Fundraising In a Challenging Economy

Tammy Zonker: Today on the intentional Fundraiser podcast. I'm talking with my good friend and brilliant fundraiser Cherian Koshy. He is the principal and consultant with Endowment Partners, and they're an investment management firm that works solely with nonprofits and foundations. We'll be talking about what's on every fundraiser's mind right now, and that is fundraising in a challenging economy, especially as we're heading into the fourth quarter.

So we're looking at inflation and possible recession. We want to talk about donor-advised funds and how they might be part of the solution. Securities, cryptocurrency, how do we, as fundraisers, navigate it all? So before we jump into the conversation, let me tell you just a little bit more about Cherian.

So first, Cherian is a super nice guy. Like, super nice. Whether he's mentoring someone or encouraging them to get their CFRE or maybe just encouraging and mentoring them to take their career to that next level, he is truly a champion for fundraisers everywhere. Next, super smart. Like, super smart, but can talk so that we can understand. A relatable super smart guy. So he has his CFRE. He is a chartered advisor in philanthropy. So he has his cap. He's an AFP Master Trainer and has loads of other credentials. He's also super generous. He serves on nine or ten nonprofit boards, including the AFP Global Board. He's an amazing keynote speaker and all of that. In addition, as I said to his work at Endowment Partners, that combination, I think, makes Cherian perfect person to talk about this important topic of fundraising in a tough economy. Cherian, welcome to the show.

Cherian Koshy: I'm blushing. Tammy, thank you so much. What a great introduction. I think I'm just going to have you do all of my introductions from now on. I'm just going to take that audio and take the recording and just play it before I ever speak.

Tammy Zonker: Yes. That intro on demand. I love it.

Cherian Koshy: That's great. I love it.

Tammy Zonker: So are you ready to jump into some questions?

Cherian Koshy: I am so ready. I'm thrilled.

nd giving and giving in early: 2023

for the first two quarters of: 2022

Tammy Zonker: That's really good. So let's just unpack what some of those other options are. Donor-advised funds are one way to really allow high net worth individuals to continue supporting their favorite nonprofit causes, to your point, without dipping into cash or securities, their stocks may be down. Although it sounds like today was a good day, I had stopped looking, quite frankly. So you've given me some excellent news going into the weekend. And fortunately for us, when it comes to donor-advised funds or DAF, I read just recently there are more than a million Americans who hold gas. And I'm trying to remember what the value?

in: 2020

Tammy Zonker: It's so charming and endearing when you say it like that.

hrough this period of time in: 2020

Tammy Zonker: Yes, it's beautiful. I mean, it's such a natural, relationship based way to enter that conversation. Not like I've been Googling you, right, exactly.

Cherian Koshy: You've been giving money to the Children's museum you scoundrel.

Tammy Zonker: Yes. You've been cheating on us. Well, for our listeners who may not be as familiar with DAFs, will you just give us kind of that one on one on DAFs and why there's such a great incentive?

ut the average payout rate in: 2020

Tammy Zonker: Yeah, it's really good. So you mentioned a resource, a DAF finder. Say that again. We'll put the link in the show notes.

Cherian Koshy: Helen Brown created this thing called DAFinitive, I guess is how you pronounce it, Dafinitive. And I'll send you the link so you can include it in the show notes. But it's DAFinitive.com and it's a donor-advised fund search. I have not actually demoed it, but I saw her tweet about it and I know somebody else who tested it and said it was really cool, but it's quite literally the only searchable database to help find information about donor-advised funds.

Tammy Zonker: Brilliant. Brilliant.

Cherian Koshy: Great tool that should exist.

Tammy Zonker: Yes. And I've been asking and searching. I'm so delighted to hear about this. It's awesome. And in the interim, while you research this and learn more about it, look at your database. Notice gifts that have come in, like someone designated a gift to you, a grant to you through the community foundation or VanGuard or Fidelity and get curious. Look beyond that. That may very well be that donor has a donor-advised fund there. So we get so busy as fundraisers, we just want to get that gift acknowledgement out to thank the foundation. Right?

