Do robots make bad fundraisers?
Do robots make bad fundraisers? In this episode of the Smart Communications Podcast, Sarah Durham chats with Steven Shattuck, author of the book, “Robots Make Bad Fundraisers” and Chief Engagement Officer at Bloomerang, about ways to apply time-tested principles of philanthropy to the modern technology available to fundraisers.
Steven Shattuck: Hey, thanks for having me.
Sarah Durham: I’m really excited. You are here. I have been a fan of your thought leadership and your work for years, and I’ve learned a lot from you for those of you who don’t know Steven, he’s a prolific writer and speaker. He curates Bloomerang, sector leading educational content and hosts their weekly webinars series, which features lots of top thought leaders in the nonprofit sector. I’ve been honored to be a guest. A couple of times, Steven got his start in the nonprofit sector, producing fundraising videos and other digital content for organizations like Butler University, Girl Scouts, Christian Church, Disciples of Christ, and the American Heart Association. He volunteers his time on the project work group of the Fundraising Effectiveness Project. I’ve heard you speak about that a few times.
Steven Shattuck: Yeah.
Sarah Durham: AFP he’s really, really, really knee-deep in studying fundraising in all kinds of places, including at the AFP Center for Fundraising Innovation, where he’s a committee member, and he sits on the faculty of the Institute for Charitable Giving. And as if that is not enough, he’s contributed content to the National Council of Nonprofits, AFP, NTEN, Nonprofit Hub. And he’s a frequent conference speaker, Stephen, thank you for joining me here today.
Steven Shattuck: Yeah, this is fun.
Sarah Durham: We are here to talk about your new book and for those of you who have not read it, I highly recommend it. It’s called Robots Make Bad Fundraisers. And that’s what we’re going to talk about today.
Steven Shattuck: Yeah.
Sarah Durham: So let’s start at the beginning. Why did this book need to be written?
Steven Shattuck: Well, you know, I work at a tech company. We help people with donor management software. So for the last eight years, I’ve kind of gotten a little bit of an inside look at how people make decisions in terms of buying software, the tools they’re using, and then how they use those tools. And I’ve just kind of collected over the years, just a lot of anecdotes, best practices, you know, things that work, things that don’t work. And you know, after, after so many years that it was kind of easy for me to compile them into this book, but the theme really comes from, you mentioned some of those research groups, we are seeing kind of year over year declines in things like donor retention. And my hypothesis on that is that I think some of these tools that we use every day sometimes get in the way of what really fosters that donor relationship. If they aren’t used, I don’t know if correctly is the right word, but in a way that that really enhances maybe the personal outreach to a donor, thanking them, telling them a story. And that’s what the book is. It’s not, anti-technology, it’s not anti-digital. It really presents kind of a framework of how to use those tools in a way that will nurture the donor relationship. That’s the goal. And if your technology doesn’t do those things, I don’t know that you need it. That’s kind of the question I pose.
Sarah Durham: I think this book sits really squarely in the middle of a Venn diagram, which has fundraising in one circle and communications in another circle. So I love the way you’re talking about that and particularly about donor retention. I mean, you write a lot about donor retention in the book, along with a lot of, a lot of other really important topics. And I want to dig into that a little bit more about why donor retention is so important. One of the things you got me thinking about years ago when I heard you speak is really paying attention to those first-time donors and what they do next. So for people who aren’t as familiar with the importance of donor retention, tell us a little bit about that.
Steven Shattuck: Well, it has so many downstream effects, right? If you’re an average nonprofit here in North America, the average rate there is around 45%. So about half or more than half of our donors who give in one year, don’t come back and give in the following year. And that has a lot of downstream effects on donor lifetime value, the cost of fundraising, right? It’s much more expensive to acquire a new donor than it is to retain one you already have. So if you’re kind of refilling that leaky bucket, you know, every other year, that’s a lot more costly and not as fun in my opinion, as keeping the people you already have. And you mentioned first-time donors that rates 20%, so eight out of 10 of every new donor doesn’t come back and give a second gift and talk a lot about that in the book, because my theory on that is, you know, it’s never been easier to become a new donor, right?
Steven Shattuck: The barrier of entry to donating is at an all-time low, you can click that Facebook donate button. You can text a gift online giving, peer to peer. These are all good things, but they tend to be very transactional, very robotic. It’s sometimes hard to build those relationships, even if you want to. And that’s my concern as we look, you know, one, five, 10 years down the road is if we don’t grab a hold of some of these technologies that are communicating to the donor on our behalf, they’re not going to do as good a job as we would as a human being in stewarding them in nurturing that relationship. And I think that if we don’t do that, those retention rates are going to continue to fall as they have been over the past five years, 10 years.
