The following is a conversation between Soraya Alexander, COO of Classy, and Denver Frederick, the Host of The Business of Giving.
Denver: Classy is a social enterprise that helps nonprofits maximize their impact through a suite of world-class, online, fundraising tools. Nonprofits use their platform to raise money, engage their communities, and advance their missions. Here to tell us about the results from Giving Tuesday, some tips for year end, and the steps that help get a nonprofit off on the right foot in 2022 is Soraya Alexander, the chief operating officer of Classy. Welcome to the Business of Giving, Soraya.
Soraya: Thank you so much for having me, I’m so happy to be here.
Denver: Let me start with Giving Tuesday. Now, 2021 marked, I think, its 10th year, and I know there were some concerns going in that people would not respond with the same urgency that they did last year. What were the results that you saw, Soraya?
Soraya: So we did see growth on Giving Tuesday, which was really exciting. 2020 was such a high watermark year, kind of unexpectedly. We didn’t know what COVID would bring. People were very concerned about jobs, and despite it all, people gave in really record numbers. We actually saw that continue through the end of the year last year, and we saw it continue through this year. Though there were some very notable changes, evolutions, and we’re still trying to figure out exactly what it means and how to go forward from here.
Denver: What were some of those?
Soraya: Yeah, how was that for a lead-in?
…we saw a big difference in the types of technology organizations were adopting. Those who were quickly adopting things like digital wallets, PayPal, things like that, actually saw conversion rates increase, while those who did not saw conversion rates decrease.
Denver: Yeah, don’t leave us hanging.
Soraya: So, what we did see, there was growth. I think some of the organizations that saw the growth were different than the organizations last year. So, frontline relief, things like some of the big food banks, some of the big social safety net organizations actually ended up seeing some declines, depending on the organization. The types of gifts were a little bit different, so on Giving Tuesday, we actually saw, again, across several organizations, a decline in donors, but an increase in donation sizes. We also saw some differences in terms of performance on devices, so there’s the macro intention of what donors wanted to do and who was giving.
It was maybe fewer donors giving more, but then we saw a big difference in the types of technology organizations were adopting. Those who were quickly adopting things like digital wallets, PayPal, things like that, actually saw conversion rates increase, while those who did not saw conversion rates decrease. So, there’s the: Who can you get onto the page? And then: Who can you get through to checkout? So, we think a lot about both sides of these– one is really exciting and interesting, around: How do you engage people? One is really not interesting around payment options; both added up to pretty significant results though.
Denver: Yeah, and I also noticed there was a growth in volunteering, and also in gifts in kind, which I found to be interesting.
Soraya: Yes, I think people are figuring out how to engage, and again, as the world is opening up a little bit more, last year put a damper on that, and I think people are eager to feel like they’re participating in the causes they care about. So, that certainly saw an uptick as well, which was wonderful. Because that is the spirit of the day, giving back in whatever capacity you can, or want to, and taking a break from the consumerist prior few days of Black Friday, Cyber Monday, all of those. So, it was encouraging, because between the funds and the volunteers, it’s really the lifeblood of so many of these organizations.
Denver: Absolutely, let’s talk about your recent report. Why America Gives 2021– the Lasting Impact of a Pandemic on Donor Experience. What did donors say, Soraya, were the top factors that made up for an excellent giving experience?
Soraya: Yeah, so this is a report that we do every year; we do it in anticipation of end-of-year giving. We do a survey across the US population of what makes people want to give, what kinds of causes they’re really engaged with, what their intentions are around end-of-year giving. Then we map it back to like, “Okay, so what happened? What did they do?” So, a few things that really drive them, one is timely causes… There’s a timely appeal, something happens, and they respond. I mean, right now we’re recording this right after the horrible tornadoes that hit the Midwest, and we are seeing, of course, an uptick in giving there. So, that’s the really easy one, but less acute…but still, there’s something in the news… they hear something from a friend, they will give.
