 Welcome everyone, thank you for joining us. I cannot believe it is a brand new week, it is Monday for those of you that have joined us live and those of you that are tuning in to the recording, regardless of what day, what time, what month, what year you are tuning in, recurring donations and best practices is something that you will want to pay attention to. So get your pen and paper ready. My pen's green, it might not show up. And get ready for today's conversation with Sasha Lewis as we talk about all things when it comes to recurring donation. Julia Patrick is here, thank you so much. Julia's the CEO of the American Nonprofit Academy and thanks to Julia, we are two year strong here for the show. I'm Jarrett Ransom, lucky enough to serve alongside and be of service to all of you through the partnership here with Julia. I'm your nonprofit nerd, hopefully your favorite and CEO of the Raven Group. We are so extremely honored to join forces and be in partnership with all of these companies that you see in front of you. These companies are here to help you do more good. Please check them out. I really think that it's our responsibility and opportunity to find companies that are helping us do more good as we continue to navigate forward in these uncertain times. So again, thank you. Thank you, thank you to our partners. And thank you to Sasha who is one of our partners with Moves Management, also CFRE and Principal with Moves Management Consulting. Welcome back, my friend. Always a pleasure to be here. You know, we love having you. We quote you a lot on the nonprofit show. And I feel like maybe this is like one of those points in time where the stars have aligned because data is it. I'm telling you, I mean, I don't need to tell you this, but everybody's talking about it in ways that Jared and I never ever heard. And it's just all of a sudden from security to management to best practices, it is just the hot topic. And so, you know, I feel like we can say we knew you when I know you're in high demand and I know that you're really one of the amazing thought leaders that we have. And so we are thrilled to have you. I think we kind of twisted your arm a little bit last month to come back because we started talking about recurring donations. And then we were just like, wow, we need to get you back quickly as the year wraps up because of this topic. So first and foremost, please tell us what a recurring donation is and why it's different than other donations. Perfect. Well, again, this is such an important topic. And as you mentioned, data, data information, anything related to those technology systems is the hottest thing in my opinion and in a lot of opinions in the nonprofit sector right now. And it's because we can do so much and accomplish so much. And in the ways that I look at it, you know, although we're raising dollars to me, this is really about stewarding the dollars that we've been, you know, given the rights or the responsibility to caretake. And reoccurring gifts are one of those amazing ways that allows us to do a lot without putting a lot of infrastructure burden onto the organization. And it's one of those programs that when done right allows you to really build up scalability in your giving program so that you're growing more without again adding administrative burden typically to the team. So reoccurring gift is actually very simple. Per the IRS, it is nothing more than a expected monthly contribution. Now, a reoccurring gift sometimes gets often confused with the pledge. And there are two distinct differences between a pledge and a reoccurring gift. A pledge per the IRS has a total dollar amount with a start and end date that is recorded and goes onto your receivables. So again, a pledge has a total amount and it has an end date. A reoccurring gift does not. It just continues to go on and on until the donor says no longer I wanna support or frankly most of the time the credit card expires. And so again, a reoccurring gift is an expected donation each month. It is not expected. And I apologize if you're getting background noise. All of a sudden I got really loud background noise in my ear. So I do apologize as I was trying to get it to go through. But again, it's that monthly expected. It's not considered a pledge. It is truly considered as a cash donation. Now, what I wanted to share just a moment ago was in most donor databases a reoccurring gift itself is nothing more than a placeholder of information. So a reoccurring gift is not a transaction. It is not a donation. It is a placeholder so that it tells you when that monthly donor gives their gift you know what it's for, what its purpose is given and it helps you project annual revenue in the months to come. So again, a true reoccurring gift is just a placeholder of information so that you know what to expect when a donor gives a gift without an end date. So that helped. Okay, like, okay. First of all, I don't know if I should be ashamed to admit this or not but if you had asked me to define those that's not what I would have said. I would have not said that and I'm not saying that you're incorrect. You are totally spot on. But for me, the concept and the differential between the pledge and the reoccurring, wow. Yes, and for me, I will agree and witness Julia. I would have different as well from Sasha but again, that's why you are who you are. For me, the big difference would have been there is no stop date for a reoccurring gift, right? And then there is a stop date. There's a start, a stop, a total amount for that pledge, in particular campaigns, capital campaigns or something like that. So already, I mean, if I had socks on and not these fuzzy slippers, you would have knocked my socks off. Well, and I appreciate hearing it from your perspective because I'm always thinking about it from the data side of things. And from an accounting standpoint, the pledge gets booked as a receivable and then you pay