank you. They know how to tell a story or they’ve got a story to tell them. But one of the things that we look at is the fact that there is discomfort resistance about fundraising. It is not something we do in our normal lives, right? We, we do our jobs, we’re professionals, we don’t go out trying to engage other people in the things that we’re engaged in. Right? So they need help doing that. It’s part of the team. Thing is they want to feel, I want them to feel responsible to one another. But in addition, there has to be some guidance from either from fellow board members are from staff into how to do this. So board member says, okay, I, I know I know these, I know these people, you know, I’m comfortable with and I’m willing to talk about it. I’m a little, I’m uncomfortable asking them for something. They were gonna tell me, no, it’s gonna harm the relationship and stuff like that. So time needs to be spent. Either one on one with board members and within a member of the resource development Committee or is there a member to go through? Okay. Let’s figure out how you do this one with respect to the resistance that you have about it. How do you overcome that resistance? You know, what do you do? So, for example, one of the techniques I told board members is you never want the first conversation you have with somebody about your organization to be a conversation we’re asking for money. That’s the kiss of death. So what you’ve got to get to do is OK, here’s what you got to do over the next few weeks. You are you gonna talk to any friends? Yes, I’m gonna talk to some women. Okay. Here’s what I want you to do in those conversations. Find something that they’re interested in. That allows you to bring up your experience with this organization. You’re not asking for money. You’re not ask them to do anything. You’re just bringing this organization into the conversation. That’s your job. Okay. Now, after you do this, let’s come back and talk about it and tell us what your experience is. Now you can do this with the entire board, right? We’re at a board meeting. Okay, Everybody next week or between now and the next board meeting has to have one of these conversations with a friend come back and report at the next board meeting. Let’s see what we learned? What was difficult? What worked did they ask you questions? What would be the next steps? So they’ve got to both feel responsible for one another. But it also at the same time gets support from one another for doing this incrementally, because this is new to all of us. It’s new because you have

[00:41:31.41] spk_2:
an exercise in the book seemed ideal for a board meeting where you uh, you ask for board members to list their objections to fundraising and then list there a personal experience of either having asked or being asked in the past. And the two don’t do don’t align like the reality cancels out the objections exactly whose idea is that. Is that yours, Michael?

[00:43:10.90] spk_0:
Or that’s that’s me. Yeah, it’s a very simple exercise. You know, I I like to draw upon personal personal experience. I believe that board members got the answers to all these things I’m concerned about. They just haven’t talked about it. My job is to get them to talk about it. So, yeah, they’re going to tell me about I don’t want to fundraise. That’s going to be, this is gonna be that they’re going to hate me, bah bah bah bah bah fine. Okay. Now, let’s talk about what actually happened in your life? Have you ever given money to anybody? Why? What was there about that circumstance that made you comfortable and want to do that? So we take their experience and bring it back work. I just, I’m gonna intercept here and you can cut this out if you want. One of my later readings is I’ve gone back to the Socratic dialogues, Plato’s writings about Socrates because what Socrates believed was that everybody had the answers to all these important questions in their head and his job was just the program and ask the questions to get it out. And I believe, I believe this about boards. Our job is to use their experience, not tell them what they’re doing wrong. Take what they’ve done and learn from it and help them learn from it simple.

[00:43:13.70] spk_2:
You’re right. That that’s worthless. I’m gonna cut that

[00:43:15.63] spk_0:
out. Yeah.

[00:43:19.08] spk_2:
Right.

[00:43:19.58] spk_0:
But yeah. So

[00:44:21.99] spk_1:
you adding to what Michael said, one of the, one of the kickers here is board members having to ask all their friends only to be asked to give gifts in return to the other organizations that you know with pro quo. And I’ve been talking about this for a decade ad nauseam because it is horrible short term transactional fundraising. All transactional. And it’s gotten really bad in our field to our detriment. And everyone gets sort of, uh, the organizations get stuck on this. It’s like, uh, like cocaine, right? And, and, and and can’t move away from it. Well, we need the $50,000. The board raises and like, Okay, well your board is going to hate doing this type of fundraising, they’re not going to be inspired when they leave, all those gifts are going to leave with them and so forth. So you’ve got a short term gain, you’re getting some money in the door. But everything else is wrong. We don’t, I always had people good point

[00:44:25.11] spk_2:
about just the last one you said, I want to just amplify when the board members leave. Those kids are going with them. When I just, I just wanted to amplify that.