Then, again, it is the technology, so you want to give. And then, what are the means by which you can give? Do you have a platform that you trust putting your credit card into? Is it easy to give? Do you have confidence that your money will be secure, that your information will be secured? So, those two sides– do you have a timely appeal? Do you understand the impact? Do you know where your gift is going to go? Then, is it easy to give? These are the top things, and so when we work with our organizations, we think a lot about what is the communication strategy? What is the storytelling? Are you able to demonstrate the impact? What is the follow up? What is the request, in terms of gift size?
Then afterwards, what are the little technology optimizations to help make that gift really easy? We think a lot… This is giving all year, but we think a lot about there’s a latent interest. You’ve worked so hard to get your story in front of people to make it compelling. Then if there’s any friction, those donors are going to abandon it; there’s other causes that can serve that need, or they’ll just go back to watching TV. So, you get a little bit of momentum and excitement, and how do you make sure you convert it in that moment in a way that’s really easy? It makes a huge difference, and we think a lot about those little changes that can add up significantly for organizations.
Denver: Yeah, it’s sort of a cognitive behaviorist study, and I notice this in every aspect of my life– I do so many things that I need to do, but when I run into friction, sometimes I put it off, and as they say, I abandon the cart. Always never to abandon it permanently, always with the intent of coming back to it, but I never get back to it. You have to capture the moment. You did say you tracked causes. What were the top causes?
Soraya: We saw disaster relief come up in a big way, followed by health, and then environment was third. I think it’s interesting, because when we saw health… This is self-reported, and so when you think about healthcare relief, and health causes, and disaster reliefs, those coincided in such a big way last year– what is what? So, for example, we work with the CDC Foundation, people really gave to them in a big way to support their efforts. Was that disaster relief or health? We’re not really sure, but we consistently see disaster just pulling on the heart strings, and people wanting to help in those moments of acute need. But the other ones are still very present. Again, when you think about how people discover causes from the news, from friends and family, those issues tend to come up in a big way consistently these days. So, we definitely see the volume there.
Denver: That’s what is very consistent with what you said earlier– that people, now more than ever, are responding to timely events. We see the things on the news, we see the things in the social media, and we react to those. I guess we all react in somewhat different ways, because in this report, you also indicated that there are different preferences in terms of how people go about online payment, depending on the donor age. I want to see if I’m correct for my own donor age here, so tell me how the Gen Zs, Millennials, Gen Xs, and Boomers go about it?
Soraya: Yeah, well, so what’s so interesting is when we started thinking about digital fundraising a decade ago, we really talked about: you need to start attracting younger donors, you need to start bringing them in. How do you think about online checkout experiences for this younger demographic? What we’re finding now is every generation, Gen Z, Millennials, Gen X, Boomers, are all comfortable with online donations, and actually, the three youngest cohorts, youngest, Generation Z, Millennials, and Gen X, are actually preferring to give online; they trust it; they became really comfortable with it. Last year accelerated that, and they’re all looking for easy payment options, but the youngest generations are most likely to adopt things like PayPal, Venmo, digital wallets.
When you think about Google Pay, Apple Pay, Microsoft Pay, so easier, and easier, and easier is the preference. But I think the most interesting thing is this is not a way to give just for the most tech savvy; everybody’s tech savvy now; everybody’s very comfortable with it. There’s become a lot of trust, and we have, frankly, e-commerce retail to thank for that. We can adopt the technology, because it’s so much more scalable and cost-efficient for organizations, and the reach is so much broader. But, no, it was fascinating to see that the generational divides, they exist, but they’re shrinking, which is a really encouraging sign for nonprofits.
So, things like credit card auto updater– a vast majority of the reason that organizations lose recurring donors is not the donor deciding to stop commitment, it’s their credit card expiring. They don’t even notice, or at that point they’re not going to go and dig it out and try to re engage
Denver: Yeah, and I think the pandemic had a lot to do with that. I mean, even my mother was going online, and nobody was going to go out, so then it morphs over to the nonprofit sector as well… we all feel comfortable in doing it. So, let me ask you this, because this one drives me crazy, I have lots and lots of people on the show. They talk about recurring donation programs, and I’ve got to tell you, it seems like everybody has one, at least in my mind. But some of them are telling me how it’s a lifeblood to the other organization, and the other is just saying, “Well, we have it, you know what I mean? But we’re not seeing anything back, so let me ask you Soraya, what makes for a successful recurring donation program?
