Lessons Learned in Building a Business That Helps Nonprofits
With Special Guest Steve Latham, Founder and CEO of GivingIQ
We make it easy to donate appreciated assets, including stocks, crypto, donor-advised funds, and IRA gifts.
Want to launch a nonprofit-focused business? These hard-won lessons learned in building a business to help nonprofits will save you time
In this show, we share key lessons from building a business dedicated to supporting nonprofits. Discover practical strategies and valuable insights that can transform your approach to nonprofit collaborations. From understanding funding challenges to fostering community engagement, we share real-world experiences that can guide your efforts. Join us and uncover essential tips to empower your mission.
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The Show’s Main Transcript
[00:00:22.140] – Jonathan Denwood
Welcome back, folks, to the WP-Tonic show. This is episode 1033. In this show, we’re going to be talking about all nonprofits. We’ve got a great expert with us. We’ve got Steve Latham with us, founder and CEO of Giving IQ. They provide services to enable large donors to transfer their stock, crypto, and other physical assets to nonprofits without incurring a tax event. Really important. Steve has a ton of SaaS experience, and he’s worked in the nonprofit sector for years. We’re gonna be talking about the particular difficulties of marketing to this particular sector. Should be a fantastic show. So Steve, are you up for it?
[00:01:14.100] – Steve Latham
Yeah, let’s do it.
[00:01:15.080] – Jonathan Denwood
That’s great. I’ve also got my great co-host, Kurt. Kurt, would you like to quickly introduce yourself?
[00:01:23.670] – Kurt von Ahnen
Yeah, Jonathan, my name is Kurt von Ahnen. I own an agency called Mañana No Más. And, uh, we also do a lot of great work with the WP-Tonic team.
[00:01:31.140] – Jonathan Denwood
That’s fantastic. I’ve been really looking forward to this discussion with Steve, but before we go into the meat and potatoes, I’ve got a couple of messages from our major sponsors. We will be back in a few moments, folks.
[00:01:44.550] – Kurt von Ahnen
WP-Tonic is sponsored by Jetpack.
[00:01:48.970] – Speaker 4
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[00:03:04.490] – Jonathan Denwood
We’re coming back, folks. Want to point out we’ve got great special offers from the major sponsors, plus a curated list of plugins and services for the freelancer, the small agency owner, and the power user. You can get all these fantastic goodies at wp-tonic.com/deals. wp-tonic.com/deals. All the goodies are there, my beloved tribe. What more could you ask for? Probably a lot more, but that’s all you’re going to get on that page. I’ve made a career in disappointment. So there we go. They love that, Steve, actually. I don’t know why. I get more email about that than anything. I find it funny, but it’s just my English humor. So let’s get into it, Steve. Nonprofits leave billions in non-cash gifts on the table every year. Why? Why do they do this, Steve? What conclusions have you come to?
[00:04:10.310] – Steve Latham
Yeah, that’s the big mystery we’ve been trying to solve for 6 years now. So for context, just kind of to frame non-cash giving, what we’re talking about. So, appreciate securities. So think stocks, mutual funds, ETFs, even bonds, MLP interests, things like that, that are where people have publicly registered securities. About 100 million people in the US own stocks outside their retirement accounts. So you literally have a pool of 100 million people that own securities that have been investing either actively or passively for decades. And you also have donor-advised funds. If you’re familiar with those, there are about 800,000 accounts out there, but they have about $350 billion in balances sitting there waiting to be deployed and dispersed to nonprofits. So it’s, think of it as a charity savings account. It’s a great tool to avoid tax and sock away some funds to get the deduction and then figure out where you want to grant that money going forward. There’s also crypto. It’s fairly nascent, but it is an emerging asset class. I think with more regulation, with the Clarity Act pending, hopefully in the next 6 months or so that gets passed and you’ll see more institutional ownership.
[00:05:18.870] – Steve Latham
I think we’ll see crypto cases where people actually use it for transactions in the not-too-distant future, but it’s going to become more important as an asset class for charitable giving as well. And it represents a great way to engage younger donors, kind of the great inheritors in a lot of cases of this great transfer of wealth that’s going to be happening over the next 20 years. And then qualified charitable distributions are the last one I’ll speak to. These are— most people don’t know what a QCD is. And if you’re under 70, you don’t really need to worry about it unless you’re advising your parents. But once you turn 70 and a half, you can actually offset the tax on your IRA, which kicks in at age 73, by donating from your IRA. So, not only can you offset the tax on what’s called a required distribution, but you also get to reduce your adjusted gross income by that amount. So, it’s even better than itemizing. It’s an amazing tool for seniors to protect their income by making charitable giving from their IRA instead of their checking account. So, those are really the 4 areas that I’ll speak mostly to.
[00:06:17.400] – Steve Latham
On a combined basis, if you look at just some conservative estimates, it should be $300 billion a year coming, maybe $350 billion from those 4 different asset classes. Today, on a normalized basis, it’s closer to $60 billion. So, what you have is basically a huge potential pot from which to give that’s much more tax-advantaged than writing checks or putting on a credit card gift, but there’s this huge opportunity gap in that most Investors, retirees, crypto owners don’t even know they have this currency they could use that can, when they donate their appreciated assets, they can avoid the tax on the gain, which is a huge— that’s what got me excited about it 20 years ago when a friend of mine told me like, if you, instead of selling the stock to donate the cash, if you donate the stock, you don’t have to pay tax on capital gains. Right. And nor does the charity.
[00:07:05.290] – Jonathan Denwood
But I think you’ve laid the land out that this is quite a large market and it’s quite important, but before I throw it over to Kirk, it just— as you were speaking, I would imagine apart from people that are in finance, I think even sophisticated people, this whole area is a bit of a minefield. And even their financial advisors— I’m only surmising this, but I’d imagine that a lot of financial advisors find this quite daunting, and they don’t really want to touch it. And that’s the beauty of your company, isn’t it?
