Philanthropy Upgrades by NextAfter
Tim Kachuriak, founder and Chief Innovation and Optimization Officer for NextAfter, is using the internet to figure out what makes people give, and leveraging that knowledge to help nonprofits reach farther.
I am passionate about helping philanthropic organizations impact more people.
Author, podcast host, and entrepreneur Tim Kachuriak feels the same. Throughout his career, he has become obsessed with trying to optimize giving to nonprofits. Tim wants to make donating easier and more impactful - and he's using the internet to figure out how.
The internet as we know it was invented to facilitate communication and create a web of easily accessible information for all. But it's also the biggest behavioral research laboratory that has ever existed.
Online Communication Meets Behavioral Science
Electronic communications are an easy, inexpensive way to reach donors. By crafting different versions of digital messaging - from emails to web pages and beyond - nonprofits can experiment to see what attracts and retains donors most effectively.
Tim's consultancy company, NextAfter, is using these experiments to discover why donors give and apply that knowledge to reach more people, engage more donors, and influence greater giving across the board. In fact, his company's mission is to create a generation that embraces widespread pervasive personal generosity.
NextAfter is also practicing amazing generosity itself, by offering the results of more than 2,400 experiments in a free online research library.
It's all part of Tim's quest to grow the most generous generation in history.
In this episode, you'll learn
- How Tim became an accidental entrepreneur
- Why fundraising is a mountain, not a funnel
- Which counterintuitive changes are increasing results
- The profound question Tim wants to tackle next
FRANK BLAKE: So let me start with your goal of making this the most generous generation in history. How did that become your goal, and if you tell our listeners how NextAfter, your organization, fits with that goal.
TIM KACHURIAK: It's something that's actually emerged, honestly. So I worked in the field of advertising and marketing, both in the for-profit space and the nonprofit space, for a period of time. When I crossed over to the nonprofit world, I just became really enamored with this miracle of generosity. Every time somebody gives a gift, it's truly a miracle. It's kind of like the more that you get of that drug, the harder it is to stop.
So what NextAfter has really focused on for the last eight or so years is really trying to decode what works in fundraising, and get that into the hands of as many nonprofit organizations as we possibly can so that we can help to really influence the unleashing of the most generous generation of all time. So that's really where we fit.
FRANK BLAKE: Very interesting. So what got you focused on this? I mean, you said you got a marketing background, that's where your expertise is. What got you focused on philanthropic fundraising? What was the decision process to establish NextAfter?
TIM KACHURIAK: it starts right after I graduated college. So I graduated college right after 9/11, which was a horrible time to enter into the job force, especially for somebody who wanted to break into digital marketing but I was fortunate enough, I worked at a country club all during high school and college. I used to joke, I had 432 uncles and aunts that were captains of the industry. So I went to one of the guys who was actually the president of the country club, he was also the president of the second largest ad agency in Pittsburgh where I grew up. I said, "Hey, can I meet with you?" Met with him, did my little dog and pony show. He's like, "Oh man, I'd love to hire you but you know what? 9/11, it hit our industry hard, our agency harder. I'm sorry, I can't help you. We just laid off 30 people yesterday."
So six months wandering in the wilderness I ended up meeting a serial entrepreneur on a golf course, actually. He had me do a couple projects for him and he said, "Well, why don't you start your own business, kid?" I was like, "well I don't know how to do that". He's like, "I do. We've got an incubator on the second floor of our office building. I'll give you a desk, I'll introduce you to people, and the rest is up to you, kid."
FRANK BLAKE: Wow.
TIM KACHURIAK: So I did that for five years, and it was great. I was living in my parent's basement, not married, no kids. I loved that, and I loved what I was doing, but I was always more of a cause guy.
So about five years into it, my church was doing a capital campaign to build a new building. I had our little marketing company do all the marketing materials for that, and it was that first time that I was doing something that I felt like I was wired to do but for a cause I cared about. Once I got that flavor in my mouth I couldn't really get rid of the taste.