Soraya: It is not having a recurring option; that is not a program. So, I think that’s the biggest difference, I’ll give one anecdote, and then talk about what I saw the differences being. We have several social justice organizations on the platform; one of them was just running programs in the background, incredible program work. They had had a page up, and then they had a separate dedicated, recurring page where they talked about how you can give less, but this is the ongoing impact. This allows us to plan programs; this allows us to not have to keep doing these solicitations; this is really what they talked about it being the lifeblood. When the Black Lives movement really took off last spring, they saw a huge increase in one-time donations, but a commensurate increase in recurring donations. Because they’re able to articulate that different impact, and that different track. Their baseline, now that sadly public attention has moved on, they don’t have that big spike.
Their baseline of recurring gifts has doubled, so now their ability to drive ongoing programs, even as the media has gone on, but their program work certainly hasn’t attenuated in importance, they’re able to do so much more with that. So, what we look at in terms of recurring optionality is: Do you have a separated program? Do you have different kinds of impacts? Do you have different kinds of gift suggestions? Do you have different ways of engaging with those donors? Then, do you not just forget about them? Encouraging those donors to give a little bit more– what we see is recurring donors are generally five times more valuable than a one-time donor, even though the gift amount is lower. The recurring donors are actually likely to give additional gifts on top of it, so you don’t have to stop asking them; it’s not a gym membership where you hope they forget it. Keep talking to them; they want to know that this investment is having impact, so keep reminding them of that.
The other thing, I’ve got to keep going back to this because it’s so boring, but I completely love it… I’m in tech… is: have really good payment options available for them. So, things like credit card auto updater– a vast majority of the reason that organizations lose recurring donors is not the donor deciding to stop commitment, it’s their credit card expiring. They don’t even notice, or at that point they’re not going to go and dig it out and try to re engage. They just let it lapse, so something like ACH is a really valuable option; credit card auto updaters is a really valuable option. Once you’ve worked so hard to get the donor, you don’t want them just to casually attrit, let’s say, so that technology partnership with the strategy is also hugely important.
So we are seeing these new crypto millionaires, we keep talking about them. They’re often younger people who are newly developing wealth and don’t have deeply instantiated giving patterns yet. So, the organizations that can be in front of them and say, “You’re looking for somewhere to donate to; you’re looking for somewhere to give some of this wealth,” either for tax benefits or just from a sense of civic obligation.
Denver: As you said a moment ago, “Give them the why,” in terms of this whole recurring thing. It is so true that these little things, like expiration of credit cards, they really do add up to the big things. They’re so easy to overlook, but the cumulative additive value of all that can really make the difference between a successful program, and one that’s just lagging along.
Denver: Tell me a little bit about Classy’s Crypto Giving Fund? I think you did something in partnership with the San Diego Foundation and Coinbase?
Soraya: So one of the things that, again, we’ve become a little bit obsessed with is one, we are seeing this… A little bit of a bifurcation of donation amounts. So, we still have these smaller, one-time, and recurring donors, that’s really where digital giving started. It was: How do you give away at scale to encourage people to give? But high, major gifts were always separated from that; you never thought about the two being the same. We are seeing that disappear. People are very comfortable giving big gifts online if they have the right means to do so. So, we’re actually doing a few things on that, where we’ve got some major gifts programs that are unpublished, but it gives major gift officers the way to engage with their donors digitally.
Again, we talked about this, anything to remove payment friction is a good thing, and then we’ve got a crypto fund. So, we are seeing these new crypto millionaires, we keep talking about them; they’re often younger people who are newly developing wealth and don’t have deeply instantiated giving patterns yet. So, the organizations that can be in front of them and say, “You’re looking for somewhere to donate to; you’re looking for somewhere to give some of this wealth,” either for tax benefits or just from a sense of civic obligation. If you can be in front of them and say, “We’ve got a way for you to give.” We’re seeing enormous interest in that. So, we set up a fund that if you have some crypto money left over that you would like to deposit somewhere, we have got somewhere.
