"The Fundraising Paradox: Modern Strategies for Engaging a Diverse Donor Base"

Transcript: I was barely 20 when my father died. The official cause was a heart attack, putting an end to a long illness, but that was only part of the truth. The real cause was something much deeper, something that has been building in him for years.

My father had always been a mystery to me. When I was a kid, we lived in Belarus, a country where most people struggled to get by, but somehow we always had money, more than most. We never worried about bills, we had a nice apartment, we had vacations.

And to convey to you how unusual that level of economic bliss was, you have to understand that most people were lucky to make $500 per month. My father was a good man, he was kind, but I never knew exactly what he did. And whenever I asked, he would smile, ruffle my head, and just tell me, it’s business, son.

What I didn’t know was that his business was slowly killing him. And I remember waking up around when I was 12 to the sounds of my mother crying. I peeked through the door and I saw my father twisted in pain.

He waved off our concerns, it’s nothing, just stress. And we believed him, as we always did. We wanted to believe him. 

About five years later, my brother came home one day to find him dead. A heart attack. Another one. 

But this time there was no hiding it. And as he died, the secrets started unraveling. What he was doing, he was working in a world I could never imagine. 

He was a money launderer for corrupt politicians and businessmen. And that was the price of our comfort. That was the pressure on his heart.

That was something weighing down him for years. And behind it all, there was even more. Cancer. 

Stage four. I was angry. I was angry at him for the lies. 

I was angry at the world for making him believe that that was his only choice. I was angry that no one, not even he, have seen a way, have seen anything before it was too late. That anger could have consumed me.

Instead, I chose to transform it. And if my father had to suffer in silence, I wanted to make sure that others did not. I wanted to fight back, not against the choices he made, but against the disease that made those choices final. 

That’s why I do what I do. Because behind every data point, there is somebody just like my father. Somebody who didn’t have to go so soon. 

And if I can help anybody, even one family, then I feel I can rewrite the engine that he has never got. Now, I’m a marketer. I don’t know how to cure cancer. 

But I do know how to raise money. And I long believe that if we just did our job well, if we raised more money, if we worked hard enough, we would always raise more money. We would keep the spiral going. 

We would let this positive spiral of good in the world never end. But through my work, what I’m seeing is some of the non-profits, especially the big established ones, are facing a crisis. A silent one in that. 

On the surface, the numbers look great. The charitable given is growing 7% per year on an inflation-adjusted basis. But behind that, there is a silent tumor. 

An individual given is at risk. Our research shows that the number of donors is constantly declining. So fewer donors are given more.

The money is coming from fewer and fewer older and older donors, as you all well know. But what’s coming up behind this group? I call it the given pyramid collapse. A paradox we can’t ignore. 

Major donors sustain us today. But without mass donors, there won’t be major donors tomorrow. We’re used to counting on this steady flow of high net worth major donor individuals, donating $10,000 or more per year. 

These donors receive our personalized treatment. They get given officers, they get messages that are directly tied to their appeal. At the broad base, we have a huge number of small-dollar mass donors, those given $10, $20, $60 per month. 

What do they get? They get an email with a red call to action usually, the annual impact report, and an occasional keychain. Now, erase that base. Mass, myth, recurring. 

Instead of a pyramid, we’re left with a fragile Eiffel Tower. And when the top shrinks, as it inevitably will, the mass donors won’t be there to sustain it. Mass donors are disappearing. 

But that’s not because they don’t care about climate or racial justice or medical research. They don’t trust institutions. They don’t trust institutions the way previous generations did. 

They don’t give by default. They don’t give out of guilt. They want to fund solutions. 

They want to fund solutions directly. They want to be recognized for their work instead of funding larger organizations. And on top of these challenges is a familiar litany that all of you know all too well.

The price of acquiring donors is going up. The attrition rate is going up. There are too many charities which serve the same mission. 

And the one we don’t like to acknowledge, but it’s there. The lack of national and international emergences to drive the fundraising hype. And of course, questions about AI. 

Economic uncertainty further amplifies the problem. When political fight cuts USAID funding, organizations need money from individual donors to close the gap created by the government. So what’s our default reaction? Major donors get even more preferential treatment to encourage them to give more.

And mass donors get a blanket email, again with a red call to action, pushing them further away into the wait and see zone. We’re looking at a future where within the next decade, the given pyramids of most organizations could shrink so much that the foundations, the very foundations of the nonprofit work is at risk. But if we want to continue, if we want to continue fighting cancer, poverty, climate change, and every other human struggle, if we want to continue the history of organizations that have been here for 50, 60, 70 years, for the next century, we have to rethink how we engage with those mass donors. 

Because we don’t need just their money. We need to win their hearts. When I talk with leaders like yourselves in this room, we always arrive at this paradox with no simple solution. 