[00:44:33.85] spk_1:
When I say that to boards, a light bulb goes off, I say,

[00:44:38.03] spk_0:
I’m not,

[00:45:35.39] spk_1:
if I’m on the board and I leave the board, I’m not going to keep asking just if I could give gifts to all my friends. And what what happens when you have me as a board member, uh, do this is I end up giving money away to organizations I don’t care about just to be nice. And whereas it would be better if I gave all that money into my organization that I love and tell people you give it where you love where you, where you’re excited because then I’ve made a bigger investment in my own organization, have a bigger stake, more of an investor. And if I think I first wrote about this 10 years ago that if I had one wish in the nonprofit world, it would be to stop the quid pro quo fundraising today because it’s a Sisyphean task. It’s just not getting anyone anywhere. It’s keeping them from anything strategic and it and it is burning out the board members. And when board members come to the board often they’re on their first board. They assume that this is the type of fundraising we’re going to ask them to do, which is why they have such resistance.

[00:45:46.89] spk_0:
What do you

[00:45:47.39] spk_2:
want to see in in its place?

[00:48:49.57] spk_1:
What I want to see is the board members to serve as ambassadors and what I call many major gift officers. So let’s look, people look at the big shots, they look at the hospitals in the universities and these massive organizations Because they raise so much money and they’re very visible and they all have what we call major gift staffs. They have a staff whose sole responsibility is to take 150 200 prospects donors and cultivate and solicit them and steward them along. Right. And and those staff For year after year have these people have this portfolio if we want to call it that. And that’s great. But most organizations have a budget under $1 million. Most organizations are lucky if they have one development officer who’s doing everything. Special events, direct mail, grant writing, crowdfunding You name it and maybe has 5% of their time to actually go out and talk to significant individual donors. So what I want rather than this transactional fundraising is for every board member To be a mini major gift officer with four prospects slash donors on their radar screen who they stick with and those may or may not be their own contacts. Many organizations have people who need more attention than they’re getting and they don’t get it because the executive director and our director of development don’t have the time. I’d sooner see the board members taking donors out to coffee calling them and thanking them for gifts, attending cultivation events with them and asking them what they think than being worried about soliciting the gift. I’m much less concerned about board members asking for a gift. They don’t have to ask for a gift as a matter of fact and I only was thinking of this this past week. Major gift officers don’t always ask for the gift. So I was a major gift officer from my alma mater. I was in charge of solicitations in the midwest big gifts. And you know, there were times I asked many and there were times when someone else asked the president, the senior vice president, a volunteer. This idea that just because you’re cultivating and Stewart and someone means you are the Askar, it actually doesn’t even add up with professionals. So I want the board concentrated on this other work, which most of them are willing to do. Oh, I’ll happily call for people and thank them for their gifts. So I’d be happy to take people out and thank them and get to know them better. Ask them if they’ll come with me or send them a personalized update. And this is incredibly important work. If we’re going to build relationships. And the other point I put out, the three of us know the numbers that most, Most of the money, most of the charitable gifts come from individuals, 85, everything. Yeah.

