Matt Scott · CEO and Co-founder, CauseMic, author of The High-Growth Nonprofit | Matt Scott is a longtime friend of Funraise, author of The High-Growth Nonprofit: Proven Steps to Quickly Double Your Revenue and Drive Impact, and a man with a plan for your nonprofit's exponential growth.
Is your nonprofit uncomfortable with growth? I mean huge, mission-busting, stuff-of-dreams type growth, otherwise known as exponential growth?
Because if your comfy idea of growth is increasing donations and programming and impact by a solid 5% each year, that’s fine. It’s just that… well, with 10-15% inflation hitting everyone, that 5% growth isn’t quite the flex you think it is. (In fact, it may not even cover your end-of-year pizza party.)
Now that we’ve scared you—and sorry about that, by the way—we’ve got a special guest to get you psyched for growth like you’ve never experienced. Matt Scott is the author of The High-Growth Nonprofit, CEO and Co-founder of CauseMic, and a longtime friend of Funraise.
As the title of his book suggests, Matt is here today discussing proven steps to quickly double your nonprofit’s revenue and drive impact, and he’s backing up these actionable insights with stories, examples, and analogies galore. Seriously, there’s something for everyone.
So settle in for a conversation centered in thinking big and changing big for breathtakingly big growth.
Hello and welcome to this episode of Nonstop Nonprofit!
Is your nonprofit growing? The average growth year over year for nonprofit's is about 5%. 5% for more donations, 5% for more donors, 5% more revenue and 5% more impact. Now 5% year over year, that's good, until we turn and look at an inflation rate of 10-15% and then it's not actually even growth anymore.
But what if I told you there was a way to grow faster? I way to reach huge, mission-busting, stuff-of-dreams type growth, otherwise known as exponential growth? Well, there is and that's why we invited Matt Scott, the author of The High Growth Nonprofit, CEO and Co-founder of CauseMic, and a longtime friend of Funraise to join us to talk about exactly this, exponential growth.
As the title of his book suggests, Matt is here today discussing proven steps to quickly double your nonprofit’s revenue and drive impact. He’s backing up these actionable insights with stories, examples, and analogies galore. Seriously, there’s something for everyone in this episode.
So settle in for a conversation centered in thinking big and changing big for breathtakingly big growth.
David Schwab Hello and welcome to another episode of the Nonstop nonprofit podcast. I'm David Schwab, your host and director of Growth and Marketing at Fundraise. Today, we have a longtime fundraiser, friend, founder and CEO of CausMic, Matt Scott. Matt, thanks for joining us today.
Matt Scott Stoked to be back here. Thanks a lot, David.
David Schwab Well, Matt, it's a conversation today. I've been looking forward to a long time. We got in touch a while back just before the launch of your new book, The High Growth Nonprofit. I knew as soon as I saw the cover, I was like, I got to get Matt on the podcast. You know, you've been a fundraiser friend for a long time. I know last time you got to talk with Justin, so I hope this isn't too much of a step-down, but I promise we're having a good conversation. But anyway, I you know, I'm really excited today to dig into the high-growth nonprofit with you. Talk about that. Obviously, nonprofit growth and growth, in general, is something that not only I know a little bit about, but I'm passionate about. It's part of my title and it's something I've been pushing in the sector for a long time. Before I was at a fundraiser, I was a digital consultant and most of the conversations I had were How do we use new technology to grow? What are the things that we need to do to grow? And quite honestly, you know, there just haven't been good answers. Like, yes, you can have as many of those conversations as you want. But as I was reading through your book, I was like, these are all of the things, all of the conversations that I had over and over and over distilled put onto paper that you can hand a board that you can hand to CEO content or president. So first of all, thank you for writing this and putting it down. I know it took a lot of your team's time and attention, but I think this book is so awesome and I am excited to spend the next little bit in this conversation to dig into a couple of the topics that I thought were really impactful and help organizations hopefully find a tidbit or two to grow. But before we dive into the book, do you mind just giving our audience a little bit of your background? Talk a little bit about CausMic, how you got into the nonprofit sector. What kept you in? What took you into the consulting side of it?
Matt Scott Yeah, totally. I'll say, what's going to probably keep me in is your intro. So thank you for that build up man. That was nice of you for taking the time to read the book. I appreciate it. Yeah, I'm Matt and I've been in the nonprofit sector for a little over a decade. I think that what I like most about this sector is we all have these big missions. We all have these big, audacious goals programmatically, right? For me, I worked at a nonprofit called Team Rubicon. It's a disaster relief organization. We were repurposing the skills and inexperience of military veterans to respond to natural disasters, and we had this, like, crazy, audacious big goal to be the best disaster relief organization in the world. And that just felt like a really awesome place to park my, my passion. You know, I'm not the smartest person in the room, but I'll be damned if I'm not the hardest working. So I figured if I'm going to do my time, you know, professionally, just working it, grinding it out, I might as well do it at a place that I was inspired by the work we were doing. So that's my background, man. I come from the nonprofits, I come from high-growth nonprofits and have been doing growth consulting for a little over a decade with all kinds of incredible nonprofit organizations that inspire me and keep me motivated on the regular.
