 Welcome and happy Friday. I am so thrilled to be back here with my dear friend, Jack Gallardo, who is a CFRE, which stands for Certified Fundraising Executive, and he's a trainer for Fundraising Academy. So the nonprofit show is honored to have the support of our friends at Fundraising Academy cause selling education. They underwrite these Friday episodes. So each and every Friday comes to you from the Fundraising Academy and we'll have one of our favorite nonprofit nerds just like Jack joining us each and every Friday. So thank you for that. We of course, you know, want to continue our shout outs with Fundraising Academy for being presenting sponsors. Thank you also to Bloomerang, your part-time controller, nonprofit nerd, American nonprofit Academy, staffing boutique, nonprofit thought leader, and the nonprofit Atlas. Jack, many of these companies truly, including Fundraising Academy has been with us or have been with us from the very beginning, which was March of 2020, when Julia thought it was really cute of her, that the show would last about two weeks. And as you know, we are a going Jesse and again, couldn't be more proud of then continued support and investment from our sponsors. So thank you, thank you, thank you. If you missed any of our shows over the last couple of years, three years, you can find us on Roku, YouTube, Fire TV, as well as Vimeo. So if you have a smart controller or smart TV, just say the nonprofit show and we pull up larger than life on your big screen, which is a lot of fun. And then of course we are bifurcated into the podcast streaming platform. So listen to the nonprofit show, wherever you stream your podcast, you can listen to today's episode, yesterday's episode, not tomorrow's, because it's Saturday, but definitely on Monday. So I'm really excited to have you back, Jack. You know how this works, right? So we have a series of questions, we in fact have four for today from our viewers that write in from all over. This one happens to be in my community of the Greater Phoenix area. And I'll just read the question aloud for our viewers and listeners, Jack. I'll ask you to just jump right in and answer it with your wisdom and your sage advice and all of those years of experience that you have under your belt. And again, just I look forward to learning from you as well. And then if there's anything I feel I might be able to add, I'll be happy to do you so. So are you ready? Yes, let's do it. Let's do it. Okay. So Denise from Phoenix, Arizona, she sends in this question. Can you share some strategies to reconnect with donors who have lapsed? Also, do you know what an average turnover rate for nonprofits is? I'm trying to determine if I can plan for a percentage of donor loss each year. That is a great question. So go ahead, Jack, take it away. So, you know, starting at the end of the question, what is the retention rate, you know, people who give the first year and then they come back and give again, it's very low. It's like in the 46 percentile range, which is really appalling. And I always like to use this example. If you were a restaurant or if you were a retail outlet or a store and you only have a 46 return customer rate, they'd probably fire you or you'd probably go out of business. So it is really important that we look at our retention rate. So one of the things that I always like to ask or come back to as it relates to lapsed donors is asking them, you know, today's show is ask an answer. So I like to say, ask those lapsed donors why they stopped giving. And they'll tell you, is it a change in their ability to give? I like to use the example, suppose their children are Romulus and Remulus, okay? Or Anthony and Cleopatra and all of a sudden they get into medical school at Yale or at Harvard. So maybe the donor can't give as much as they would like to because their children are now going to medical school and it's very expensive. So the first question is, is it a change in their ability to get? The second is during the pandemic. And in fact, a very recent report just recently published said that during the pandemic, donors changed their priorities. They went away from arts and humanities and culture and they did more on social services and you know, feeding the poor, healthcare, that kind of thing. And you could get that report, just a lot of articles being published around that now. But then after in 2021, they went back to their traditional giving ways of giving. So is there, did their priorities change during the pandemic? Yes. The other thing I'd like to ask is what did we do wrong as fundraisers? Is it stewardship? And remember, stewardship is such an important component of that fundraising cycle that we call cause selling at the fundraising academy. It's not the end of the cycle. It's really about talking to our donors, thanking them and telling them about the impact of their gift in the work that we do. Now, maybe you didn't do that correctly and the donors said, well, they don't really care about my gift. They never thanked me. And honestly, we see a lot of statistics that some organizations don't even thank their donors. And then that impact. So maybe the failure is on your part and it's about stewardship. So the first thing I say when you call a lap stoner or you're talking to a lap stoner is take responsibility for them lapsing. Say, oh, we're sorry, what do we do wrong? And maybe they'll say, well, it's because we don't have the money to give like we did in the past. So take responsibility. Secondly, thank them, thank them. And then thirdly, if you really want to get them back, remind them of the reasons why they gave initially. If it was to help end homelessness, then talk to them about the reason you gave a gift to us once about helping us to end the homeless population in our community. Tell them about the impact of that gift and invite them to come back and make a gift again. Now, here's something that I always like to say. Retention rate, as we started this conversation, Jared, we said it's 46% around there, some three or four points on either side. But you know where the highest