The Modern Nonprofit Podcast – Creating experiences that inspire generosity
Dave Raley is the EVP of Analytics, Innovation & Strategy at Masterworks, a full-service marketing agency committed to helping nonprofits inspire new levels of generosity. At Masterworks, Dave leads one of the industry’s strongest teams in analytics, media, and strategy – and the industry’s only experience design team.
This week Dave joined Gabe Cooper to discuss the qualities all top nonprofit leaders have in common, why nonprofits should lead the world in managing data with integrity, and creating a renaissance of innovation in the nonprofit sector.
“We’re very passionate about helping ministries and nonprofits grow and we’ve done that though marketing, fundraising and strategy,” Dave said. “It’s a cool matchup between what I feel called to do and what Masterworks does.”
Additional highlights from this episode include:
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Intro: Welcome to The Modern Nonprofit Fundraiser Podcast where we help nonprofits reimagine generosity and put the joy back in fundraising. Hear from leading nonprofit fundraisers and marketers as they reveal strategies for strengthening donor relationships to propel your nonprofit forward.
Gabe: Hey everybody, welcome to the Virtuous podcast, I’m Gabe Cooper. So excited today to have Dave Raley with us. Dave is a longtime friend. He’s Executive Vice President of Strategy and Innovation, I hope I got that right, at MasterWorks which is one of our favorite agencies to work with in Poulsbo, Washington. Dave, welcome to the program.
Dave: Glad to be here.
Gabe: Yeah, absolutely. Okay, so before we get into some of the tactical stuff, give us a little background on MasterWorks, what you guys do. Then, how you ended up at MasterWorks and in generosity in general.
Dave: Sure. MasterWorks has been around for probably about 30 years. I’ve been there for about 15, so I’ve got about half the tenor under my belt. Essentially, we’re an agency and we exist to … One of the things we talked about and that I feel like is really my own personal life, call is this idea of inspiring generosity. So, I love the fact that you said that. That’s essentially what we exist to do.
Dave: The longer phrase we talk about is inspiring the time, the giving of time, talent. Treasure to things that give light to the power of God. We’re very passionate about helping ministries, nonprofits grow and we’ve done that through a lot of fundraising, a lot of marketing and strategy, analytics, those sorts of things over the years. It’s been a blessing and it’s been just a core part. Just a really cool match up with who I feel like I’m created to be and what I’m called to do. It’s also what MasterWorks does, so it’s been a good match.
Gabe: That’s great. That’s awesome. You guys work with a lot of big orgs. Not exclusively, but generally the … You guys do a little bit larger. I know a lot of the orgs that you work with, and some of the most cutting-edge fundraisers out there doing some really innovative stuff. Leading change in a lot of areas.
Gabe: What are … If you look at the VP of advancement role or fundraising role or marketing role at the orgs you work with, what are the qualities of those most innovative leaders? What do you see working time and time again and what marks those great leaders?
Dave: Sure, yeah. You know, I thought about this, like I said I’ve been doing this particular gig at MasterWorks for about 15 years and … I realized a couple years ago that between my own experience and the other folks at the agency we probably work with every significant nonprofit in the country. Personally, I think I’ve worked with over 50.
Dave: I did actually a little poll internally and talked to the team. I just asked them, “What have you seen when it comes to really highly effective leaders in development?” There’s the long version that would be there’s seven, but I’ll just give you a couple of highlights.
Dave: Number one, this is I think seems very simplistic but it’s just core across every leader that I’ve ever run into, that’s that they find out what works, and they do more of that. I think that when I see particularly younger leaders, of which I am one, you see folks that get in their ivory tower and feel like, “All right, we have to have a diversified portfolio. We’ve got to do this that and the other.” They were talking a lot of their conversations philosophical and what we should do or what the market should do.
Dave: One of the things I’ve just seen time and time again with really effective nonprofit fundraisers is they figure out what works, and they say, “Well how can we double down on that? How can we double down on that again?” They become really, intensely, almost myopic. It’s they’re so focused on what works and it’s like they get these blinders on, in a good way, and just continue to double down. That’s one.
Dave: Another one that really has stood out to me is that they … The way I say it is they leverage natural assets. Every organization has things that are really their own core strengths. They might be in their history, they might be their founder, they might be their geographic location, or who they know, or influence on capitol hill.