David Schwab Right? Well, just because I think you intentionally didn't say it, but I will say it for you as we talk start talking about growth. And you mentioned being part of high-growth organizations. Your time at Team Rubicon wasn't full of stagnant growth either. Can you just remind us and our audience what you know when you started at Team Rubicon, too, when you ended your time at Team Rubicon, what was that growth like?
Matt Scott Yeah, I was there for seven years and when I started we were at about $275,000, an annual revenue. And when I left we were at $51 million in annual revenue. And yeah, it was, it was a crazy and wild ride and, and I can share more about it. But actually, oddly enough, before that I worked at another high-growth nonprofit, but it was more established. So we went for tens of millions of dollars to hundreds of millions of dollars in a really short period of time. I was there for about three years, but it was an entirely different maturity stage, so I got to do it at a stage of organizational maturity at an organization that had been around for decades, but got brought on new leadership with a vision for growing. And then I got to do it in a very entrepreneurial setting. And so, yeah, I think also I hope what's reflected in the book and hopefully in this conversation too, is that a lot of this stuff I found scales up, scales down, scales across like these are just how to like their specific, tangible ways to grow in any environment where you're trying to make the most out of, you know, not having enough time or money in order to execute all your ideas. So yeah, anyway.
David Schwab Yeah, it's awesome. So I think that's a perfect segue way into what I wanted to have you on and talk about today, because one of the things that I felt so often is a fear of growth. You know, the nonprofit sector talks so often about the 8020 rule, where and if. Sure you're all familiar with it, but 80% of every gift given needs to go directly to the cause. And if you don't stay within that 20% of overhead. I hate that word, by the way. But if you don't stay within that 20% of overhead, you're a bad nonprofit. And I think that's led to a fear of growth. But with where we're at today, I think where I wanted to start the conversation is why organizations should be. Mindful of growth and should want to grow. And what the opposite of being growth minded is as a nonprofit today.
Matt Scott Yeah, great point. And you're right, David, Like, I think that's one of the biggest challenges in the nonprofit sector is, you know, if we're in a for-profit sector, especially if we're investor backed. But, you know, regardless, right, we get to think further out. We might get to think about customer acquisition costs two, three years out, having that return on investment, what's the total lifetime value of that customer versus the acquisition cost? And acquisition cost is not just, you know, the true marketing sense, which I mean, I can't wait to pick your brain on, you know, more about that than I do, but it's also like the whole infrastructure, the technology, the people, the content creators, all of that stuff goes into acquisition, and nonprofits are challenged because they have to have that return on investment within the first 12 months, within the calendar year, not even within 12 months, within the calendar year or fiscal year. Right. And that's a huge challenge. So but at its core, like what I've seen literally hundreds of times, I've done this now hundreds of times with nonprofit leaders helping them very quickly grow. By that I mean, you know, double, triple their revenue over a 2 to 3-year period. What I found is that most nonprofit leaders are not allowed to think big enough. They set their targets really low. And so the very first exercise we go through with a client is transitioning from an incremental to an exponential growth mindset. And it doesn't mean necessarily that you're spending more money to get there. That's the important thing. And that's how it ties back to your question around, you know, the overhead. We actually sit clients down and we say, okay, let's let's get around a whiteboard and answer this simple question. How do we double our revenue with half the resources over the next three years? And what we found is like by force, by creating a resource-constrained environment, you actually like, you lead to like these really creative and innovative ideas, but most importantly, it leads to like ruthless prioritization. So what I like about an exponential growth mindset of thinking like we can in fact double, triple our revenue over a 2 to 3-year period, we don't have to spend more to do it is that it gets you it shakes you out, especially for an established organization who just keeps doing what they've been doing just a little bit better each year. It gets them out of that mindset. It gets them to create think differently, and it's how you can then make these bold, calculated risk with some level of, you know, comfort in knowing that you're going to see a return. It's just not possible. If you think, How do I take my rubber chicken gala every year and make it a little bit better? You know, like you're not you're never going to invest in technology. They fundraise, you're not going to get HubSpot, You're not going to like, do these things. You're just not. If you're always thinking about, let me just take the way that we've been doing it for the last 20, 30 years and do it a little bit better, if that makes sense.