down the receivable as the pledge payments come in. A reoccurring gift is never booked as a receivable on your organization's balance sheet. It is just a cash donation a month that it or timeframe that's which received. And so although they're often managed similarly in the systems, they mean two very distinctly different things from a data management standpoint as well as frankly an IRS standpoint. So, I know, I put you open at the bit. So one of the things, and I am working with an organization now, which you know, Sasha, working through some of these challenges. So pledges go on the books of the organization, meaning that is a contractual agreement. It's receivable. Again, tell me a little bit more about that. Correct. So it's when a pledge is received and a pledge for the IRS is defined as again, a start and an end date with a total amount to be donated. A reoccurring gift is an expected amount per month and no total amount is stated because we don't have an end date stated. And so we do book this as a receivable. So per, again, the IRS, whenever you hear from a donor of whether it's emailed, text message or anything or written documentation that says, here's this donation, I'm gonna give it to you. I'm gonna give you this gift for the next three years. The year in which that is donated, that entire let's say it's $1,000 a year for three years, you put into your accounts $3,000 into your annual fundraising totals for that year. If it were a reoccurring gift that was expected to be reoccurring for the next few years, all I would be booking is a $1,000 donation that was just a straight cash donation. I wouldn't record any three or $5,000 because again, that's an end date that becomes a pledge, that's an amount. And so it very much has a significant impact on how you record your fundraising totals and then again on your projections. Okay, so I'm like, again, hair on fire. You do this to me every time you're on, which is a good thing, but I'm thinking of giving societies. You know, so many of our nonprofits, especially if those of us that followed Terry Axelrod with raising more money and then as it became Benevon that pushed to build our giving societies. There was always a three to five year pledge period. And what are you seeing now? Are you seeing those morph into recurring donation strategies or what is that looking like? Because again, if we're recording these differently, that's a pretty significant change. It is, and it really I think depends on the culture of the organization. Now historically and typically you're reoccurring monthly donors or those campaigns are more often than not the smaller dollars. So the $25, $50, the average monthly gift ranges between $51 to $52 depending on the study that you're reading. So that's particularly where you see that space. Now the Benevon model are those multi-year giving societies. Those have an intention and I believe it's actually a combination of both. So those multi-year giving societies are a pledge. They do get recorded to your books and it gives you a direct relationship for stewardship. You know when it's going to end and when it's going to reoccur. That allows you to meet fundraising totals. So if you're in the middle of a campaign you want to do more of the pledge strategy because then you can look those pledges and you can account them for your goals. If you're really looking for a long-term giving model there's a lot to say that you could consider a reoccurring gift strategy and look at those dollars as reoccurring gift without an end date. Now here's the caveat. Stewardship is still critically important to either one. If you're not stewarding properly you're going to lose that reoccurring donation. So it goes back to the culture of the organization. I think often there is a transition where the lower dollars are typically reoccurring gift. Larger dollars are more typically those pledges and therefore that reason it really drives stewardship. And again it helps you with your fundraising totals if you're booking three to five year pledges and you're in the middle of a campaign. So I hope that helps describe the difference between the two. They're both incredibly value add. And when I see a monthly giving program or donor that is giving a gift and I'm thinking of campaign strategy I'm thinking of planned donors. I'm thinking of that pipeline. Those are the most valuable prospects I see in the database is anybody that's giving eight to 12 donations a year. Those are your most engaged and your most passionate. They're the donors that want to do more. So those are the donors that I want to figure out how we can help support, help feel connected. Again, whether it's a pledge or reoccurring gift but as a volume you want a larger portion of smaller reoccurring donors because that is your pipeline to build them into mid-level donors and then major donors. Okay, before we go on to our next question say that number again, what do you see is the average range for the recurring gift? According to studies the average reoccurring monthly donation is $52 or $51.52. And when you think about it from our retention standpoint so the average first-time giver gives and retention stays around 23, 25% based off of most studies. Your reoccurring monthly donor and these are actually all studies came out of Bloomer Anxwell to give credit where credits do where they talked about our reoccurring monthly donors and I'm gonna make sure because now I wanna make sure I get these stats, right? That when they looked at their giving pools they found again, $51 was the average given $60 for those given be it EFTs or your direct debits. And then of those when we get into dollars I lost my train of thought there and I'm gonna own it. But yeah, go ahead. Somebody help me re-create this here. I guess what I'm getting at what I'm getting to is that that average recurring gift, that number it's pretty high. Thank you, that's where I was going with