[00:07:49.260] – Steve Latham
It’s one of the reasons. To answer your question, I’ll just provide a little background, but I think you’re spot on. Very few investors know about the benefits. Very few advisors, relatively speaking, are actually introducing tax-advantaged ways to give to their clients. So if you’re a self-directed investor, you don’t have a financial advisor, you don’t have a philanthropic advisor. That’s why most people continue to give in ways that are frankly financially irresponsible, because if nothing else, you can give a pre-tax gift and let the charity keep the money that would have gone to taxes if you sold the asset and sent the cash. So, we’re trying to help remove friction, remove— I like to joke, our biggest competitors are complacency and inertia. It’s getting nonprofits to do things. In a more progressive way, thinking about how to better leverage technology.
[00:08:37.910] – Jonathan Denwood
They’re big competitors though, aren’t they, Steve?
[00:08:40.690] – Steve Latham
They are. They’re immovable forces sometimes. So it’s helping. So the reason why that big gap exists is really threefold. One, very few donors are aware of the benefits. 2, if they are, it’s a painstaking process to actually execute those non-cash gifts to charity. And then thirdly, very few nonprofits are out there aggressively or assertively introducing these ways to give to their donors. They’re just kind of still in the old way of doing things, like, let’s just, you know, cash is king. There’s a researcher in our industry named Russell James who, you know, he coined cash is not king in fundraising. It’s actually the worst thing you could do is lead with a cash ask because that’s the least from which people have to give is their checking account. The most they have to give is from their investment account. So ask big, ask in a more tax-advantaged way, and you can have much deeper relationships with your donors. But We’re still in maybe the second inning. It’s still a very immature market as it relates to non-cash giving. So that’s our whole mission and focus.
[00:09:36.540] – Jonathan Denwood
Right. Over to you, Kurt.
[00:09:38.860] – Kurt von Ahnen
Yeah, I find the timing of this interview absolutely uncanny. I’ve just gotten involved in a family office management project through our agency, and I didn’t even know what family office management really was until we started the project. And I’m realizing There’s just a whole category of discussing how to manage money, how to create longevity through generations, how to warm the bench for succession within your family. And I think part of what you’re talking about here, Steve, is huge, right? So it’s people and the nonprofits that I’ve worked with, they all cry like they’re broke. They don’t have any budget. They’re poor. They can’t do stuff. And then there’s all this money sitting here. That should just be shifted over to them. And it’s advantageous for like all the parties when you start running the spreadsheets and the numbers. Why is it, it seems like only a certain percentage of people or a certain— I certainly don’t want to make this like the 1%ers, right?
[00:10:39.890] – Steve Latham
But like, why is it like— It’s a 1% solution though. It really is. We just analyzed 220,000 tax returns for nonprofits. Less than 1% of investors actually donated appreciated assets. It’s just, it’s crazy how underutilized these sources of funding are at a time when, if you’re involved with the nonprofit world at all, you know, it’s a really tough time. The cuts in federal funding has devastated a lot of organizations. Think like food banks, after-school programs, all of these things that relied on federal funding have just gotten gashed. And so they have these massive voids. Same with like human, you know, relief efforts. Uh, UN, uh, their refugee program for the United Nations is looking at like a $2.5 billion deficit because of the federal funding is not there to fund those programs anymore. So they’re, they’re, they’re really trying to figure out how do we, how do we reposition and rethink our whole business model when the money they’ve relied on for decades is not there? It’s not a statement whether it’s right or wrong for the government to fund these, but it’s just an, it’s, it’s an issue. Secondly, you’ve got financial headwinds. You’ve got inflation.
[00:11:47.250] – Steve Latham
There’s just less money left over between housing, groceries, fuel. Everything’s so much more expensive. So your average middle-class household, if there are any left, they have very little left over in their checking account at the end of the month for discretionary spending, i.e., charitable giving. So there’s some serious headwinds. There’s a lot less trust of nonprofits. That’s another issue. What’s interesting is about a third fewer households today donate to charity or their church than a decade ago or 20 years ago. And that’s a huge loss of donors. And it comes down to people just, I’m not sure that the money I’m giving them is being properly invested and used. And that’s an issue. So, and to your point, Kurt, there’s literally $100 trillion in shareholder wealth, household wealth sitting in the markets today. That could easily fund charities for decades. But it’s just really trying to untap it, right? And that’s what our focus is. There’s other orgs like us. I think there’s a growing realization that they’ve got to become— they’ve got to talk to all their donors, not about just their wealthiest donors. Because again, 100 million people, 60% of people who make over $100 grand now have investments.
[00:12:59.760] – Steve Latham
These are a lot of your $500 donors, not your $50,000 donors, but they could probably give you instead of $500 in cash, they might be able to give you $5,000 or $7,000 in securities or from their IRA if you invite them and educate them why it’s beneficial. And that’s really where the gap is.
[00:13:17.780] – Kurt von Ahnen
Yeah. Now, do you feel like people just aren’t aware of it? So I’m trying to think of like Bitcoin comes out, everybody knows about Bitcoin, right? Like there’s new things come out and everyone gets fired up. AI comes out and we’re all AI experts, but Like this tax stuff is sitting here on the books for decades and it seems largely ignored. Where do you think that gap in education is? Do you think it’s— do you say, okay, well, the school system failed? Or do you say like, how do you wrap around?
[00:13:49.480] – Steve Latham
How much time do we have? So that was a joke.
[00:13:53.490] – Kurt von Ahnen
I realize I went off script here.
[00:13:54.930] – Steve Latham
I think financial literacy, even when it comes to these things, is there’s still a gap. Like I I took a personal finance class in college, one of the best classes I took, but very few people did that. Like, when I came out of school understanding compounding of interest and time value of money and, you know, understanding the difference between investment accounts and whole life policies, like, those are— but very few people have elected to take that, that those classes. If you have a financial advisor, you should be getting advice. We actually just published a We’re about to publish a report. I think we just published it. It’s available. But basically, there’s a study of advised clients when it comes to philanthropic planning, and 85% of advised clients, of financial advisors’ clients, expect to get guidance as it relates to charitable planning, tax-advantaged giving. Only 28% actually receive it. So, there’s this massive gap between— and these are advised clients that have a financial advisor. The ordinary, you know, self-directed investor, where are they going to learn about this? So there’s just a lack of infrastructure, I think, and systems to educate donors on smarter ways to give.