David Schwab It's such an important point here and reminds me, we just released an episode with my friend Andrew Olson. I'm not sure if you know him or not. Also a consultant on the fundraising and nonprofit leadership space, but he closed our podcast episode with what may be one of the most challenging statements I heard, and I want to get your response to it now. So he said, Directed to a nonprofit leader, if you're more concerned with maintaining the status quo than you are with making your mission impact, you're probably in the wrong role. I just want to get your take on that.
Matt Scott Yeah. I don't know him, but I like him. Look forward. I'm getting a lot out of this already. I'm, you know, I love to continuously. Larry, it's. I can't wait to go listen to that episode. But I mean. That's right. I couldn't agree more. Right? Yeah. A lot of people get into this space and they kind of they go through the you start in the annual fun and then you become a gift after they're a major gift officer. And now you're, you know, director of development and fundraisers are notorious for this. I know when I was a fundraiser I used to sometimes do the same thing. You set your target so low. And then, of course, everyone's like, Oh, wow, we exceeded our revenue target and everyone up and down the food chain likes it, right? Because the board, like, thinks it looks good and all that. But may I tell you, my time in Team Rubicon just ship the shit out of that thought process. It just destroyed it because it was like, if we're going to be the best disaster relief organization in the world, we're going to need resources to do it. We're going to have to grow our volunteer base, not by hundreds, but by tens of thousands. How do we get to 100,000 volunteers in the next three years? And so I love what he's saying because it ties it back to the work and ultimately the mission. And if you are if your mission is big and audacious and you know, you want to like one of our mutual clients Dig Deep, right? They want to eliminate the fact that like 2.2 million Americans are without clean running water. Well, if you're going to take that on, you need to think big. You can't be thinking small. You can't think, think small, and then try to exceed your goal. So I love that. I love that Andrew tied it back to the mission, you know? So.
David Schwab Yeah, I know what you're talking about there, I think is critical. It's something that I challenged my marketing team at Funraise here at the beginning of the year. I said, Let's make a really scary goal, and we set goals that we thought were just audacious. And as you start to come up with plans to hit these audacious goals, you realize the way you used to do things, in the way you used to think about things. They just don't apply. Like, yeah, if you want to grow your time, if you want to grow 5%, you can keep doing what you're doing and send 5% more letters in the mail or send 5% more emails or increase your score on your donation page by 5%. And you're like, Yeah, great, we'll have a pizza party at the end of the year. But really, if we think about inflation, we just lost 15%. Yeah, yeah, yeah, yeah. And I think it's so critical for organizations, specifically leaders at organizations now to adopt this growth mindset because the market is so volatile because everything around us is changing faster than ever with new technologies and changing economic global economics and like macro and micro and all of these things affecting even the most hyper-local nonprofit organization is affected by these macro trends if you're not thinking about radical growth.
Matt Scott Mm-hmm.
David Schwab It's almost to the point where you're like, like Andrew said, like it's time to hang up your cleats and go get a corporate job. Selling vacuums as one of my old bosses used to say.
Matt Scott Yeah, that's right. That's right, man. Yeah.
David Schwab So as we're thinking about this growth mindset you talk about in the book and I thought was really important and I wanted to talk about next year is when you set these big goals, it's really easy to look at the goals and say, okay, if we're going to do this, we have to have the best possible plan in place. Everything has to be perfect. We have to know step by step by step what we're going to do. And I mean, you even posted about it today on LinkedIn, where organizations can spend upwards of almost a quarter million dollars on internal and external costs, just putting their annual plan together, let alone this like big, I'm going to triple I'm going to double revenue over the next three years. Like, yeah, talk about some ways you help organizations and you help leaders get out of that. The literal paralysis by analysis that stage of of it.
