Hey, it's Mike. Quick note before we get started. My company, BuildGood, publishes this podcast that you're listening to. But our core work is to actually build a multi-channel metrics-based fundraising program for nonprofits that focuses on building the long-term value of new and current donors. So we actually helped nonprofits in the US and Canada build a broad base of donors. We helped them with acquisition, with retention, with monthly giving, and with mid-level giving programs. Now, every year, we take on a few new clients. And we tend to work with international development organizations, hospital foundations, children's hospital foundations, and local poverty relief like food banks or homeless service providers, those kinds of organizations. Now, here's the thing. If you're raising at least $5 million, and you're looking for a partner to help you raise more money with your digital and direct mail programs, or if you're going into an RFP process, you can get a hold of me at
[email protected]. And someone on our team will make sure that the email gets to me, and I will personally get back to you. Alright, let's get the podcast going. [Music] Well, hello, builders of good. Thank you for tuning in to the Build Good Fundraising Podcast. Fundraising isn't easy, but it should be simple. So, on this show, we take the mystery out of raising money. Now, on every episode, we coach you to build your fundraising like a flywheel. If a flywheel has five parts, number one is listening to donors. Number two is engaging them. Number three is asking the right people for the right things at the right time. Number four is celebrating every single gift at every level and every type of gift. And number four is reporting back in a meaningful way, in a responsive way, in a real time way. Now, if you master the five parts of the flywheel, your fundraising will start to spin reliably with less effort on your part. The revenue will grow and so will your career as a fundraiser and as a revenue leader. Now, every week, we focus on just one part of the flywheel. And today, we're focusing on asking, specifically asking the right people for the right things and the right ways and the ways that they want to give. We're talking about donor-advised funds or dafts, as you may be familiar with. And we're talking to Mike Todd, he's the founder and CEO of Transform Philanthropy. His bread and butter, the thing he does every day is help organizations figure this stuff out, figure out how to grow revenue from donor-advised funds, figure out how to get that structure in place, that infrastructure, that strategy, what it looks like when the donors don't necessarily always have a direct relationship with you as a charity, but they might have a relationship with the financial advisor or with some donor-advised fund and how you fit into the picture and how you can be part of that conversation. So without further ado, here's my conversation with Mike Todd. Mike, thanks for coming on the show. Oh, my pleasure. Thanks for having me. A few years ago, donor-advised funds were like nowhere to be seen, so to speak, in fundraising world. They existed, but it just wasn't a thing. And more and more, you hear about dafts, you hear about donor-advised funds. They're starting to maybe have a little bit of their time in the sun, but most people and most fundraisers are still fairly unaware of the power of dafts or are maybe even not really doing anything different yet to take full advantage of it. And that's why you're here. So let's start here. What are, let's go to daft 101. What are donor-advised funds? Sure, thanks. That's great. Like I laugh when you said that. Dafts have been around in Canada for 70 years, but up until very recently, most of us haven't heard of them. I agree with you, so I like to refer to it as the oldest new thing out there. And a daft in simple terms is a giving vehicle that allows a donor to give today, get the tax benefit today, and then over time make decisions about where they actually want the funds to go to, which operating charities that they want to receive the funds. Got it. So they give today in terms of they're making a gift to a donor-advised funds, so they get the tax receipt in today in this calendar year. But they don't actually have to give that money to charities, so to speak today. They get to then give that money away on a time scale that they choose. Is that how it works? They're choosing. Yeah, absolutely. And it's an interesting model because it really changes the nature of a charitable gift. It now allows it to be part of a wealth management strategy. And we can talk more about that, but it's really interesting. It's an opportunity to give not when a fundraiser asks me for a gift, but when I have the asset to donate, I need the tax receipt, and I know I'm going to give this away over time anyway, so it really changes everything. Right. Why would I have this need to get the tax receipt in this year? Why wouldn't I just, if I'm going to support these charities over the next five years, why not just over the next five years make these gifts? Sure. There's a simple answer, and then there's a more not complicated, but a larger answer. The simple answer is, and having worked with donor-advised funds for a lot of years, giving season things ramp up December, the second half of December, people