Shortly after that I ended up selling my business. I moved from Pittsburgh to Fort Lauderdale, Florida. I went to work for a nonprofit organization down there. That was my first taste of being inside of that world. I was so amazed that there was basically these advertising agencies that worked exclusively with nonprofits, and we worked with one that was based out of Dallas. One of the founders of that company said, "Hey, why don't you come to Dallas? We've been doing direct mail for 30 years and we're really trying to break into this digital world. Maybe you could help us start that division?" So that's where I got into this space. Through that process, I just became obsessed with trying figure out, how do we optimize giving? How do we make it easier for people to give? How do we make giving actually a positive experience for donors? That's what ultimately led to the founding of NextAfter.
FRANK BLAKE: The amazing thing to me on your site is actually information you just put out there for free. For people to see AB testing, this works, this doesn't work. I mean, it's fascinating.
TIM KACHURIAK: Well, we learn we have to practice what we preach. Right? So if we want to be generous, we have to be generous with the things that we've been entrusted. What NextAfter specifically does is we've started what is now the world digital fundraising research lab. We focus on doing two kinds of research. The first kind is what I refer to more as forensic research, where we're analyzing large amounts of data across the nonprofit sector. Then the other part is where we use the web as basically a laboratory where we can actually run rigorous scientific experiments to try to figure out what works and what doesn't work. It's amazing, because a lot of things honestly, fly in the face of conventional wisdom or intuition. So it's been a fascinating journey, for sure.
FRANK BLAKE: So what are those things that are counterintuitive that you've discovered.
TIM KACHURIAK: Well, I mean one of the things is that we think about digital marketing or fundraising as kind of a funnel, where people come to the website from various different channels whether they get there from social media or from search engines or from emails or offline campaigns like radio and TV, and the concept of the funnel is that people have gradually moved through this thing through organic processes. But what we've learned, not the case at all. Right? Actually, we've taken the funnel and flipped it upside down and said, "No, it's more of a mountain." So the donor, to get to the top of the mountain where they actually make a financial gift to support an organization that they care about, they have to go through a series of work and it's hard and it's not easy. We actually make it harder for them by not communicating clearly, by putting very friction-laden processes before people. So what we try to do is say, "What can we do to make it easier for people to give?"
FRANK BLAKE: Behaviorally, do you find the prompter for why people give, why they climb that mountain that you described, how do you get desire to climb the mountain? What is it when you're consulting with folks?
TIM KACHURIAK: The key is really helping the organization to discover their unique value proposition. For example, I sent an email to you, and the goal of the email is ultimately to get you to go give a donation to my organization. Well, there's a series of these micro decisions that you have to make in order to complete that journey. So the first decision is, do I open this email? Do I delete it or do I ignore it? If you make a decision to open, you have to make a decision to read, maybe to keep reading, maybe click, right?
FRANK BLAKE: Yeah.
TIM KACHURIAK: Then as you click, you get to the website and the landing page and there's a series of these micro decisions that you have to make as you navigate the content, the copy, the images, the video, whatever is on that page. If the content's compelling, if it's inspiring, you might click the donate button. Then you go through this donation experience. There's even a series of decisions you make as you complete the transaction. Do I want to give a one time gift or a recurring gift? How much do I want to give? Do I want to designate my gift in some way? How do I want to pay? These are all little decisions that a donor makes.
So when we think about value proposition we say, "Look, at any of those decision points, the potential donor could bail out of the process all together. They could just say no at any point and it undoes all of the work that's accomplished to that point." So that's where we target these experiences and we say, "How do we communicate more value at this specific moment to get them to continue to say yes along this journey?" If we can do that over and over and over again, we can build a continuous unbroken chain of these micro yeses, we can get more people to the top of the mountain, and ultimately influence greater giving. So that's really how we think about it.
FRANK BLAKE: As you've looked at this are there…personal behavioral traits that have come through to you or some people more innately generous? Can you identify, here are these people who are more given to generosity or an appeal to this kind of emotion is more likely to yield generosity?