Matt Scott Yeah it's like, it's like chasing perfection over progress, right. Yeah. This is a common problem. I mean, you kind of describe like the strategic planning process, right? Like we have to have the plan has to be baked and everyone has to sign off and etc.. And, you know, at its core, I think it's because let's start with the challenge, the challenges that nonprofits and most teams, frankly, rely on unstructured meetings in order to make big strategic decisions and set priorities. Unstructured meetings are where you invite a bunch of people to a room like hour six or eight, whatever your leadership team, and you say, okay, what's going to be our big strategy? And you end up just talking in circles. And ultimately the only thing that comes out of that is another meeting. Very rarely are you able to prioritize anything. So you'll see this like on in our approach to on a strategic level, but also beginning to operationalize, which is what you're talking about. So you set this big audacious goal. We're going to double revenue half the resources next three years. Okay, Well, what are the key strategies? How are we going to do that? Let's say you want to take an audience-led approach, meaning you're going to reach each supporter on the right channel with the right message at the right time. Okay. Or to do that? There's all these things that need to happen. They could be like, the thing you got to do is you start listing them out like it could be a new donor welcome series so that when people give, they their nurture their it could be setting up Google Analytics for right. Making sure that you've got a way to measure and track the effectiveness of this. It could be, you know, big things like we got to redesign our website, it could be implementing a new fundraising solution, whatever these things might be. You just outline all of the actions that would have to go into creating an audience-led approach. And then you think about, okay, well, how much impact will this have on that goal of doubling our revenue over the next three years? And how much is it going to cost, be it time or money and anything that's, you know, low cost, high impact is a priority one. Anything that's high impact but also high cost. So let's take that example of implementing a new CRM. It might be a very high impact, but it might be a very high cost. So you have to build out like a list of all the things that need to be done. And then it's like, okay, who is responsible for this actual output? What is a realistic timeline? And now instead of having an unstructured meeting where you essentially spend six, 3 to 6 months just talking about a strategy you have, this is our big goal. We've determined what are the three kind of ways in which we're going to execute that this year? What are the specific items that need to happen? Who is responsible for them? Are they how are we going to resource these? And it just it begins to move from talk to action. And I think that that's pretty critical. If you're going to grow your organization is you need to have a bias for action over a bias for documentation. You need to have these frameworks, these methodologies for, for turning ideas into action. So I won't if that's what you were thinking. But that's just I think that's so core because talk is cheap ultimately, you know, ideas are shit without execution and you have to execute. And so, yeah.
David Schwab Yeah. I mean, that's exactly what I was leading with that question when I was working in fundraising. I would more often than I care to admit, run into scenarios where we would delay the launch of a campaign because we couldn't agree whether or not to use an Oxford comment in email.
Matt Scott Yeah, yeah.
David Schwab And I'm like, guys. And it led me to this thing that like this statement that I parrot all the time now is an imperfect appeal or an imperfect message. An imperfect ask or offer delivered at the right time is going to do exponentially more for your organization than a perfect appeal delivered to it. Too late.
Matt Scott Yeah. I actually have a great example that that that comes to mind for me. Like again, I came from disaster response, right? So we're working with one of our clients and they're there for programmatic pillars, clean water, beach access, plastic pollution and reducing the impact of climate change. Right. And they've got an awesome tech stack, they've got a great website, they got all that stuff. Well, when this historic flooding happened in California, there was a need like on our team we identified, Hey, this seems like an urgent appeal moment. You got to get out there and ask for money. This is not an organization that typically responds to natural disasters, but this historic flooding literally, literally hit all four of those programmatic pillars. We're going to have, you know, clean drinking water is going to be jeopardized because we got to do water testing out there. Plastic pollution is going to come up on the beach. Obviously, this is the impact of climate change, etc.. Well, because they took too long to even determine whose decision is it whether we're going to go or no go. And then once it was go, it was like, okay, we need it to be perfect. And how is this going to impact what we had to get programing to buy in and all these different stakeholders? And it was like, boom. Then they had the perfect message. The message was beautiful, but the timing was completely off because people that news cycle is so tight now. And so we used to see this all the time, a Team Rubicon where we would have to move up further and further up the solicitation. And one thing that we did that was just game-changing was like, don't worry about it. Literally, we would get out in front of a disaster and we would send out a solicitation. And if we ended up not responding to that disaster, because thank God this hurricane didn't hit the you know, hit the coastline and it stayed out and fluttered out or whatever, we would reach back out to those folks and we'd say, hey, we took this money. We appreciate your support. It allowed us to get the resources that we needed in place in order to respond. And we don't need to respond to this one. We're so thankful for it. Would you like that money back or would you like us to apply it to the next disaster? And literally, I am not kidding, David. We never had a single person ask us for that money back. But when we missed that cycle, when we missed that news cycle, we would just raise hundreds of dollars instead of hundreds of thousands of dollars.
David Schwab So, yeah.
Matt Scott Timing is everything.
David Schwab And I think what you're talking about there is so important is timing matters more than content more than anything. I remember working with a huge organization right at the beginning of COVID and it was like February, March of 2020. No one knows what's happening. This organization's headquartered in New York and San Francisco, so they're literally the epicenter of everything and we don't know what to do. This impacts everything we do, but we don't do anything to impact it. So we can't go ask for funds. We don't know what's going to happen to our donors. And their CEO sent an internal memo and I was like, Why don't we just send that to everybody? Yeah, yeah. It was a text-only email. It wasn't formatted, it wasn't designed, it didn't have header, logo, imagery, anything was like we just send that. Yeah. And to their benefit they said yes. And it was their single biggest fundraising appeal of the year and it wasn't even a fundraising appeal.