Dave: Yet the nonprofit fundraisers that I see that don’t do well tend to just spend their time being envious of other organizations. “Well, you know, we don’t have a really dynamic leader. My CEO isn’t a fundraiser, so you know if I have that CO like at that other organization I could really do something.” They spend all their time fretting about others and other organization and the history that they don’t have or the natural assets in my terms, my words, that they don’t have that they fail to look at their own organizations.
Dave: Particularly mention some of the bigger ones we work with, some organizations that have tremendous outreach and broadcast. They’re in front of millions of people, but they many times don’t even think about that as “Oh gee, we have access to millions of people, maybe we could use that in our marketing and fundraising communications” The really wise nonprofit fundraisers leverage those natural assets.
Dave: I guess the … If I had to pick a third, and this has been the most important to me. I heard an interview by a gal who’s actually moving over to head up all the marketing at Coca-Cola a couple years ago, and she was moving actually from an agency that did Coca-Cola. So I was reading an interview with her and the interviewer asked her this softball question, “What are the biggest challenges you’re going to face in this new role leading all of the marketing at Coca-Cola?” She said something that really struck me and I realized I think applies to everything that we do. She said, “I think the challenges that I face are the same challenges that every marketer faces and that is I have to maintain the present and optimize the present while inventing the future.”
Dave: I thought about that, man. Manage the present and invent the future. It’s not an either-or proposition. It’s not something that you can do one at the expense of the other and the best nonprofit fundraisers that I see out there are ones that really hold those intention. Everybody errs on one side or the other, nobody’s the perfect, “I do both really well.” But the ones that I see do really, really well understand that those two things are critical and don’t let one sort of die at the behest of the other. They focus on managing the present and inventing the future.
Gabe: That’s great. And it’s so hard. It’s finding the kind of leader that can do that, that can strike that balance is … I’ve seen it, I guess, in the last 16 or however many years I’ve been doing this. It’s a little bit of a unicorn. It takes a really special person to be able to do both well and sit on that fence.
Dave: Well and you know one of the other things on my list is just the leads with humility because like I said most … I mean, reality is if I think of all the nonprofit, the chief development officers that I’ve worked with, maybe less than a handful actually do well at both. But the ones that have done really well, that don’t have both, have the humility to recognize. “I’m all about risk taking and innovation, I could care less about managing the present.” Or vice versa. “I’m all about optimizing, getting that 5% growth but I just don’t get excited about the big risk-taking innovation.” They surround themselves with people or their agency or … That can help push them in areas that they need pushing.
Gabe: Yeah, that’s great. That humility and self-awareness to know where your flat spot is, is huge.
Gabe: You and I have talked a lot about innovation over the years. I feel like every time I bump into you it’s a topic, it’s what you’re concerned about, obviously what we’re concerned about. We’ve both talked a little bit about how we wish people would innovate faster. I’ve heard you in particular use this word stagnate and that sometimes innovation stagnates a little bit at nonprofits. Speak to that a little bit. Tell me what you mean by that and what you’ve seen.
Dave: Yeah. I think that keeping … I would say building an innovation culture and keeping an innovation culture are two separate very, very difficult tasks. One of the things, if you step back and look at the last probably six or seven decades of nonprofits existence you had a whole class of nonprofits honestly founded in the same decade that are really the big behemoths today, the organizations that are really large. If you study the history of nonprofits you’ll find that in many ways the 1980s and 90s were kind of a golden age of nonprofits, as far as if you look at growth and fundraising goes.
Dave: You had tremendous amounts of innovation going on. Tremendous growth going on. Really use leveraging strategies of the day, with last year being the anniversary of the reformation. You think about Martin Luther and using the printing press like, “Oh, good idea Martin, why don’t you print stuff and hand it out?” But if you think about obviously his day that was a wildly foreign concept. What do you mean? This is just something that no one did before.
Dave: Well if you look back at the 80s and 90s, nonprofits were doing some pretty incredible things. In fact, ahead of the commercial market, in many ways, and Steve Woodworth and our president here at MasterWorks was doing things with long term value and analytics and calculations that weren’t even coming up in the commercial sector a decade before it came up in the commercial sector.
