Episode 140: The Importance of Referral - Leveraging Trust to Increase Rapport in Relationships
Welcome to another edition of "Around with Randall", your weekly podcast for making your nonprofit more effective for your community. And here is your host, the CEO and founder of Hallett Philanthropy, Randall Hallett.
I love welcoming you back to another edition of "Around with Randall". Today we talk about the idea of connectivity and why it's so important in building relationships. It may be more specifically in starting relationships and what this really comes down to is a matter of trust. I saw an interesting post recently on HubSpot that said that three percent of prospects in a sales scenario, three percent trust the sales rep. I was stunned. I didn't think it would be high, but I didn't think it would be three percent either. Fifty-five in that same HubSpot post indicated, 55 percent said they no longer trust companies as much as they used to, and I know that's true of me as well.
Whether it's reliability of the product or if it's a service that was delivered or completed in the right way, I think we've all become a little numb to this idea of trust. This is now bleeding over into the nonprofit world. The independent sector did a survey last year that indicated that only 56 percent of Americans trust nonprofits. Now in comparison to, let's say, really, really important things like the Supreme Court, Congress, the president, those numbers are astronomical. But interestingly enough that trust of nonprofits is down three percent from a couple years ago, and down further from years past.
We also are seeing, at least in the newer generations coming into adulthood, so let's take Generation Z as an example as they become adults, they're younger in their professional lives, in life experiences, that they only trust nonprofits at a 46 percent level, where baby boomers are 67 percent. So just based on those numbers you would say, well this isn't going to get better.
Why is trust so important? What what does it mean to us? And then we're going to get into why it's important to have this concept of connection in people that are representing you as a fundraiser or as a CEO or CPO. Maybe you're a board member and your role in that trust, according to research, has been connected to some of the base needs of who we are as human beings. They're fundamental almost to the same level as water or food in terms of a necessity. So if we take Abraham Maslow, which I did a podcast on and talking about the hierarchy of needs, the first level of connection or trust that we should have is the idea of reproduction. It's in the Baseline psychological needs. But really it's in level three before you can ever get to self-confidence and self-actualization, this idea of love and belonging connection is critical.
The Stanford Center for Compassion and Altruism did some research and found that people who feel connected show lower levels of anxiety and depression. They have greater empathy and they also tend to be more cooperative and trusting. This is where I think social media has seen such a large growth opportunity in some ways. If we're seeing an erosion of trust in the one-on-one individual relationships that we have, then we probably are looking if we know that it's innate. Something that's critical to who we are as human beings for other ways of building connection, and I'm certainly not the expert here as you've heard me say many times, but I think this is where the connections we have on Facebook and on the other social media platforms, Instagram, Twitter, other things where we view those relationships as relationships where someone like me might look at them as just communication, information.
If we turn trust and connection into philanthropy, which is why you're listening ,after me speaking for four or five minutes about kind of the Baseline concept we get into where we really want to land today and that is why it's important to have people out there who are advocating for us. Don't forget, and I give Nathan Chappelle and Brian Crimmins an immense amount of credit. They talk about this constantly that the percentage of households in the United States making any kind of charitable gift to any nonprofit is under 47 percent, according to the latest numbers, and that's down from two-thirds the households who made a charitable gift in 2002. If there are less people generically making charitable gifts then our ability to identify number one and number two interact critical become even more important, exponentially more important in the identification and outreach process.
So let's look into the sales world. Two terms what we've heard of a cold call and a call based on a referral, or maybe a warm call in the sales world. According to Duct Tape Marketing one to three percent of cold calls actually result in some type of interaction, communication, relationship. At least the process I'm not saying close a sale, I'm just saying they get a conversation. Same study found that when they had a warm lead, a referral, somebody said you really need to talk to Randall, it was nearly 40 percent. And while I don't think nonprofits, the nonprofit space have those statistics. There, I think they're very much along with line that I see at least anecdotally this idea of trust in how we connect to others actually has some pretty powerful writing, research, studies. So the Dale Carnegie organization has written about obviously this and they talk about trust in terms of business relationships is that trust creates repeat business, that trust leads to recovery, and that trust drives loyalty and Partnerships.
