Episode 3: Philanthropy and Culture: Robbe Healey interviews Jeff Schreifels on Strengthening Nonprofits

DonorPerfect – 00:03

Welcome to Nonprofit Expert presented by DonorPerfect.

Robbe Healey – Host – 00:15

Welcome and thank you for joining us for Nonprofit Expert presented by DonorPerfect. In this series we’re Read More

DonorPerfect – 00:03

Welcome to Nonprofit Expert presented by DonorPerfect.

Robbe Healey – Host – 00:15

Welcome and thank you for joining us for Nonprofit Expert presented by DonorPerfect. In this series we’re talking about case and culture and courage, and I’m very excited. Today we’re joined by Jeff Schreifels, who’s principal at Veritas Group, and he’s going to help us explore culture, organizational culture, and the characteristics that he’s seen and understands are really true in high-performing organizations. In his work with clients, he’s really had a unique opportunity to see many stages of growth, to look at the way leaders influence the way an organization evolves, what are their philosophies, how do they go through adaptive change, and I’m sure he has lots of interesting insights to share with us. So, before we get started, I want to give Jeff an opportunity to introduce himself to all of us. Thanks for joining us, jeff.

Jeff Schreifels – Guest – 01:11

Thanks, robbie. It’s great to be here. You know I’m 58, and so a lot of folks my age who are in fundraising kind of got into this by mistake, right, didn’t we? I graduated with a history and education degree and thought, oh, I’m going to be a teacher in inner city Philadelphia and it just didn’t happen that way. But I immediately got hooked into a nonprofit.

Robbe Healey – Host – 01:35

Was it at least a history nonprofit.

Jeff Schreifels – Guest – 01:38

No, it was a publication actually, and I really love the mission of this organization. And they said I called them and said, hey, do you have any jobs? And they said, yeah, we do, we want to have you be a fundraiser. And I’m like I have no idea what that is, but I’ll learn. So, being a nonprofit that paid very little, they said come over and interview.

02:01

I did, and I got this job as a fundraiser and I learned it. I read everything I could, I went to seminars, I did everything and I fell in love with fundraising. And what I loved about fundraising at that moment was the ability to send something out to someone and then get their money back with little notes written on them saying I am so happy I could do this for you. And so when you, as a fundraiser, get that kind of feedback, you’re hooked. And I was hooked on fundraising. And so for a span that was 33 years ago and in that time I’ve learned every aspect of fundraising, from direct response fundraising from organizations like Feeding America, arthritis Foundation, american Cancer Society and learning how to bring in millions of new donors and cultivate those people to what I do now working with nonprofits on their mid major and plan giving programs where it’s more one to one relationship building, and so over those 33 years, I feel like I’ve learned something over that time about how, what are successful organizations, what do they look like, and what do organizations need to work on in order to get to the place that they need to get to. So I’ve had a tremendous and fun career being able to do that, and now I own a company called Veritas Group that works specifically with organizations to build their mid major and plan giving programs.

03:39

So what we do is we come in and we look at their situation. We do a whole data assessment. So data is really big for us because that tells a big story. Then, once we see the data, we’re able to help them build a structure, because we know that in order to have the time and energy to build relationships with donors, frontline fundraisers need that structure to work with them. And so we build that structure and then we work with them every week and sit down and make sure that they’re being held accountable to their plans, their goals, give them good, great strategy and come alongside of them and give them encouragement, because we know that’s what frontline fundraisers need in order to be successful, and so we’ve been doing that now for 12 years. We’re working with 90 plus clients, looked at millions of donor records and worked with a lot of CEOs and boards to know what makes up a good organization, successful organization and what makes an organization that’s really challenging to work with.