Matt Scott Yeah, yeah, yeah. See get out there. Right. Like yeah, they love that. I mean that's, and that's that, that actually lends itself to another thing that nonprofits, you know, whenever they do this, it always works is like donors are your investors their investors, right? So you treat them like investors. You know the founder of a Funraise, Justin, a friend of mine. You know, he's that he was at Liberty In North Korea, Invisible Children before that. Yeah like they treated their donors like investors. So what you're sharing that CEO letter that's just going out that's raw. It's real. It's just it's authentic. And it explains that we're in the middle of a crisis. Here is what we're doing about it that gives people faith. First of all, it just brings your brand up when maybe they're not thinking about you. And then secondly, it gives them hope that, like you're thinking about how this is going to impact the organization's ability to meet, meet, whatever your mission is. And. I love that you share that story. That's such a practical thing. It's like, get that letter out there, you know?
David Schwab Yeah.
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David Schwab Now that you’ve heard how Funraise can radically change your nonprofit’s fundraising game, let’s get back to the conversation.
David Schwab Changing topics a little bit, but very much in line. Another very much in line with not just being a growth-minded organization, but an organization that's able to act on their growth mindset. It takes a very specific culture and a very intentional approach from leadership down. And one of the things I thought was so interesting in your book is you talk about an organization hits for growth milestones, give or take, in their history, where they go from being founder, led and founder, part of everything to having the first layer of management and that founders not involved in the day to day anymore. And then they go to like, okay, now they're a large enterprise type organization and now they're an international organization. And you give some great examples of these in your book, but I wanted to talk about that like that culture because it one it could be scary when you reach those points where you're like, hey, I like especially as a founder, as a leader, like I have to let go of control. So I want to talk a little bit about like your conversations and how you coach leaders through those big milestones and maybe assuage some of the fears or pain that comes through those big changes.
Matt Scott Yeah, totally. So you're kind of talking about we talk about how like the evolutions and revolutions of organizational growth and as you move through this process of growing inevitably what works right now to solve the pain points in the problems that you're experiencing are not going to necessarily work in the future. So, yeah, first, you're this entrepreneurial organization and you're really dependent on the founder of the organization. And I bet the majority of nonprofits listening probably fall into that category because we know that 85% or less than a million in annual revenue, right? So they're out there and they're founder LED and that person is picking the technology. They're doing everything. They're doing everything. They're sending the donor letters out. They're trying to figure out just like every little thing that has to be done. Right. Well, as they start to, like, go into the next phase of growth where they're building a team and maybe that starts with the board and, you know, volunteers or one or two paid staff members. Ultimately, those folks are going to begin to need direction. They are going to need leadership. They're going to need autonomy to go right to take action. And so you essentially you've got this very, like, entrepreneurial place where you're just telling them where you're going and then you're giving them some direction and they're supposed to just go out there. Well, the same thing happened like a Team Rubicon. And I always thought, like, I'm a builder. Ahmed Doer, you know, So you have your own personal brand, you have your own personal sweet spot, your own superpower. And for me, it's like I'm a builder and a doer. I'm not a maintainer. So but there came a point in Team Rubicon evolutions in revolutions when the breath of my job began to shrink, right? Like I wasn't doing as much breath, but it was like going deeper. And there was there had to be structure, there had to be rules, there had to be a process for like making decisions around technology and implementing that technology. There is a process. There's and so for some it might say, Oh, well, that's red tape, you know, Well, yeah, if you're at an entrepreneurial stage where you need to move quickly, that's probably the case as you begin to evolve as an organization. And there is becomes like a need for more structure in how you make decisions and how you collaborate with stakeholders, then you know, the solutions that you put in place in that first phase of growth is entirely different than what's going to come in in a later stage of growth. So I think it's just a really critical for an organization to identify what phase of growth they're in and to anticipate what are the potential issues or problems or pitfalls or roadblocks that they're going to face and know that whatever works for you today, that's probably not going to work as you move into the next phase of growth because it's going to surface. All kinds of new issues for you.
David Schwab Mm-hmm. Yeah, I think it's that fine balance of putting a safety net in. So if you fail, you don't fail too far, but not enough guardrails where it's like bowling with kids, the bowling alley where you can't do anything but ball strike. Yeah, it's a tough place as a leader too, because you failed and you don't you don't want others to have to go through a repeat that failure. But that's also part of the process of learning to raise up new leaders in an organization is creating those guard rails but allowing the room to fail with things in place. Like you said, it's red tape, but red tape pointing people in the right direction.