[00:48:56.82] spk_2:
When you had requests, it’s like 88 or so, but it had requested 77 or something like

[00:49:39.47] spk_1:
that. The largest gifts come from people, we know if you look at your own given right and where them and individuals are really loyal. I ask people all the time on boards. This is part of breaking down that resistance. What’s the longest number of consecutive years you’ve contributed to an organization Now for many, it’s our alma mater, right? So I graduated in 84. I’ve been giving to them for 37 years and I’ll give them till I die. And many people do. That could be your church. We give for decades. So we don’t, it’s not about the short term win. It’s about what I call an annuity of gifts over what could be decades. If you bring someone in them, they get excited most of our organizations or institutions that are going going to be doing our work forever. Some are meant to put themselves out of business and resolve some problems. But most nonprofits will be here for 100 200 years assuming the planet is and helping people with medical needs, helping seniors, helping kids get educated, whatever it is, building community and we want people to have a state for a long time. So let’s have board members helped build that state with these individuals

[00:50:38.96] spk_2:
and that that also relieves board members of the, the fear and anxiety of having to be the solicitor. You know, some board members will step up to that. Uh, some will with training but it’s not necessary. You’re saying board members can be building the relationships in all these different ways. May be hosting something in your home with four or 6 couples or something. All these different ways. You

[00:50:42.79] spk_5:
mentioned the thank you,

[00:50:43.66] spk_2:
notes the acting as the ambassador all these ways and then maybe you’re cultivating them for someone else to do

[00:50:50.59] spk_5:
the solicitation.

[00:50:54.56] spk_2:
Maybe maybe the board member is involved in it or maybe not. You know, it doesn’t have to be

[00:51:18.26] spk_1:
right. It goes back to the good cop bad cop, the board members, the good cop and then brings the executive Director of director development and to ask for the gift that’s perfectly legit perfectly legit. I played that role many times as an executive Director Director of Development. Where I asked uh, yeah, where the board member cued it up. But I was the Oscar

[00:51:48.36] spk_2:
right and you’re collaborating in the relationship, the board members reporting back, letting the Ceo no, you know, this is, this is how it went with her baba. You know the ceo is asking, you know, do you feel like it’s maybe it’s the right time for me to ask or for us to ask or is it still too early? Or look, she expressed interest in this particular program. And you know, the board was just talking about expanding that, putting putting more resources to that. This could be a very timely topic for me to bring up at a meeting with her or or the three of us know you’re collaborating around the relationship strategizing about when the best time is to actually do the

[00:52:34.05] spk_0:
solicitation, right? And going back to board meetings for a second. One of the things you want to do with the board meeting is acknowledged. The people that have done this. You know, wow, let me, let me tell you, the executive director says, let me tell you that. You know brian and I brian introduced me to so and so and we had a meeting and you know, we walked away with a check for $5000. Thank you brian, do you do right, celebrate it builds it celebrate the winds and it builds it into the culture. You don’t want to be the only one who never gets thank you. Right.

[00:52:38.45] spk_2:
Let’s talk about the expectations, establishing

[00:52:42.07] spk_5:
expectations around

[00:52:44.45] spk_2:
giving and fundraising for board

[00:52:47.21] spk_1:
minimums. Yes, who wants

[00:52:49.37] spk_2:
to kick that off. Let’s spend a little time with that. Yeah brian

[00:55:36.44] spk_1:
can I? Because I’m, I have, I’m rabbit about this one actually to, um, I cannot stand minimums and given gats I give or gets Excuse me. I believe that everyone should do their best on both. Besides everyone should give a personally significant gift as an investor in this organization and do their best at fundraising. And uh, without going into great detail, what I see time and again, there’s a minimum gift ends up being a ceiling out of floor. You think everyone’s going, ok, everyone’s gonna give at least this. But most people then give that, it feels like dues. You set the, the amount low so that most people can reach it, you still have some who can’t. And, and it’s been proven again and again, that, uh, that minimum gifts do not generate the largest gifts, minimum gift requirements don’t help. And people say, well, how do board members know what to do? And I said, well from the very beginning, and we talk about a job prospectus in the job description, You tell prospective board members, here’s the range of gifts we have board members giving anywhere from $500 to $5000 depending on their capacity. We ask people to do something very significant given the who they are and what they can do generally right. We want everyone to feel that they’ve made a gift they thought about that’s important to them. Some people ask for one of the top three gifts you give anywhere, which is a very concrete way to put it in and, and works. So on the gift front, you give people guidelines. And here’s, here’s an interesting thing you actually asked board members for a gift. I’m amazed. We’ve never best fundraising, best practice fundraising. We ask our major gift donors for an exact amount, Tony would you consider a gift of $10,000, etc? And yet we let our board members just give whatever they want to give. Why would we do that? I really push asking every board member for a specific amount that, that, that is personally significant to them. Makes them think about what’s significant And on the get side, I really believe it should be the best of your ability because if we say you’ve got to give or get 5000 a board member with a lot of capacity can just give the whole thing and not do any work or swap gifts with friends. And yet and the board member with less capacity is left, um, doing the hard work and that doesn’t make for a team. Everyone needs to do the hard work together.

