In this episode of the RKD Group: Thinkers podcast, hosts Justin McCord and Ronnie Richard discuss with guest Dave Raley a range of topics, including Dave's journey in the nonprofit sector, his entrepreneurial ventures and his new book, "The Rise of Sustainable Giving: How the Subscription Economy Is Transforming Recurring Giving and What Nonprofits Can Do to Benefit."
Dave shares insights from his career in digital fundraising, the importance of mentorship, and his experiences launching Imago Consulting.
The conversation also touches on the Purpose and Profit podcast, the impact of the subscription economy on charitable giving, and the future of nonprofit fundraising.
He shares:
- His preference to follow trends rather than be the first to try them
- How his early interest in technology led him to a career in web development and marketing
- That the heart of his entrepreneurial spirit was evident in his longboarding business
- How he transitioned to nonprofit work after discovering he could make a career in it
- His beliefs in the importance of sustainable innovation in the nonprofit sector
Show chapters
- 00:00 Introduction to the Podcast and Guest
- 02:57 The Journey of Mandolin Dave
- 06:56 Early Interests and Career Path
- 10:30 Entrepreneurial Ventures and Longboarding
- 11:30 Transitioning to Nonprofit Work
- 14:52 Pioneering Digital Fundraising
- 18:12 Mentorship and Influences
- 23:25 Understanding Personal Wiring and Career Choices
- 25:50 The Concept of Sustainable Innovation
- 30:09 Starting Imago Consulting
- 32:36 The Purpose and Profit Podcast
- 36:37 The Rise of Sustainable Giving
- 42:20 The Future of Nonprofit Fundraising
Meet our guest
Transcript
Justin McCord
Dave, what's it like to be a Disney adult?
Dave Raley
So good. It's just like, you know, there's these cultures, you know, like in East Asia, I feel like it's, like, so okay to just wear your heart on your sleeve, you know, and geek out. So I feel like as an American, a conservative, you know, person, like, just to be able to just be out there with my Disney appreciation, it just feels good.
Justin McCord
Where does that come from? Or where did it originate?
Dave Raley
I was born and raised in Southern California, so I definitely had a bit of the ... in fact, my parents would take me every year to this convention, and it was in Anaheim, California. And across the street from the Anaheim Convention Center, Justin, was this place called Disneyland. We did not have the money to go into Disneyland. I definitely grew up, by most definitions, poor. I mean, we were homeless at times, candidly, as a kid.
Justin McCord
I think I've heard of it.
Dave Raley
But I remember looking over the fence at Disneyland and just being like, that place is awesome. My mom would take me to the Disneyland hotel, which was like, it might as well have been Disneyland to me. And I was like, so cool.
Fast forward, you know, 40 years, I’ve got two little girls. We live in the Pacific Northwest now, so it's kind of that, you know, distance makes the heart grow fonder type of situation. So we just, we love it. Love it.
Justin McCord
There's somewhere in between Little Dave and, you know, older Dave, there's like a, there's a line there of how it either stayed relevant in your life or came back into your life.
Dave Raley
So good. Came back, came back. I mean, I was candidly in college, we lived in L.A. So we were like, just down the freeway from Disney, and it was like, eh, we went once, I think, you know, in four years. I lived the early adulting years, and it was, candidly, it was, yeah, kids. It was kids and then nostalgia, right? When you take your two-year-old, and they're walking down main street in a Tinkerbell outfit, and the like world is theirs, you know, you're just like, okay, sign me up. How much is this?
Justin McCord
Yeah, yeah, I've got the pictures of taking the three-year-old, right? Same thing. Asleep in the stroller, wearing the Aurora dress, so like, all the ruffles are crumpled over. And so, yeah.
Dave Raley
Mm-hmm. Quintessential.
Ronnie Richard
I've got the boy version of it, I think, a five-year-old with lightsabers on the hotel bed.
Dave Raley
Yeah, it's like the Avengers, you know, or Star Wars. I love it.
Justin McCord
Yeah, yeah, it taps into something.