We’re working on a few different funds with several local organizations where we can accept and facilitate it, but we’re actually also doing something where for major gifts, we will process it on behalf of the organization. Again, just there’s not ubiquity yet in accepting crypto funds; this is a really important avenue for new revenue for these organizations; so that’s absolutely something we’re really interested in. I think the interesting thing with crypto is it can be a little bit scary because of the fluctuations of value to say, “Okay, I’m going to accept this, and I’m going to hold onto it, and have to somehow convert it, and have to figure it all out.” So, we’re trying to help be the intermediary of that and take all of that question out of it. We can convert it, we can minimize the risk on it, because I think it is something that everybody’s still figuring out how to contend with. But it’s real value there, it’s pretty exciting for us.
Denver: No doubt about it, and I’ve got to tell you, if I was a CEO of a nonprofit now, I would probably hold on to 10% of it. That’s what I would do.
Soraya: In a year you’d probably look back quite happily on that decision, so no, it’s really interesting. But it’s so funny, because when we look at these new patterns of giving, one of the things we’re seeing is that these younger… You were asking me about generational differences, the older generations were the least likely to be impacted by the events of last year. Be it social justice, be it COVID, whatever disaster happens, they have had a lifetime of consistent giving patterns, and they’ve found their causes, found where they want to invest, and it’s become a long-term relationship. The younger donors still do not have that; they’re starting to come into some discretionary income; they want to give back, but they haven’t really developed long-term relationships.
So, you see these younger generations the most influenced by current events, and the most influenced by friends and family soliciting gifts, or just talking about an issue. So, that behavioral development is an amazing opportunity for organizations to say, “This is exactly where your gift can go; it doesn’t have to be huge dollars, whatever you have, this is the impact we can have.” So, making sure to demonstrate that impact at all levels, because these are your future lifetime donors, and so even though it feels like maybe more work for less reward, it’s actually going to really pay off for the long-term health of these organizations.
Denver: I couldn’t agree with you more, and they also can be the beneficiaries of this transfer of wealth that’s going to go to them, so you want to have them on your roster.
Denver: Okay, tech person, let’s talk about virtual and hybrid events? So many of these galas, and I went to a number of them, were done virtually; now we’re getting slowly back into sort of a hybrid existence. What do you see when you look into your crystal ball, in terms of all these tech advances that have been made over the last year or two, in terms of what these events are going to look like down the road?
Soraya: Yes, well, my crystal ball entails talking with lots of your listeners all the time, and talking to their donors. We saw that, at first, people were really trying to figure out what a virtual event looked like, how to make it engaging, and I think we stumbled a lot. We didn’t really have the tools, so we tried to just port over physical events into the virtual space, and it was clumsy at first. We then started building really robust ways to engage with people– How do we do individual connection on virtual events? How do we share information? You think about a virtual ride… you can’t do these big bike events. But you can do leaderboards, and you can have different coaches, and it’s become really fun. But after going on two years of this, people are tired; they want to get back together.
But you don’t want to lose some of the real benefits from that, which is no matter where you are, you can participate, no matter if you have the means to get out, you suddenly expand the aperture of who can participate. That’s been really exciting, and you can do some fun things where if you have a built ballroom, there’s actually very little engagement across all of the people, but suddenly you have a virtual component to it. You can start having really fun live auctions, things like that. So, I think what we’re seeing is you mentioned hybrid, yes, hybrid. Everybody’s talking hybrid, nobody ever wants to go purely virtual really again, but nobody’s really interested in abandoning a lot of that connection that was facilitated. So, hybrid events I think are the future, and figuring out a nice way to make it accessible to everybody. Give that in-person connectivity via the virtual component, and that’s what I think we’re going to see.
Denver: A personal wish I may have here as well is these virtual events have been so focused, instead of going on to 10:30 at night, I just hope that can be carried forward. Also, a little bit more of the program is interspersed, sometimes you wait until everything, and then go for the highlights at the end of the program. Try to make it entertaining right from the very beginning, and then maybe have some dead spots in there, if you will. But don’t put it all at the end the way they did, because I’ve gone to a number of these things, that’ve been 45 minutes and they’ve been great.