[00:56:58.63] spk_0:
There’s a couple of, I mean I’ve learned this from brian’s and that’s my, become my mantra, working with working with boards about personally significant gifts and there’s a couple of, there’s another consideration now, especially with, with our desire to diversify our boards, polls, we may be reaching into populations that don’t have access to resource, but they’re important in terms of perspectives that they bring to our deliberations. And so having this as the standard personally significant gift for everybody. It’s equal. We’re all equal. We’re all giving the best we can. Another part of that. And I really like what brian says about, you know, asking our board members, it’s a negotiation, right? It’s not a no, I I need $1000 from you. And that’s what you gotta do because you’re a board member. It’s what I, you know, let me, let me tell you what I give. Okay, Okay. And now here’s what I think might be reasonable for you. Let’s talk about it. Okay. Is it is that a reasonable gift for you? It’s not demanding its opening a conversation as, as the possibilities. So, you know, I mean, I’ve done some capital fundraising and very often we ended up in a negotiation. You know, I asked, I went in asking for a certain amount, which I thought that person could give or we thought that that person could give when I put that number on the table and kept my mouth shut for a few minutes. You know, so they came back and they said, well, you know, that’s a little, okay. Let’s talk about it then.

[00:57:20.23] spk_2:
Support. Support training. It could be training could be staff, support for the, for the board that the, that the, uh, the employees, the staff are, are obligated to give either their own or through a consultant. What kind of, what kind of board, what kind of support do we need to give our board members around fundraising?

[00:57:41.83] spk_0:
Yeah, there are two,

[01:00:39.01] spk_1:
two pieces here. The first gets back to something, Michael said a long time ago about staff and the need for staff support in terms of the board meetings and the board members being involved, board members will only help with the fundraising. To the extent they have staff support. They’re always gonna need staff guidance materials, someone to bounce ideas off of and, and such staff need to be managing this, reminding board members of, uh, their next action step with a certain donor, um, providing materials and so forth. So, staff have to keep the tracker, as I call it this, even if it’s an Excel spreadsheet with a list of everyone and who does what and, and, and, and constantly move the process forward. But probably the most important thing is training because as Michael noted, board members come with very little experience and a lot of trepidation and the more training they can get, the more comfortable, they will be the more comfortable and effective. I always ask when I do a training, how many of you have ever been asked for a gift, The way we’re talking about it. How many times has someone said, Michael would you consider sitting down with me so I can ask you for a special gift, our organization. The truth of the matter is with all the asking out there with all the fundraising in every form. Very few people end up in these conversations. It’s the big, big, big, big donors. Right? And, and so many board members have never been on the other side of the equation and really have no idea what one of these meetings about. They assume you just go in and you ask for money. You just say, you know, will you give this? They, there’s no way for them to know because they haven’t experienced it themselves. So we need to teach them what it is. Uh, and that it’s all about the relationship, which definitely takes some of the pressure off. It’s always about the relationship and it is never about the gift to me. That is the number one rule in fundraising and I will leave money on the table time and again. I just, I just coach someone an hour before this conversation who’s the head fund raiser for a program within the school because a donor um, offered up an amount before being asked for an amount and it’s a significant amount and a big step forward. And the question becomes, do I go back, do I negotiate? And some of this is happening by email and I said in knowing the stoner, I said, you take the wind, it’s about the relationship. This is much, this is big for you. There’s always next year, the year after and so forth. So teaching board members, it’s about the relationship, not the gift, whatever happens this year, that’s okay. We’re building the relationship helps them feel more comfortable because they think they’ve got to go in and come out with whatever you all were hoping for. You know, it’s a, it’s a, it’s uh, and we’re guilty of building this mindset. We as a culture.