Cherian Koshy: Yes.

Tammy Zonker: And we don't do the due diligence behind it, necessarily, like, get a little Nancy Drew, Hardy Boys vibe going on and do some sleuthing to figure out who are the donors that likely have a DAF, because if they've given through it before, they're more likely to give through it again.

Cherian Koshy: Absolutely, yeah.

Tammy Zonker: And have those conversations reach out and hopefully you've done some of that and you've loved them up and told them how their grants through the foundation has made a difference.

Cherian Koshy: So, Tammy, that's the most critical thing. So absolutely important when you're doing any sort of research in your database to do the soft credit. That's brilliant advice. The thing that I think a lot of fundraisers forget about is that within a lot of these Daft accounts, you can just go in and click all of the grants that you've done before and repeat them. So what you need to do is really level up on those donors and explain to them what they did, because you want them to go in and change that right. And say, hey, I gave $500, I'm going to give $1,000 in the future, as opposed to have them do the Ronco set it and forget It funding and just lather, rinse, repeat on what they did last year. Because that happens quite a bit in the DAF world.

Tammy Zonker: Yeah. So good. Talk to us about securities and cryptocurrency again. Roller coaster rate market fluctuations have really been like a roller coaster. So what should we be considering now when it comes to stocks? And that really scary. Words, cryptocurrency.

s, they've been investing for: 1020

Tammy Zonker: Cherian, we'll have you back for another episode where we'll talk just about crypto. There is a lot to unpack there. Yeah, I've heard you talk about the distinction between risk and uncertainty and making the next right choice. Take us to school on this.

Cherian Koshy: That's a good one. That's potentially a whole other podcast on its own, but way too nerdy for most people. So let me give your listeners an example, and I'm not going to put you on the spot to have to answer this. It's better with a visual. So if you visualize an opaque, like jar, right, actually two jars. And so in the jar, I say there's a 50 50 mix of black beads and red beads. And if you pull out a red bead, you win. And in this other opaque char, I tell you there are black beads and red beads, but we don't know what that looks like. But if you pull out a red bead, you win some prize, right, when we do those studies. And so just take a moment and say, which jar would you choose from? Right? And if you're listening to the podcast, which jar would you choose from? Most people say I'll pick the one that's 50 50. And if we switch and say, okay, what if the black beads the winner instead of the red bead, they still choose the one that's 50 50, which doesn't make any sense when it comes to probability. So this is the big distinction between risk and uncertainty. We tend to prefer known risks, and I love behavioral science and behavioral economics, and we could talk for days on that on its own. But the idea is that we tend to conflate the idea of risk where there are multiple options that we could decide from. However, we could calculate out the probability of success in one of those decisions and that's risk. Uncertainty, at least according to this professor from the his concept of uncertainty is a thing where you have no clue, you don't know any of the variables. And because of that, uncertainty is really different in terms of making a decision when it comes to nonprofits, in particular, because we conflate these two things, we tend to say, well, that's risky and therefore I shouldn't do it. But if we do enough research, if we find good information. If we delve into that information, we get people to help us with understanding the probability of those different risks, then we can make better decisions around the risks. And with uncertainty, there isn't really a right answer. It's just it is what it is. We don't know if lightning is going to strike. That's a really great example. If anybody is listening, that's a sports fan. There was a Super Bowl once where the Seattle Seahawks decided to if they got a touchdown in the last few minutes of the game, they would have won the Super Bowl. And the call from the coach was to rush instead of throw the ball, even though they have this great quarterback. I won't get into all the sports ball part here, but Annie Duke talks about this in her book Thinking in Bets, and she says, everybody was off because the Seahawks rushed the ball and they lost the Super Bowl. And everybody's like, how could you rush the ball? You've got this great quarterback. You should have thrown the ball. And if you look at the data, the data says that this running back was very successful in running the ball at this yardage. In these scenarios, the math indicated that that was absolutely the right call. But so often we look at the result of an action, oh, you didn't get the touchdown, and then say that was the wrong call, as opposed to look at the probabilities of these two courses of action and choose the one that makes the most probabilistic sense. So that's more than you bargained for.