Okay, so let's go back to the, you, your upbringing, and so since you didn't want to be a Disney character―which was what I assumed that you just wanted to be Peter Pan when you grew up―as far back as you can remember, what was it that you wanted to get into? What did you want to be when you grew up?
Dave Raley
Man … so I had friends that were like, I'm going to be a fighter pilot. I'm going to be a firefighter. And for whatever reason, when I was young, I was like, eh, okay. Like, good for you, you know? I just, that wasn't super attractive to me. The earliest that I can remember, though, where I kind of discovered a passion was probably eighth grade. And it was eighth grade computer class, guys. This is … and I'm old enough now―I'm a geriatric millennial, by the way, more and more people are familiar with that, that the internet was like this newfangled thing―And I coded my first website, and I was like, it was … by the way, “Happy Gilmore,” you know that movie? Class, I still don't know, okay, okay, I still don't know how I did this, but I was able to like, digitize, ‘cause this is like VHS days, guys, you know? So I was able to digitize clip my favorite clips from “Happy Gilmore,” and I built an entire, like, fan site ...
Ronnie Richard
You're among friends here.
Dave Raley
… for “Happy Gilmore,” and I was just like, number one, computers are awesome. This internet thing is so cool.
And then it was later in life that I was like, actually, the internet is like this really cool business opportunity. And so that was, in college I was like … I went to college to go be an IT web person, and then I had to take these, like, marketing and business classes, and I was like, wait a second, like, one, I'm not like, I like people, I can't code all day. And so, I'm gonna be of limited use when it comes to that. And so for me, it was like this beautiful combination of like, yeah, the internet is a super cool thing. But the reality is, I love business, I love marketing, I love just that life and the people that it affords me to meet.
Ronnie Richard
Where did longboarding come into play? How did that get in there? Deep cuts.
Dave Raley
Man, deep cuts. I don't know if this is a video podcast, by the way. All right, I'll show you ‘cause I have these sitting just off camera. So, when I was in college, I got into longboarding ‘cause that's, you know, Southern California school, easy transportation around campus. I actually bought a longboard from my roommate, like, an old, you know, dinged up longboard.
Ronnie Richard
Yes.
Dave Raley
And I was like, this is super cool. I learned how to longboard, designed my own board, because that's just who I am. And I spray painted it, and had custom stickers made for it, and all this kind of stuff.
Fast forward, a couple of classmates and I had to basically design a business plan for class. And it was for this idea of a concept called Poncho Longboard Company. And we got to the end of the project, and we were like, this is legit. Like, this is super cool. What if we actually did this? So we launched Poncho Longboards, and there were three of us. At our height, we were in seven different states and like, you know, like, doing it for real. Like, I remember we made boards at first by hand, literally, fiberglass and resin, like plywood and not recommended, by the way. And I told the guys after I think a year of doing that, guys, if we're not gonna do this legit, like, I'm out, as much as I like you, I don't wanna go, you know, deal with these chemicals all day. And so, we got some funding and actually launched it. So I always have this hiding off camera. So I think you guys are the first to see it, but since you asked the question.
Ronnie Richard
You
Justin McCord
We love a good prop. I kind of want him to write it, like, read it across the ... Okay.
Dave Raley
These are still, well, these are just decks, but these are just … and they're still wrapped up, but you can see them. So, one of our series we call the East West series. So we had like a little yin and yang option. So, this is our west, this is our east board, sorry. Seems pretty obvious. And then ...
Ronnie Richard
Very cool. That's, those are nice looking.
Dave Raley
Thank you, sir. Yeah. I still ride occasionally. You know, I, I always, I loved the entrepreneurship thing. Basically, I was, I was, well, my business partner/founder, Joe, was basically the creative genius. Like, he did all these designs. Like, it was his concept. He was just such the quintessential artist.
Justin McCord
That's fantastic. Whatever happened? Whatever happened to the company?
Dave Raley
The other guy, Eric, was like the quintessential sales guy―a musician, could talk to anybody about anything, like, just people person to the core. And then I was literally everything else. So accounting, sales or finance, marketing, you know, legal. And I learned so much, but I was like, at the end of the day, it's like, I'm, I'm not a skater dude. I don't, you know, so this is not a lifelong passion. And it was, candidly, graduating school and, and looking for, quote unquote ...