are all of a sudden in the panic. I need a receipt. I want to make the gift this year. Not sure who to give it to. They throw it in the DA. That's the simple answer. The longer answer is, and I'll give you a great example of an account I actually worked with, a donor I worked with some time ago, where, and this was a high net worth individual, so I'm going to use big numbers, but it works right across the board. This was somebody who was a very frequent giver. They, on average, gave about $100,000 a year through any number of grants, and they also just sold their company, so they were faced with a huge tax bill, and they were flush with cash, and what do they do? So, this donor, after we sat down and talked about it, they took a million dollars, and again, large numbers, but it helps with the example, as well as the fact that this is actually what happened, took a million dollars out of their investment account and put it into their donor-advised fund. So, I got a tax receipt for a million bucks. Great. Give that to the accountant. Deal with the tax problem. And at the very least, what that donor had done was pre-fund their giving for the next 10 years, on average, as I said, a hundred grand a year. So now it's pre-funded. It's sitting there ready to go. It is pathway to charities already, and they've solved, or at least they've helped mitigate their tax problem. So that's just an example of how it could work. That donor didn't give a million bucks, because they wanted a million dollars to go to the charity immediately. They gave it because they knew, over time, they would spend it or donate it. Right. So, are devs, is this just for like, high net worth of them? Is this just for wealthy people? Yeah, great question. No, it's not. It's a, and that example that I use, and I use it frequently, because it's such a great one. People ask me that question. Excuse me. It works regardless of where you are in your income life, in your giving life. If you give away, I say to people, "Listen, if you give a hundred dollars away twice in a year, then open up an online DAF, put a hundred bucks in off your credit card, donate it." And then when the next one comes along, another hundred bucks off your credit card, donate it. And at the very least, at the end of the year, I have one tax receipt instead of two. It's a great way to start off on this adventure. And then as your giving goes up, the DAF is able to expand along with you. So, a few years ago, when DAFs were becoming a bit more popular, and we always talk about that build good. We want to be practice leaders, not thought leaders. I was like, "Well, I should start playing around with DAFs." So, I opened up a DAF, which was super easy. And I became a monthly donor to my own DAF. So, I just set up a monthly recurring donation to the DAF. And I purposely didn't give the money away that year. I just let it pile up for a few years. And it was a little bit like those listening, if you have a retirement account, if you have something like wealth symbol, or if you have any of those sorts of tools, where you can log in and see where your portfolio is at. It was a little bit like that. I could log in and I could see how much money was sitting in my charitable portfolio. That was available for me to give away to charities. And I actually found that process to be super interesting. And then when you do give to charities, you have this, depending on what tool you use, what DAF you use. You have this online tool where you can actually see your giving history and your disbursements. And so I've found it just from a gamified sort of way of giving interesting. Yeah, that's a great example. Okay, so it's not just for the wealthy. It's for anybody who likes to give money to charity. And who maybe isn't going to give away all the money that they're giving to charity this year. They want the tax receipt for this year, but they're going to give it away over over time scale. That could be this year or it could be longer than this year. It could be years and years. [BLANK_AUDIO]
could be somebody who has some sort of liquidation event, sale of a business, or maybe they have some real estate portfolio on their selling rental properties. And so now they've got capital gains tax. And they could give the money a whole-- the government a whole lot of money, or they could give a decent amount of charity and lower the tax burden and use that money still give it away, but use it in a way that it goes to a place of their choosing. Versus the CRA, or the IRS, or whatever it is. And it could also be for every day average donor next door who just wants a more managed way of giving, and who is interested in maybe even having a bit more control over what the charity knows about you and what they don't know about you, and centralizing your giving. Is that a fair way of summarizing it? That's exactly a fair way. It works, as I said, from a couple hundred dollars a year all the way up to millions of dollars. It'll grow with you. OK. So I want to get into what this means for fundraisers. But before we do that, by the end of the next 30 minutes, what do you want? You've got people listening to this podcast or directors of fundraising, revenue leaders, fundraisers, marketers. Everybody has P&L responsibilities. Everybody has revenue responsibilities for the organizations they