Sarah Durham: So one of the things you talk about in the book is I think right at the heart of that idea of technology, making it too easy for us to communicate badly with donors. And as you can imagine, cause I wrote a book called Brandraising. I really love a good made-up word and you, you have a great made up in your book. It is Seglumping.
Steven Shattuck: Yeah.
Sarah Durham: So what is seglumping and why should we keep an eye out for it?
Steven Shattuck: Well, you mentioned there’s a lot of really easy ways to communicate badly. You know, it’s super easy to fire off an email in MailChimp or your database to all thousand of your subscribers. Right? And I get a lot of these emails because I’m kind of a philanthropy Deek and something I see a lot of is; Dear Steven, whether you have donated this year or still planning on making your gifts, here are some things you can consider. And I read things like that and I’m like, well, wait a minute. Don’t, you know, if I donated this year, don’t, you know, if I’m already part of that program? It’s available to us to track that data, but it can be hard. And if we’re not tracking that data that can really lead to some bad outcomes, it’s very easy to alienate a donor to lump them. That’s kind of where the term comes in, lump them into maybe a communications cadence that is not appropriate for them because maybe we haven’t been paying attention to some of the signals that you’re sending. So what I try to layout in the book is the more you can take a very individualized, personalized contextualized approach to one donor or small groups of donors who may be kind of look alike and you’re in your file, that’s going to have better outcomes than just saying, well, it’s time to send our appeal. Let’s email it out to everybody and hope that, you know, one or 2% of people respond and that’s usually the best those appeals do. And it’s hard. It’s hard to reach out individually, but I think it pays dividends versus just taking kind of that one size fits all approach to communicate.
Sarah Durham: And so seglumping is when you sort of broken out segments that are so big, that you’re still communicating with them in ways that don’t feel personal and we’re really lumping them together. Is that fair to say, right?
Steven Shattuck: Or presenting those different segments to the donor and asking them which one they fall into, right. Whether you’ve already become a monthly donor or you’re still considering, and it’s like, wait a minute. That should be a pretty easy proportion.
Sarah Durham: Don’t you know?
Sarah Durham: Yeah. Don’t, you know, that really is the key phrase. I wish I had maybe tease that out in the book more, but if you read the book, keep that in mind. Cause it’s like, don’t, you know, I’m already a monthly donor don’t you know, that, that was my first gift. You know, don’t, you know that I had a loved one who passed away from the disease you’re trying to eradicate when you can present that information back to the donor and illustrate to them that you know who they are, you know, they’re a new donor, you know, they’ve been giving for years, you know, how their lives have been touched. And that information is oftentimes very readily available or easy to get. If you start to communicate and build that relationship, use it. And that information is what goes underutilized. So often when we communicate digitally, when we communicate in an automated fashion, when we leave the robots off to do it because the robots, not yet, they will be someday, but right now they aren’t quite smart enough to tease those things out for you. And it takes a little bit of a personal approach, at least right now.
Sarah Durham: The things I really thought about a lot as I was reading your book was the problem of capacity.
Steven Shattuck: Yeah.
Sarah Durham: Because I think anybody who reads your book will definitely agree that segmenting and communicating in more personal individualized ways is, of course, going to be bound, to be more effective. The problem that I see a lot is the person who’s in charge of communications is also in charge of 18,000 other things. And so even though they might be able to pull out of their CRM, you know, that this person lost a loved one versus this person who did not, they don’t actually have the capacity to write the email that is unique to that person versus the other audience. So where would you advise an organization with limited capacity to communicate and really individualized ways? Where should they start? What’s the baseline?
Steven Shattuck: Yeah, it’s hard, right? I’m sure some people are listening to this, maybe rolling their eyes because there’s a lot of people like me that are out there saying you’re not doing enough and I hate to be that person. But to answer your question, you know, I think new donors is a place that has some high ROI, right? If you can set up some kind of automated chime or alert, where if we get a new donation to the organization, let’s stop what we’re doing and reach out to them. Shoot them a quick email saying, Hey Sarah, thanks so much for your donation. Notice that it was your first donation. We’re so happy to have you join the family. You know, can’t wait to tell you about all the great things your gift is going to do. We’d love to talk to you more. That’s going to pay dividends because that retention rate is really low, right? 20%. If you can get that second gift, you’re on the road to a lot higher lifetime value. So I think that’s one area where they can do it. And another thing is, you know, if you’re a small shop, one-person shop, don’t forget, you may have board members. Maybe you’ve got some loyal volunteers. Maybe you’ve got some loyal donors who could become volunteers as well. Those are all really great people to spread that stewardship workout so that you don’t have to do it alone. I think very often we kind of take a lot on our shoulders and maybe forget that, Hey, there are people out there who can help. And there is some interesting research I’m thinking of like the Penelope Burke Research that comes out every year that shows that actually board members and volunteers, their stewardship efforts are more effective than maybe a paid employee because they are not a paid employee. They’re a volunteer and maybe they can speak to why they support you. So you don’t have to do it alone, even if you are a one-person shop. But I think it just comes down to prioritizing. And I would definitely put new donors, monthly donors towards the top of the list. Cause you want to hold on to those people. For sure.