Justin McCord
Yeah.
Dave Raley
… a real job and realizing―that was the point in time I realized that you could actually like, get paid to work for nonprofits. Did you know guys that you can get paid as a professional career working with nonprofits?
Justin McCord
I’ve heard about that. I've heard about that. How did, okay, so you’ve got to tie this together. If I remember right, your wife's from the Pacific Northwest. And so, that was a little bit of a pull from Southern California.
Ronnie Richard
Rumors. I've heard rumors.
Dave Raley
Yes. So my wife's from Oregon. Yup. Good, good memory. I'm originally from, basically, Palm Springs, Palm Desert, Inland Empire, as we call it in California. And, and by the way, Coachella wasn't cool when I lived there. It was only cool later. But yeah, we totally can ... but, so yeah, so just in school in L.A., I was engaged to be married. My wife and I were like …
Justin McCord
Okay. Okay. Can we, can you and I long board in Coachella soon? Okay. Let's do it.
Dave Raley
… neither of us wanted to stay in the broader Los Angeles concrete jungle. And so, she didn't want to move to Palm Springs. And I was like, that's fine. I don't want to move to Oregon. And so we compromised and said, what is Seattle? What if we try Seattle? That seems like a cool vibe. And we just started looking for work from there. And that was literally 20 years ago this year.
Justin McCord
Did you, okay, so how did you find or figure out that you can have a profession working with nonprofits once you got to the Seattle area?
Dave Raley
Yeah. So I was basically senior just looking, looking around. I figured, if I'm going to move to another city, I need to basically just find the big companies in that city. So I looked at Microsoft, at the time, Costco, Washington Mutual Bank, by the way, Amazon, Facebook, Google, all those that are big major employers in the area. Those were not really a thing. and, and so I was just trying to, you know, look for work. In fact, I had some really good conversations with the heads of recruiting at Washington Mutual Bank. And I thought, ooh, work in the big, shiny building downtown. Like, I don't know that I care about banking, but you know, they, they were, at the time, they were like the cool bank, which, by the way, didn't work out a couple of years later when they went bankrupt. So I'm glad that didn't work out.
But because of that, I had looked through the alumni directory, and there was a guy in banking in a place called Bainbridge Island, Washington, which sounded very exotic. So I went and hung out with, with him, and he basically told me about a friend of his that ended up being the executive creative director at this agency called Masterworks. And I was like, what's Masterworks? It's an advertising agency that works for faith-based nonprofit organizations. And at that point I was like, wait a second, I'm graduating with a dual degree in marketing business and this information technology web stuff. Like, you mean I could like, literally work at a quote unquote agency that actually works with nonprofits?
And that was like, slam dunk. Like, I had job offers at a general contracting firm to be their director of marketing. The Washington Mutual thing basically fell through. There was one other company I was talking to, but it was like, no, like, I want to go work for the agency that works for charities. Like, that is such a cool thing. I got, it just blew my mind.
Ronnie Richard
So at the time you're starting that, and you're thinking about websites and digital, I mean, that was pretty much in its infancy or maybe even still in the womb. Yeah. Yeah.
Dave Raley
It was pre-infancy. This is pre ...
Justin McCord
Ronnie, the dude's a, listen, he's a pioneer. He's a pioneer. Let's be honest.
Dave Raley
… infancy. This is my first day on the job. You guys will appreciate this: I had an office, which was only because they didn't have enough cubes for project manager. So I ended up in an office because that was the only space they had for me. And the company was growing, and the lead project manager basically walked in with, literally, I'm not kidding, like, three-feet-thick-worth of binders.
Each binder was six–12 inches thick. And I was like, I've never seen a binder, like I, I just graduated school. I've never seen binders this thick, and they were all … and she said, look through these. Like, this was my first day on the job. It was all direct mail samples. And I was like, they never taught me this in marketing school. Like, what is this direct mail stuff?