[00:15:04.410] – Steve Latham
And unfortunately, the brokerages— everyone thinks, why aren’t the brokerages educating their donors? They do to an extent, but it’s normally to the extent they want them to open a donor-advised fund with them. That’s their solution to charitable giving, which is a great tool, and we have a tool for that. It’s not a one-size-fits-all approach. It doesn’t work for a lot of things. So having better education to people who have assets is really one of the first steps. We view that the best-positioned advisor to do that is the nonprofit themselves because they have a relationship with the donor. They could say, hey, Kurt, are you aware of the benefits of donating appreciated assets? Most people are not, but did you know you can avoid capital gains tax? Did you know you can itemize the deduction? Did you know, um, if you donate from your IRA, these benefits accrue? And if, and if the nonprofits can become those advisors to their donors, they can build really deep relationships because the gratitude that comes from being educated is immense. So there’s, it’s a win-win opportunity, but it takes, you know, people wanting to change and willing to do a little bit of work.
[00:16:05.780] – Speaker 4
So if I get us back on the rails with our notes, what did running a digital marketing startup Or startups teach you the most, you know, about what these nonprofits actually ignore?
[00:16:16.450] – Steve Latham
Yeah, um, I got to be very careful with my words, uh, because I don’t want to insult anybody, but I would say it starts with change management and willingness to change and adopt and adapt, uh, because if you’re in business today, especially— I spent 18 years in, in, uh, digital marketing, advertising technology prior to starting this company 6 years ago, uh, so I feel like pretty much, you know, pretty deep. I had an agency for 8 years. That’s kind of like a tour of war, right? Like you’ve experienced, you come out of that and you’ve experienced everything. It was all digital, all marketing. And then spent about 8, 10 years in the digital media measurement analytics side, working with brands, working with agencies of all sizes. And that was really eye-opening. But we discovered that there’s a common problem between marketing, if you’re an agency trying to sell in like an analytics solution, or if you’re a solution provider trying to sell into a nonprofit, you have to present the solution in a way that benefits the person who’s making the decision. If it’s not, if there’s not something in it for them, or if there’s what we call an agency cost where it actually is good for the organization but not for them, then it’s really hard to get your solution adopted to sell it in.
[00:17:31.050] – Steve Latham
People will do all the time. They don’t, they act like employees, not owners. This is more in the, in the for-profit sector. But if it doesn’t help me, even if it’s good for my company, that doesn’t help me, it didn’t go to my incentives or I have perverse incentives, then I’m not going to adopt it. Same with nonprofits. You could show them, here’s a, a really easy way to unlock millions of new funding, but they have to be willing to say, okay, then, um, I’m gonna go do some work. Or maybe what about Marge? That’s what she does. I hear this story all the time. Well, that’s what she does. She’s the one who does it. Like, put Marge to work in a more productive way versus trying to investigate lost, you know, mystery gifts. She should be calling your donors and asking them about why they donated to you and how you can better deliver your message to them. Become a steward, not a, not a researcher. And I think that that’s the opportunities, um, but it’s really hard to educate them. What I could— what’s different in the nonprofit world versus the for-profit world is the incentives, or lack thereof.
[00:18:25.900] – Steve Latham
There’s not incentives for most nonprofit employees To exceed their goal. You take a salesperson who works for a software company, they get accelerators, right? Once they hit their, their quota and they can actually make more the more they sell. Whereas in the nonprofit world, there’s actually, there’s no incentives. Very few organizations actually incentivize their fundraisers based on what they raise. They just get a flat salary, maybe a guaranteed bonus, but their whole goal is raise enough where they don’t have to fire people in most organizations or do enough where everyone says we’re doing a good job, but I don’t need to do more than that. That’s why I chose the nonprofit world. I’m, I’m looking for life balance and not spend all my time working. So there’s an incentive issue. So they’re less motivated to get ahead. What they are motivated to is to not look back. So FOMO is actually probably one of the best tools out there where I’ve seen— we’re not a big FOMO. I don’t like playing that card, but I do see it very successful for organizations that are willing to do that because if there’s one thing universally people hate more than anything, it’s missing out on something or looking like we’re behind our peers in something.
[00:19:28.930] – Steve Latham
And I feel like that’s probably, you know, one of the best leverages that you have. But again, it’s a, it’s a, it’s a, you know, it’s a, it’s a sword that cuts both ways. You either can convince them, then you take that action, or you could— they won’t take your call again because you’ve made them feel bad. So it kind of depends, you know, on what you’re marketing and selling and to whom and what the role is. I also found that It’s really hard to go up and, you know, kind of bottom up. It’s impossible. You really have to go in and get an executive level sponsor because the people down on the line, even though they’re the ones who you can help the most, they’re only going to do what their boss asks them to do. And very few of them are surfacing new ideas. It’s kind of a top-down culture is what I’ve generally seen across, not specific to any one nonprofit, but working with literally thousands. There’s generally, there’s goals here and it all trickles down. And if it’s not aligned with that, then they don’t have time for it. So you’ve gotta find the people that are ultimately responsible for innovation, growth, efficiency, donor experience, not— and they’re the ones that you gotta, you have to get in front of.
[00:20:35.640] – Speaker 4
Yeah. Yeah.
[00:20:36.530] – Kurt von Ahnen
Jonathan, I’m gonna push over to you.
[00:20:38.680] – Jonathan Denwood
Well, before we go for a break, I’m gonna ask the obvious question. How do you, based on your experience, how do you get in front of those type of people?