retention rate is? The highest retention rate for donors is with monthly donors. It's somewhere in the 80 to 90%. They're so committed monthly donors. So here's the takeaway from this question. Get those donors who are loyal, who give one or two gifts a year, convert them to monthly giving and you will retain them as a donor. And honestly, we could do a whole ask and answer just on monthly donors, but there are a lot of really great ways to get monthly donors. So I urge you to look at that as a way to stop your donors from lapsing and stewardship. Stewardship, that's all great advice. I would say, you know, I really go back to ask, thank, report, repeat. So we're talking about that stewardship, right? It's ask, thank, report, repeat. And I have to add to, you know, I have had that conversation with someone that I called and I said, you know, I'm really sorry to see that we're losing you as a donors or something we could have done differently. This particular conversation, right? They shared with me that they were going through a big family change, a divorce, and they just really needed to reestablish their account and figuring out, you know, where they can allocate appropriately. I also have had that same, you know, we have kids in college right now. We just need to focus on getting our kids, you know, through their higher education years. So, you know, just having those conversations, Denise, I think that's where you're gonna find to reconnect is your best strategy to reconnect with these donors. You know, if you're also experiencing some turnover in particular with your leadership or your development team, this is a great opportunity to use that to connect with your donors, do an introduction or reintroduction, you know, introduce your team. There's so many ways to connect. And Jack, you gave some really good examples of you for all time. And you know, Jared, here's the thing. When a donor says, you know, I don't have the ability to give now, I'm going through a divorce, my children are going to college. What is the next thing that you should say? When can I reconnect with you? When can we chat again about this? And they'll tell you, they'll say, well, let's talk in six months, you know, once I've gotten through this whole divorce system, or let's talk after my kids are over the establishing college, let's talk again. And that's that relationship that we talk so much as so important as maintaining those donors. Absolutely, absolutely. Thanks for adding that. Well, Jay in San Antonio, Texas, Jay wants to know if it's ever appropriate to have an employee of a nonprofit serve on the board. We have a terrific staff member who I think would be a great addition to our board of directors. She's an expert in programming. So what say you, Jack, is it ever appropriate to have an employee on the board? So I think that there are many organizations that do have an employee on the board. You know, I worked for Catholic Charities, our CEO was the secretary of the board and other organizations. My question around this is we have to understand very clearly what the board does and what staff do. And the board's primary function, aside from their legal responsibilities and their fiduciary responsibilities and the stewarding of the finances of the organization is to approve policy. Policy like HR policies, volunteer policies and that really all important donor acceptance policies. What does the staff do? The staff implements those policies and does things. In this particular incident, this particular question, I love the fact that they have this very articulate, smart expert in programming. Here's what I would do with her. I would give her the opportunity to report to the board at every board meeting about the work that she is doing in the organization's program side. The other thing that I would do is I would give her an opportunity to lead discussions around programming at the board meeting or at a strategic planning meeting because she really can talk about and bring other things around the program side with this organization to that board meeting. Does she have to be on the board to do that? Probably not. So I do like this distinction that we make between the policy making function of the board and the staff in implementing the policy. Here's the thing that I hear quite a bit and maybe you do as well, Jared, where staff people say, and I'm sure you've gotten these questions on the nonprofit show is board members wanting to interfere with the execution of some of the plans. That's not their role. Staff implements plans. So I like to keep this distinction between the policy making function and the actual implementation function pretty clearly separated in the minds of the board members. Otherwise they're gonna wanna say, hey, Jared, I don't want you to hire that person. I know her where that's not really a function as it relates to their role. I think that's a great, the policy side being the fiduciary governing agents of the organization, let's keep staff staff and keep that separate. I would go on to question also, Jay, perhaps this person to add on to what Jack said, to be part of the board conversations, the strategic planning conversations. If you have a program committee, this might be where that person could truly be a critical component work with some of the board members if you have a program committee, because she could report what's working, where there's opportunities, where there's challenges and really serve as that conduit of information. So I love your answers. And that's what I would add is if there's a committee, let's engage her in that space. I'm sorry I didn't bring that up. I'm glad you're on this podcast because you are absolutely right. When I was a development director, I was a non-board member on the fundraising committee and definitely she could be put on there and she would be an asset to that committee without having being a board member. Excellent at whether it's program or fundraising or marketing or finance or whatever it is, staff could be members of those committees without having a board being a part of the