We need to treat the big donors as if they were the small donors. So we can free up the resources to treat the small donors as the big donors. At the same time, we have to keep treating big donors as the big donors they are.

And we only have the budget to treat the small donors as small donors. The natural temptation is to growth hack it. Throw everything you have at the problem.

Amazing branding campaign that would put the organization at the forefront of the human’s attention. The Super Bowl ad. The movie stars. 

The red carpet. The awards. The partnership with a big tech firm. 

The whole downtown of a major city colored with your organization colors. The blissful fantasy is we raise bazillions in the process while attracting new donors. But the awkward reality is you end up spending $3 to barely make one and lose time in the process. 

This negative formula has to change. And the flashy marketing campaign is just a nice hack. Nice to hack. 

But the bold new thinking is a must hack. We must focus on winning the hearts and minds of both mass and major donors while making money in the immediate perspective. As if the Wall Street was watching. 

We must combine tech and data. We must achieve immediate performance while diversifying our donor base. We must achieve both short-term and long-term goals.

And if that’s going to happen, it’s only going to happen with the combination of heart and technology fused together in a new way. A way where we can treat small donors as if they were the big donors. But keeping the small donor budget. 

And solving this given pyramid collapse, solving this paradox starts with technology, data, but most importantly, a mindset shift. Mass donors don’t give out of loyalty. They don’t give to a brand. 

They give because they believe in a mission and how your organization serves that mission. The idea of taking a personalized approach that works so well for major donors and just dialing it down for mass donors is deceptively simple. Just ask 15-year-old me, why do I spend hours researching cancer? Invite me to volunteer. 

Bring me to an event. When I find my first job, ask me for the first $5 donation. As I progress through my career, ask me for 10, 15, 20. 

Ask me to become a recurring donor. Maybe mid, maybe major. All of that, easier said than done. 

But technology and data do make it possible. And non-profits can build meaningful connections with those small $5, $10, $15 donors without breaking the bank. But there is a catch. 

The catch is, it is still cheaper in the short term to attract 50 plus, 55 plus and charitable, who can give more right now. The financial targets are built with that in mind, especially when no emergency is driving the sugar high. It forces us all into this vicious cycle of talking about diversifying our donor base, but never actually getting to do it. 

Instead, spending dollars on acquiring the same audiences. This paradox, it’s complex. The solution isn’t easy, but it must be simple in order to be implemented. 

We must find out a way to cut this cycle into a line that goes up and to the right. Nothing new here. Instead of increasing the value of every donor that’s already in the new donors at the same time, and diversifying the donor base, and changing the audiences, all of that, while driving immediate financial targets, we must break it into a couple linear steps. 

There are four steps total that I’ll walk you through. The first one is what I call the default, or well, number zero. The topic of this track, the topic of this talk track was originally supposed to be AI. 

And what I see in my line of work is using AI too much with too little supervision. It’s yet another blissful fantasy. It’s yet another magical tool that the promise is it will solve all of your problems. 

A couple examples, non-profits launch a Google performance max campaign or a meta advantage plus trust in the best practices. The result, burned budgets, and usually about 50 cents back on the dollar spent. Another one, non-profits bundle all the messages together, speaking to the same donor about the entire breadth of the mission.

Or, non-profits launch new channels, spending more to reach the same donor and generate the same revenue. Step one is to break that. Train the algorithm. 

Train it to be more efficient at what you’re already doing, attracting those 65 plus charitable donors. Think of algorithms like adding 10,000 interns, free interns to your team. They want to help. 

They’re eager to help. But without training, they will do more harm than good. With the necessary supervision, they will set you apart. 

Train them. Train them by going beyond best practices and feeding them more granular data. Feed the three-year donor value instead of the first transaction.

Break those campaigns into topics. Separate cancer research from rehab from family support. Tell it to go explicitly into podcasts or video or display because you know your donors are there.

And most importantly, don’t listen to Google saying that all you need to do is just spend more. Just training the algorithms will undoubtedly increase the return for every charity in this room from 0.5 or 1 to 1 to 1.5 to 1. Step two is the process I call stop, start, continue. What does that mean? That means obsessively looking at your digital fundraising program, stamping the worst 5%, launching new ideas and investing more into what works best. 

It’s the same process I would follow if I was managing the stock portfolio. It’s also the same process we all used to have back in the 90s when we were launching the first direct mail campaigns. Yet that art of performance media testing is lost when we let the algorithms do its thing.

And adding this obsession, adding this process to your team’s daily schedule will increase the immediate return from 1.5 to 1 to 2.5 to 1. And yes, at this point we still attract the same donors, the core donors that your org is already attracting. We didn’t start diversifying yet, but with these two steps we create enough room in the budget for step three, mass customization, which will open up for those segments. And in this step, what do we do? We introduce specific data about your organization.

