 Hey, welcome back everybody to another episode of the non-profit show. We're really excited that you are here today with us We have a conversation that I think we always It's always in the back of our mind And we always think how do we know? You know, how do we navigate this? Larry G. Raff is here to talk to us about understanding major donors Larry. Are you gonna like kind of blow our minds today? And give us some ideas that we didn't know Well, I think I'm gonna introduce you to some different thinking perhaps that You haven't thought about before to be sure Well, I love that that's always a good day for me when I get to learn something new and This is a topic that oh my gosh for so many of us is really a critical piece Another thing that we want to let everybody know is is that we are really excited about a new cohort of co-hosts say that fast three times They come to us from all over the country and so over This month and next month you're gonna see us rolling out introducing these new Co-hosts we're really excited about it and you might have already seen some of them joining us on the nonprofit show The other group that joins us each and every day are our sponsors and they are amazing Most of them have been with us since day one More than a thousand shows back and they include Bloomerang American nonprofit academy nonprofit thought leader staffing boutique your part-time controller 180 management group fundraising academy at National University JMT consulting and nonprofit tech talk These are the rock stars that help you become a rock star because they support our industry Okay, Larry G. Raff you were just in New York yesterday talking to a group you're back in your hometown of Boston Talk to us about what abacus does Be happy to julia. Thank you abacus is a brand new tool the only of its kind that operationalizes donor research To provide you with an objective bias free number To ask a donor for for a three-year pledge So if you're in a campaign If you're doing a special initiative where you're asking for major gifts We all know you can collect all this information And you never have it all And then you have to figure out. Okay. What are we going to ask this couple for how much? well abacus is a 21 questions only easy online way to get to those numbers and because We've have enough Subscribers and data now we are seeing that our predictive accuracy Is within 5% of actual pledges So you can use it to value your pipeline as well as figure out how much to ask someone for a gift We're very excited about it. You should be you know, um, you and I need to offline I need to get with one of your folks or maybe you And get I would I would love to get a tour of this to see how your product works And and and while we're not really here to have you sell your product, but I got to ask this question How do you? Structure your Your clients are you like a monthly fee or is it per tract or how is it that you navigate with your question? It's for individuals. It's a subscription. It's a monthly uh amount it's either $45 a month or it's 65 because we have The ability to ask questions about your sector. So if you're in performing arts or if you're in health care Or if you're you know, if you're in behavioral health, there'll be other questions and And then if you're a large shop or a small shop We talk about an annual fee. So it's all very affordable particularly compared to the wealth assessment Services that are out there So, you know my my desire I've been in the business over 40 years my desire is just to get this tool out there to help help nonprofits and All good will come from that. Yeah, I love it. Wow. That's cool. Not what I expected you to say I thought it would be, you know, really an arduous Financial commitment. So super cool. Well, like I said Offline let's I would love to get a tour of your product to learn more about it because this is as we're going to talk Really one of these things and and we were talking in the green room chatter you know, there's a gut feeling and I feel good about this and Good fortune's going to come and you're going to say, yeah, not so fast. It's kind of a myth What are we looking at here, Larry? Well, it is a myth and we're going to talk a little bit about bias money bias as well, but Through our beta testing and through our experience over the many years The reality is when you're ready to have a gift conversation with a donor You're still using your gut and hoping for the best because if the if the donor asks you hey, Larry Where did you come up with that number? Which I which has happened You need a reasonable answer You know a professional answer. Yeah, and trusting your gut is not that So it's really no way to run an industry or a profession to When you're at the end game of the whole development process of getting to a major gift to ask you at the end game You have nothing to help you objectively Come up with what you need to have that conversation Okay, Larry tell me what the answer is to that question because I'm I've never been a professional fundraiser. I've been a community advocate and championed You know many nonprofits and I've sat in those meetings. I've made the ask A lot of times many times. I still do No one has ever asked me that and if I had been asked that question I would have freaked out. I got a man up. I would have been like what I mean I probably would have said well, they told me to ask you I mean Right because that's really what's happened. I can think of over, you know, 40 years of doing this in my community um The development director the CEO would say, okay, we're going to meet with mr. Mrs. Smith And we're going to try and get them to give us x amount and you're the girl Okay, right and so if somebody had asked me that Tell me how to handle that Well, and even if they asked the CEO or the development director that question they they Would have to finesse it. I'm sure and say well We want to be respectful mr. Mrs. Smith and we don't know what's what's in your what's in your pocket book But would you please consider a gift of x? And