Dave: You look at the growth rates that nonprofits had at large and as an industry and you mostly saw double digit growth. It was pretty easy, hindsight was 20/20 to grow 20% or more, 10% or more. But if you look at nonprofits today, there are nonprofits that are growing and are innovating and doing really, really great things, but if you step back and look at the industry at a macro level you’re not seeing the same kind of innovation. You’re not seeing the same kind of growth at all. Many nonprofits are just happy to stay flat. It’s like, “Hey, we were flat this year. Despite these down trends we’re so happy we could stay flat.”
Dave: I go, dang, I don’t know about you but that’s not very exciting. It’s not very encouraging. If you feel called to the work that you’re doing, it’s more than discouraging. It prevents us from doing our mission. So, we do feel … I do feel like the nonprofit industry at large and I feel like MasterWorks and my personal call is to help create innovation and what would it look like to create a renaissance of nonprofits in the 21st century. 2020 and beyond.
Gabe: Yeah. So, what does that look like? How do we think about that? Cause I love the idea of sort of kick starting a renaissance in innovation. Reclaiming that the 80s and 90s growth period and that’s obviously going to look completely different in 2018, but what do you kind of do to spark and kick start that?
Dave: It’s my day job so I spend pretty much every day on that topic. A couple things … Well, the short version is I don’t know the answer. Again, in hindsight we might look back at 2018 and be like, “You know, we were on to something.” It’s really hard in the moment to know. All I know is that nonprofit industry at large is not growing and innovating like it needs to.
Dave: For us there’s a couple things. One is just this idea, and I’m sure you guys have talked about it on previous podcasts, but this idea of experience. As marketers, as fundraisers especially we fall under the category of direct response. You send a direct mail piece out or you do a television ad or you do a social media ad and it’s an ask.
Dave: So, on and so forth, that’s the way it works. I’m not knocking it. It’s what’s made organizations grow when you need it. You have to … It’s a biblical principal to ask. But, one of the things we realized honestly starting about 10 years ago was that the role of things like brand, things like content strategy, things like what we call UI/UX, just really great design. We’re more than just aesthetic things. A brand, yeah right, the logo is … Which font should we use on the logo? That’s not what I’m talking about. I’m talking about the experience that individuals; human beings have with causes. We threw ourselves a couple years ago and have continued to double down into this concept of experience design. So just let me explain it really quickly.
Dave: We think of the combination of brand, content strategy … So brand, who the organization is, what their vision is. What’s remarkable about them. Content strategy, the digital experience, which is massively important today and then how the overall experience, physical and digital for donors in particularly when you’re talking about fundraising, how those coalesce to actually create people who are passionate about causes.
Dave: More and more if you actually go down to generations you realize that even from boomers on down, the loyalty and giving is not what it used to be. What it comes down to for us is creating experiences. That’s a major thing. Technology is a major thing in terms of creating a renaissance. We’re right in the middle of a very interesting time with Mark Zuckerberg going to DC and the European Union to talk about privacy and data. I think this is necessary to get to the sort of … It’s sort of governmental and regulatory catch up on what’s been happening with technology and data.
Dave: In fact, if anything nonprofit should lead the way in integrity and data privacy and all those sorts of things, but there is a massive amount of stuff that we can be doing with data to find the right people that might be interested in a cause. Put a message in front of them and move them towards action. There’s a lot, but for us technology, experience, design … Just thinking about those two things in particular are pretty massive for us.
Gabe: Yeah. No, I love that. So much of what we think about resonates with that. A lot of it, honestly, if you look at sort of design thinking or human considered design out of Stanford of IBL how people think about customers and sort of getting into the DNA of nonprofits to help them think about their donors that way, to sort of actually think about things as a donor’s perspective.
Gabe: Instead of thinking about them like a checkbook, think about how they feel and experience and asking those hard questions and asking them why and what makes them tick and then tailoring messages around that and thinking about giving to their donors before their donors give to them in that way. That concept is actually pretty foreign. It’s amazing. It moves the needle tremendously, but it ends up being foreign.
Dave: I remember when I was in college, I was a marketing major and I remember reading in my integrated marketing communications textbook about multichannel communications and one to one. That’s been the language for … I guess that makes at least 20 years so that’s been the holy grail, one to one. I do believe in that but technology today, the things that we can do with algorithmic AI essentially. Just going to give you an example, we developed an AI a couple years ago that we’ve used and rolled out on virtually every organization we work with that helps us to decide who to communicate which messages to.