[01:03:05.00] spk_0:
The other side of it is that there are some very, for me very simple things that boards can learn how to do to build a relationship. For example, one of one of the things I very often do with a board retreat, simple exercise or on fundraising, I told people, look, you’re now going to somebody, you’re sitting in somebody else’s fundraising dinner and there’s somebody sitting next to you. Okay, So you want to have a conversation with the person sitting next to you, get to know them. So here’s your job. You’ve got to ask that person questions about what they’re interested in their lives and so on and so forth. And you’re looking for some place in them that connects with your organization. Then when you find that place, then you can introduce your organization, but that’s your job and we, you know, we pair up and people around, you know, around the room, sit down and try to have these conversations and realize that they can, because these the way in which we want to build relationships is a technique and it’s something we need to practice and become comfortable with. You know, people are not used to really interestingly asking questions. We all tell people things about ourselves, but we don’t ask them questions about themselves. So I mean that’s one of the pieces of support, right? Doing those kinds of things, telling stories quick, you all went to visit a program, tell me something that happened in that program that you saw that really was important to you that inspired you. That made you think about the value of this organization. Tell me the story. Well, people don’t know how to tell stories. They have to learn how to tell stories. It’s it’s but it’s a very simple, you know, these are not complicated techniques, but it’s all part of becoming comfortable in what brian is talking about in this ambassador role, relationship building a relationship relationship. I love the relationship,

[01:03:13.80] spk_2:
not the gift. Like that, brian. All right, we’re gonna leave it, we’re gonna leave it there with the, with the support

[01:03:14.55] spk_5:
idea. You

[01:03:28.60] spk_2:
got to support your board members, Michael Davidson, consultant and coach. He’s at board coach dot com. Ryan saber asking matters, asking matters dot com And he’s at brian Saber, Michael brian thanks very much. Terrific.

[01:03:32.80] spk_0:
Thank you. It was a pleasure tony great questions. Thank you. My

[01:03:36.34] spk_2:
pleasure. I’m just, I’m just trying to keep things going. Look book and

[01:03:40.96] spk_0:
the book, the book, I’m it’s

[01:03:42.61] spk_2:
Michael and bryan, who cares about Michael, Bryant’s the book you want? The book is,

[01:03:46.72] spk_0:
the

[01:03:49.80] spk_2:
book is the book is engaged, boards will fundraise how good governance inspires them. It comes out this week, this week of october

[01:03:58.74] spk_0:
18th. Yes,

[01:04:00.34] spk_2:
it’s not a long book, but it is long on value as you can tell from this outstanding conversation, lots of value in the book

[01:04:08.69] spk_5:
next week.

[01:04:09.65] spk_3:
Deborah Kaplan pa

[01:04:13.29] spk_5:
loves new book. The time for

[01:04:14.99] spk_3:
endowment building is

[01:04:17.45] spk_0:
now

[01:04:19.49] spk_5:
also very emphatic,

[01:04:20.77] spk_3:
just like uh just

[01:04:22.23] spk_5:
like engaged boards will fundraise

[01:04:39.79] spk_2:
if you missed any part of this week’s show. I beseech you find it at tony-martignetti dot com. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two

[01:04:40.92] spk_5:
dot c o

[01:04:42.89] spk_2:
Our creative producer

[01:05:13.09] spk_4:
is Claire Amirov 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 You with me next week for nonprofit radio big non profit ideas for the other 95% go out and be great. Mhm