Tammy Zonker: But it's I love it. It speaks to the calculated risk.

Cherian Koshy: Yes.

Tammy Zonker: And as you're talking, I'm thinking about year end campaign strategy and looking at segmentation, really thinking about gift strings and attaching those gift strings to impact statements, figuring out how can we have a challenge gift? Those are calculated risks, risk factors. Those are things that we can apply math. We can look at historical patterns and results and make some calculated decisions.

Cherian Koshy: Correct.

Tammy Zonker: Versus I think uncertainty could be let's just do what we did last year.

Cherian Koshy: Yes.

Tammy Zonker: Right.

Cherian Koshy: We're what I call the hippo effect. The highest paid person's opinion started right there's. Someone who's like, well, why would we do this segmentation? Why don't we just send out one? It's cheaper to send out one thing to everyone.

Tammy Zonker: Let's just ask 1,000 people for $1,000 each.

Cherian Koshy: Someone call Oprah. Which is a terrible analogy for me, because I worked in an organization where they did get an Oprah gift, so I couldn't ever bat that one down.

Tammy Zonker: Or the new Mackenzie Scott. Who knows?

Cherian Koshy: McKenzie right, exactly. But there's so much of this, and we saw this in the pandemic. A lot of organizations just said, we don't know what's happening, so let's stop asking. And coming back to the recession, I come back to the number one piece of advice that I could give your listeners right now is don't stop asking. Don't stop talking about your impact and the needs that are out there and the opportunities for donors. You don't know the financial situation of your donors. You don't know what their assets are. You don't know what their heart is. They may choose to make sacrificial gifts in the midst of a recession because they know how important your mission is. Don't take that away from your donors. Don't decide for them that they can't give absolutely leads out there and make sure that you continue to ask and that you nuance that and say, okay, there are some people who won't be able to give a cash gift right now. Let's talk about a monthly gift. There are some people who can't do a cash or monthly gift. Let's talk about an asset based gift plan for the future. If someone says, I can't give you anything right now, no worries. Let's talk about your but you care about this cause. You care about these beneficiaries. You care about these issues. Let me tell you a story of someone who gave a gift of life insurance or made us a beneficiary of their IRA or made a gift in their will. These are all things that cost you nothing today. If you keep putting the needs and opportunities of the organization out there, people will respond to that. And I think we saw that through the pandemic. But it's so important to remember that.

Tammy Zonker: I could not agree more. I think that's brilliant advice. And if we are feeling it at the pump and when we buy a gallon of milk, you're lactose intolerant. A gallon of lactate oat milk. There we go. Oat milk. You're so chic. We know that many of the beneficiaries of our work, many of our clients are feeling it so much more significantly.

Cherian Koshy: Absolutely.

Tammy Zonker: Yeah. Beautiful. All right, Cherian, anything else we need to hear right now in these uncertain times?

Cherian Koshy: The only other thing that I would say to your listeners is that you need to stay encouraged. I know that it seems like whammy after whammy, pandemic and great resignation and trying to do the job of multiple people and now a recession, and it can feel overwhelming, and in fact, it is indeed overwhelming. So let's own that and say, yes, it's overwhelming. But the work that you all are doing I don't know you, but I know that you work in a nonprofit and that you're trying to raise funds for that organization. And that work is important. Your community depends on you. And while I don't want to put any additional pressure on you, I know that you are making a difference. And you go to work every day, and the world is better because you do. So thanks for what you're doing, and just stay encouraged. That's my word.

Tammy Zonker: I told you all you would love Cherian. Do we not love cheering? Yes, we do. All right, Cherian, at the end of each episode, I like to ask a few rapid fire questions. I think that gives a little more value and some insights to our listeners. So are you ready for some rapid fire?

Cherian Koshy: Yes, I'm ready.

Tammy Zonker: All right, first one. What's the best fundraising or development advice you've ever been given?