TIM KACHURIAK: I don't know specific persona or personality type but one of the things that we find oftentimes is that as a nonprofit organization, we fail to help the donor understand the reasons why they should give. So I'll give you a very practical example. So if you look at a lot of donation pages for nonprofit organizations, it's just a form that you fill out. So you fill out your contact information, your payment information, you hit the submit button, and then your donation goes through. But the problem with that is that's all cost and no value. So one of the simple things that we've tested and we found over and over again is by actually putting more copy, putting more words on the page, that actually relates to the donor reasons why they should give, it makes a huge difference. When people see that, they're like, man, who's going to read all that text? Well, you know who's going to read the text? The people that are your ideal donors will read that text. So it's things like that that are just very counterintuitive.
Another example is emails. So if I showed you some examples of different email tests that we've run, most emails sent from nonprofits are highly designed, they've got graphics and images and buttons. We test just sending plain text emails, like an email that I would send from me to you. So from Tim to Frank, where it's very plain text, the language is very clearly communicated, and it increases results by 300% or more in fundraising. So it's things like that that are kind of counterintuitive to folks that are doing this for a while.
FRANK BLAKE: So what kind of tests will you typically run? What's an example? I come in and I say, "Hey Tim, can you help me?"
TIM KACHURIAK: So the first thing that we'll typically do is really study the organization. We go through and pour through all of their data. We look for, where is the greatest opportunity to move people to the very next step of the journey? Then we'll map out a design of experiments. If you think about it, the web is the greatest behavioral laboratory that's ever existed because I can serve version A of my page, and version B of my page, and every other person gets a different version of that. Then I can monitor what the data suggests works. So we do that, we'll map out different experiments, everything from like testing different Facebook ads to testing different landing pages to email campaigns to social media posts. We'll just look at what the data tells us. Oftentimes it's the very un-intuitive things that end up working.
FRANK BLAKE: When organizations come knocking on your door, do you find that they're receptive to your insights, or that we've all got these notions ingrained on how you raise money and put on an event and have somebody on the stage who's got a compelling story to tell and then everybody bids a table, what do you find from the organizations themselves?
TIM KACHURIAK: I think they're initially attracted by data. I mean, you mentioned earlier, we have 2,500 different experiments that we've run and we open source it, it's all published online. I think that data becomes very compelling for these organizations. They see, there's a lot of gurus and industry leaders in our space and it's like, trust me, I'm a doctor. We bring to the table real behavioral-based data that says, "No this works, versus this." I think that that's very attractive to people.
FRANK BLAKE: Why do you think it is that most nonprofits stay, what I'd say is subscale? Just have a really hard time scaling up, why is that?
TIM KACHURIAK: I think there's a number of reasons. Number one, I think nonprofits are incredibly risk averse, and probably for a good reason. But I think what sometimes happens is that by being risk averse, we sometimes fail to assess the risk of not trying something new. As a businessman like you understand this, I mean this is partly really getting ahead and moving and advancing the organization is taking calculated and mitigated risks. So I think that that's also something that's really interesting about the testing and experimentation we do, is we give people the opportunity to try something new, but at the same time mitigating some of the risk.
So instead of betting the farm on something, we can actually run a small-scale micro test, look at the data, and then make our play from there.
FRANK BLAKE: Is the statistic right that roughly 2% of the population gives to a nonprofit in a year? Is that the correct-
TIM KACHURIAK: That is sadly correct, and it's been that way since they've tracked it for the lot of 40, 50 years. It has not improved-
FRANK BLAKE: If you said, "Here's a goal for the country," that you might be able to help the country achieve, what do you think that percentage could be?
Double it and it's 4% and it still seems mighty small.
TIM KACHURIAK: As an optimizer, you're never done until you reach 100%. So that's what we try to instill with the folks that we work with is that you're never really done. You're never really done until you get 100% results 100% of the time, but I mean you're right. If we could double it, if we could increase it by 50%, I mean that would be billions and billions and billions of dollars, $450 billion was donated to charities last year. So if you could increase that by 50%, it's significant.
FRANK BLAKE: Have you noticed a change with the pandemic? Has that changed how people have given or what motivates their giving?