[00:20:50.230] – Steve Latham
How do you get in front of the decision makers? Networking. You just have— this is where being— I think a few things you can do. One, you have to be committed to the space. We’ve seen this, like the success, I think, of people who sell in this industry. They live and breathe it. They’re active in the social discussions on LinkedIn, in groups. They’re attending conferences, they’re networking, they’re building trust, building their name. Those are— you really have to know what’s going on because if you’re not aware of whatever crosscurrents are happening at that moment, talking to your potential customers, it’s really hard for them to feel like they can truly trust and confide. And trust is critical. It’s a people business, right? Despite tech and all these advances, at the end of the day, people do business with people that they like and that they trust. So I think that’s a big part of it. We, we haven’t cracked the code on marketing and selling into nonprofits. It is the hardest, longest sales cycles, especially the really big ones. Small ones move pretty quickly, right? Because normally the person you’re talking to is the person, the executive director of that, and they, they are agile and they are motivated.
[00:21:51.550] – Steve Latham
You start getting into larger organizations with silos and decentralized organizations, or it’s, it’s much harder to, you know, get all the stakeholders aligned there. It just takes a lot more time. Getting through legal is hard. I mean, it took us a year and a half to get an agreement signed with a really big hospital system. It just, everything’s slower, everything’s harder. Again, the lack of incentives, the lack of, there’s generally a resistance to change. Those are the things you have to work through. So I wish I could tell you what the 3 steps are for success. We’re still trying to figure it out.
[00:22:24.490] – Jonathan Denwood
Well, I suppose you’ve got kind of, I’m only surmising this based on what I’m hearing here, Steve. I just think you’ve got kind of 3 buckets. You’ve got the end users, the people that, that got the resources, haven’t you? They’re, they’re gonna— they’re the most diverse, aren’t they? They’re really hard to pinpoint. And then you’ve got the financial advisors, and then you’ve got the nonprofits themselves, and they’ve all got they’ve all got certain strengths and problems about marketing to them, isn’t there? Because I suppose the end users, those that are putting the money in, I suppose you could just target a certain, um, wealth level, a certain salary wealth level, and just use paid advertising and try and go to direct to the end giver. And I suppose you could also do that with the financial advisors, couldn’t you? Have you? Am I on the right track, Steve?
[00:23:33.170] – Steve Latham
You can. It’s just expensive trying to educate millions of people on something that, you know, and with advertising marketing, there’s no silver bullet. It takes repetition, frequency, consistency, You got to do those things on a regular basis to get the resonance, to change people’s thinking and their behavior. And it’s a big investment. Unless if you have a multimillion-dollar media budget, you can probably get there faster. We do not. So we’re trying to be as efficient as possible, trying to earn media where we can, but educating donors, educating financial advisors, and then, you know, continuing to prod and pull and cajole the nonprofits to take simple steps that can have huge— that can pay huge dividends. It’s a combination of those 3, but they are the 3 constituent groups and they each have different needs and different friction points that we’re trying to solve and engage.
[00:24:24.400] – Jonathan Denwood
That’s fantastic. I think that’s a good spot for us to go for our middle break. It’s been a fantastic discussion with Steve. We will be back in a few moments, folks.
[00:24:33.810] – Speaker 4
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[00:25:10.890] – Speaker 5
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[00:25:48.300] – Jonathan Denwood
We’re coming back, folks. I want to point out we’ve got a new sponsor for the next few weeks. It’s Infinite Uploads. What do they do? Well, My beloved tribe, you’ve all had clients with hosting packages and they’re getting close to their disk space limit. Um, they’ve got a load of media. It’s all— one of the problems with WordPress is the media library, and you would love to clean it up, and you would love to avoid that discussion with a client of having to move to a more expensive hosting plan. You can do that by using infiniteuploads.com. Basically, they reorganize and make your media library more efficient and easier to use. Plus, they offer a CDN functionality and a host of other benefits. Um, they’re offering 3 months free. And if you go to infiniteuploads.com and use the promo code WP-Tonic, you get 3 months free. What more could you ask for, my beloved tribe? So remember, go to infiniteuploads.com and see what they’ve got to offer. It really will help you and your clients. Over to you, Kurt.
[00:27:24.480] – Kurt von Ahnen
Well, I think I get the fun question, and that is just sometimes we hitch our trailer or whatever you want to phrase it, like we just hitch it to something that’s just hard to sell. And I’m in that space. I’ll be very transparent, Steve. I am very, very passionate about fixed operations training in the motorcycle industry. And boy, I’ll tell you, you can’t pick a more unsexy thing to sell to a dealer owner than, hey, I can help your service department. Um, because they really want to focus on sales and not service. How do you market something that just sounds like not sexy? Like, I can help you with tax-smart stock giving. Like, it’s just, um, it, it just doesn’t have, like, in marketing terms, right, it’s missing that, that pizzazz. It’s missing that sparkle sprinkle. Um, how do you do it?
[00:28:13.880] – Steve Latham
Yeah, it’s not the shiny object that you’re talking about earlier, like, you know, AI, crypto, these things that have gotten people excited. It’s kind of a bread and butter thing, but it’s just not— it’s not widely used. And that’s, you know, so we’re trying to show like we have some great clients, some great case studies, and we showcase those. 2 that come to mind are Shriners Children’s Hospitals, wonderful organization. My grandfather was a Shriner. You know, they’re very near and dear to my heart and we’ve helped them. I mean, they tripled stock gifts last year, right? Working by just making the donor experience easy. They don’t oftentimes care as much. I don’t know. They do actually get excited about shiny objects. We’re trying to sell like actual economic value, like, hey, this is a huge untapped source of funding. You could grow your budget and your fundraising without having to go acquire new customers or donors, which is really expensive. So we’re trying to present a business case to them. Take these few steps, and our terms are so easy. We don’t charge an upfront fee. We don’t require a monthly fee. We just take a transaction fee.