represent. What do you want them to walk away with after the next 30 minutes? Yeah, that's a great question. How to phrase this. I think what I'd love people to take away from this is the recognition that the DAF is not just another way to give the same old donation. And it's just the payment rail. It is that, but it's so much more. It's not just the payment rail. It's the world is changing around us. And we're moving from what I would call a direct giving environment, donor to charity, to more of an intermediated giving environment, which is a term I love. It may be in the case of a DAF, and a DAF that's sizable enough where there's actually an investment account attached to it, from donor to financial advisor to DAF sponsor to charity. And at first glance, you think, oh, man, things just got way more complicated. I don't think that's true. It's just changed. And so what I want people to take away is the recognition that the players have changed a little bit. There's a couple of new entities there that you need to be aware of. You need to understand their role in the process. And you also need to adjust your stewardship policies and strategies. And it's not four times the work, trust me. But it is just a recognition that there are other people involved. And you want your nonprofit to be visible at all of those stops along the way. Right. So the moment you say, intermediate environment, it used to be donor to charity. And now it's like a donor, financial advisor, some DAFs also have advisors, and then like to charity. It made it the end, like as a fundraiser, I am always trying to own the relationship and deepen the relationship. This sounds-- maybe not scary, but this sounds like, oh, man. This is a different setup here. So I'll start here before we get into the tactical, like how to work DAFs into a growth strategy. I think we need a little bit more, even more of an understanding of what they are and how they work. Sure. If I get a gift from a DAF as a fundraiser to the organization, I see a gift from a DAF. How much access do I have to that donor? Great question. And let me preface my answer by saying, the goal is still to identify and steward the donor, the person who's actually giving something to my organization. No question. That hasn't changed. That's in fact, that's just more important than ever these days. But when you get a grant from a DAF, you may have my name and address, email address. You may have just my name. You may have something called a fund name, because most DAFs will allow me to name my fund. And that's kind of a nebulous thing where it could be called the Mike Todd family fund, in which case you may be able to find out who Mike Todd is, or it may be called the Happy Day fund, in which case it's a bit more of a challenge. Or the last choice is it could be completely intentionally anonymous. The challenges or the task is to get as much information as you can about that donor. The reality is you must acknowledge and thank the donor regardless of how much you information you have. The good news is less than 5% are actually intended to be anonymous. But you still do your thank you, and you send it to the DAF donor, because at least in Canada, DAFs are committed to passing those letters along to the donor. And there's all things, all sorts of things, we could talk about how to write the letter, where you're really encouraging the donor to actually put their hand up and say, hey, it's me, it's Mike Todd. And then you know who I am, where to find me, and you can steward me appropriately. But if that's not the case, you still are able to pay attention to me and try to steward that relationship. And as I said, most cases, the DAFs are going to accommodate that and allow that. When it's, as I said, also when it's the fund name, it depends on the name. But either way, you think that there's no situation where you get that check and should not acknowledge and thank. And unfortunately, these days, quite honestly, I think most DAF brands go unacknowledged out of confusion, out of uncertainty of what this thing is. Some people are not quite sure. Is there really a person behind this foundation? So that's the key is always acknowledge. Yeah. So this is almost like getting a grant from a foundation or family foundation. Except there's actually another layer of anonymity that is possible for the donor if they would choose. And maybe the donor themselves isn't even aware. Maybe there it is the happy day fund. Maybe the donor might not even be aware that the donor is getting this check from a DAF and the fund line items as happy day fund. Maybe the donor isn't even aware. Oh, they don't actually know who I am. And now it's on you as a charity. We do something called a total fundraising review, where you do a lot of data deep dive. And oftentimes, we see DAFs essentially categorized as corporate gifts. And the DAF company might be in somebody's portfolio who is stewarding corporations and corporates and corporate sponsors partnerships. But no fundraiser ever thanked the donor behind the gift. The DAF was sometimes thanked, but not the actual donor. Do you see that a lot? Absolutely. I see that most of the time. And it's tragic really because there's a crawl rate of this. Having conversations more and more with donors who have DAFs. And they're not quite up to speed on the