Robbe Healey – Host – 04:48

As you’re describing your experience. I think I have at least 40 questions that I didn’t plan to ask you, so I’ll try to limit that. But I think the one nerve that you struck is this getting out of entry. Getting out of point of entry where we’re just collecting names. We’re collecting new dollars. We’ve got this transactional work going on where it looks like we’re successful and the metrics show we’re getting new people, but we’re looking at the wrong metrics. So I think my experience is a lot of boards wanna see metrics and I’m gonna ask you in a minute to talk about how you help them understand which are the right ones to look at and which are the wrong ones to look at.

05:34

Because not all metrics were created equal. And as we do this, go through the questions I had planned to ask you, which I’m sure you will weave in everything we need to know, I might jump in with a question or two, because I think if I have one, probably the people who are listening to this might have the same one. So thank you for that. But when you think about moving from being an organizationally based fundraiser into your role now as an external consultant, what, in particular? How do you interact typically with boards and staff leaders? What does that look like? Is the point of entry the staff? Is the point of entry the board? How do you get access to both in the right way?

Jeff Schreifels – Guest – 06:19

Usually our point of entry is either the head of development, so the VP of development or director of development, or the CEO of the organization, and so usually they detect that there’s some kind of problem in the upper half of their donor pipeline. So from mid to the plan giving, they’re noticing something’s not right, and so that’s my usual first foray into the nonprofit is they contact us to say something’s not right? I watched one of your videos, or I read your blog, or I saw one of your podcasts, and something you said really hit me and so would you consider working with us? Or what do you actually do? Because they don’t know all the details behind what we do. So I said, well, I wanna look at your data first, because your data is going to tell us how your donors are migrating into your from acquisition all the way to plan giving, or if they’re migrating, or if they’re migrating, and are we keeping them.

07:27

That’s right, and so there’s two big things. We look at Donor retention, which everyone talks about, and we all know that, in the nonprofit space, donor retention over the years gets going down and down. Exactly, we’re not keeping our donors, so we keep acquiring these people. We’re not keeping them, so we have to keep spending more money to bring them in. Right, it’s the hamster wheel.

07:48

The other thing that we but we don’t look at is donor value attrition, so what we do is we look at donors that come in at the 1,000 QM level, let’s just say, and then we track their giving behavior over time, so they hit the 1,000 QM level, and then we want to know okay, in 2018, they hit 1,000. What have they done since then? And what we find is we lose between 40 and 60% of their value over time, and so what happens, though, is that most nonprofit leaders don’t know this, because all they’re evaluating their mid and major gift programs on is bottom line revenue, so, every year, it looks like they are either staying the same a little bit or growing, but what they’re not looking at is the donors that gave four years ago. What are those same donors giving? And three years ago, what are they giving? And the reason they don’t know is because new donors keep coming in and masking the behavior of the older donors, and so we see all this value attrition going on and they don’t know it.

08:57

And when we expose it they’re like are you?

09:00

oh my gosh, I have no idea that we’re losing all this revenue, gosh, what if we could at least recoup half of that? That’s another. You know millions and millions for program that we didn’t know. And typically the reason for all of that value attrition is they’re not treating their donors properly, they’re not thanking them properly, they’re not reporting back on the impact.

Robbe Healey – Host – 09:23

So you mean stewardship and cultivation is actually important Absolutely.

Robbe Healey – Host – 09:27

I’ve heard that. Can you talk more about that?

Robbe Healey – Host – 09:30

Yeah, and maybe you’re going to in a minute. The hallmarks of a successful organization are one of the things we talked about, so maybe that’s part of that.

Jeff Schreifels – Guest – 09:37

Well, what’s happening is that nonprofits overall we’re talking about culture nonprofits overall really don’t value donors. They don’t. They say they do. They might say well, we get out receipts within one week after we receive, you know, and all of that or 10 minutes.

09:55

Right, but they don’t actually see them as part of their mission. So if an organization is doing all these great things for humanity, for the animals, for the planet, yet they’re still looking at their donors as really cash machines, they take them for granted. They take them for granted If they could look at their donors as part of their mission as well, that these people want to give and when they give they’ve received great joy in their giving. And you think about how do we properly care for those donors, because we have an obligation to them as well.