[00:29:18.800] – Steve Latham
So we’re 100% aligned with our customers to help them grow this untapped source of funding. And they, you know, for pennies on the dollar, they can, they can, you know, grow and scale, and then we can even offload a bunch of work for them. But, um, so trying to sell business results, right, to, um, is challenging, especially when the organization purchasing is not necessarily bottom line oriented or top line oriented. They’re just kind of— It’s different, right? Again, back to the incentives and issues. I think when it comes to donors and investors, like everybody wants to save money. So what we’re— one of the things we’re showing them is like, this is a— if you’re fortunate enough to have been in the market these last 5 years, you’re sitting on massive unrealized gains. Today there’s about $74 trillion in unrealized gains in the market. This is a huge problem for a lot of people. It’s a great problem to have. They’re like, I have— I bought Nvidia at $10. It’s $230. I have to take some gains. It’s now half of my portfolio. But if I sell this, I’m going to get crushed, especially if I live in states like California, where you have a 37% capital gains tax all in with state and federal.
[00:30:22.520] – Steve Latham
So educating them on here’s how you can actually do your charitable giving and save a ton of money by not having to pay the capital gains tax and itemizing it. If you want, if you, all you have to do is tell them once, once they get that, the first question I hear back is, Why didn’t I know about this? I’m like, well, that’s, you know, it’s still one of the best-kept secrets in personal finance. We’re trying to dispel that. So it’s, um, it’s hard, you know, it’s easy when you have something that everybody wants and you’re just taking orders. Uh, it’s harder sometimes selling real business value, um, and proven solutions that they may not be sexy, but they’re very powerful. And so in that case, you just gotta find, it’s a numbers game. You gotta find the right customers that this is on their mind. This, it’s timing lines up with their objectives and priorities. And then that’s really the key to success in those cases.
[00:31:10.810] – Kurt von Ahnen
Nice. Nice. Thanks, man. Jonathan?
[00:31:13.700] – Jonathan Denwood
Yeah, I just— I’m just getting the feeling from this conversation, Steve, that it is the nonprofits that you’re concentrating on. So what have been some of the techniques that have enabled you to build— you and your team to build relationships with nonprofits?
[00:31:36.030] – Steve Latham
Education.
[00:31:36.250] – Jonathan Denwood
That you could— all right, go on. Sorry.
[00:31:38.100] – Steve Latham
It’s education. It is. It’s all about education, thought leadership. And we’ve, we have close to 4,500 nonprofit customers today that have registered with us, onboarded with us. We really haven’t had much of a sales presence ever. In fact, we’ve had, you know, I think we’ve had some kind of inside salespeople primarily, but most of it’s just people that they’re interested in learning. They attend a webinar. Our value prop’s pretty simple. There’s no financial obligation, so it’s easy to get them to sign up. The harder part is then getting them to, you know, implement and adopt and follow our playbook to get the results. But that’s, I think marketing in our space is really about education and awareness and helping them understand. They like to see who else is using you. Like it’s one of these things that an interesting thing I’ve, phenomenon I’ve noticed in our industry as a startup. And there’s probably a lot of startup folks listening to this, is, um, in most commercial spaces, like, you’re— you start to scale up around maybe year 3 or 4, right? You— it takes a year or 2 to get product-market fit, then you invest, you figure out what works, then you can kind of hit your hockey stick, if you will.
[00:32:43.020] – Steve Latham
Think about projections, your financials. In the nonprofit, uh, tech world, it’s about year 6 or 7. So it’s— these companies really start seeing the hockey stick growth. It takes like 6 or 7 years to build the trust, the awareness, the credibility, the brand awareness to then actually start getting adoption. And then once people see others adopting you, then they’ll jump on. So it’s kind of a, it’s a much longer, slower build to get there. But there’s some really fantastic companies that have done really, really well in our industry, created a ton of value for their investors and for their customers and for the donors they’re serving in the nonprofits. So Part of this is also just attrition and staying, you know, while others, we’ve had several kind of enter our space and then kind of say, ah, this is too hard to do. So part of it is just staying power and staying in there for a long period of time. But there’s also challenges.
[00:33:34.460] – Jonathan Denwood
So I follow what you’re saying, education, but it’s a very broad statement. So what are some of the techniques and some of the things that are promoted this, um, education that have worked for you?
[00:33:49.210] – Steve Latham
Webinars, articles, um, thought leadership. It’s same, most B2B marketing is all about marketing, education, and thought leadership, I think. And that’s, that’s always a proven tactic. If you can establish yourself as a, as a subject matter expert and have a solution that addresses a specific need, then it’s just a matter of educating the people on how to solve those problems. Um, and then showing ’em a glide path to do that. Uh, we also now, we actually launched earlier this year, we, we really put education as the, center pole of our tent for the year really going forward. Because what we discovered is we have these great tools, but if the, if the, if the user, the fundraiser, is not, um, confident and comfortable in that domain, they’re not going to use the tools. It’s kind of like if I give you a CRM but I don’t train you how to use it, you’re not going to become a very good CRM user. So we’re actually doing a lot of education, of workshops for fundraisers, and it’s free. We do this just to help educate them on, to demystify these ways to give, show them the key best practices for enabling their organization to grow, and then teach them literally how to introduce us to their donors, how to have conversations, give them a script and playbooks and all the tools they need.
[00:34:57.050] – Steve Latham
So enablement and education is a really critical part, not just on the sales side, but for the onboarding and launching as well.
[00:35:05.670] – Jonathan Denwood
So have you got any insights about how they find you? You know, how many, how much of it is recommendation and how much of it is that they just come across you in, you know, offering this free training? Have you got any insight about that?
[00:35:24.600] – Steve Latham
Uh, we look at the data when people ask, you know, how they heard about us. It’s kind of all over the board from a webinar, uh, a partner. We have a lot of partners that are out that we’re embedded in or go to market with that are in complementary adjacent spaces on the charitable tech side. Word of mouth, referrals are the best. When people get referred to us by a happy customer, that’s obviously the best source of new opportunities you could ask for. So we try to, and that’s where I think customer sat is really important. If you have highly satisfied, loyal customers, they’re more willing to introduce you to their peers. They like The nonprofits like to collaborate. They’re very, they like to trade notes and who are you using? What do you do for this? Especially if they’re not in the same, if they’re local but not in the same markets, there’s no overlap or competition. They’re pretty open and collaborative. So we, you know, we try to make sure we deliver a great customer experience and customer sat, and that definitely translates into referrals.