And at first I was like, okay, holy crap. What have I done? Like, because all I had learned in school was obviously web, but also, you know, the four P's of marketing and basically what I now understood as general advertising or, you know, brand advertising, right? I did not know, candidly, that direct marketing, period, was a thing until literally that first day on the job. And I was like, wait a second.
So I actually cut, ended up cutting my professional teeth on what we would call, you know, traditional fundraising.
Justin McCord
Right. Right.
Dave Raley
You know, radio, telemarketing, you know, direct mail, but it was unintentional. I was just like, man, I want to work and do this marketing thing for, for charities. It wasn't until a couple of years later that it was like, hey guys, so the internet seems to really be changing things. Does anybody here know somebody that knows something about the internet? Dave, you know, ask Dave, he knows.
Justin McCord
Ronnie, what you don't realize is that for all accounts, Dave is like, the Tom from MySpace for faith-oriented causes.
Dave Raley
That was the nicest version of that metaphor that you could have come up with. I used to call myself the grandfather of digital at the agency because of course … and I ended up leading and building our digital team for a dozen years. And so by the time I stopped basically being responsible for that team, it was three, I think three generations of digital. It doesn't mean, I still don't think of myself as a digital person, but it's just, yeah, a wild difference between back then and today.
Justin McCord
There's a, so, you spend 18 years at the agency, and that's a lot of lifetimes, not just generations of digital, but that's a lot of lifetimes. And it's a lot of lifetimes working in nonprofit, on top of zooming in on the direct marketing space and growing digital for so many faith-forward causes and awesome organizations that you had a chance to work with. Talk a little bit about the people that kept you grounded, and kept you sane, and that sewed into you during that tenure.
Dave Raley
Man, great question. I learned a phrase or a term, I guess, years and years ago, I think it was a Seth Godin post, and he wrote an article on the difference between heroes and mentors. And one of the things he talked about was you can have heroes in your life that you may actually never meet, right? You've read their stuff, you've been exposed to their ideas, you appreciate something about them, and they can be a hero to you, and you can learn.
And then he talked about the difference between that and mentors, which are people that are actually in your life. And I've been blessed to really have both. Hopefully everybody has both, but for me, it's been this combination of people that I just candidly look up to and just try to, you know, I've never felt like there's like, one mentor or hero that's like, I just want to be like them. But I have always admired aspects of different individuals. If that makes sense.
And so for me, professionally, there are really several individuals that would be much more in the mentor category. So, Steve Woodworth is the CEO of Masterworks, and he … I worked for the guy for 18 years. And I actually just wrote a recent post on crossing the million-mile mark with travel―which by the way, Justin, was probably like, I hit that years ago―but, yeah, you know. But one of the things I said was, one of the, one of the lessons I learned, you know, I've learned over travel is just to set what's an acceptable, you know, travel schedule for you. And for myself and my wife and our family, that's basically twice a month. Now I might have a five-day trip or a two-day trip or whatever, but basically our travel rule is twice a month. And so I've, I've stuck to that for 15 years. Well, that was an example of mentorship from Steve because ...
Justin McCord
Every other Tuesday.
Dave Raley
… when I was working for him back in the day, he said, Dave, you just need to talk to your wife, figure out what's, what's acceptable for you guys as a family. And then our company will basically honor that. I was like, one, I didn't know I should do that. And two, that's really admirable. Like, super cool. So I was always blessed to have people that would just, you know, take me under their wing and just to say, Hey, this is, this is what I've learned. And part of it is, I think, my personality because I do, I do highly respect and appreciate people that have gone before and what I can learn from them.
I'm also the kind of guy that would rather not make my own mistakes. You know, some people are like, I'm gonna cut my own way, and I'm gonna figure this out on my own, and I'm gonna make my own mistakes or whatever. And I'm like, can you just tell me all the mistakes you've made, and I'll just not do those. Like, can I read the book and just, you know, not do those things, right? And that's just, you know, part of my wiring. And so I think that's always been apparent to people who are sort of older and wiser, and so they've, they've invested in me.