intricacies of what this thing is, but they know they love it. It's extremely convenient. They're quite happy about it. And then they tell me that nine times out of 10. And I think it's the vast majority of DAF grants that are not acknowledged. And donors are quite honestly the running out of patience with the fact that they usually, I'll use the word "unally," don't get thanked. And so it's working against the best interest of the charity, not to be able to thank everyone regardless of how much or how little information you have. So it's critical. It's a critical issue. So let's keep it super simple. Mike Todd has had some sort of event in his life where he's come into money and he's going to put some of it in a DAF. And so you do your research and you find a DAF company called Impact More. So you're going to go with Impact More. You can park, let's keep it like even numbers here, you're going to park $100,000 in Impact More. You, Mike Todd, get the tax receipt from Impact More for $100,000. And that comes off your tax burden and that's great. You now have $100,000 sitting in your DAF. Maybe you have an investment account tied to it, so it's growing a little bit, which is exciting. And a year from now, you decide, I'm going to take $10,000 of that. Maybe let's back up a step. In your Impact More, you created the Happy Day Fund because it makes you happy. And a year from now, you decide, I'm going to take 10K of this 100K. And I'm going to give it to a charity. So I tell Impact More, please give 10K to this charity. And then Impact More sends an e-transfer or letter in the mail with a check and the charity receives this letter in the mail. It's coming from Impact More. And in there is a check from Impact More from the Happy Day Fund for $10,000. And now some fundraiser who's sitting at Salesforce in the Salesforce is tasked with putting this check into the CRM. And maybe they put it in as Impact More. Maybe they put it in as the Happy Day Fund. Maybe nobody ever thinks to. check that there's a mic taught behind this donation. And that's where it can get confusing, right? Because there's like the DAF name, there's the fund name, but then there's also the donor name. Absolutely. I would say my first thought is the correct way to code that gift is you hard credit the foundation impact more. And then you want a soft credit for the donor. And your example initially we know that it's a happy day fund. So you've got a hard credit for the foundation, soft credit for the fund name. But in that letter that I have already preached about where you're going to thank the donor via impact more, the way you word it, and this is where it gets really creative. But the way you word it is you make it clear you only know that they're called happy day fund. And you make it clear that you'd love to know who the person is behind that fund and be able to answer questions and be available and keep you up to date on the benefits and the impact of your donation. So the hard credit, soft credit thing is the first thing and I don't see that in I don't know 95% of the data grants that have been made that I've seen so far. Yeah. Okay. So now that we've got a bit of a baseline, here's all of us listening, here's what we know about DAFs. We know that DAFs are a way for donors to give money today and get the tax receipt today. But then be able to use their DAF over the next few years to actually disperse that money for charities. We know that DAFs typically have some sort of brand or some sort of name and then we know that within that name, a donor can have different funds and they can name the fund. And we know that charities can get money from DAFs that is triggered by a real donor on the other end. You may know the donor's name. You may not. You may know their email. You may not. You may know their street address, their physical address, but you may not. Because remember, you might say, well, the CRA requires those things. The CRA requires those things for the entity issuing the tax receipt, which is the DAF, not you. So you might get you may get a name. You may get email. You may be physical address or you may get none of that. You may only get the check. You may only know what the DAF name is. You may only know what the fund name is. So we're in this situation. These are all the possibilities. This is how how DAF giving works. Now, when you're advising organizations, what is the first thing that organizations should get in place? Let's get into the, let's get into the how to what's the first thing organizations should get in place? If they want to take more advantage of DAFs that can come from high net worth individuals can come from mid-level donors, but can also come from the average donor next door. Sure. Yeah. I tend to look at this the tactics in three phases, not necessarily because this is the way I like to progress in my work with charities, but because it's easier to understand. So phase one is sort of a passive approach. So you know, you get these checks and you look at them and that's great, but you're not sure what it is and you want to know more. You want to make sure you're least treating these correctly. So the first thing is the data coding in the CRM that we've covered absolutely has to be correct. Depending on the size of your organization, you want to make sure that there's a process in place