[00:36:22.370] – Jonathan Denwood
So these partnerships, what are some lessons you’ve learned about building partnerships that you feel that you can share with us?
[00:36:31.720] – Steve Latham
Yeah. So when I talk about partners, there’s, think of like fundraising platforms. So think of like Blackbaud, GoFundMe Pro, Fundraise, Pledge, BetterUnite, some of these technology platforms that serve nonprofits. So in a lot of cases, we’re just providing the functionality tech for gifting of non-cash gifts, right? Those generally all focus on cash and credit. And in that case, it’s joint education to their customers because we’re trying to get their customers to opt in to use us or to embed us or to click a box to activate it. We also work with consultants. There’s a lot of philanthropic consultants and marketing agencies out there. So in those cases, I think like working with Alliance Group, Pursuant, Moore, Stelter, some of these marketing organizations that actually go out and help their customers with annual or planned giving. Programs and campaigns. So being, you know, working with them, again, education enablement, helping them become part, you know, our goal is to become part of the recommended tech stacks that they’re bringing to their customers. Those are important. And then we also work with nonprofit educational groups. There’s quite a few nonprofit organizations whose whole mission is to educate other nonprofits.
[00:37:43.220] – Steve Latham
So we work with them as well. Most states have a center for nonprofits, like a a knowledge sharing place. So we try to work with them as well. So that’s, you know, again, there’s unlimited number of paths you could be pursuing, but when you have limited resources, you really have to focus on what’s going to move the needle for you. So we’re always, you know, and you always have to reassess because nothing stays static. It’s always changing.
[00:38:07.440] – Jonathan Denwood
Over to you, Kurt.
[00:38:10.120] – Kurt von Ahnen
You know, in your answer, Steve, the thing that really hit home for me was that You know, you can’t be all places at once. You can’t, you can’t possibly serve all those markets. And then, and then you said it, right? You have to focus on what moves the needle the most. Um, that to me is, and, and maybe I’m asking for too much in this question, but, but what, what is it that gets you excited? Like, like when you, when you see that, when you see a needle move, like for you, what, what is it that gets you going? Like, And I’ll be more transparent. For me, I really enjoy when someone at a, at a, at a, what appears to be a low level of understanding or a low level of entry point can, can make a giant leap forward, right? Like, like that to me is super, super exciting. You see the lights come on in their eyes and you’re like, wow, that’s amazing. Yeah. But for a lot of people, if someone’s already at, you know, a good level and you can just inch them up a little bit, sometimes that gain is so much more than that initial Big leap, right?
[00:39:08.500] – Kurt von Ahnen
So, so what moves the needle for you the most and what gets you the most excited?
[00:39:12.730] – Steve Latham
Yeah, I’d say, and it’s kind of, it’s different for different segments of our customer base. So think like enterprise customers, the organizations we define as over $50 million in revenue, a lot of times over $250 million in annual funding. Those are incremental changes. They’re generally not something transformative. They’re just, you know, incremental updates. And those, those are, those, those can be gratifying too, because we know we can have massive impact because of their scale, right? We can help. I started this company really realizing that, you know, I don’t have kids. I thought about being a big brother or doing something one-on-one. I thought, you know, I can have the most impact by helping organizations serve their donors. And we can, we can affect millions of lives, right? Not just one. So when we help the big the big players become better at educating their donors and building deeper relationships, that’s very gratifying. Also just gratifying is a small nonprofit that where, you know, a $25,000 gift to someone like Shriners, you know, they certainly meaningful, but on a— in the big picture, a $25,000 gift to a small charity that has a $100,000 budget, those are really transformational, right?
[00:40:22.850] – Steve Latham
They can, they can really be— get them excited about how The possibilities, and it’s easy, right? We show how easy it is to unlock these big gifts or more giving or bigger gifts from your existing donors. So I think helping them, enabling them to have more success and serve more people, animals, provide more services, whatever those causes are, that to me is what we’re very impact-oriented organization. We’re, I’d say, 50/50 missionary and mercenary. So we’re definitely trying to change the world, but also playing to win and build a really successful company as well. So they both, it’s kind of like Jim Collins, if you remember Good to Great, if you can find that overlapping of what you’re passionate about, what you’re good at, and what you can actually make money doing, that hedgehog philosophy, that’s very much aligned with that. So I feel like, and that’s a lot more fun than the ad tech world, like helping brands optimize media spend. There’s probably some value created there, but this is actually helping people in need. And that’s a lot more exciting.
[00:41:26.320] – Kurt von Ahnen
Yeah. And, and again, I’m gonna go off the radar a little bit with your response. And that was, you know, you kind of brought it up, right? The, the idea that it’s, it’s more than acceptable to make an equitable earning for yourself while you’re assisting other people. I think that’s a, I think that’s a disconnect a lot of people lose. They assume that if they work in the nonprofit space, they’re going to put themselves in a poverty category.
[00:41:48.690] – Steve Latham
Yeah. And in some cases they do. Uh, it’s, it’s unfortunate. I feel like It’s kind of a different tangent, but there’s been so much focus on overhead inside these organizations. Um, it’s created some, unfortunately, some, some, I would say some, there’s, there’s externalities. So what happens is nonprofits now are much more likely to outsource services than to hire someone to do it internally. Because if it’s outsourced, it’s not in their salaries, right? If it’s 1099, but they, they might be paying 2x, right, for that 1099 contractor than it would cost to have a really good person in-house. Yeah. who’s committed, dedicated. It’s not just a project they work on amongst other work at half the cost. So I feel like that’s a problem. Real simple analysis I always thought about, or metaphor here is, let’s say you’re a nonprofit. Your one thing is to have this big event that’s going to engage people to educate them on some issue, right? You could go hire like a junior event planner for $50K who Might get 500 people there. If you hire like a really good event planner at $100K, you might get, you know, 5 times as many people there.