Dave: Back when I started at MasterWorks 15 years ago that was a … Back then it was a manual process, and by manual, I mean I had a spreadsheet and I picked cells with numbers in them and I said send this communication to that person, send this communication to that group, not that person. Before that … Some people listening to this podcast may have done that on paper, but it was very manual and a few years ago we developed an algorithm that we now use with all of our clients and that algorithm goes person to person and it looks at all of their transactional history, but it also looks at other things like topic, age, a number of different factors. We’ve consistently found that thing … Just implementing that AI to make the decisions on whom should receive the communication has usually resulted anywhere from a 15-20% immediate lift. That’s because you’re actually communicating on a more individual basis and making that decision rather than on a big group.
Dave: Like okay, should these 2,000 people get this message? I think so. It’s going through all 2,000 of those people, scoring every one of ’em and then making the decision on which one of them gets communication. It’s pretty crazy. It’s cool.
Gabe: Yeah. I love that. I love that. Obviously, that’s something close to my heart so … Give us a little bit more just because I want to get down to the sort of ground level in the weeds around moving to more of the donor experience type thinking. If I want to move from thinking about my donors as transactions and checkbooks and I want to move to giving them an experience of what it means to be part of what I’m doing and to sort of feel that, what are my first steps? It feels like a big jump but … How do I start down that road?
Dave: 100% the first thing that I would do is actually experience your organization as an outsider. Every organization we work for, I mean my work at MasterWorks, I’ve drunk the Kool-Aid, I think I know what the experience of the organization is, nonprofit X, Y, Z. You think you know what the experience is, but those of you that have been in this business for a while realize that the reality on the ground is probably not as awesome as you think it is. The number one thing that I would do is to actually do, and for lack of a better term, a donor experience audit. It’s something that we do for the organizations that we work with for prospects. Where it’s you literally come in as an outsider. It’s hard for insiders to do it so you might … I have a board member or somebody that’s outside … Well board members are a little probably too vested, but somebody that’s an outsider that can give you just candid, raw feedback. It’s classic secret shopper stuff. Give a donation or sign up for the email list, give a donation, and then track everything.
Dave: We’ve done this now for a number of organizations and you get two things. Number one, and most importantly you get this step back experience of like, “Oh, that’s what our experience is. That’s not even what I thought it was, let alone what I want it to be.” It’s very visceral too. If you want leadership to make a change you show ’em something like this. This is … I gave a gift and the number of times we’ve done that, there was a thank you and then no future communication ’cause somebody … The data didn’t get somewhere where it needed to be, that kind of stuff. The other thing is you start to realize these really big either gaps or opportunities in the experience.
Dave: We had an organization we did this for a couple years ago and it’s a … It was largely based around an annual event and they had this tremendous build up recruitment, six to nine-month recruitment process and pumping up for the event. Then obviously a process to make sure you actually did the event and all that sort of stuff. We stepped back into this audit and one of the things we saw was oh my goodness, within two days after the event we go stone silent on this audience for three months until we’re asking them again. Until we’re recruiting them again and its sort in transactional mode. It’s like what if we actually supported them and encouraged them and followed up and provided valuable resources, like that might actually help our relationship. Then from a business perspective help them do the thing again and be more passionate about ’em, maybe refer some other people.
Dave: But unless you step back and actually look at that total experience and do the sort of secret shopper plus the analytics to say this is where people are dropping off so on and so forth, you just don’t know. And you don’t know what you’re missing.
Gabe: Yeah. I love that. It’s huge advice for business, any organization, but I think in particular nonprofits and in particular that very first donor experience. The thing that we harp on all the time, the stat varies a little bit, but something like 75% of people that give a first gift never go on to give again and often it’s a very, very correctable thing and often it comes down to just be a secret shopper and see what your person feels. See what you would feel like if you went to this big thing, your heart got wrapped around a cause, you give a gift and nobody talks to you for 60 days and then they hit you up for some arbitrary amount of money and talk about all institutional stuff. Just go through that and see and it’s like no wonder most of ’em don’t give again.