TIM KACHURIAK: Yeah, it's been really interesting. So when everything started to really shut down a lot of travel and people were on lockdown in early March, we set up this tracking study. So we took 160 different organizations from 12 different industry verticals and we monitored all of their email communications and we're continuing to monitor them. One of the big shifts that we've seen is because a lot of the in-person events have been shut down, a lot of the face- to-face communication has pretty much stopped. There's been a significant increase in the volume of digital communications that are going out. So really, digital is becoming much more of the lifeline for these organizations.
What was also interesting, we tracked all the giving for 90 different organizations, and what we found is during this time that actually digital giving has increased by 30% year over year, compared to 2019, that same period of time.
FRANK BLAKE: Right, which is consistent with retail sales, by the way.
TIM KACHURIAK: Yeah, and so that's encouraging but I also think it could create another challenge, because one of the challenges I think with digital communication is that it's very cheap. It doesn't really cost me much to go and just start blasting a bunch of people with a bunch of emails. I think the danger is that it could lead to the proliferation of really, really bad communication from organizations. We always talk about that people give to people, they don't give to websites, they don't give to emails, they don't give to direct mail letters. People give to people-
FRANK BLAKE: Well, that's a great point right there.
TIM KACHURIAK: Right, yeah. There's a danger that sometimes with all of the technology that we can actually lose our humanity, we can lose touch with the fact that this, what we're really trying to do is to foster a relationship where the donor feels valued and they're able to really feel connected to the impact that they're having through their gift. That's the magic, when that happens it gets really, really exciting.
FRANK BLAKE: So you said recently, finding out about why people give isn't a deep enough question, that you want to find out what makes people care. All right, so that's another level of profound question. How do you go about answering that?
TIM KACHURIAK: Well, I mean we're doing it through some of our research but there's been a lot of stuff that's been done over the last 10 years or so on this specific topic. I'll give you one specific example. Dr. Karen Wynn, she's at Yale University. She is a PhD in psychology professor, and then she also runs this thing called the Baby Lab, which sounds really weird but it's actually really cool. So what they do is they do different behavioral research with infant children, so up to 18 months. So these kids, they can't speak, they don't talk yet. She observes their behavior.
So one particular experiment that I found was really interesting. She has this little puppet theater set up. In the puppet theater, there's two puppets on either side, then there's the box in the center of the table. Then a third puppet comes in, it's a little duck, and inside that box is a rattle. The duck is trying to open the box, Then puppet number one comes over, helps the duck open the box, it gets the rattle, and everybody's happy. So then they reset the stage, same scenario, puppet on either side, box in the center. Chicken comes out, struggling trying to open the box, trying to open the box. Puppet number two comes over, stomps on the box, stomps it closed.
So then what they do is they take those two puppets, the ones that were on either side, they hold them out at arms length of the child, and in almost every instance the child chooses the caring and compassionate puppet versus the mean one. What that suggests is that compassion is something that's almost hard wired into us. It's not something that we actually have to be taught, it's almost part of the fabric of our nature.
That gets me really excited because that suggests that compassion and caring for other people is really something that's innate. We just have to remove the calluses that we've put on ourselves just as we've gone through the battles of life, and unlock that. So that's really exciting stuff.
FRANK BLAKE: So if you were to say to our audience, "if there are a few things that people need to know about philanthropy and giving and generosity, these are some of the things you ought to know. You ought to understand."
TIM KACHURIAK: Well, the first one is it's good for you. There's research that suggests that giving actually really helps the giver as much as the person that they're trying to help, so that's one thing. There's a whole bunch of research around that. Number two, it's that find organizations and causes that really stir your imagination, that really speak to your heart in terms of what you care about. Maybe if there's changes you want to see in the world or if there's wrongs that you want to see righted, I mean those are the kind of things that people really get a lot of satisfaction from when they're giving to something that's really aligned with who they are as a person.
FRANK BLAKE: I have a general point of view of philanthropic organizations that we've had some people on in the past talk about this, that there's too much anxiety around the direct spend of dollars and if this were a business, you'd view your marketing spend very, very differently than most nonprofits do. It almost seems like donors have this odd restriction of hey, we don't want to see more than X percent go to anything other than direct to your beneficiaries. Do you run into that a lot? Do you try to address that?