what I always what I always follow up with is and if we haven't asked you for enough, please tell me Wow 20% of the people come to the meeting with a larger number than was asked for Okay, I'm adding that in my bag of tricks. I had never done that and you know what else happens People smile or they laugh when you say it and that's the kind of frame of mind you want them in when they're considering your ask It's a win both ways. Yeah, and you know what larry? I think it's genuine It is genuine no question. It is genuine. It's genuine Do you think that this myth becomes less of a myth The more you are in this this industry this sector this part of the nonprofit world That um, you know your donors, you know your community Or do you still think that this really is just something that we Is part of how we ask that we're not really being prepared enough How do you see that arc? The it's a very good question. Well, the arc is I agree. We're never prepared enough because if we're relying on our bias An interpretation of this data that goes through our bias filter Yeah, then then there's there's the likelihood you're going to leave money on the table right and Trust me on this. You never know what people have You never ever know what people have and the best research You can hire the research and they'll come back with ask for this or they can afford that and It's far too often the case that they could afford much much much much more because You can't capture all that information Interesting So you really feel you feel confident that it's generally more and not less Because I think human nature would be and maybe this is like fierce talking because I think a lot of times we We go into these asks being fearful And in that scarcity mentality you really do feel like it's there is more abundance than we ever consider well Especially these days and the reason you're fearful is because you have nothing behind you that backs up the number and the rationale That's why you're fearful if you did have a basis for a non bias basis you go in with strength Okay And I would say yes people if they've accepted an invitation to have a conversation about a gift to your organization Then they have capacity Yeah, I love it. Well, let's talk about this this other thing and that's Fundraising headwinds. Yeah What does that mean to you and what should that mean to us? Well, uh, I there are several and they're dynamic. Uh, so a shrinking donor pool AFP just came out with data, you know 50 000 plus donors Are seven percent fewer This year than last year Uh, which accounts for almost 90 percent of total giving so That's fundamentally a problem and small dollar donors are shrinking as well Making sense of donor research, which I've talked about there's there's just it's it's just Wild wilds Swings and I and I did research on this and I'll talk we'll talk about it in a minute Full the philanthropic capacity estimates, you know, the eye waves and the donor searches of the world You know the the Results they come up with can vary significantly from reality. They're very good at taking thousands of names in your file and It's scoring them and getting it down to something. But that's about it Because because of the high variability Um, personal and organizational biases about money Ever present, you know, some organizations human service organizations might say, oh, how could I ask for a million dollars for my My organization Well, if the numbers add up to making sense that you should then Get over your bias About your organization. You're worth it Make the ask right. Um No process internally about arriving at an ask amount Often there's the buck doesn't really stop anywhere analysis paralysis Right. Yeah, you never you never ever know what you Want to know a need to know But don't let that stop you from having the gift conversation And there's a lot of new gift officers in the field, you know, there's been a recent Real strong influx of folks and we need to get them to be much more productive much more quickly because The competition is much stiffer There's more nonprofits and fewer major donors that adds up to a problem Yeah, well, you know, we go on the nonprofit show We go by the number 1.8 million registered nonprofits In the country and and you know, I would argue they're a hell of a lot more that are kind of under the radar that aren't necessarily You know tracking and and doing what they should legally But I think one of the things is that It's so varied and we don't have those pillars of giving You know, we have ancillary and somewhat if dare I say kind of You know Off of off of main highway kind of people, right? We have Very unusual nonprofits That people can give to as opposed to the main pillars that that we used to give throughout our communities Whether they be faith-based or they be, you know, human services or health I mean, but we have things that are, you know, like chinchilla rescues and not to negate them But do you know what I mean? We have very boutique boutique. Yeah, that's the right word Thank you. That's the right word and that might Reach somebody's heart and their value system And it's it's really an issue. I mean, I talked to so many CEOs that are just shocked at the amounts of money that go to that go away from their organizations when they believe they're, you know, frontline Organizations really doing the hard work and then they see money bleeding off into other sectors that that Maybe they don't feel ours is important to the whole community But in my estimation, Larry, these companies that are are taking more of a Lion's share, they're well marketed. They're well branded. They're communicating with donors They're more strategic, right? And so they have more money and more budget to do all of that. Yeah, well, they're making that investment They are making that investment because the donor retention It's easier to get a gift from a previous donor than from a new person And so the investment in retaining your donors and growing your donor pool is We'll pay back. There's just no question of it