where if the check arrives and it's with your finance person, you want to make sure that they understand, oh, this is one of these donor advice funds, I need to alert fundraising because sometimes the news never even gets to a fundraiser. That there's been a gift because it looks like it came from impact more foundation. Oh, okay, that's great. We don't have to worry too much about them. So it's all about make sure that there's internal processes in place that everybody who needs to know about this gift does. And oddly enough, I mean that alone puts you on a different playing field with the donor advice fund. So that's great. That's the passive approach. But what if you realize, hey, this is kind of interesting and it's the fastest growing way to get in Canada and the US and the UK apparently. So we want to make sure that we're in front of this and we're actually actually benefiting from this. So I refer back to what I said earlier about donors who aren't think. We want to make sure that your organization is what I like to call DAF attractive. Sounds kind of silly, but the point is when I come to your website or when I speak to your fundraiser, do I realize that, A, you know what a DAF is because donors do think that sometimes. And B, you realize how good it is and how beneficial it is for me as the donor as well as you the organization. So how do you make yourself DAF attractive? And it's relatively simple. We've covered the data coding. That's great. Just use the words. I have had conversations with more than one donor on this issue and it's my favorite pet peeve these days. If you have a ways to give page and everybody's got one and many organizations call it that ways to give. If you have that page and I'm a DAF donor and I go to your website and I pull it up and I don't see the words donor advice fund on your ways to give page and I'm belaboring the point intentionally. Some folks look at that and go, oh, they don't take DAFs because it's not, this is ways to give. This is how I can gift you organization. It's not on there. Therefore, you don't take DAF grants. And as I said, I've had these conversations before where they move on and it's sad and they're also, as I said earlier, they're running out of patience with that because they see the power of the DAF and they're not sure they want to work with an organization that doesn't. So make sure it's all of your website. Ways to give donor advice fund. You don't have to say much. And in many cases, it's an opportunity to introduce the concept to your donors who don't have DAFs. That's one thing. Second thing is when you're speaking with prospects and donors, ask, ask everybody, do you have a donor advice fund? And you know what? In this day and age, you're going to get a strange look, eight times out of 10. I don't even know what that is. Okay, well, it's this way to give that's really, really useful and you can decide how much you want to say. The two times out of 10, they're going to look at you and go, yeah, I do. Do you know what that is? Yes, absolutely. We love them. They're great. And we realize how important and effective they are for you. Ask everybody. Just socialize the term. And it's really helpful in generating interest, identifying those few folks in your donor base now who probably have one and may not be using it to give to you. I've had an equal number of conversations with donors to say, you know, I got a DAF. I love it. It's so efficient. Of course, I'm still writing a check to charity ABC. And the first time I heard that, I asked, but like, why would you do that? Well, I don't think they take that money. So you've got to get over that. And that's something that most charities don't think of. I don't blame them. It's kind of an odd response, but it's understandable. And the onus is on us as the organization to make sure the donor knows that we know. I want to clear up. You just mentioned this. I don't think they take DAF money. I wonder if fundraisers don't realize that or might think, oh, we have to somehow do something to be able to accept DAF money. So I want to clear up the fact that every single register charity is able to take DAF money. It's absolutely. It's a check like no other. You are able to accept it. So this is for everyone listening. You are already able to accept DAF money. There's nothing that you really have to do in order to accept it. There's lots you have to do to overcome the perception on the donor end that you are not DAF attractive or DAF ready. But you are already today. If you got a gift from a DAF, you can check that money. It is money like no other. In fact, it is easier money. You don't even have to tax receipts. It's already been tax receipts. It's like getting anonymous cash that somebody drops off at your door and you just get to deposit it in the bank. That's right. Okay, so let's go back to step number one, which is just getting the basics in place. You talked about coding. We talked about hard credits and soft credits. I just want to make sure that our audience is up to speed here. Can you very quickly just define the difference between a hard credit and a soft credit and why that's important when you're coding gifts in a CRM? Sure. It took me a while to figure this out as well. The hard credit is who just sent us this money and the reality is it came from impact more. The checks has impact more. It was impact more as asset to give away and they did. I've never used this term before. I'm hesitant to do so. But that's the actual donor. But the important donor is the person who gave impact more of the money. So that's why you want a soft credit because that's the person you want who steward. There are some stewardship tactics you can use with impact more and we can talk about that later if you want. But the important point is you want to steward Mike Todd. So the soft credit allows you to track that as if it's Mike Todd who gave you the money directly just like the old days. Yeah, so the hard credit is for legal attribution and for finance attribution. So when you do your financial audit,