[00:42:58.420] – Steve Latham
So even though you paid more for that resource, you got a much greater impact. And from an ROI standpoint, you’d definitely rather pay an extra $50 grand and get 5 times the results, right? Twice the cost and 5 times the results. So I, that, but that unfortunately there’s the incentives are a lot of times the opposite of that. Like, let’s hire, let’s pay as little as we have to. To keep our overhead low so we don’t get called out for spending too much money on people instead of our programming. That’s one of the challenges and there’s not much we can do about that.
[00:43:28.190] – Kurt von Ahnen
I
[00:43:28.450] – Steve Latham
don’t know if that helps kind of answer.
[00:43:31.110] – Kurt von Ahnen
Yeah. And then they just kind of hope to get lucky, right? And unfortunately, luck’s not a big part of the game.
[00:43:36.220] – Steve Latham
It’s not. Or they unfortunately tend to say, what did we do last year? Let’s just repurpose that. It’s like, you can’t keep doing the same thing. I was at a conference a couple weeks ago. It was the Healthcare Philanthropy Conference, AHP International Conference. And it was really— I sat in on a session about marketing to donors. It was really interesting. They were talking about like, think about how many emails you get around the giving season. You start getting them if you’re not. They’re the same templates like, dear Steve, thank you for your support in the past. Here’s 3 paragraphs about our mission and the impact and the results. What this one marketing firm was presenting, it was like That’s, you know, that’s your, your A. If you B-test it against with a quiz in there about the organization or the cause or a video or something interactive engagement, you get like dramatically higher response rates. So the innovation needs to come into how you do your work, not just the tools you use, but how you’re going to engage your donors, your customers, however you think about your different constituents. So I think that’s, um, That’s another challenge that the industry still struggles with.
[00:44:41.930] – Steve Latham
They tend to, I mean, how much direct mail do you get? Like, who wants direct mail? Like, I, you know, I still see, but you know why they do it? It still works. There’s a lot of people who like the direct mail, but unfortunately they’re sending to everybody when only maybe 10% of their donors actually prefer that. So those are things that there’s a lot of waste, a lot of inefficiency. They’re getting better. They, the the nonprofit marketers, but they’re still, you know, they’re still just now adopting practices that have been kind of, you know, established best practices and used by everybody in the, in the, in the commercial, you know, branding and marketing for, for a decade now. So it’s a little behind, a little slower to innovate, but, you know, hopefully slow, slowly, surely leveling up. And, you know, our goal is to help that.
[00:45:27.680] – Kurt von Ahnen
Nice. Jonathan, over to you.
[00:45:29.810] – Jonathan Denwood
Yeah, I think It just occurred to me, and you’ve probably done this already, um, I would have thought natural partners are public radio and television stations because they would benefit from you and also they could promote you as well. Have you done any outreach to those?
[00:45:50.530] – Steve Latham
We have a few. We’ve tried. We’ve been to a couple of the public media shows this year, the conferences. Um, again, Creature’s a Habit They are, they’re really comfortable talking about donate your car, but there’s, you know, and there are, there’s 500,000 cars donated a year, which is surprisingly high. But they, they, they’ve been doing that for a long time. But like to donate securities or from the IRA, like they just don’t, it’s hard. It’s just, again, it’s so new and so different. And generally speaking, the person who you’re talking to is also the manager of the station, is also trying to manage a sales team is also trying to manage programming. Like, again, they’re stretched thin. They rarely have like fundraising, dedicated fundraising people in those public media companies. The biggest ones do. But, you know, your local radio TV, which would be perfect because they own the airwaves, they could actually promote their own, given to them through their own PSAs. It seems like a no-brainer. I get asked this all the time. I’m like, we’re trying, it’s hard. It’s just tough to get them to, you know, to change the way they do things.
[00:46:51.540] – Jonathan Denwood
It’s amazing. Um, over to you, Kurt. I think we’ve got the last question, haven’t we, Kurt? I mean,
[00:46:57.370] – Kurt von Ahnen
yeah, our last question’s just kind of a fun one, Steve. Really, no, no pressure, right? Uh, if, if you gotta remember, Jonathan’s got an accent, right? So he thinks about Doctor Who and the TARDIS and time machines and things like this.
[00:47:10.310] – Jonathan Denwood
So it’s in my mind all the time, Steve and Kurt.
[00:47:14.070] – Kurt von Ahnen
So, so if you had your own TARDIS, if you had your own time machine, you go back to the beginning of your career journey, What advice would you give yourself?
[00:47:24.160] – Steve Latham
Of my career? So a couple of things. Well, as a startup founder, I would say the number one thing I tell people, and I used to get— I went to undergrad at Oklahoma, and I used to get invited back to speak to the entrepreneurship class. And then I started telling them, I was like, don’t start a business right out of college. Go work for a company. If you want to start a startup, go work for a company, a startup. in that industry, learn the business, learn the, learn it, learn, you know, the market, the people, build your relationships, build your knowledge, then go launch and do your own thing. I stopped getting invited to speak because they didn’t want to hear that. They want to encourage people to start a business right out of college. I’m like, it’s a terrible idea. Like when I started my first startup, I was age 30. I had spent 3 and a half years as a financial analyst. Went to, you know, pretty good business school for my MBA, worked for a consulting firm in summer between first and second year, worked for Boston Consulting Group, spent 2 years in private equity, spent 3 years in a startup.