Yeah, you know, one of the things that you mentioned and I can't wait to get into this Is money bias What is money bias? I think we're all gonna know this Let me uh, I mean we all of us were born into different circumstances, you know, some some less affluent some very affluent and so The amount a $10,000 gift for me Is the same as a 50 or $100,000 gift from somebody else so I did a I did research over 10 years And I gave fundraisers over 400 of them Two case studies 21 questions each the same that are into calculator And I said, okay, tell me how much you want you would ask to the small donor and ask to the large donor Well, the small donor the range of responses Was $25,000 to $250,000 For the large donor it was 50 50,000 to 3 million Now, mind you, this is the same set of data They're all fundraisers And the bias that is at play And how they interpret the information And it could be because they're new or they're seasoned Seasoned people might go to 3 million, right? Uh Or the nature of the organizations that they work for That's money bias in numbers in in the actuality Of real circumstances And that's why you need a non-bias objective way to get to A value That you then vet with people who know the donor And so they'll say they get a reality check You know, they'll say hey, you're crazy. That's that's way too much or or they can do a lot more than that I love that you can do it Seriously Seriously, and and so that's that's why I created Advocates. It's simply put that's just no way To to run a business when you're asking your best donors For the most you've ever asked them for and you have no solid basis for why Yeah You know how off-putting or Maybe off-putting isn't the right word, but how But asking for the wrong amount or you know too low too high How does that impact the discussion? Does it does it ever torpedo it because the donor can't get beyond it or Everybody's so stressed out and the tension, you know is is escalating like Because it seems to me. This is such a pivotal piece Of the relationship going forward not just Sitting there in that restaurant or that conference room or wherever right on your campus it it seems like we We have this stumbling block. That's it's pretty big Yeah, what does that look like to you? Well, I think it's language oriented. I I think You know, I use sort of a set kind of language And and it's it's you want to disarm two things You want to disarm the research? So say I don't know what's in your pocketbook. I don't know what you're capable of or what your financial pressures are But I want to be respectful So what you're saying is please forgive me if I screw up That's what it's saying. Yeah, I love that and you say would you please consider Would you please join us because everyone who's here has given? right It's a social bond Please join us and consider a gift of a hundred thousand dollars That can be paid over three years And if we haven't asked you for enough, please tell me Love it. That's the language that we that we typically use that I train my clients on using It's it's very useful. I want to tell you a quick story To illustrate what bias is about because it's more than what I just described A client a humane society executive director and board chair go into a couple's home And and the calculator when it was in an excel format Said asked for a hundred thousand dollars over three years And they go into the home and it's not very updated The kitchen hasn't been updated for a long time and they're starting to get cold feet Their bias is kicking in Right and they signal to each other to go to plan b plan b was 50,000 And in the course of the conversation when they showed the couple of the gift chart The couple volunteered a gift of a hundred thousand dollars Before they got to the ask So if if they had followed their bias and asked for 50 They may very well have left 50,000 on the table. Yeah. Yeah, and that's where bias shows up very commonly It's so interesting. I learned that selling shoes getting through college People who have money wear good shoes because they don't like their feet to hurt And if you look rag tag clothing, but they've got good shoes on That's fabulous. Oh my god, that's that's just fabulous Well, I think that that's a great example of of where we We do take the look at things and you know use that word bias. We we really form an opinion that's You know tough because it's mostly emotional and then we follow our gut It's just like what you said in the very beginning that myth of of what we think is going on So this leads me to kind of my last question of our time with you When is it right to make an ask and we get this information? Um, and we get through all of the emotion and the relationship building So when is it right to put this all together? and proceed with Making the ask right good question and it's back to that analysis paralysis problem And I'll tell you uh on the calculator. We hit we you know in addition to offering a Suggested asked amount and what to expect We have a readiness score So if you haven't if you were unable to answer some of the 21 questions We're feeding back to you and telling you hey, you're not ready. You need more research and more discovery To get the answers to this question like, you know, what was the largest gift they made to another organization as a for instance? Uh, have they made it a state? Have they included you in their estate plan? Those are the sorts of things you get by knowing the people Building that relationship So when you then get to is it when's the right time to ask? It's it's twofold. One, do you have the right information to make the right judgments about what that gift conversation is going to be about? And secondly, did you ask the donor To meet with you in order to discuss a gift To the campaigner to the organization And as long as you don't ambush them And you're saying this is a meeting to discuss a gift or your support of Then they're ready Then they're ready to have to make a gift 99% of the time sometimes something happens in between But 99% of time if they