at the end of the year and they will need to know that if ImpactMore gave you the check in your system, ImpactMore is attributed to you having gotten that asset from ImpactMore. And there's documentation that you have to keep on record for seven years. So if you ever get audited by the government or the CRA and they spot check you and they go through different transactions and they find one for $10,000. So that's a large transaction, let's double check it. If that check came from ImpactMore and you don't have it attributed to ImpactMore, that would be a red flag. So, hard credit is what entity sent you the money and that is for legal and for financial attribution. Soft credit is for fundraising attribution and stewardship attribution. So, it came from this entity but who is the person behind the entity that I need to do it? It's no different than foundation money, you get foundation money or you get grant money. There's still a person at the foundation or people at the foundation or people at if you get government funding, there's people at the government that you are lobbying or that you're in relationship with or that you then follow up with. So, that is the soft credit which doesn't quote unquote count for financial attribution but it counts a heck of a whole lot for who actually gets to be stewarded for this gift. Exactly, I love that. So, you've got to get that in place. A lot of people don't have that in place, that's a good first step. Then you said, "Hey, finance needs to tell fundraising if a daft check came in." So, that is a good business rule to have in place, right? Like any daft transactions, let the fundraisers know ASAP. Absolutely, it's a must and you'll say, "Well, there's hundreds of dafts in Canada. How am I supposed to know whether this is the daft or not if you're the finance person?" I would, first of all, I would err on the side of making sure of caution and let fundraising know anyway but over time you're going to learn or you're going to talk to somebody who understands the landscape and you'll learn, "Oh, is this a daft?" And then you'll know going forward that it needs to be treated as if there's a real person behind it because they're very likely is. Okay, so we've got that in place. We figured out soft credits and hard credits. We created business rules around who gets the hard credit, who gets a soft credit. The finances on board, they understand the importance of the afts. They're going to let fundraisers know the moment they think they got a daft gift. Now it's time to become daft attractive and it's updating the ways to give page. Is it as simple as just like donor-advised funds? Is a way that you can give just including that? Do we need to include, do we need to educate donors? That this is a tax-advantaged ways to give? Do we need to point them toward dafts they can use? Is this legacy giving? We're actually just telling them they can make a legacy gift and donors are smart. They will figure it out. How do we think about this? Yeah, that's a great question and it's an important one. I think you make sure there's a couple of little technical issues. Make sure they know your legal name and your business number. I know it's probably in the footer of your website, but put it right up there in the donor-advised fund section. So to answer your question more specifically, I think you want a little bit of a paragraph realizing that a lot of the people who look at that aren't going to know what a donor-advised fund is. And if you've accepted the fact that this is a great way for the charity to receive revenue, you want to teach them a little bit. So what I do when I work with organizations is we come up with a one-pager. It's a clickable PDF that people can download. It's branded to the organization, not to me. And it's just a one-pager on what a donor-advised fund is because you want to take advantage. Exactly as you said, you want to take advantage of that opportunity to educate them and share a little bit about what DAF is and why they could learn from you as opposed to somebody else. Got it. And then you said we're going to start asking prospects and donors, hey, do you have a donor-advised fund? So this is in conversations we're having with donors, especially on the major level front where we're having coffee, we're having conversations, we're having phone chats. How about for the folks who are not in that kind of relationship with? The relationship looks a little bit more like mask communications, mask emails, mask letters, that kind of a thing. How can we work DAFs into those? Great, great question. I think you make sure that