[00:48:28.350] – Steve Latham
I thought like, I, if anyone, I’m finally ready to go do my own thing. I learned so many mistakes. I learned from so many of my own mistakes that first 18, 24 months. There’s just so many things you don’t know, like when you get started, but you have to learn these things to be successful. Think about like building a sales organization, creating a sales plan, a sales process. You have to know your space. You have to know your customers. You have to understand the dynamics in the industry to figure out how are we going to actually build a sales machine and how do you, how do you create a sales plan for a sales rep? Like, I didn’t learn that at Harvard. Like, they never taught us, you know, all these things that you had to learn to become an entrepreneur. And so that’s why I always tell founders, don’t start a company, especially in a space you don’t have experience in, and especially right out of school, because your chances of success are like 1%. The Michael Dells are the, you know, one in a million. 99% of them don’t work out, and then they get kind of jaded because they have a bad experience, and they could be great entrepreneurs if they had just built up their skills and their knowledge and network before doing that.
[00:49:29.070] – Steve Latham
That’s one. Secondly, I think depending on where you are in your career, it’s just, I see a lot of mistakes a lot of millennials and Gen Z employees make is they come out not with this mindset of how can I add value? How can I prove myself? How can I learn and grow? But like, what’s in this? How do I get paid? Right? Kind of a selfish approach to business. When I started my first job, like my whole number one goal was to prove myself, prove that my employer made a good decision hiring me, be the best in my class as an analyst in a class. I had very specific goals, and none of it involved, like, maximizing my income. I was, I make I didn’t make anything, right? I was underpaid. I was in debt for the first 3 years out of college, not just student loans, but also because I wasn’t making money, real money. But I was like, long-term view, like, I need to learn and grow, and then I can harvest down the road. And I think that’s another thing. Delaying gratification is one thing that I view as one of the secrets to my success, and seeking feedback and input.
[00:50:30.260] – Steve Latham
That’s another thing: people generally are not very open to feedback. That’s the only way you’re going to get better. You know, iron sharpens iron. But if you are thin-skinned and can’t take constructive advice, your ceiling is very limited. So those are things I try to recommend to, you know, people who are new to the workforce. If you’re a founder, it’s like, know what you’re good at, find people to fill the gaps, realize, you know, you can go fast alone, but to go far, you need a team, very different skill sets to start a company and get product-market fit and establish that you have a viable business opportunity. Versus trying to scale that. 0 to 1 is very different from 1 to 10. And depending on what you like to do, like, could it help really in what your mindset is? If you love growing, running, operating, growing something, like with— think of Atomic Habits, doing lots of little things, you know, getting better as you’re doing it and figuring out all the tweaks that we can do to improve our operational model. That’s very different than I having a vision for a solution. That doesn’t exist today.
[00:51:29.810] – Steve Latham
I want to bring it to market and solve a problem. Very different skill sets, but both are very necessary depending on where you are in the evolution of the business. So I think figure out what you like, then make sure you have the best chance of success before making that leap. I didn’t listen to that advice. That was my own advice. I’ve started 3 companies in 3 industries I did not know, and I paid the price for it. It’s a lot longer, slower slog to do that. So I try to I say, don’t do what I did, you know, learn from these lessons, and you have a much higher probability of success.
[00:52:01.660] – Jonathan Denwood
Yeah, I think, I think you kind of put that so well, Steve, because you, you know, through our conversation, I think it’s been obvious that there are certain cultural, certain attitudes in the nonprofit space that you had to learn. And I think you’re pointing that out in the other businesses that you started. That it’s these cultural and these specifics around these industries that you really gotta understand. Do you think I’m on the right track, Steve?
[00:52:37.090] – Steve Latham
Yeah. Every culture, every industry has its own norms, standards. Um, I was told how hard it is to sell nonprofits, but I didn’t really understand it until we started doing it. And cuz I was like, this is a no-brainer value prop. Literally, when people hear our value prop, they’re like, it’s kind of a no-brainer. There’s no risk; it’s all upside. And you present something that’s a no-brainer, and someone says, ” That’s great. Like, great, can I get your proposal? No, not interested right now. Why? Just not, just not right now. Just not ready for that now. Was there something wrong with the solution? No, it all makes sense. I get it. It’s just not now. And, you know, people just— I was— that was shocking to me because I was like, if you’re in a company, a private industry, you would never say that, right? Yes, this is a way we can grow our funding, save money, reduce, and improve our efficiency with no upfront or fixed costs. What’s not to love about that? Of course you would sell that like crazy in the private sector, but in the nonprofits, it’s new. We have to think about it.
[00:53:32.930] – Steve Latham
We gotta talk about it internally. It’s gonna take us a year or 2 to get warmed up to this idea. And that’s just kind of the nature of it. But I didn’t know that coming in. Had I spent some time in the space prior to that, probably would’ve had a very different business model going in; would’ve spent less on the front end on sales and marketing, knowing that timeline is much, much longer. So you learn these things, but every, as you said, Jonathan, every industry has a different setup, different norms, and you just gotta figure that out to figure out how to succeed in that environment.
[00:54:04.990] – Jonathan Denwood
That’s fantastic. Good place to wrap up. So Kirk, I’m gonna start with Kirk ’cause he’s got a prior engagement he’s gotta go to. So Kirk, What’s the best way for people to find out more about you?
[00:54:16.140] – Kurt von Ahnen
Well, I’m super active on LinkedIn. In fact, I spent some of this week going through the spam on LinkedIn. Uh, I also own Mañana No Más, and you can catch me over at mañananomas.com or through WP-Tonic and Jonathan.
[00:54:27.700] – Jonathan Denwood
That’s fantastic. And Steve, what’s the best way for people to find out about you and about your company?
[00:54:35.000] – Steve Latham
Uh, givingiq.com. That’s our site. I’m pretty active on LinkedIn, too. I’m always happy to connect there. Yeah, it was pretty easy.
[00:54:45.500] – Jonathan Denwood
Yeah, I think it’s been a great discussion. I think we’ve given some insights in the world of nonprofits. I know a lot of the people that listen to this show work for nonprofits. So if what Steve’s got to offer sounds interesting, he’s very approachable on LinkedIn, and all the links will be in the show notes. We will be back next week. I think it’s our roundtable show. We’ve got a great panel, got some guests. We’ll see you soon, folks. Bye.
[00:55:15.120] – Speaker 6
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