board. Yeah, absolutely. So thanks for- I knew there was a reason why you were here. You beat me on the straight and narrow. That's right. I appreciate you leaving that hole for me to add to the great information you already provided. Well, now we're going to Marilyn. Sherry writes in and wants to talk about the thrift shop that they have. So we run a thrift shop and we'd like to offer employees a discount for staff, volunteers and board. What do you think would be a good discount percentage without giving the farm away and at the same time encouraging them to shop with us? That's an interesting question. It's a great question. And let's face it, many organizations have thrift shops Habitat for Humanity, St. Vincent and Paul. I mean, there are so many out there. But I always ask myself, what is a discount? Is it a reward to those employees? Or is it a supplement to their salary? It sounds like in this case, it's just an incentive for them to shop with at that thrift shop. If it's a reward, perfect. But to find the discount, why are you doing it? And as I said, in this case, it's just an incentive for them to shop at the thrift store. I don't see any reason why not, why you should not give a discount to employees or board members or I don't know, volunteers. I mean, I worked in a library foundation. We gave our volunteers at the library bookstore a discount. I think it's a nice little reward for them. The question I have is, do you, and I don't know the answer to this and maybe you do, Jared. When you give a discount, do you have to disclose that you have that, or you gave that discount? And what does it mean around transparency, ethics and accountability? And I kind of, yeah, I kind of think that you probably do have to disclose it in maybe your annual report or somewhere. You know, that's a great point that I hadn't thought of because similar to you, although I never worked in a library or any of that, but that's my vocal level is not can do it. Anyway, it doesn't fit a library setting. I'm just, that's the word I was looking for. But anyway, I did work for a food bank and they had a grocery store connected with the food bank and they allow the same percentage, you know, a certain percentage. I can't remember what the percentage was. It wasn't huge. The other thing I think about, and I love that you brought up this ethics and the transparency, Jack, so thank you for that. You know, I know that there's some retail stores, not for profit, but just retail stores that offer friends and family days. So maybe you have that quarterly or every so often where, you know, the board members, you can invite other friends and family to kind of come and shop on these special days. Maybe you're clearing out, you know, a season and that could be beneficial. But I would also use that opportunity to market and promote the agency, right? So if you have a friends and family shopping day and you extend it beyond your inner workings, right, of your staff, your volunteers, your board, you're now engaging at the whole new audience and you're engaging with, you know, a demographic in a way that you can tell more about the mission so that they understand, you know, where their support is going. And I feel like that now that you mentioned the potential ethics dilemma, Jack, that's where I feel most compelled is to, you know, set aside a specific day. So Sherry, I encourage you to think of it that way. And yes, maybe do have, you know, a couple of statements or a statement in your report because I'm sure you're gonna see a spike in sales on those quarterly days or quarterly weekends, whichever you choose. And I think that, I don't know, that just feels better to me. Yeah, you know, it's funny when I worked at, you know, we did these monthly book sales at the library foundation and the last hour of the book sale, we called it a bag sale. So for a dollar, they could fill up a paper grocery bag with books for $1 as a way and I'll tell you honestly, for me, it was, I didn't wanna carry the books back to the storage room. So we tried to let's get rid of these books and actually by the end of the day, that last hour, the books have been pretty clean. Oh yeah, they've already been combed through, absolutely. So they can do something like that, that last hour of a sale to give a discount for employees and staff. Yeah, I know that would be great. Well, here's a question. I know we're gonna dive deep into this for the remainder of our time, which isn't much, but Wayne in Seattle wants to know how important is a case for support and goes on to state that we have not really written one for our nonprofit. And it seems like maybe we are way behind in having this tool, please advise us. And Wayne, I can't help but see this white flag surrender. I love this question. I think it's a great question. Help me, Jack. Yeah. Go ahead, take it off. Yes, I love this question and you and I are both consultants. And one of the first things I ask when I go to a new consulting relationship, show me your case for support. Let me see it so that I could understand the rationale underlying why you're doing fundraising. The case for support is the rationale for why you fundraising. The case for support is the reason. A nonprofit organization deserves philanthropic support. A case for support is a set of messages that prepare prospective donors and funders for solicitation. It's a set of arguments explaining why your nonprofit deserves a gift for support. And finally, it's an encyclopedic accumulation of information, parts of which argue for support. Now, let me give you an example. Now, you know I worked in healthcare. I worked at a library foundation. In healthcare, we would have an overall case for support of the hospital when it was founded. What was the mission, the vision, the values of the hospital? And then we would write a case for support for each of the lines of service of the hospital. I remember once, and this is a true story, Jared, I worked at a hospital in Los Angeles and a major foundation was coming through the foundation. This was very early in my career. And I wrote a case for support