it's in your newsletter. Ideally, once you've identified a few folks who are giving to you through a DAF, you might want to get a donor story in there and work into the story itself, why the DAF was such a value to the donor. And then sometimes it's something as simple as in your buck slip, you want a little checkbox. Thick, please contact me. I prefer to give through my donor-advised fund. And like that is so valuable because as I said earlier, if you get somebody to put their hand up and say I have a DAF, there's a bunch of reasons why that's extremely valuable. And in some cases, that becomes a higher value donor than somebody giving directly to you. And there's reasons why that's the case that we can talk about. But there's always ways to put it in and to normalize it and socialize it. And treat it as, you know, it's just another way to give to us, knowing that there's all sorts of benefits to both parties. Let's talk about that. Because in our work, we put in track mail fundraising, in digital fundraising, we give everyday donors who would be considered a broad base or mass or whatever term you want to use. They're not making the kinds of gifts that would, where major gifts officer would step in, for example. They're giving 100 bucks, 200 bucks, 500 bucks, 50 bucks at a time. When we include other ways to give, when we start asking them if they want to give from assets, which includes devs, when people do take us up on that offer, the gifts tend to almost always be a significant upgrade in their giving history. So it tends to be a larger gift. And if the organization does a great job, that's not a one and done. So that can actually represent the fact that a donor has upgraded their giving to you because now they're giving from some other assets. And I think there's a psychological shift that happens when you start giving from assets and not from disposable cash or disposable income. I can't quite explain it, but it seems like there's a bit of a psychological shift that happens when you make that choice. Can you talk to that a little bit? Oh yeah, that's awesome. There's all sorts of things that flow out of what you just said. Let me start with the end. That is that donors who switch midstream from giving directly to a death, they're giving tends to go up and it's unusual. And a lot of the state is out of the US, but we trend in the same direction and all of these trends. So why would that occur? Why do people give more through a death? And I think it has to do with the structure and think back to my example earlier of the guy who put a million dollars into a staff. I tell my fundraising friends that, "Hey, you've got the hardest job in the world. I really do believe that." Whether you realize it or not, you're asking me to do two different things. One is part with some of my harder-and-money. And two, give that money to you, to your organization. And when you go back to my model, when I put money into my death, not when you ask me, but when I need the tax receipt and then it becomes available, it's halfway to charities already. There's a strange thing that happens in it's an interesting phenomenon. And as I said, it took me a while to figure this out. But it's halfway there. I dealt with the separation anxiety of writing that check last year. It's no longer mine. I can't have it back, even if I wanted it back. So it becomes this thing that donors tend to be more generous with. Because it's just sitting over here somewhere halfway to a charity. Oh, you know, $100 here's $200. It makes no difference to me. Either way, it feels like it doesn't cost me a penny, because I gave it away last year. So this is really interesting thing. And that's why I believe that right across the board, giving tends to go up. Retention tends to go up too, which is interesting. The US number, at one study I saw, is that it goes up 15%. And I sat and pondered that for a while, and tried to figure that out in relation to the increase in money. And I think it's fascinating, because what I come up with is you're no longer asking me those two questions. Will you give away some money? Will you give it to us? All we have to talk about now is your mission, whether we're values aligned, whether I'm going to be happy with the impact I get. It's all about the mission. That's the fun part. The first question is a little uncomfortable. Well, I have that conversation with my advisor now, and I pay that person to help me with that difficult conversation. But now it's just about the mission. And I think that just tends to help the donor really, really align with the organization, because that's all they're focused on is the impact. And so we see the frequency of grants go up. Most staff donors give more than once a year and often give to the same organization more than once. And the retention go up. Yeah, I think it's that two-step thing you talked about. So in a prior life, organizing fundraising events,