Robbe Healey – Host – 10:33

I think that’s a big stumbling block for some directors in particular who don’t see donor engagement as program.

10:44

That’s right At the dawn of time, when I took my first fundraising training from the late Hank Rosso, he said something that I wrote down in my notebook and I still have the notebook, and I don’t think I actually understood what the impact of what he said was until maybe 15 years later. But he said the degree to which your philanthropy program will be successful is in direct proportion to the degree to which you see fundraising as a program as important as every other program. And that’s exactly what you’re talking about.

Jeff Schreifels – Guest – 11:15

He was spot on, and that was in the early 80s.

Robbe Healey – Host – 11:19

And he was already out there proselytizing for good stewardship and good donor engagement and your research now with hard data is proving that he’s right Absolutely. I mean at the time he knew he was right.

Jeff Schreifels – Guest – 11:34

Yes.

Robbe Healey – Host – 11:35

But we didn’t have all the CRMs and all the metrics and we couldn’t crunch all the numbers. But how do you help directors, or perhaps even staff, take this on as a program rather than overhead cost?

Jeff Schreifels – Guest – 11:50

Yeah, well, in our process of working with them that is part of our training with their staff and with leadership. So, in other words, when we go into an organization where we want to train those frontline fund raisers, we’re also training the CEO and all and any and all board members that want to come to our training. We want to be able to, at very beginning, get their minds right and their hearts right about what we’re trying to accomplish here. And so, before we even get into the work with them, we’re talking the philosophy. We’re talking about what are we doing here? What is our overall philosophy with donors? How do we want to help?

Robbe Healey – Host – 12:35

them do what they want to do. When you say we do, you mean the organization, the organization, okay.

Jeff Schreifels – Guest – 12:38

Yes, yeah, and so that’s what we do at the very beginning is try to set that culture of philanthropy up so that everyone is coming from the same place.

Robbe Healey – Host – 12:52

Are there your top three pushbacks that you typically get from board or staff who say I’m not buying this, and are there three? This is the Kool-Aid, this is the essence of the Kool-Aid I get it.

Jeff Schreifels – Guest – 13:08

I would say, first of all, most of the CEOs we talk to immediately they have some kind of disdain and some level of fundraising and so we have to help them get over that part, because usually fundraising is sort of like a necessary evil in a way for a lot of leaders. Many of them are focused on the output of their prop, program or product that they’re putting out. They’re not focused on donors and how donors need to also be part of that program. So that’s a big hurdle we have to get over with a lot of leaders.

Robbe Healey – Host – 13:48

Is the hurdle bigger with staff or board, or does it depend?

Jeff Schreifels – Guest – 13:53

I would say it’s more with board. Many of the front line frontraisers already have that. They’re always like, yes, that’s we’ve been telling leadership, we want to build relationships, we need the time to do that, you need to invest in it. So they’re kind of most of the time they’re already there. Board they’re even more detached than even leadership. So getting the board at the very beginning in our training is crucial for everyone to understand where we’re going, how we should invest in our whole pipeline and why that’s important. And one of the ways that we show them why it’s important is in every one of our donor assessments. Going back to data, we give a five-year revenue projection that if you were doing this right, here’s where you could be in five years. Instead of being here, you’d be here’s where you’re currently are. If you did nothing differently, this is where you’ll be in five years. But if you actually made the changes that you needed to make and the proper investments along that pipeline, in five years you could be here.

Robbe Healey – Host – 15:05

Not to mention, you’d have significantly more money for these programs. That, you think, is what you should be focusing on.

Jeff Schreifels – Guest – 15:10

When they see those numbers then they’re like oh.

Robbe Healey – Host – 15:14

And in their day jobs they would never pass that up.