that. So when you look at that overall in the year you're looking at over $600 that you can expect from a reoccurring donor. And if you continue to expand that program and then you have expected dollars that you know you're going to get the one thing that I wanted to jump to is retention. You're looking at a monthly donor that's in a reoccurring giving program typically your retention's around 80%. When you get into years two, three and up it goes into 95%. So when you talk about acquisition and retention and where you're spending your dollars if I were a fund-raising, you know in that fundraising role as an executive director I would be spending so much my time in having my development team work on reoccurring donations and stewardship of those programs especially when you're combining that with a mid-level giving program. This is your bread and butter this is the most valuable asset that we are not taking advantage of next to our data is our monthly donors are building out an incredibly robust monthly donor program that is stewarded, maintained and supported with the entire support of the organization. You do that, what you build upon as a foundation for your overall giving campaign and giving programs it just takes your foundation from let's say this to this and your pyramid only gets bigger. So let's move into the data management piece of this because as again fund-raising is my background strategy in addition, so you couple those together and I think, okay I wanna nerd out with the data specialist I wanna figure out how to best manage what's in our donor database so that we can leverage the power of these recurring donations. What should we be looking at in our CRMs our customer-client relationship management software talk to us about the data management piece. First things first is making sure that your CRM has the capacity to do with the monthly giving program not everyone on the market does and so it's making sure that they have that distinction between a monthly donation or a recurring gift versus a pledge. When I look at recurring donations the couple of things that I want to do first when I'm assessing a client's database is I look to see what does it make up of right now when we look to see how many recurring gifts are in there how many are monthly, how many are quarterly how many are semi-annually and get an assessment of the frequency and who's in there because what happens more often than not with recurring donation programs is we're not stewarding when we recognize that a credit card's expiring we're not stewarding when we see those rejections come in and so nobody is calling to say hey we haven't gotten your recurring gift for the last two months what's going on because we're just not thinking about those follow-up steps we've processed the dollars we've got them in but what about again the stewardship if you're like me I put those things on autopilot I don't think about them and only recently did programs actually allow you to pay for the service like auto updating the expires date that's not something that everybody has because your payment processor may not provided or it may not be a premium that you're paying for so you have to have a stewardship program in place to make sure that we're monitoring expired cards those that are getting rejected those that all sudden again are just not giving because maybe they moved and they didn't update the billing address and so when I look at those I also see a touch point opportunity why are we not using those as an opportunity to call and say hey thank you thank you for your gift let me tell you what you've helped accomplish this year is there anything else I can do to help serve and support your relationship with the organization and so to me there's just so much from a data management standpoint and I haven't even talked about revenue projections and what it does for the organization that's just the donor stewardship kind of top of the tap piece. Okay so I didn't realize that there was this Cadillac version I remember when I first started my career and insurance was being provided and they said you can have this Pinto version or the Cadillac version of the insurance right and I'm thinking the same when it comes to our donor database so what you just said Sasha is that there is this premium opportunity essentially that will auto renew a card and I might not be using the right vocabulary that will help you to keep these donations even when a card expires and a new one let's say the same credit card, same visa but new expiration date. I didn't know that existed either. It pairs with the payment processor so it all depends on who's pushing the dollars behind the scenes but it's something to look into and if I may for a moment on the data management side recurring gifts are managed and recorded in your donor database just like every other donation the dollars are actually transacted in a completely different program software called your payment processor and so we have to be aware of not only are we reporting it properly in our donor database is the payment processor managing it accurately are we needing to because that's where the errors happen because sometimes what also I see excuse me is the payment processor rejects it but they're not following through that on the data entry side so they're still importing it into the database as a donation but we're not actually catching and seeing that this donation didn't actually come through and so when we get into month in reconciliation year end audit we have a bigger mess to deal with and so it is a data management piece that we want to be very aware of because every month we need to be reconciling these donations against the payment processor and what's being recorded into the donor database well yeah because for a client that are a donor that gets behind it's harder for them to catch up and it's easier to say yeah I've moved on to something else and to your point I