There was a ticket price to attend the actual concert or to attend the event or the gala But then at the event there would also be an ask to help with a specific project or to help support the mission People who would buy the tickets well in advance and then they came to the evening would be Would be more generous than people who bought the ticket at the door Because somehow they've like the people who pay at the door They just they just parted ways with now you're asking me to part with with even more Where the ones who had bought the ticket in advance that had already been there already committed to that that was already in the past that was done This was a new decision that they were making Which was more mission aligned so yeah the fact that somebody has already committed this money to charity that decision has been made sometimes years ago Now it's just free money they get to give away so to speak That doesn't that doesn't come off their bottom line that month They're not going to feel that money leaving their wallet so to speak Yeah, yeah, and if I can interrupt there. I think this is why You know the things we've been talking about our evergreen. This is always the way Daffs can function But in this current environment we're in I think this is why it's particularly important to have a Daff strategy because I'm talking to friends now if we're saying you know what our numbers are I seem to be heading down or they are heading down or I'm having trouble getting a hold of my best donors We're living in interesting times. Let's just leave it at that But the fact that I can give you a grant and it doesn't cost me a penny that means I can keep writing Effectively writing that check and I see the Daff now as a volatility smoother and a recession resistant revenue stream. So it's it's doubly important now Yeah Lastly, I want to I want to briefly get into We've become we've gotten the basics in place. We're hard coding. We're soft. We're hard crediting. We're soft crediting Finance and fundraising working beautifully together as one nature is healing, right? We are Daff attractive. We've got it as one of our ways to give we're working it into our mass marketing and our mid-level giving Donors are starting to understand that this is an option for them donors are taking us up on the offer to to make gifts from Daffs We're getting some larger gifts How do we steward those gifts? You do everything you can to figure out the identity of the donor and then you would steward them just as you would anybody else That's the key you want to get get past the Daffness of it all and just focus on that donor But the good news as I said earlier is even if you can only get so far with identifying the donor You still steward and there's still opportunities to do that Yeah Well Mike this has been a fantastic conversation. I'm a big believer in Daff Especially after we've been leaning more into planned giving and giving from assets even in the mass marketing that we're doing even in their Direct mail and digital fundraising growth talking to donors about giving from assets and turns out that the $50 donor in your file is sometimes a $50,000 donor in another file and you didn't know until you actually started making it clear That you're the kind of charity that seeks larger gifts that you are set up to take larger gifts and That you are set up to take gifts from people who sometimes use these financial instruments that are maybe a little bit more quote-unquote Sophisticated than just making an online gift They don't have to be more sophisticated. I'm not saying they're more complicated, but they tend to be seen that way If people want to know more where can they find you? Sure Very easy. I have a website transform philanthropy dot CA. It's more of a landing page I tend to live on LinkedIn most of my thinking goes directly on the LinkedIn my videos go on LinkedIn So that's a great place and I would love to connect with you if you're on LinkedIn and then very simply email Mike at Transform philanthropy dot CA Well, Mike. Thanks for coming on the show. That is all for us today I've got a short plan for you our listener. I want you to after this podcast episode go and talk to finance Go on talk to your CRM team. Maybe you are both of those things and And ask you know are we do we have a strategy in place for this when gifts come in? Do we know if it's a death or not? How does hard credits and soft credits work right now? What is a process that we can have where you let me know when a death gift comes in and then I can start to research who that person might be and we can start Sture thing that person just like we would a mid-level donor or a major donor or one of our beloved broad-based donors So that is step number one get that in place step number two go to your giving page go to your other ways to give and Add paragraph about Daffes remember that this is about changing the words you use Changing the words you use is free it costs you nothing but it changes perception and It could maybe lead to larger gifts for you down the road So that is a little bit of time well spent typically other ways to give is what we call forgotten copy Somebody wrote it five years ago and it never gets updated because it's just not a page anybody looks at So go look at that forgotten copy on the ways to give page Well, thank you for listening to this podcast Fear listening to this podcast your my kind of people. I'm your kind of people I just want to remind you of the build good summit coming up in Toronto go to buildgood summit calm We'd love to have you these are the kinds of conversations we're having there. I'm your host Mike Turks and cheering you on as you do good in the world
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