Matt Scott Mm-hmm. Mm-hmm. Yeah. You're almost talking about another. Another thing that I really like is, like, failing forward, you know? Just making sure, like, we tried stuff all the time out, and we do for clients. You know, we try things all the time because we're trying to double revenue with half the resources. So you're going to have to take a simple, calculated risk. And sometimes those risks are not going to pan out. Sometimes the, you know, the investments are not going to work. But it's about like identifying, Well, okay, what is our I mean, this probably makes total sense to you as a growth marketer, but like, what are our leading indicators that this strategy is working? What are our trailing indicators? Right. And you don't have to actually wait for a trailing indicator to know you need to give something enough time. But okay, let me use that specific example. Let's say you're like, okay, our nonprofit is going to begin to use paid media to reach new donors on LinkedIn. LinkedIn's super expensive. So I'm using that example specifically, right? It's like, yes.
David Schwab I know, I know.
Matt Scott Yeah. So like getting qualified leads, of course, they're higher quality, but it's very expensive compared to other social platforms. Right. Okay. Well, what are your leading indicators? Like what's your website traffic look like? How many of those folks are subscribing? Right. They haven't yet given you any money and you don't yet know how. Let's say you're trying to build a recurring giving program for mid-level and major donors and you're going to go after LinkedIn as a way to target like executives making higher income, right. But not crazy high income. So they're not major donors, but like, hey, you could afford 250 or 500 bucks a month, Right. Okay. Well, that's a little scary because if you're waiting until that trailing indicator shows that you're given that most people are going to start with a $500 a month donation. So what are the leading indicators? What's that website traffic? What does that conversion rate look like for new subscribers? How many of those folks are donating of those you know, what percentage of those folks are engaging in your content? Those are leading indicators of whether or not the platform, you know, that channel is working to grow your mid-level monthly giving program. Anyway, just a thought.
David Schwab Yeah. And I mean, it's so important as specifically as fundraisers to understand the nuance between leading and lagging indicators and how they work together. I remember so often I would be trying to push organizations to build marketing funnels, and it was such a foreign term to them because it's, you know, a fundraiser lives and breathes by their ROI. I spent a dollar here. I made two, three, four or $5 here or I didn't, and I can't live with that. So kill everything. That's not a positive return. And so often I'd have to have conversations. Okay, yes, this channel is losing money, but when you invest at this channel, building your brand, building your reputation, building your awareness, you see the return in these lower channels. Do you see how when we turned on this channel, your lower funnel channels grew their return? You're averaging two and a half to three and now you're at four. Yeah, that didn't just happen because you kept spending money there. It happened because you invested in other places. So it's looking at the full picture, yet also understanding when to say, okay, this isn't working and I'm going to cut my losses before it doesn't work even worse, right?
Matt Scott Yeah, yeah, yeah. Well, what do you think are some of the what are like the most critical, you know, leading versus lagging indicators?
David Schwab I always come back to engagement versus return. So your leading indicators are always going to be engagement. Engagement looks different obviously on any different channel you're you're in, whether email engagement looks very different than direct mail, engagement looks very different than organic social or content looks very different than advertising. But each yeah, each channel you're investing in, each platform you're investing in has its own core engagement metrics. And you and I spend an entire hour talking about the engagement metrics and those leading indicators on each of those channels, I'm sure. But you've got to look at those first because that's going to tell you what's going to happen. Those lagging indicators, your revenue, your return, your conversions. So that engagement is going to influence how many people come to your website, how many people see a giving experience, how many people make a gift, what the volume of that gift is. The other sizes are those average gifts. Whether or not those gifts are one-time or recurring, and then further down, you're even looking beyond that. First conversion is okay, how how do these people who came in through this channel perform once they made the gift? Are they one-hit wonders?
Matt Scott Yeah.
David Schwab Or do they give like my normal donors or do they give at a higher percentage than anyone else on my file? Right. I remember. It reminds me I was working with an organization and they had never done segmentation on their email file. And I said, Let's do some real simple segmentation bucket your general donors, your mid-level donors. And then instead of sending the same thing to everyone, let's also pull out your lapsed donor segment and see if we can reactivate those donors. Yeah, And we found that when we pulled those donors out and spoke to them and reminded them like, Hey, once you really cared about this. Something may have changed, but we'd like to invite you back in. These are people who haven't given in to three years yet. Not only were they reactivating, but they were reactivating and proving to be higher value donors than their current file interest simply because they chose to. A little tangent, but not necessarily related to early and late indicators, but they chose to speak to these donors in a different way and engage with them directly on the channel they were in. We saw that come back in and it is that lagging indicator where they came in at a higher average gift, at a higher conversion rate, at a higher value, and stayed on the file longer one than the new donors they were acquiring, but also their general donor file.
Matt Scott Yeah, so I.
David Schwab Thought that was really interesting.
Matt Scott Yeah, exactly. I actually think that level, that kind of email segmentation is where we probably see the biggest ROI when we think about how to customize that experience, especially during a campaign. If you can just break it out and then treat those folks differently. Yeah, it's pretty it's pretty incredible. We've seen really strong ROI, so I'm glad you gave that example.