love that you said it's a touch point to be able to say you know can we just share with you what we're doing or the new things that we've been able to achieve this year you know create more of a relationship I think it's really an important part of this not to just expect that money every month without any touch point and if you even think about that opportunity you know in the sense this could be a renewal why not you know ask the question and you never want to ask questions if it's not the right time but if it's right time to say hey you've been giving $25 for the last five years what do you think about doing $30 you know it's not a big jump but it's an opportunity to ask if they would consider a greater gift and you know what's the worst I could say no just renew out what it is you know that's a great answer too thank you yeah I love it wow okay yet again you've like put my hair on fire which is like a normal thing this is gonna be something that puts your hair on fire I think because this is one of those what should we be doing Sasha questions and I am really curious to hear if you're gonna say what percentage of donations should be recurring okay should be and what is statistically the average is two entirely different things right statistical averages show that of databases that are 40,000 records or more only 3% of the donations on average come from monthly donors for smaller databases of less than 25,000 records 15 to 25,000 the percentage is 9% now when I've worked with the organizations and when I have seen an incredibly incredibly robust monthly giving program 30% of its donor donations came into a monthly giving program and that organization had a tremendous mid-level giving program as well they had a solid donor pipeline and I was really impressed about how they approached Moose Management because Moose Management for them started with their annual fund it started with their Moose or their monthly giving program monthly donors were treated in such a major gift way that they were stewarded and up into that greater part of their donor life cycle and so statistically they are still very small part of our donor database but when I look at where the greatest dollars and the greatest miss potential it is in our monthly giving programs and developing one that makes sense for our donor it's not about what we want it's not about what we as an organization think is cool it's taking the time to actually ask our donor pool hey we would like to develop a monthly giving program what are some things that would be meaningful to you do you want newsletters do you want tours do you want invitations or do you just want to give a gift and not hear from us sometimes that's the best answer too but not just throwing together a monthly giving program but taking the time to brand it to talk about it to really build it up that's to me part of the strongest foundation of mid-level giving which is where we all have heard me talk about that's your missing dollars because the top of the pyramid's tapped out people so stop going there let's start worth spending some time and give love to the rest of the donor pyramid so one of the things that I love the most with the recurring donations is the cash flow projection and I can imagine that the governing board would also really love to see that data and I'm curious if you could share with us how we can start to forecast this funding I have seen many organizations build a campaign around recurring donations being the lifeblood the sustainability of our month to month you know keeping our doors open even at times so how can we really leverage the information that this data provides internally when it comes to forecasting our financials and our health of our financials and it goes back into how well and what's the quality of the recurring gifts that you're recorded into the database are the schedules accurate have you applied the transactions that have come into the donor's record to the recurring gift so because that's the thing the recurring gift function in most donor databases is a placeholder of data so if you don't actually connect the transaction to the recurring gift placeholder the system can't tell you what your projections are they're gonna say that recurring gift is past due behind schedule things like that and so again go back and make sure everything in that recurring gift schedule is accurate because then I can look and say of these 20 individuals that give an average of $50 a month over the next 12 months here's what we can statistically expect to show up and come in the door oh and hey in December we have an extra 15 more gifts that come in quarterly and so we're gonna be able to anticipate these dollars come in and so when you think of moves management you can project that out for two, three, five years and say okay based off of who's giving today here's what we know we know there's gonna be attrition we know there's going to be a little bit of a loss of course but then if we start building on it because what if you grow just from a thought perspective what if you grow 5% more monthly donors every year your foundation just grows and grows and grows and so we get so much more coming into the door if we give care and attention and stewarding those that are giving a gift each month so it's, I mean the biggest thing that we can do is put together a robust monthly giving program that meets our donors needs and is serving their interests so that we then can't have those foundation dollars because those monthly projections I mean it is guaranteed dollars you know every month that those donors are expected and because you've steward them, you've talked to them they know that you care about them so you know that next year it's gonna keep coming in but if you haven't talked to them and haven't said thank you just like with the state gifts and plan gifts somebody else is going to get it if you don't take the time to steward it. What about