TIM KACHURIAK: Yeah, absolutely. It's a huge problem in our industry. I think what it comes down to is we're measuring the wrong metric. We're measuring efficiency and not impact. I always like to give an example. Imagine there's two organizations, one is a $1 million organization and they have 99% efficiency which means 99 cents out of every dollar goes directly to whatever it is that they're doing. The other one's $100 million organization and they've got 50% efficiency, meaning 50 cents out of the dollar is going to the field, the other stuff is overhead or marketing. Which one's creating more impact? I mean, it's an obvious point, right?
FRANK BLAKE: Yeah.
TIM KACHURIAK: It's just something that I think a lot of people are starting to grasp that this is just measuring the wrong stuff.
FRANK BLAKE: To me, that's one of the things that thwarts our getting past the 2% number.
TIM KACHURIAK: That's right.
FRANK BLAKE: I love the efficiency versus impact. That's a great way to describe it. From a business perspective, you just measure the impact, the efficiency is fascinating but tell me what the impact is.
So I don't want to put you in a difficult spot of having to choose amongst your clients because I'm sure you love them all, but do you have an example of, here's an organization that came to us and open minded and here's what's been able to happen since?
TIM KACHURIAK: Yeah, I would probably have to say Hillsdale College is a great example. We've worked with them for a number of years and when we started with them they had been doing direct mail for probably 40, 50 years. They were just dipping their toe in the water with digital fundraising. They really leaned into this opportunity to grow that as a channel of revenue, but also as a platform for what they see as their mission, which is really educating America. They say that they're America's college. They do that by giving away their coursework.
The neat thing about that is that gives us the opportunity to get people to experience the value proposition of the college, so that we then ask them to give a gift they have a much greater understanding as to really the benefit. But they've been really great, I mean they've grown 10X in the last five years. So that's been really exciting to see the growth that's come from that as well.
FRANK BLAKE: So I want to ask a series of questions that of late I'm asking a lot of the people who appear on the podcast. The first is, what's the craziest good turn that anyone's ever done for you?
TIM KACHURIAK: The craziest good turn. I would have to say right when I first graduated college and I was looking for a job and nobody would give me a shot. This guy, his name John Vento, he was that serial entrepreneur I mentioned. He just took interest in me. He said, "Look, I'll be your partner, I'll help set you up, and I'll help give you a chance." Honestly, that changed the complete trajectory of my career honestly, because I had no intentions of starting a business. I wasn't entrepreneurial, but it really suits me and I love it. It's really created the foundation for what would ultimately become NextAfter. So I mean that was a huge, I guess, change in direction from what I had anticipated for my life. So that was a big one.
FRANK BLAKE: Is there an example of where you took that and you turned around then and did something for someone else who was just equally, gee, I wasn't thinking about this, and now you're launching them on a path?
TIM KACHURIAK: Yeah. We try to do it every day, Frank, honestly.
FRANK BLAKE: I can see it.
TIM KACHURIAK: One of the things we talk about is, we want to err on the side of generosity. So if we really want to unleash this widespread pervasive generosity we have to practice it in everything. Again, it's why we try to be very liberal with the things that we have instead of holding onto this stuff saying, "This is our proprietary stuff," we want to give it freely and just see what happens. It's been really surprising, great things happen.
FRANK BLAKE: So what's one piece of advice that's stuck with you from either your parents or somebody you worked with? A piece of advice that if you could put that one on your table, a desk, to look at it every day.
TIM KACHURIAK: Always be curious, always be curious. I think that that's something that is really shared by a lot of the folks that we work with is this insatiable intellectual curiosity. I just want to see what happens. That opens up the opportunity for innovations and breakthroughs. So curiosity is a big one.
FRANK BLAKE: So if there is one person, not a famous person unless it just happens to be some famous person that you know but someone that you know whose life you'd say, "Boy, I really admire that person has lived his or her life," that you'd call out and say, "Wow, that's what I want to do."
TIM KACHURIAK: Yeah, his name is Tom McCabe, he was my former boss at an agency I worked at in Dallas. We're still very good friends. He's such a statesman in a way that he approaches everything. He ran a company like mine but 30 years ago for 30 years, and just the way that he is with his family, the way that he always was with his staff, the way that he just is in the community. He's just an incredible man and somebody I admire greatly. Honestly, I say all the time, I say, "When I grow up I want to be Tom McCabe."