David Schwab Yeah, Well, I think this brings us right into the final topic I wanted to talk about. And I think it's it's such an important topic for not just leaders, but everyone who works in the nonprofit sector to be really mindful of. And that's technology. We're at a point in time and this is why I chose to come to the tech for good space and work at fundraisers really point in time where organizations don't have to settle for bad technology or or technology that was not built for them. We're at a point where there are like there are so many options for.
Matt Scott You know.
David Schwab Every different type of organization, every different type of cause to have tools built specifically for them. You talked about Justin and the founders at Link. That's how Fundrise started. As they said, we don't have a tool that's right for us, so we're going to go build it. And they realized if it works for us, it might work for someone else. And yeah, yeah. And that was, you know, nearly ten years ago now. But so we're at a point where technology is part of everyday life of the nonprofit. We're not just outside of work, but at work. So how do you what I want to talk about here is how you help your clients and the people you consult with. How do you help them? One, adopt technology and get more familiar and comfortable with technology, but also analyze their tech stack and analyze the tools that they do have and potential gaps or pitfalls. And then the next part of that is, okay, you've got your gaps, you've got your pitfalls, What kind of conversations and what kind of things do questions do you help them ask to find what's the right fit?
Matt Scott Yeah, great question, because I see technology is a big driving force for growth and scaling, you know, especially when you're limited, limited resources on the human capital side, on the people side, this, this like so many of the things that we do here at Cosmic also comes from our experience working at a nonprofit where we hired a technology consultant. We met with a junior business analyst for an hour. They told us exactly what tech stack we needed. We paid a lot of money to implement it, and what we ultimately were delivered was like this Ferrari and we had no pit crew to get this thing around a track. And what we needed was like a Kia. So we needed like cruise control, we needed air conditioning, well, whatever the equivalent is in the technology space, but we didn't need like that really, really crazy level of customization because we didn't have the people or the process to max even come close to maximizing that solution's set of capabilities, right? So a great example is like marketing cloud, right? Like nonprofits who are, who are sold Marketing Cloud. I don't mean to bash anyone's system. Marketing Cloud is incredibly powerful. It's incredibly powerful. But do you have anyone on your team is going to run queries? Who's going to like who is going to be the administrator of that system? And let's say you work at a nonprofit and you, you know, you hire a person to run that system and you they don't know anything about it. You train them up on it. And now like six months later, they're $100,000 employee. They're going to go work somewhere else. You haven't documented your process. Now. You had a single point of failure and nobody else knows how to use the system. And then you're in a six-month search and, you know, just wash, repeat, wash, repeat, washer, repeat. So again, I don't want to bash anyone's system, but it's just like you don't need a Ferrari when you need a Kia and you need a few different people who know how to drive the thing. So yeah, yeah. So the process that we go through is, you know, we ask the end users what are the nice to has, what are the must-haves? And then you go out and you do vendor demos and you ask them to demo those must-haves. And then after you've really thought about like the implementation is the easy part of a technology, but it's like, okay, how is this going to. Change the way that you work. If you have a system that allows you to send an automated journey to a new donor, a lapsed donor, a monthly donor. Okay, cool. That's awesome. Are you increasing your capacity on the content side? What's your plan to create content so that you can plug it into this system? Well, now here's something that's come up in the last just several months, right? Is AI in the role that it's going to play in generating content? So you can take you know, you should probably have a prompt writer as as one of your open job descriptions right now. Yep. So you can take your top-performing emails over the course of the last several years. I heard this actually at a conference. It was like great advice. It was like, take your top-performing emails, load that sucker up, and then basically prompt it to write your new donor welcome series based off of your top-performing emails. That's just an example of how you can actually increase your capacity, leverage new technology, change the ways you're working. But if all you were doing was originally saying, we got to send new on our welcome series or like we need marketing automation, we need a way to send automated journeys. But you haven't thought about how are you going to staff those journeys, How are you going to create that content? Who's going to be out collecting those stories? You know, the ways in which you're working have to change alongside your technology or else you're going to end up over-buying tech. And the worst part is that your board or your people who are in authority over budget, who aren't actually on the ground at the thousand-foot level, and they don't understand why this technology hasn't worked and they're going to write off the whole idea of growing your mass market audience, for example.
David Schwab Yeah, Yeah. It's something I've always said a lot as technology doesn't solve anything. Technology only amplifies. Yeah. And it's come up a lot in the conversation with A.I., But in general, technology is just a tool. And tools. Tools don't do anything without someone wielding a tool. Yeah. Now we by the time this podcast launches...
Matt Scott Like it airs!