Jeff Schreifels – Guest – 15:18

No, that’s exactly a lot of the business folks when they see that they’re like this is no brainer, okay, so the ROI on this is a 10, 15, 20 to one. That’s a no brainer to them, yeah. Exactly, it’s like oh, I get it. So you’re saying this small investment relatively will yield this for our programs and projects down the road? Yes, it will.

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But it’s going to take more and it’ll buy the way you have to help.

Jeff Schreifels – Guest – 15:43

That’s right. Well, because we’re there along to guide them through that process.

Robbe Healey – Host – 15:49

So, thinking about the flip side, are there behaviors you can see right away, that you know, because this pattern or this behavior or this structure is present? This is a hurdle that they need to really address, I guess are there some kind of hallmarks of not necessarily dysfunction but in current correct structure or work that are really a frontline indicator that this is an opportunity for them to do it differently? Or is every organization really unique in that regard?

Jeff Schreifels – Guest – 16:33

Well, yes, every organization has unique challenges, but, having worked with hundreds of them over the last 14 years in doing this work, there are certain themes that come across. One is what we just talked about, where we see leadership not really engage with fundraising. Almost detached or detached or even sometimes hostile to it.

Robbe Healey – Host – 16:58

Hostile is worse than detached.

Jeff Schreifels – Guest – 17:00

Hostile is much worse than detached, so that’s the one thing we noticed, that we also look at how long, how long are their fundraisers staying in their positions at this organization?

17:13

the tenure question right, yeah and if we’re seeing, you know, every 12 months there’s a lot of turnover, then there’s something wrong at the top, you know. We also then look in the data, of course we just talked about it. They have low donor retention, high value attrition. We know something is wrong with how they’re treating donors that are not cultivating, stewarding, caring for donors well. Another one is just looking at their management structure. A lot of times organizations are structured improperly and they have, like the head of marketing, managing the major gift team or you know, they’re just like the head of marketing reporting to the CEO.

Robbe Healey – Host – 17:59

Yeah, but the major gift team doesn’t have access.

Jeff Schreifels – Guest – 18:02

No, and so we see that a lot. So the structure is wrong and, related to that, we see bad management. So typically what we see is let’s just say an organization has five major gift officers and they have a director of major gifts. That director of major gifts is supposed to be managing each of those major gift officers on an ongoing basis, but we find out almost all the time they don’t have the time to do it. Why? Because they have their own portfolio and that’s what they’re really being evaluated on, so they’re gonna spend most of their time on that. Plus, if you’re a manager or a director in a nonprofit, what are you doing? You’re in endless meetings, right, yeah? And so what happens is no one knows what’s actually happening with their fundraisers. They’re out there doing their thing and they’re putting on. They’re putting these bad, terrible KPIs on them to keep track of them, because they’re not really managing them. They’re only managing numbers. You know, how many visits did you make this month? How many face-to-face, how many phone calls did you make? All these tactical measurements that they’re trying to put on donors or frontline fundraisers and it’s making them leave because it’s almost impossible to make these numbers.

19:24

I was sitting down with four major gift officers from a major university recently. I said what are, what are your biggest challenges? They said we have to meet. We have to have 30 face-to-face meetings every month, every month. And they tell you the truth at the last week of the month. We’re just trying to meet with anybody just so we can tick off a box.

19:47

So these are not meaningful connections to them, they’re just trying to make you know, trying to meet with people just so that they can show their manager in the database. You know their CRM system. They’ve met with 30 people and this is what is happening across. Bad management is going on and so and another. I think nonprofits just don’t value management because they look at it as an overhead cost and we don’t want to add more Overhead because then those ratios look bad and therefore they think donors won’t want to give to them. That’s just not true and that’s what we actually do. We take we essentially Take the place of a manager, because we’re working with those fundraisers every week To make sure they’re actually held accountable, being focused, providing encouragement and care so that they can make their revenue goals and build relationships with donors.