Soraya: That’s so funny, that’s really interesting that you have to be very intentional with the agenda in a way you don’t if you’ve got a captive audience. My advice for you would be you need to get a couple of extra drinks, they’re fun by night. If you engage the right way, it’s great, you get a babysitter and…
Denver: That’s actually the first note I’ve made from this conversation, get extra drinks.
Soraya: There we go.
Denver: But yeah, you’re seeing the same thing with board meetings; board meetings could meander on forever, but now, after they did that at the very beginning, they took their existing board meeting and put it online. They said, “This isn’t going to work,” so they get much more focused, and much more intentional, because people won’t hang in there for more than 75 minutes, or whatever.
Now, it may be too late to do anything about this, but I’m going to ask anyway. I think about 12% of giving comes in the last three days of the year. Now, I know a lot of that has been pre-baked and planned well ahead of time, but is there anything an organization can do in the last week or two to maybe get a few more gifts between now and December 31st?
Soraya: So, one of the things we’re doing with our organizations is we’re working with them on any gifts of a material size, let’s say $5,000 and up, depending on your size of organization. Anybody that came in the past year that was approaching that amount, we’re working with our organizations to reach out to them and say, “Okay, can you give on the 20th? This is our big giving day, will you come back in?” That way you get ahead of it a little bit, and you know if that person didn’t come back, you probably want to really reach out to them.” Try to make sure that they’re engaged on those last few days, because I think of that nail biting of: Are the big donors going to come back?What am I going to see on the last day? Then it’s too late to do anything, really strips control away.
So, if you do a personal reach out, but you don’t build up this last day of the year; we’re trying to get ahead of this; we want to work with you, you get that special solicitation. That way you still have a few days to change the outcome is one of the things we’re thinking about, and then I think-
Denver: That’s interesting.
Soraya: Yeah, so we’ll see, I think a lot of our organizations are excited about that possibility. What we’re trying to do is give either special pages or special engagement options, to let donors know why that’s important as well. Because I think donors are smart; they want their gifts to have an impact, and so I actually think sharing it with them. We need to see where we’re going to land, and so we really are asking our biggest supporters to engage early is resonating. Then I think the other thing, I’m always going to come back to relational and then tech is: it’s not too late.
Some of these really straightforward… I think it’s hard to set up a new campaign, it’s hard to spin up new marketing assets at this point. It’s too late, but some wallet options… I just will keep saying it, because it is completely transformative. You enable digital wallets, you enable PayPal, you enable ACH, you set up a separate recurring page, it will completely transform your giving. It will add several points of conversion, and if you think about the conversion rates you have, and the amount you raise, and you annualize a few points increase, it’s really material. So, I sound like a broken record, it is the difference between our successful organizations and our unsuccessful organizations, and so I just can’t stop talking about it at this point.
Denver: Well, I’m glad you do, because so many things that we do in this field are so difficult and so hard to do, this is not one of them.
Soraya: This is not one of them.
Denver: Just do it, and get a return, I mean, it’s just common sense. Let me ask you a macro question about the sector, and we’ve alluded to it before, but do you see any challenges in the fundraising ecosystem going forward? As you know, we’ve lost tens of millions of donors since the turn of the century. Big givers are now the preponderance of the percentage, it used to be 18%, now they’re 45%, in terms of those top 1% of givers. I just wonder how you look at where this is all going in the years ahead?
Soraya: This is a great question, it’s something that I know everybody in this sector has been agonizing over. For us, the beautiful thing about all of these different giving options is you still spend a lot of time on the high net worth donors. You still spend a ton of time in relationships. Technology allows you to create that kind of experience at scale, because it is a big problem that individual giving is sputtering. So, the more that you can say, “Okay, I used to need to call, and send these very expensive mailer packets, and do all of this stuff to engage donors.” That is a lot of time, it’s a lot of resources. Unless you know you’re going to get a return, you’re going to hold back. Technology allows you to do that at scale, very low cost, and so you can have a lower return and it still adds up. So, I think the answer is… both/and… How do you consistently engage with the high net worth donors or the major gifts?