for that foundation around a cardiocath lab, a place for cardiology. And as we toured through the hospital, the program officer from the foundation became very impressed with our neonatal intensive care unit. And luckily I could write a case statement for that. So the case statement and writing it for all your lines of services at the library, we would write an overall case statement for the library. Then we would write a case statement for children's books, adult literature, literacy, whatever the program was. Why do I think it's so important for you to have a case statement not only for your organization, but for each of your lines of services? A case statement is a communication tool. A case statement is one of the foundations that fundraisers have in their toolkit. It's so important. When you write a quality case statement, it informs your writing across the board. Pieces of that case statement will inform you as you write your direct mail letter. It will inform you as you write your grant. It will inform you as you build your website. It will inform you as you write your newsletter. It will inform so many different things. You won't have to create a case for support every time you have some fundraising function. One of the things that I always like to say, every single nonprofit, now this organization may not have a formally written case statement, but they do have a case statement they use. I say formalize it. Last week I was rot driving, or maybe it was not last week, but when school was in session and these football players from our local high school were holding up signs and it said, come and get your car washed by us so that we could afford to buy uniforms. That brief sign was a case for support. It informed prospective donors to go there and pay $5 or $10 to support that football team or that baseball team or whatever it was as they tried to buy uniforms. That's an example of a very simplistic case for support. It doesn't have to be a long document. It could be very short, but it's so important as we develop our prospective donors. Next week, next Wednesday I'm gonna give a shout out for the fundraising academy. We are going to do how to use your case statement in getting referrals through the donor fundraising cycle, the cause selling cycle, from getting referrals to stewarding donors. If you call me up at my hospital, Jared, and say, I am interested in women's health, then I'm gonna take a look at my case statement and my communication tool with you is gonna be articulated in that women's health case statement. So important, such an important document. When is this for Fundraising Academy? It's Wednesday. And if you're seeing this via YouTube or something, it will be on my learningportal.org at the fundraising academy. You'll be able to download it later. And it's such an important thing. It informs our presentation. If I'm bringing you to the hospital to see women's health, I'm gonna look at my case statement and I'm gonna get some talking points. If a board member is out in the community, being your ambassador for your library, they're gonna talk about children's literature or literacy based on those talking points in their case statement. And you're right. Once you have this case for support, Wayne, just as Jack said, you can repurpose, repackage it. So many different conversations, proposals. There's so many ways to use this case for support. Now, I heard you use case statement and I just wanna clarify, Jack, is a case for support and a case statement the same? They're not. And I'm glad you caught me. This is the second time today. Okay, I'm not gonna make it three strikes on my mouth. But you're right, a case statement is a shorter version. When you come for women's health, I'm gonna get some case from that case for support. I'm gonna create some case statements. You may say, you know what? I'm interested in mammography. I'm interested in your birthing center. I'm interested in prenatal nutrition. So that case for support is gonna help me create those case statements around those specific things that you're interested in. Great, well, I just wanted to clarify. I didn't mean to throw you in the bus or throw a purpose ball. No, no, you know what? I'm glad that was the last question because another question and I may get something else that I'm missing and that would be three strikes and I'm out of here. That would be three strikes. Well, Jack, you're always fantastic to nerd out with. I love nerds. It's a compliment. I hope you take it as such. But Jack, a lot of CFRE trainer for Fundraising Academy. Check them out, fundraising-academy.org. Amazing company doing such great work in and around our community. We're so grateful to have them as our partner here for the nonprofit show each and every Friday and each and every day. So thank you to our other presenting sponsors which are Bloomerang, your part-time controller, American Nonprofit Academy, Nonprofit Nerd. Another shout out for Fundraising Academy. Staffing Boutique and the Nonprofit Thought Leader. Each and every day these companies allow us to have these unscripted conversations with so many amazing Nonprofit Thought Leaders around the globe. So thank you for serving your time with us here today, Jack. We are just so honored to have you. Each and every Friday, we will have a representative from Fundraising Academy joining us in these conversations. So again, thank you for your time and thanks for all of you that joined us today. We will be back on Monday. So we hope that you enjoy your weekend. We have Saturday and Sunday coming up and we have such a lineup for next week that I cannot look forward to it fast enough or weekends fly by, but I really look forward to each and every day to have a conversation on the Nonprofit Show. So thanks to you, Jack and thanks to all of our friends and my fellow Nonprofit Nerds for joining me here today. We hope that you enjoy your weekend, get some rest and you'll join us on Monday until then as we end each and every episode. We want to remind you and ourselves, Jack, to stay well so you can continue to do well. Thanks, everyone.