Robbe Healey – Host – 20:41

Somebody’s listening to us now and isn’t yet working with you. Are there one or two tactical things they could change? Yes immediately start seeing some Success.

Jeff Schreifels – Guest – 20:53

Yes, so the number one thing they could do is make sure that every donor in their portfolio Is qualified in a major gift portfolio. This is the number one problem. We see Major major gift officers have portfolios, two, three, four hundred donors in them and most of them are not really qualified, meaning they don’t have a two relationship. The donor has not said, hey, yes, I want this relationship with you. Instead, they’ve met a metric. So let’s say, your metric is $5,000. They gave a gift of $5,000, and then they’re immediately put on a portfolio.

21:35

We know that over doing all of this work for so many years that only one third of donors that meet a metric actually want a relationship with you. So that means if you want a full portfolio of 150 donors that’s the max that we would say you need 450 donors that meet your metric and through a process of reaching out to them, touch points and getting them to respond to you, you find out who are those one third. The problem is most nonprofits don’t go through that. They just put them on a portfolio and that’s a real cause of frustration for the major gift officer because now they’re working with all these donors that actually don’t even want to talk to you Exactly.

Robbe Healey – Host – 22:22

It’s like you can be my best friend, but I don’t want to be mine. That’s right. Yeah, exactly. So as we think about and you’ve certainly given us a lot to think about today, but as you, as we think about how to knit this all together, are there lessons you’ve learned that you would say never repeat this behavior. Lessons you’ve learned that you would always include?

Jeff Schreifels – Guest – 22:48

Yes.

Jeff Schreifels – Guest – 22:49

So I would say to every nonprofit leader do not go after the money, because if you go after the money, you will lose the relationship with your donors. Now you may get some money, but you will not get a relationship. And so our approach is build a relationship and the money will follow. So that’s number one don’t go after the money, too many. There’s so much pressure on major gift officers to get the money and they’re getting pressure from CEOs because they’re getting pressure from their board to make these their budget, their revenue numbers, and so when they feel the pressure they’re going to put it on the frontline fundraiser. And then the other do not do is, don’t under, invest in the full pipeline. So we’ve seen organizations who invest a ton of money into donor acquisition and then trying to cultivate those donors and they are never doing anything from the mid to major side.

23:54

So one example has been, historically, american Cancer Society. So we’ve had them for over four years as a client prior to that. You know they’re a huge organization and they’ve made a. They brought in a ton of donors and revenue from these events that they do amazing events. But those donors have been just sitting there giving their $10, $25, but they’re, they bring the hundreds of thousands of those donors. So they built up a program with small dollar donors, nothing on the major gift side, very little. But they made a decision and investment about four or five years ago. That said, we’ve got to develop this part because there’s nowhere for our donors to go. And so they built, they built a structure and the team and they put in the investment to build out mid and major gift programs. In just four years they went from 24 million in major gifts which it seems big, but for them it was very minute to now $74 million.

Robbe Healey – Host – 25:04

That’d be much bigger.

Jeff Schreifels – Guest – 25:06

Much bigger, but they’re probably not done. They’re not. No, they’re not, they’re still. And you know what? In 10 years, that will be so much more.

Robbe Healey – Host – 25:13

Think of the impact that could have on the work they’re doing.

Jeff Schreifels – Guest – 25:16

Huge impact Absolutely.

Robbe Healey – Host – 25:18

Absolutely Other things to always include.

Jeff Schreifels – Guest – 25:23

Well, invest in your people. So I don’t think nonprofits understand that when you have major gift fundraisers or mid-level fundraisers leaving every 13 to 18 months, like they’re doing, you’re not just losing an employee, you’re losing the cost the cost of replacing that person, which is quite a bit, and then the relationships that they created with those donors, and you’re losing revenue from those donors. So treating your people well and investing in them will reap so much more in the long term. Again, it’s short-term thinking versus long-term. And what do we want to do? So if you want to build a culture within the organization that’s healthy, start with your people and invest in your people. And then, of course, invest in your program. Invest in all phases of the pipeline, because if you invest in your program, your people will be happy, your donors will grow and their relationships will grow as well. And then you want to report on the impact that you’re making with donors. This is the number one reason why donors stay right, because they know what their gifts are doing.