Now while those concepts are written in the for-profit sales world this is where we begin to pivot towards the tactical, which is something I promise in every podcast towards philanthropy and non-profit work. Repeat business is the equivalent in the nonprofit world of consistent donors year-over-year-over-year. Less side months and less live once last year but unfortunately not this. Some of you are unfortunately not this, if the number of donors is decreasing just across society then our ability to keep our donors and build deeper more meaningful relationships. Again the Generosity Crisis, Nathan Chappelle and and Brian Crimmins, the this idea of transformational radical relationships, transformational conversations becomes more important.
Trust leads to recovery, which was number two from Dale Carnegie. How many times have we heard about relationships and philanthropy having to take a step back because there was a mistake made either in communication, execution of something, recovery? If we have a deeper relationship with our donors and we're able to identify who these people are is important because it allows us to keep them.
Number three, it creates loyalty and Partnerships. That's the highest level of philanthropy we can have where people feel invested in what they their actions speak for, their values, and they do that through maybe their charitable philanthropic giving. All of this leads us to how do we find more of these opportunities. How do we identify people that are more likely to give to us? We quit worrying about wealth as 80 to 90 percent of what we're trying to look for and we start looking for connectiveness, likelihood, and here comes your Tactical, I think there's four examples I can use either in my past practical experience as a fundraiser or with clients in Consulting that I think could be helpful, that if you're looking for building deeper relationships or being introduced into new relationships, you need someone to help you.
I'll go back to what we said a moment ago. If you're cold calling a bunch of alums or grateful patients or just leaders in the community with no sense of connection, I equate that very much along the lines of Statistics from Duct Tape Marketing. One to three percent are going to be successful in getting you in the door,40 based on referral. If that's true, and I think it is, then the more time you spend on the front side building the referral agencies that you need the more likely you are to have a more targeted approach in terms of relationship building for philanthropic purposes.
So let me give you four examples. Many years ago I arrived at St Thomas Academy as the head of philanthropy in external relations. Didn't know the community in Saint Paul, Minnesota nor Minnesota in general other than being there a couple times to go see a lake. I didn't know anybody up there, was one name that kept coming up as I was doing a lot of intro conversations and it was in odd places, from faculty members to certain alums to board members, and I wasn't like I was bringing up the name because I didn't know who this person was. The name was Jerry Brown. It turned out that Jerry Brown was a graduate of the school went to college, came back and taught, coach football, and to my knowledge is still the all-time winningest football coach in terms of wins in the state, in the history of state of Minnesota. He had, since 1951 until the just before the turn of the century, he had been affiliated with that school as a student, as an Alum, as a teacher, as an administrator, as a coach. To say he knew everybody was an understatement. I mean classes are only 100, 125 people. Taught math. He knew everybody. For some reason they got out of kilter. I don't know exactly all the details to this day but I finally called Jerry Brown and said look, I'd like to chat with you, and he says yeah you know I'm retired and all of this I said hey I'm new, help me out here. Your name comes up. I'd love to chat. I offered Jerry a job on the spot. The job was very simple. I'll pay you to come and travel with me and all I want you to do is get us into the room so I can be meeting people as we go. Paid him a few thousand dollars a month. Jerry Brown got me into any and every conversation I ever needed and or wanted, to boot he is one of the finest people I've ever been around. Salt of the earth quality human being. Do you have someone that can help you do that? Is a little investment worth a lot of reward? Something to think about.
Number two, I'm working in a capital campaign with a client. We are aiming very high at some huge donor opportunities and if you need more information about campaigns in general, I think I did them in episodes 44 through 47, kind of the steps of campaign. This is a small piece of it but we spent an enormous amount of time on the front side with The Campaign Committee and in particular one honorary chair who I will keep nameless even by identifying them in any way shape or form who's literally got us into rooms and got us access to people we never dreamed we would have, not everybody, but good high-level quality people, and conversations that are very large and larger than we probably anticipate. We spent an enormous amount of time with that Campaign Committee making sure that we had individuals that represented the different parts of the community, and an immense amount of time getting this honorary chair in the door. And yes that slowed down the front side but I think the results are going to be enormous because that person has credibility in a community that we didn't have. How you structure your Campaign Committee is critical and they get you into the rooms with trust of people that you normally can't get in the room yourself. Spend more time on the front side for the benefit on the back. Speed is not your ally here.