David Schwab Yeah, it could be a total different conversation. A.I. is doing some crazy stuff, but as of right now, day and date, you still need someone to run an input, someone to make sure it's running in the right direction. Like you said that, Yes, that owner, that internal owner. And so it's really, it's making sure you understand. Like, it's so perfect. What you're saying is. Understand your problems. Yeah, but then understand who is going to own the solution to the problem. And then your bit. Then you'll be able to plug in and find that technology. And also, like so often, I've seen like, hey, we need a new giving platform or we need to be able to do marketing automation, we need to be able to do all these things. But really the problem, they're the problem that's being fixed by these tools is we need more revenue. Well, revenue isn't like you don't. You can use tools to drive revenue, but maybe it's you don't need a whole new platform to go through the expensive process of getting on to the like you said, Ferrari versus Kia is such a perfect example. Like and oftentimes most of your problems can probably be solved by the tools you have today. And then as you're solving those problems, you're going to feel the pain points of your tools and know, okay, it's not actually our email marketing system, it's our CRM because our CRM doesn't have the triggers. We need to be able to talk to the people we need to. Ah, it's our it is our email system. So we need to go and get we need to go and upgrade that or we just don't have enough content to send. So even if we wanted this, we can't do it. Yeah. So awesome. Well, I think that is a really good way for us to start bringing this home, coming back to where we started almost is, you know, we talked, we started this conversation, why organizations should be concerned with growth. Not in a bad way, but should be attentive to growth, should be growth-minded. Yeah, let's hope that over the last almost hour here, we've convinced at least someone listening like, hey, we need to like, we're not doing this and we're missing out. How can someone start the conversation at their organization to become growth minded? How does it like what is that first conversation to get out of the 5% mindset?
Matt Scott Yeah, well, I guess I shamelessly plug my book, which is free. So you go to causmic.com forward slash book and get it for free, literally giving this thing away. I think it's got a lot of different things in there to prompt conversation within your organization. But I would say, really, like gathering that leadership team around a whiteboard and asking them that question of what are we going to do? How are we going to do this? How are we going to double our revenue with half the resources? And I know people because I've done this like literally over 100 times, and people are going to look at you and they're going to laugh and they're going to think you're crazy and you just ask them to stay with you in the room to really work with that with you. Because just starting there with a basic list of, okay, how are we going to do this? And then just take that list up to the board and say, how impactful will this idea be? How much effort would it take? Right. How much cost would it be? What would we have to really do to make this happen? And that's going to allow an organization to narrow in on like 1 to 3 key strategies on how they're going to do it. And now you boom, you're off to the races. You've got a work plan that you can start to work against. You know, I think that's pretty critical because if you're serious about growing, if you're really are serious, you got to get the mindset to change. But then you have to have a bias for action. You have to turn your attention towards action, doing, not talking about something. So I would encourage that is step two.
David Schwab I definitely think your book is a great place to start. It's a great book. It's a meaty read, but it's a quick read. So it's not one where you got to invest a quarter just to read to get through it. It's something you can get through and digest relatively quickly. I think I thumbed a page or two in every chapter to come back to be like, Hey, I should go and look back at that, think back about that. Or, Oh, that's something that I know someone can bring into their daily work. So that's a great resource. But how else can our audience engage with you?
Matt Scott Oh yeah. Well, we also have a great newsletter. We, we offer a lot of free resources on our site. Honestly, LinkedIn is great. I try to stay up on the conversation there, respond to things. Justin and I are constantly sharing industry best practices, so yeah, fine, fine. Find us on LinkedIn as well. Just CausMic on LinkedIn. So that's pretty easy. Yeah. Which is that, which is a natural plug for our conversation earlier. It's, it's, it's said cosmic, but it's spelled cosmic. So that cost David unfortunately a dinner I think. I hope I hope an expensive one at that but.
David Schwab Yeah, yeah. Alex is listening. He's, he is patiently waiting to tell me which sushi restaurant he's going to make me take him out to because I. I thought it was Cause Mic, but I was wrong. It is CausMic spelled cosmic. But please do go check out the book. Follow Matt and team on LinkedIn. Great content all the time. I love being able to see the for good sector equipped with great resources and that's what his team does. And you can get in touch with them further on their website if you want to meet with them. I know they've got a great resource for growth consultation, so that's something I would recommend everyone listening. Go take, whether you're growing five X all the time or not, I'm certain. You can have that consultation and get a new nugget. So take advantage of that. Get to know Matt and the team at CausMic.
Matt Scott Yeah, thanks. Thanks for reminding me of that. Everyone could get a free book and a free and a free strategy call. So yeah, I appreciate that. And thanks a lot, David, for having me on. It's great, it's great to reconnect with old friends and I really appreciate the thoughtful questions and for making it through the book. So, yeah, thank you.
David Schwab Matt. Thanks for your time today.
Matt Scott Awesome.
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