Robbe Healey – Host – 26:38

It’s not about the inputs, it’s about the outcomes.

Jeff Schreifels – Guest – 26:41

Yes, and so it’s not just about investing in reports, but what goes beyond that. It’s investing in the infrastructure it takes. It might be hiring writers to talk about what you’re doing Storytellers Storytellers exactly and so investing in impact for your donors is going to reap tremendous benefits. And then, obviously, investing in donor relationships, and that means not just hiring people, but giving them the tools, but also giving them the time to do it.

Robbe Healey – Host – 27:14

And it’s not buying Chachkas, it’s spending time with people.

Jeff Schreifels – Guest – 27:18

It’s spending time with people and then understanding that it takes 12 months to really get going, but it’s really two years to really develop those relationships and start seeing the results of those relationships. But many times nonprofit leaders don’t have that patience. So having that patience is key to long-term success.

Robbe Healey – Host – 27:42

Well, and I can imagine for board members, if they’re looking seriously at the metrics and looking at who are their A prospects, their customers or their clients, they realize immediately you don’t have a high value client in a month.

Jeff Schreifels – Guest – 27:57

Right.

Robbe Healey – Host – 27:57

So I’m hoping that makes sense to them and they support then the CEO in altering the way they look at success.

Jeff Schreifels – Guest – 28:06

I mean yes, they should.

Robbe Healey – Host – 28:08

Should Love should.

Jeff Schreifels – Guest – 28:10

For some reason, I feel like board members like lose their minds around the nonprofit space, Like it’s supposed to be something different than what they experience in their work life and their businesses. But if they did, they would realize, yeah, we’re spending this. You know, we’re spending all this R and D and everything else for long-term profit. We should also think about it in terms of the nonprofit as well.

Robbe Healey – Host – 28:36

So long-term, You’re helping them look at who are the clients we can’t afford to lose.

Jeff Schreifels – Guest – 28:41

Exactly.

Robbe Healey – Host – 28:42

So I’m sure they’ve done that in their day jobs as well. So, imagine that you’re the frontline fundraiser, or even a CEO who’s enlightened, and you just hit a brick wall. Any last minute advice for how to crack the brick wall.

Jeff Schreifels – Guest – 28:59

You know I have a lot of people come and ask me that question. And how do you answer? It depends. I have to ask what have they already done to try to knock down the wall and what has been the response? And if they’ve done all they could to try to make a change and make a difference with their managers, with the CEO, and they still are not getting anywhere, then I say it’s time to move on. And that’s hard because usually the frontline fundraiser is there because they love the mission but they also have to worry about their own mental health and their own situation. And so if they’ve done all they could, then we’re always saying you need to find something else where you’re valued, where donors are valued, and because that’s a different place to be, because I don’t want them to fall out of love with fundraising, because fundraising is the greatest profession I know and when it’s working well it’s such a gift for the organization, for the donor and for the fundraiser.

Robbe Healey – Host – 30:05

Well, when you think about the sources of revenue for nonprofits, philanthropy is one that is uniquely ours. And if you’re not doing it well, shame on you Exactly. Thanks, jeff, so much. You’ve given us a lot to think about. I still have 38 questions left from your introduction, so maybe we’ll be able to pick this up again.

Jeff Schreifels – Guest – 30:27

I’d love to but.

Robbe Healey – Host – 30:28

I really appreciate your time today and I’m sure all of us have a lot to think about in our own personal practice in the way we engage with our staff colleagues and our board members, and I hope you’ve enjoyed this conversation with Jeff Schreifels on culture as part of Case Culture and Courage, non-profit expert, presented by Donor Perfect.

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