Why might some cost-driven donor choose to donate to save the children over UNICEF? Stand up to cancer over American Cancer Society? Amnesty International over ACLU? That data is already discoverable in your CRM file and your donor file. It’s in those subtle differences. It’s in their grocery store shopping habits, it’s in their crypto portfolio, it’s in their social media subscriptions.

And deep mass customization is all about digging through that data and automating the messaging to talk to the donors about what they want to hear about right now, even if they are donating just $5 a month. The best part? These same insights apply to the next generation of your mass donors. And because we reached 2.5, roughly, return on the previous step, we now have the budget to talk to that 15-year-old about cancer without expecting the immediate break-even.

Or to launch that broad Super Bowl campaign, go on that red carpet, but this time inform it by the data. And these three steps, these three skills, they’re a must-have for fundraising in 2025. They resolve the paradox. 

Skill one is training the algorithm to take the control of AI before it takes control of you. Step two is tap, start, continue. Cut the dead weight, launch new ideas, and invest more into what’s already working. 

Step three, deep mass customization. Talk to small donors as the major donors they one day will be. But the problem is that most non-profit tap before reaching step two. 

And it’s not because they lack the skill set. Rather, because they don’t pair it with the mindset shift that’s needed. We’re already losing donors.

We’re already losing people who care. And choosing the hard, unappealing way of solving the both end instead of sticking with the familiar way of the or is the only way to minimize that outflow. There are three aspects, again three, to this mindset shift. 

The first is fire in the belly. A strong for-profit-like desire to crush the result, succeed, don’t settle for subpar financial result. The Wall Street is watching. 

Second, it takes a village or a highly functioning team. Collaboration between analysts, media buyers, and creative designers is essential. Tech and data must come to the media’s rescue. 

Winning the hearts and minds of donors starts with the hearts and minds of the organization working together. And finally, the third one, choosing to embrace the power of small steps. Big changes don’t happen overnight. 

Progress comes from consistent, deliberate, sequential actions. In the end, the key to rebuilding the given pyramid for the future and resolving the paradox at the same time is the both end, but not at the same time. It’s not that big, splashy, Super Bowl campaign doesn’t matter.

But analytics and immediate performance has to come first. It’s not that diversifying the donor base doesn’t matter. But hitting the immediate financial results must come first.

It’s not just about the emotion. It’s not just about analytics. It’s about both. 

But analytics must lead emotion. And this isn’t just a theory. It works. 

Eight years ago, UNICEF USA faced this very challenge. Too dependent on emergency fundraising, struggling to get long-term support, not knowing their donors. So they made a choice. 

They trained the algorithm, segmenting donors into 10 unique segments and fed that to the data. They stopped wasteful campaigns, and they kept repeating it every day for eight years since. And they customized donor experiences, treating small donors like long-term partners, like major donors they will one day become. 

The results? Over eight years, that program has grown 25x. Not 25%, 25x. And draws improved 3x in the process.

And improved donor trust. Application of the skills goes beyond UNICEF. It’s a blueprint for any nonprofit. 

Start small, optimize every step, and use mind and heart together to build something extraordinary. But 2,920 days and small steps later. The lesson is simple. 

Resolving the paradox of mass donor giving isn’t about sending that one splashy message to everybody. Or buying one new tool, onboarding one new cloud or any other AI framework. It’s about choosing to stick with the process, apply the skills, no matter how hard it is in the process.

Now, all of you have a box on your table. If you open it, there is a ladder strip. One way to look at that strip is it’s a bracelet. 

It’s easy to use. You all know how to use a bracelet. It’s as straightforward as focusing on just one thing, on improving the performance or diversifying the donor base. 

But let’s try something different. Please do this with me. Take the edges. 

And I don’t have it. I’m doing the imaginary one. Take the edges.

Flip one of them. And connect it now. You’ve made a mobile strip.

Where the inside becomes the outside. The outside becomes the inside. It’s a paradox.

And we can choose to embrace it. One that captures the challenges and the opportunities facing nonprofits today. Using the mass donors and the major donors into this endless loop of emotion and dollars raised. 

Why? Because mass donors are the future. Because every new donor leads to new data points, which leads to new insights, which leads to new ideas, which leads to new donors. At the same time, the mobile strip by its nature reminds us that every paradox, every endless loop can be transformed into a series of linear steps. 

We can’t afford to focus only on one side. We can’t afford to focus only on one objective. We need to do both ends, but not at the same time. 

So as we grapple with this charitable paradox, join me. Join me in embracing the power of those linear steps coming together into an endless loop. And every time I flip that edge, it feels like I’m rewriting the ending.

But it’s not my ending that matters. It’s yours. And the organizations that thrive 50 years from now are the ones that will solve it today. 

So what will your team stop, start, and continue doing? Thank you. If you want to connect with me, this QR just leads to my phone number. And I shared that we did a research. 

You will see a link to that research on that contact card in case you’re interested.