Cherian Koshy: So that one is easy. I got it from Linda, who was one of my mentors way back when. I didn't even really know what fundraising was. And her piece of advice was keep learning. Always be learning about the work that you're doing and what are even better practices that you could do. The never stop learning one is one that I've taken to heart and that I continue to wake up doing every day in some way, shape, or form.

Tammy Zonker: Yeah. Love it. What book do you recommend to our audience and why?

Cherian Koshy: Well, I think we talked about a couple of books. One is if you're interested in risk and uncertainty, we should talk more about Annie Duke's "Thinking in Bets" is a great one. What I would say is, from a fundraising perspective, I think we're facing a leadership crisis. We have a lot of people who are retiring, a lot of organizations that are struggling to prepare people for leadership. So there's a really great book by our friend Mark Pittman called "The Surprising Gift of Doubt." And I think I consider it like desk reference on leadership. So if you are just starting out in leadership or you are fumbling your way through it like I have been for decades, or if you're a seasoned leader and you just need a refresher on some concepts, "The Surprising Gift of Doubt" by Marc Pittman is one of my favorites.

Tammy Zonker: I love that. And a note to listeners, keep looking at future episodes because Marc will be on the intentional fundraiser as a guest, and we'll be talking about that. Brilliant book.

Cherian Koshy: That's great.

Tammy Zonker: Yeah. Very good. Next question. What are the top three characteristics a successful fundraiser needs?

Cherian Koshy: I don't want to say antagonistic, but a lot of people will say listening. But I want to differentiate listening and say, you need to listen, but you need to listen at what I would consider one of the highest levels of listening, which is the good of the other person. So a lot of times we're listening to someone and we want to process the information, and we're directional about how we use that information. But I think what we need to think about at a deeper level is how are we listening to what's unsaid? How are we listening to the things that this person deeply wants and cares about in their life? Jen Love explains that every nonprofit was essentially founded because somebody got angry enough about a problem that they started an organization to address that. And the people who are giving to your organization are similarly angry about something, and they want that thing solved. So how do we get there. And it comes back to this idea of growing a grateful donor, someone who says, thank you for allowing me to live out this solution to the problem that our community faces. And that doesn't necessarily mean saving someone from a bad situation. It may mean them realizing, hey, I have a lot of privilege and I needed to learn that this was part of who I need to be, who I need to be when I grow up. So that's a lot baked into one thing, but it's sort of I think it's the big characteristic that every successful fundraiser needs to truly understand.

Tammy Zonker: I love that, and it's so forward thinking.

Cherian Koshy: It is.

Tammy Zonker: Love that. What's your favorite fundraising tool or application?

Cherian Koshy: I think there's a lot of cool tools that are coming out right now in the tech boom of nonprofit technology, and so there's a lot of neat things that are out there. I got to hear about some really cool AI tools at this conference that I was at without singling out one, because they're all great people and great friends. I think nonprofits should start looking at what artificial intelligence and machine learning can do for your organization because there are some really cool applications that are out and are evolving and some that are just coming out that are really, really interesting to me. Yeah, go ahead.

Tammy Zonker: No, please.

Cherian Koshy: I was just going to say some that are donor-facing, like figuring out donor activity and some that aren't, and both sides of that are really neat.

Tammy Zonker: Yes, we've been having a lot of conversations at fundraising transformed with some of these tech partners as well, and just the impact that they can have. I mean, we all struggle to get additional staff to add staff, and these tools have the equivalent, like, we can truly work smarter and it can help fill that staff void that we all feel.

Cherian Koshy: Absolutely.

Tammy Zonker: Yeah. So good. All right, now this one could get you into a lot of trouble. Cherian, I know that you speak at a lot of conferences, you keynote a lot of conferences. Which conference is your favorite and why? Which of your children do you love the most?