Number three, I've got three or four clients I'm doing grateful patient we know when the clinician introduces the doctor, more likely it could be PA and NP, a nurse introduces the patient to the fundraiser and says they're a part of my team. We know that that gift officer gets more conversations and raises more money. Doesn't mean all of the Grateful patients, but instead of worrying about let's just figure out who the wealthy ones are, I'm spending more and more time figuring out who are the most likely partners that we should have as clinicians that align with the Strategic needs. And then how do we create that trust to get that introduction.
The fourth is just in general probably thought I'd lead with it our boards. So if you need a little bit of thought process on boards you can go back to listen to episode 59, and this is mentioned, but the job of a board member is changing. Particularly as we see a reduced number of philanthropic donors out there, we need board members. Yes they have a fiduciary responsibility, a legal responsibility to do all the things that go along with 990s and make sure they approve the minutes, and the Slate of officers, and the finances. I'm not saying eliminate those, but if you're spending most of your time as a nonprofit on the legal and not on the connections then you're missing opportunity, hugely, for philanthropic connection. Your board should take in terms of its kind of build out or or what it what it looks like. It should take it's in all your process where are the tentacles into your community that board can leverage opportunity or relationships or introductions. Having people come and say Bob's a good guy, Sam's a great gal, we love having her and let's put her on the board and you're like yeah but they live next door to you, they have the exact same social group, in fact it's your sister doesn't leverage more options.
Those are four examples where maybe it's someone who has a great deal of credibility, who's been a long-time employee or long-time connector, certainly your campaign, your cabinet, committee how they reach out in the community and open doors for you, grateful patients is a way. I'll even throw another one in. Maybe you need a class Captain system if you're in a university or high school or or a like a law school. I'm more likely to take a call from a law school classmate then I am just blankly. Yes it takes more time. Yes the end result should be a major gift. I'm not advocating reducing the ROI but what I'm saying is there are less people giving then we got to find more ways to get in front of the ones that do. So there are some options all the way finishing with your board.
In the end these options, in terms of opening the door, are critical. Go back to what we talked about a few minutes ago about the difference between cold calls and kind of referral warm calls. You know immensely more connective and an opportune but then it becomes upon us as fundraisers, and if you need the moves management process you can go back through episodes 21 through 24A And I take people through to the four big areas of how to make a phone call, how to build relationship and cultivation, how to ask and how to steward. But they all come down to what are our responsibilities. We need to be reliable. We need to be reliable to the person who makes the referral and to our donors or prospects. We need to be honest. Telling the truth is more important than in that relationship. Then tell them what they want to hear. We need to be responsive when somebody needs something. We need to jump particularly those who are willing to open their doors for us but also with our prospects and donors, and finally we need to be objective, what's reasonable.
If you're not spending more time trying to figure out how to get better options for those first time meetings or leverage someone's giving at a higher level, and you're not using outside influencers that can add to the trust to the relationship, who can add to the possibilities. Yes it takes time, and yes there's not an ROI within a moment. But what we know is it makes all the difference in the world. Trust and reliability and those connections are the key to keeping, and maintaining, and growing your philanthropic efforts. Don't forget to check out the website www.hallettphilanthropy.com. Podcasts are posted there or you can download those around with Randall at any one of the million different ways in which you can get it to your phone or wherever, and the blogs are on the website so check those out - two week 30 second reads. And regarding the podcast, leave a comment, if you would please on Apple or Downcast or iHeartRadio, wherever you're picking this up. Remember that what we do is important and there are crazy times going on right now. I think I'm seeing a lot of almost fear in the eye of some nonprofit leaders as they see these huge shifts. Remember what we do, what you do, is important. My favorite all-time saying, some people make things happen, some people watch things happen, then there are those who wondered what happened. Nonprofit work's about being people who make things happen, partnering with people who make things happen, partnering with people who might be able to connect you to those people who can make things happen. Those big donors, those philanthropists, to do and care for those who are wondering what happened. Those are individuals, couples, organizations who need philanthropy to be a viable and important part of your community. You're doing good work. It's tough but it's worth it. I'll look forward to seeing you next time right back here on "Around with Randall" and don't forget make it a great day.