FRANK BLAKE: That's very cool. Well, we had a guest on recently who talked about having a generosity guru, as something she said, "This person's my generosity guru." Is Tom McCabe that person for you?
TIM KACHURIAK: He is. He taught me the theology of giving, if you will. Where it's really an incredible thing that happens when somebody gives a gift to another organization. Really, it's an irrational thing, it doesn't make sense because they don't naturally get a tangible benefit back, it's not like buying a product. So there's something special that happens there and he just really unlocked, I guess my perspective on that.
FRANK BLAKE: If you were to answer the question, boy, if somebody really knew me they would know this about me, what is it?
TIM KACHURIAK: Wow, if they really knew me they would know that despite what I project, which is confidence and innovation, that I have bouts of incredible insecurity where I feel like an imposter or that I'm not really the person that I want people to think I am. We host a conference every year and for some reason the night before the conference I absolutely lose my mind and I can't sleep and I'm worried. It's because it's like all the people in my world that I care about are there. All of our clients are there, all of my staff is there, everybody that we interact with. It's a very, very dark and humbling time but then the next day is the greatest day of my life. It's amazing just the difference. So that's one thing I don't think anybody knows a lot about.
FRANK BLAKE: So where, if the listeners want to learn more about you, learn more about what you're doing, obviously they can go to the NextAfter website. Are there other places for them to find out more, other resources that you would direct them to?
TIM KACHURIAK: One of the things that we've developed over the last couple years is this NextAfter Institute. Really, the goal of the institute is to do more training and we've developed a whole series of different workshops and certification programs, and we virtualized it now with COVID, so they're all available online. But there's a whole host of other free resources, templates, guides, eBooks, all sorts of things that are available.
FRANK BLAKE: So what's the institute? That sounds pretty interesting.
TIM KACHURIAK: Well, the institute really is how we see our opportunity to fulfill our mission fulfillment. So if you think about it, we can only work as a consultancy, we can only work with a small subset of organizations. So if we want to be true to our goal, which is unleashing the most generous generation in the history of the world, we have to find a way to amplify or magnify our impact. The institute's designed to do exactly that. So we want to try to get into the hands of as many people that are working in this space as possible, the resources they need to be more effective in their craft, to really develop this opportunity to run their own experiments and learn from the donors as they go through that. So that's really what the institute's really designed to do.
FRANK BLAKE: That's phenomenal. Then if you said five years from now, what is NextAfter doing? What is Tim Kachuriak doing?
TIM KACHURIAK: Well, I mean this company and this vision I think is big enough to captivate my imagination for the rest of my life. So hopefully, god willing, I'll still be doing this. But where are we headed? So we just launched a new mystery donor study in partnership with Salesforce and it's a global study. So we're in nine different countries, six different languages. What we're doing is we're giving mystery gifts to 400 different organizations and then we're monitoring how these organizations communicate with us as the mystery donor and we're going to publish that. So I think what we're going to probably do is really take a lot more of our research and really explode it out of just North America.
FRANK BLAKE: That's awesome. Tim, I can't thank you enough for your time. What you're doing, not only is it fascinating, as you can tell, I love how you approach the problem technically but also just the heart that you bring to it because as I said, I looked at the first thing when I was preparing for this interview is I went to your site. All this information free and I know that's not easy to do, just say, "Hey, we're going to make this information free." Your objective is such a great objective, your mission statement is such a great mission statement. I do believe there's so many people with a good heart who want to do well by others but really need help in thinking about how to do it. Look at the donation part of it as the unseemly part that they really would just as soon not deal with, when it's actually a core… it is a core to the mission.
TIM KACHURIAK: That's right. Well, thank you, Frank. I appreciate the opportunity to share with your audience. Look forward to more crazy good turns.
FRANK BLAKE: All right, thank you. Thank you for your crazy good turn, thank you, Tim.
TIM KACHURIAK: Awesome. Thanks, Frank.