attrition? What is the standard we can expect? I'm thinking when we plan events when we do you know just about everything else we plan for this Delta or this change rather of people that RSVP but don't actually show up so those recurring donations how might we project attrition? Well when you take some of the stats that I shared earlier if we're looking at you know you're one of a recurring gift retains into the next year at 85% we're gonna get attrition at 15% so if you're doing those productions your first year of recurring donors you're expected to get 85% of them take the time to convert them to a second year recurring donor which means don't lose them because then you're at 95% likely to keep them from that point in time forward if you continue to do solid stewardship and so if I am looking at 100 donors that I'm going to expect 95 of them to continue those are really confident great numbers whereas I'm looking at my first time donors and I'm only expecting 23% of those to give again you know those numbers are very numbers don't lie and so your monthly donors are where your greatest again monthly donors mid-level giving all of those go together because those are those transactions that are many that have to feel like major donor engagements that have to be scalable as well that is what your monthly donor recurring gift program does is it gives you the ability to scale stewardship and scale giving out a way that should not be a burden to the organization but allows you to do that at mass quantities with extreme personal experience for each donor in that pipeline. Absolutely now we don't have much time but I am curious if you can hit this curve ball out of the park and I know that you can what if we are considering in this new year that we are changing donor databases how will that impact our recurring donations and what should we consider as we consider the change of the database system. Absolutely well when you're going to think about transitioning from a new month you know database or monthly giving processor or whatever that may be most platforms do not allow you to actually transfer the credit card information itself. I found a few that will allow you to pay a premium for it but it is pretty sparse because it's not in compliance with PCI rules and regulations. I'm not an expert in that area but I know enough to know that they're gonna transfer first name, last name, address and billing information but that's the extent of it. So if you're in the process of considering a transition you need to have a very well-developed campaign that is informing your donors that's reaching out to them letting them know that they'll need to upgrade. Go in and log into their new portal create a new giving program or you need to have a plan in place on how you're going to call every donor and get that information as well because all too often we don't know that's going to happen and we lose those monthly donations unfortunately. So it's not just a simple oh yes we can convert it. Yes they're telling you truth they can convert it but they're just converting names and addresses not the actual gift processing tokens and pieces that are required to transfer dollars between to the organization. So don't do it quickly spend about a year planning it to be honest give yourself nine months because you have to communicate with the donors you have to build out in my opinion a targeted communication strategy. Otherwise I mean if you've spent that much time building up a hundred and you only get 25 of them back that's a lot of lost time and a lot of lost energy. Yeah thank you. Never I always think and I'm aging myself I dream of Jeannie it's like it's not it's not that simple. So I heard you say a plan about you know 12 months really at least nine months make sure that you have this in order because I have been novice enough in my early early years of career to say oh yeah what's you know what's the big deal we're just changing donor database. There's really not that much to consider and I can only imagine you know the true data analyst going are you kidding me like there's so much to consider and there is there really is and a conversion like that should not be done overnight. And again if this is something you're considering for the new year think about how it might impact these recurring donations that you and your team have worked so extremely hard to capture and to cultivate to continue that gift. So Sasha thank you so much for nerding out with us. You are always fantastic breath of fresh air and again setting Julia's hair on fire again. Always a pleasure. You know always but I have to say you make it fun you make it achievable you freak me out but you give me hope you know strategies that I'm like okay I can see we can do get this done. And so that's important I mean that's really important. Yeah here's Sasha's information. Check her out really interesting. I think this is the the dawning of the golden age if you will have the nonprofit world as it relates to the digital world. And so this is where we need to be. Again I'm Julia Patrick I've been joined by my fabulous fabulous co-host Jared Ransom the nonprofit nerd and you can see us on Roku on YouTube on Amazon Fire TV and Vimeo check us out. We were meeting with in a staff meeting last week and our executive producer Kevin Pace you know we were coming up on 500 episodes but he has taken a lot of highlights and made snippets and smaller videos. So we're actually over about 750 videos that we have so that if you need something like a quick hit of Sasha and you don't have time to watch you know all of the hours that she spent with us you can pick out some highlights. So check out our channels because we are really everywhere. We wanna also thank all of our sponsors who are with us day in and day out especially as we wrap up this year. We wanna remind everyone to stay well so you can do well. We'll see you back here tomorrow everyone.