Dave: I would say just to add on to that, once you identify some things, most organizations … When you said don’t talk to ’em for 60 days, which we’ve seen, I’ve also seen organizations really worried about how much they talk to their organizations. Particularly larger ones with multiple departments, they want to chance at the new name or the new donor sort of a thing. I would just recommend no matter what your insights are out of that process, test it. Just do a split test because … Don’t do like, unless you’re a really large organization, a multivariate 22 panel thing, literally test A or test B because we’ve seen things that are very intuitive. Like of course we should call all new donors, let’s do that. A lot of organizations very proud about that. I saw well, did you test it? Because we’ve found with some organizations that calling new donors within 60 days of their file actually suppresses long term value.
Dave: You’re like wait a second, I thought I was just being really nice. What if it was just a thank you call? Well, I don’t know, test it.
Gabe: That’s great. I love that. Okay, so incredibly helpful, I don’t want to suck up your whole day here. We usually have a lightning round we typically do at the end so just to get some quick insights I know hopefully some of the nonprofits we have are going to listen to this and really be inspired to sort of push through the envelope in terms of innovation and so just amazing insights. But let’s finish on this. I’m just going to throw a couple of quick questions at you. You kind of give me a couple sentence answers and I’m interested in vague. All right. First one is, book, most impactful book you’ve read int he last year or so. If it hasn’t been a year then you can go back a little further.
Dave: Oh yeah. I would say, because it dovetails really with our conversation today, “Thank You For Being Late” by Thomas Friedman. Highly recommend, if you’re an audiobook person definitely do that. I “read” the audiobook before I got the real thing because I was so moved by it. When I got the real thing, I realized this is the thickest book I read in years. It’s an intimidating read as far as length, but honestly really, really good. Thomas Friedman wrote “The World Is Flat” and a number of other really good books, but he’s essentially an anthropologist and he connects why technology and a number of other things are accelerating and what we need to do about it. I don’t agree with everything he says in the book, but it’s really challenging, and our entire senior team has read it. Highly recommend it.
Gabe: Wow, that’s great. Podcasts, Netflix, you have any favorite shows there? I know Friedman actually has a podcast I believe, or World Is Flat has a podcast so I don’t know if it’s on your list.
Dave: Yeah, you know, my … I’ve just been sort of binging this one. It’s called WorkLife. I’ll have to look up the name of the gentleman who does it. But WorkLife is a TED podcast, but the gentleman who does the podcast is just really engaged and … Adam Grant is his name. Adam Grant WorkLife. It’s just 30-minute podcasts and they’re just always really challenging and to leadership for your own. Organizational culture. Things like that, so I recommend that.
Gabe: That’s great. Then finally, I know you’re trying to be a dad, work really hard, traveling all over the place. You got any personal habits that keep you sane? Keep you grounded?
Dave: A couple years ago I went to a younger leaders gathering. There was about a thousand young leaders from 150 different countries around the world, which is pretty crazy experience, but the most important thing I think was that there were 400 mentor leaders. Folks that had gone before and the constant thing to me was creating sustainable rhythms. It was a Christian conference and so the term that I came up with out of it was this idea of living a life, liturgy. What are my daily, weekly, annual rhythms? That’s only then relatively new to me in the last couple years. It’s not a tradition that I grew up in and so me I have a daily rhythm, a weekly rhythm, and a yearly rhythm that are just help keep me grounded. I play the same prayer every morning, I have the same kind of action list. So that’s been the biggest thing for me. Is just creating this … This is my rhythm. It’s not all about … Especially when you’re heading up innovation. It can feel tempting to be like, “Every day has to be different.”
Dave: Every day in reality is different and so if you don’t have rhythms it can be hard to stay sane.
Gabe: Yeah, that’s great. If you haven’t seen it yet there’s James K. A. Smith has a book on the liturgy of life and the rhythms of life that if you’re into that you would love it. It’s sort of creating the habits that form the heart and how they have way more impact on who you are and what we give them credit for.
Dave: Very cool, I’ll check it out.
Gabe: I think that’s it. Thank you so much for joining us today and, man, what a pleasure to hang out and hear your insights. You gotta come back again and do this soon.
Dave: Yeah. Love it. Just enjoyed … I think we’ve known each other probably more than a decade now so, glad you’re doing the podcast and happy to be on it.
Gabe: All right, thanks, Dave.
Outro: We hope you enjoyed today’s episode of The Modern Nonprofit Fundraiser. The podcast is brought to you by Virtuous, the CRM in marketing automation software helping charities raise more money and create more good. Be sure to rate and subscribe. For more resources head to VirtuousCRM.com.
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