know that this is about a gift coverage. This is about a gift. Then they're ready to have that conversation Now it may not close that day Right, you can ask them and ask said they need to sleep out. They need to talk to their advisor or what have you Uh, and if it's a bigger number than they were expecting you need to say, well, you know Instead of three years if it would be easier over five years To fulfill this request Then that that would be pine that would work. So you need to be prepared for the objections and for the what is what abouts So don't expect to close it on that day, but they're ready to be asked Right, and that's what's important. I I love that you separated those two because I think you're right. I think um, you know, the actual aspect in the The discipline of you know, getting the meeting preparing for that meeting and making the ask Needs to be separate from the closing and how we we look at what a success In a failure is and like how do we feed the pipeline? It's it's all of those things and and we talk about cause selling That's something that a lot of times um, I don't see enough of uh, Our folks in development in the nonprofit sector recognizing It's more just like did we get the money or didn't we right? It's transactional Yeah, it drives me nuts because that's not the way that you build that sustainable approach. That's right And julie Something I preach is it's easier to get the pledge than to get the pledge payment True dad right and you need to steward them once they make a pledge. That's when the work starts Because you need to keep them engaged Yeah, so they pay that pledge Right, right Wiser words have never been spoken. Absolutely. And again, we don't focus on that. I think a lot of times we forget That that is a big part. It's it's just customer service, which we don't use that word enough Use the stewardship, but it is customer service and uh, there is there is a there is a solution to that too But it would be it's typically frowned upon in the business And I converted a major hospital to this So if you get a ten thousand dollar pledge From someone you book it That year as a ten thousand dollar income right Well, what if you just booked the cash from that pledge As what you raise that year It's not the pledges. It's the cash you brought in And then you know what cash to expect based on the pledge for future years, but you still need to get it And that will incentivize gift officers and fundraisers to stay close with your donors Because you're counting their pledge payments in the current year And as you can imagine, uh fundraisers weren't too thrilled about that idea, but administration was Well, yeah, because that has been an age old problem. I mean we look at you know, Legacy gifts and we look at generational wealth transference and how that looks and estate planning and all that and it can really skew Your sense of how well you're doing versus the reality of What's actually coming through and going into the bank, right? Yeah When you get when you get that bequest payment Which bumped your year. Well, don't budget next year Based on this year Right. It's just not real. It's not repeatable. It's not recurrent. Right, right And you know, I think and we don't have much time left but I think um that was illustrated a lot with With covet and with some of the the the funding and the the grants that came out and you know, just this these big um inputs of money To, you know, various sectors and then it's like wow, okay. That's that's not repeatable or it's not being You know, we're not navigating forward on that. It's over And now there are a lot of organizations That are really behind the gun because they ramped up with the this funding and hadn't really planned forward Remember the ice bucket challenge? Yes, that huge spike. I I did a blog post on this the next year and went back to baseline Yeah, it was never really increased. No, no, no. Yeah, absolutely. Well, I could talk to you all day Larry G. Raff really interesting conversation I can't wait to take a test drive on your product and we like I said, we'll do that offline because I'm fascinated by this and I have been and I continue to be in those those meetings As a community leader not a professional fundraiser And it's it's tough and it's fraught with a lot of anxiety. I personally love it. I really like it But you know, I I get to do the fun part as I As I see it and make that ask And I have never really had This background of information to help arm me Like I think you're providing our sector and so Really interesting check out donor abacus dot com Two weeks you can use it for free for two weeks. Okay. Well, okay That's even better. Um, yeah, and and you'll learn more about what they do and how they came up with this And uh, Larry travels around and speaks. I know you were just like you said in new york yesterday Speaking to a group of professional fundraisers So, yeah, this is something really to take a look at for your organization Another thing that we want to make sure that you take a look at and those are our presenting sponsors We have amazing support from folks like bloom or an american non-profit academy non-profit thought leaders staffing boutique your part-time controller 180 management group fundraising academy at national university jmt consulting and non-profit tech talk These are the folks that join us day in and day out So we can have these really interesting conversations like we've had with larry today Okay, larry I think that there's a lot more I would say a lot less stress Going towards next asks for so many people that have been able to meet you today on the non-profit show And learn about not only your product, but your mentality. I I've really enjoyed learning from you It's it's been great. I really appreciate your time today. Oh, thank you. Julie. Thank you very much It's been a lot of fun. Hey everybody, um each episode we end with this message And it goes like this To stay well So you can do well. We'll see you back here tomorrow everyone. Thanks so much larry. Have a great day