Sarah Durham: I really love your example of an alarm going off every time somebody becomes a new donor and taking the step. And one of the things you talked about in the book, and I think Penelope Burke has written about is the power of the personal thank you. And particularly when somebody picks up the phone and calls and I’ve served on organizations and talk to a lot of organizations where that’s one of the ways board members get pressed into service is to call first-time donors, which is so great. It’s a great way to make a board member feel like they have a job to do you give them a script. In fact, there’s a script on the Big Duck website you can download for free I’ll link to it in the show notes, you know, give those board members a script, let them call, let them update your CRM with some notes about the person and boy is that first time donor who maybe even just made a $10 gift feel so important.
Steven Shattuck: Absolutely. And you touched on it that there is that double impact. It also engages the board member or the volunteer. And if they have maybe shied away from fundraising, this could be a good way to get them involved. Maybe they’ll stay, gee, this isn’t so hard. Maybe I will, you know, take a crack at fundraising. And the other thing, you know, you mentioned $10. Most new donors don’t give at capacity. So you never know when that $10 donor could become, you know, a bequest donor within just a few years if you do a good job building that relationship.
Sarah Durham: I can see also that that capacity issue we’re talking about can also be addressed proactively in your communications. In other words, if either the person who calls you to thank you for your first gift or maybe that welcome series that is made by robots makes note about the fact that, you know, we wish we had the capacity to communicate with you in a completely individualized way. Unfortunately, we’re an organization that puts most of our resources towards advancing the mission. And we are always excited to hear from you. And here’s how you can be in touch with us. But you know, maybe there’s a way to sorta also help donors understand that you’re doing what you can do to be personalized.
Steven Shattuck: Yeah. I think that can be endearing. And I think that technology can help, right? It’s not about completely shutting down all of these tools and only using the phone or only handwriting notes, but when they work in tandem and when you maybe apply some of these time tested principles of philanthropy to the technology or using, rather than just kind of the out of the box templates, you know, weaving in stories, not being donor-centric that’s when the technology hurts, but it’s not, it’s not the technology in itself. That’s the problem. I think it’s how maybe it’s applied in some situations.
Sarah Durham: So in the last chapter of your book, you take out your crystal ball and you make some predictions for the future. Can you share one of those predictions? One of those things you see happening in philanthropy that you think organizations should keep an eye out for?
Steven Shattuck: Well, since I finished the book, there have been really cool things that have come out that are amazing. I mean, there’s tools out there that, you know, can serve up specific giving amounts on your online giving page based on the user’s location, their previous giving history. And it can be different than a completely other website, visitor looking at the same page, you know, we can do well screening and, and see where donors have given elsewhere and what kind of, you know, real estate holdings they have. I mean, there are a lot of really cool things out there. I think AI is probably the one that is the most likely to come to fruition and they’re already some of those things. And again, it’s not anti-AI, the book at all. I think that the AI should tell you who is the best person to reach out personally right now, kind of equip you to do that and empower you and encourage you. But you ultimately have to be the one that picks up the phone, invites them to a Zoom chat, you know, takes them out to coffee. That’s where the technology and the human can really work together for awesome results. It’s when AI is totally doing everything, that’s when I think we will get ourselves into trouble and the non-profit sector, you know, we’re, we’re kind of the one holdout in terms of an industry or a sector that hasn’t completely been taken over by, you know, chatbots and things like this. And it would be a shame if we kind of followed suit, you know, probably people can think of times when a for-profit or a business sent them something that was just totally weird or they had a chat experience. I’m sure people can think of things. If we can remain that one, hold out in terms of sectors. I think we’ll continue to raise a lot of money and make some cool things happen
Sarah Durham: And keep fundraising human.
Steven Shattuck: Yes.
Sarah Durham: You should make t-shirts to say, keep fundraising human.
Steven Shattuck: That’s a good idea, maybe stickers?
Sarah Durham: Do it, Do it.
Steven Shattuck: Not a robot.
Sarah Durham: All right. Well, Steven, your book is terrific. We will link to it in the show notes. Where would you like people to pick it up? Where should they go get it?
Steven Shattuck: Amazon, you can get a Kindle version. You can get a paperback. We’re working on an audiobook that’s important to us. So if you search for it on Amazon, if you Google Robots Make Bad Fundraisers, you’ll find it. If people want to reach out to me, I’d love to hear from them after they read the book. I love feedback. So, that would be cool to hear from folks.
Sarah Durham: All right. Thank you for joining us today.
Steven Shattuck: Anytime!