Keep talking to these people, of course, because this is becoming a bigger size of the pie. However, we are benefiting from billions and billions of dollars of retailers figuring out consumer behavior, priming consumers to expect certain things. And then we kind of adopt that technology for our own experiences, and the donor and the consumer is the same person; their expectations are the same. Once they have set up their Apple Pay account, it’s there for whoever to use. So, what we are trying to do is say, “Okay, we can’t change macro trends of widening income inequality; we do not have the power to do that.” So, yes, you need to talk to them, I know with donors, you do, you need to cultivate those relationships, and talk about the impact.
But the small donors are still developing, especially these younger donors who are coming up, there’s more expectation of… We’ve talked a lot about, let’s say, conscious capitalism, and what they expect from the brands that they support, what they expect from their employers. What do they expect from themselves? So, I do think we’re going to see more smaller giving. There’s going to be pressure on that, because of income inequality I think, but you still have to talk to these people. I think it’s becoming easier and easier to do it, actually. So, there’s no silver bullet I have to offer, I wish I did, we would be doing it. But I do think doing this at scale and doing it more cheaply is going to help counter some of these macro trends.
The piece of advice… so I came from both the social sector; I worked in nonprofits, and then I worked in retail and e-commerce: Do not stop talking to your donors.
Denver: Yeah, I think you’re absolutely right, in terms of technology. I’ve talked to a number of organizations who are really using it well, and it frees up their people, this technology, to actually become engaged in relationships with donors, instead of having to do a lot of this administrative stuff, and making their lists, and doing all those other types of things.
So, in addition to payment options, let me close with this: Give me a New Year’s resolution for a nonprofit who wants to get started off on the right foot in 2022, and also a little bit about how Classy could help them do that?
Soraya: I will give one piece of advice maybe, if I can be so presumptive, and then one New Year’s resolution. The piece of advice… so I came from both the social sector; I worked in nonprofits, and then I worked in retail and e-commerce: Do not stop talking to your donors. I think people feel like they’re going to overburden them; they’re going to try and pack a lot of information in. They want to back off once a donor has given. Do not do any of those things. E-commerce does not do it, because we’ve found that the people most receptive to your message are the ones who have just invested with you. Keep talking to people; they will not get sick of you; do it in little bite size amounts, but don’t get shy. So, that’s my one plea as we go into the end of the year.
My resolution, this is a good one.
Okay, if I could give a resolution for the nonprofit audience out here, and I’m on the board of a nonprofit here… we think about this a lot, it’s: Think about the technology you’re using, and don’t think about it as a commodity. Really think about what are your expectations as a consumer? Am I offering the donors the same opportunities that I have as a consumer?
Your giving page is not a commodity; your marketing plays are not… Well, I’ve got something, so it’s optimized. Pressure test your technology, make sure that you’re using all of the features. They are there to help drive conversion, retention, donor engagement, and these things will have an impact. So, don’t do a “Set it and forget it.” Don’t assume that because you have a button or a page that you have a program. Leverage the technology to the maximum capacity it can be used; it will pay dividends. It shouldn’t require a lot of time; good tech is there to save you time; it will not sink your team. First couple weeks of January, when things settle down, spend some time doing this; it will really pay dividends.
Denver: Yeah, well, fundraising is a relationship business, and this technology is just going to help you build those relationships, and it’s central to that. Tell us about the classy.org website, and some of the information that people will find there?
Soraya: Thank you so much, so yes, we spend a ton of time looking at our campaign data. We have thousands and thousands of campaigns at any given time running on our platform, so we try to distill all of the learnings from that, and all of the learnings from all of our thousands of customers. So, on the website, you will find a blog that we publish new content on several times a week. You’ll find tons of guides, and white papers, and assets, and webinars, to help you on your fundraising journey. Again, we just take the best of what this sector has to offer, and we try to package it in a way that’s useful. So, we are constantly providing new insights that we’re discovering, and we love sharing it with the sector. So, please do engage. We’re so thrilled to do it, and we love engaging and learning new things, and we’d like to do that with you all.
Denver: Very cool. Well, thanks, Soraya, for being here today, it was a real delight to have you on the program.
Soraya: Thank you so much for having me.
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