Cherian Koshy: Yeah, exactly. That was exactly what I was going to say. I have three kids, and they always ask like, which one is your favorite? And like, well, you're my favorite daughter because I only have one. So I will say what I love about the AFP International Conference is that because it's so large, it's the one time where I get to see so many people in one place and catch up with so many people. So I do love that because I feel like when I go to all these other conferences, I miss out. And someone texted me today like, hey, are you going to be in this place? I'm like, no, not that one. That one's certainly one of my favorites. I think there are some conferences that are doing some really smart things, virtually that are really cool. And NTEN's virtual conference was really great this last year. I really enjoyed being part of that. There are so many.

Tammy Zonker: So many. Yeah, you were very political there. I love that. And I'll send it.

Cherian Koshy: At the same time, I think the big thing to think about when you're thinking about conferences, where are your people and where do you really want to learn from, what environment do you want to learn from? What people do you want to learn from and with and how does that all play out? So for some people, it's super small and super hands on. And in that case, Nonprofit Storytelling is a fantastic conference. I've never been, but like, everything that I've heard, people are like, this was so good. It was a life changing experience and it was amazing. And I'm looking forward to going at some point. But then other people love the big conferences. It just depends.

Tammy Zonker: It's good. And I'll just say it was such a pleasure to co present with you and our mutual friend Rachel Muir at AFP International Conference this year. That was awesome. I am going to encourage you to go to Nonprofit Storytelling Conference at the end of October. I'll be key noting there. So excited about that.

Cherian Koshy: Well, I will do my best, but I've used your story about wealth screening in a board presentation that I gave because they were asking about sharing information about west screening. And I was like, let me tell you a story from my friend Tammy, and everybody just was appalled. So if you haven't told that story on the podcast, you'll definitely need to.

Tammy Zonker: I will tell it. So it came from the presentation that Cherian and Rachel and I gave, and the title of the presentation at AFP International Conference was "What Happens in Vegas Stays in Vegas." Like our worst fundraising fails.

Cherian Koshy: Yes.

Tammy Zonker: So we'll leave it as a cliffhanger, a little mystery there, but we can learn so much from our failures, maybe even more than from our successes.

Cherian Koshy: Yes, indeed.

Tammy Zonker: Yeah. All right, last rapid fire question. Knowing what you know now about fundraising, what advice would you give your younger self who is just starting out in the profession?

Cherian Koshy: I think that it all comes back to find a mentor, a guide, a sage. I was late to that game, and I'm so grateful for Linda and several other people that stepped into that void. But today I have this essentially personal board of directors that we meet regularly. They help kind of counsel me on things. If I had that when I was younger to bounce ideas off of, to remind me of how much more I had to learn, I would have made way fewer mistakes, different ones and still mistakes, but just that would have been so much more helpful. So if you are in that spot, I could not encourage you more to find other people to come around you and help think through whether it's career or practical stuff or whatever it might be. Friends like you, Tammy, are just super helpful in thinking through, like, what are some things that other people are talking about that I should be paying attention to? And it's just great to be able to have those conversations.

Tammy Zonker: Yeah, I agree. And it's definitely an honor to be in your circle.

Cherian Koshy: Honor is all mine.

Tammy Zonker: Well, Cherian, thank you for joining us and sharing your wisdom and your smarts and your hearts and helping us to be better and wiser fundraisers. And I think just more thoughtful, intentional, courageous fundraisers. So thank you.

Cherian Koshy: Thank you. Thanks for having me. It's such a pleasure, like I said, to be able to talk with you whenever we get to do so, and I look forward to seeing you in person soon.

Tammy Zonker: Yeah. Hopefully non profit storytelling or somewhere else in the world.

Cherian Koshy: Yes.

Tammy Zonker: Yes. So if you want to learn more about Cherian and his work with Endowment Partners, check out his website, Endowmentpartners.com. We'll include that link in the show notes as well. And likewise, if you want to follow Cherian on social and who wouldn't check out the show notes. We'll include a link to his Twitter handle and his LinkedIn profile and all his other handles. Thanks for listening to this episode of the Intentional Fundraiser podcast with me, Tammy Zonker. Stay strong and keep on transforming your fundraising so you can transform the world.