And then the other one―and I probably quote him, I probably quote him once a day, but right, you know about him, once every couple of weeks―and that is a gentleman by the name of Bobb Beale, Bobb, by the way, with three B's: B O B B
And Bobb, by the way, is a consultant, which I think is so funny because if you've ever seen the movie “Office Space,” while we're going in our throwbacks, Bob the consultants were not necessarily appreciated. And I remember the very first time I met Bobb, actually, was at a, he was consulting with the agency, and somebody canceled on him for lunch or whatever. And so, I was the young, I think I was an account executive at that time. And they were like, hey, Dave ...
Justin McCord
Yeah.
Dave Raley
… you have time for lunch? Why don't you go with Bobb?" And I was like, okay, who's Bobb? And what does this mean? But it's a free lunch, so I'll take it. And in that lunch, at the end of that lunch, Bobb said two things to me that, by the way, at first were really quite offensive. I was like, what do you, what do mean, Bobb? And they ended up being really instrumental in my life. Number one, he said, Dave, you're a salesman. Now, one, who wants to be called a salesman? Like, I don't exactly think of that as a generally positive label, right? But two, he didn't realize he was stepping on all sorts of father wounds. Like, my dad thought he was a salesman, but he wasn't a very good one. And you know, there was just stuff there. And so I was like, you take that back, and he was like, Dave, you've been selling me on ideas this entire lunch. And I was like, touché. Like, if that's what you mean by salesman, you mean like, I see something that I want you to see and understand and take advantage of like, sign me up. Justin, you and I have known each other long enough that I'm sure you can relate, right? Where it's like, yeah, Dave, you know, I get, I just feel like I've been blessed with the ability to see certain things. And then I feel like part of my life's mission is to help others see those things. So if that's what a salesman is, then sign me up.
The second thing he said, by the way, that was mildly offensive was, Dave, the way you're wired …
Justin McCord
Absolutely.
Dave Raley
… is that you're basically going to be fired up and really good at anything you're working on for about two years or 90 %, whichever comes first. And I was like, how do I not see that as a backhanded compliment? Like, are you saying I'm flaky or disloyal? I mean, I had been at the company for three, four, five years at that point. I can't quite remember, but I was like, I'm not disloyal, Bobb. You don't understand.
Well, that's not what he meant. It turns out what he meant was my wiring is, I am much more entrepreneurial. I prefer to start, and to create and to build. But once the thing is pretty much built, like, the maintenance or the operationalization or some of those sorts of things was not going to be great for me. And so that one stung a bit, but it took a couple of weeks to realize, you know what? I actually had not, at that point in my life, I had not worked any job longer than two years. And so I was like, well, he could be onto something.
Well, again, fast forward 18 years. And now I'm like, okay, I totally see, what it doesn't mean is you're going to quit your job every two years, or you're flaky, or you're inconsistent. What it does mean is I do have this sort of internal clock that I need to pay attention to that, like, okay, Dave, what, am I coming up on another one of those seasons? And if I don't have something either lined up or sort of on the horizon, then I do, I don't burn out like, generally, in life. I tend to just sort of rust out. Well, I guess I'm at like, lack of fire, lack of passion. And so it's just, it sucks. It's no fun. And I've been there multiple times.
Justin McCord
It also explains why chapter 30 of my preview edition is blank because, like, it doesn't, the book doesn't end it, guys, at 90 %, and then you just … so I don't know, I don't know how it …
Ronnie Richard
90%.
Dave Raley
You lie. That is, there are words there, but actually the, well, we'll talk about the book in a little bit, but there is a reason the entire last section of the book is about the future. Because I, that was, candidly, one of the things that made me worried about writing a book in the first place is how could you ever write down like, like … I feel like when you write a book, it feels like, it's like, like final or encapsulated. And it's like, well, what if I'm wrong? What if things change? What if it evolves?
Justin McCord
Where's the hair?
Dave Raley
And so, so actually, the last five chapters of the book are about the future, you know, what things are changing.
Ronnie Richard
So Dave, as you just described some of the things about your personality and the people you've been influenced by, you said you're not one who likes to take chances, letting other people … you don't want to be the one who makes the mistakes, but then you also get this itch to try new things somewhere between those two. How did you make the decision to start your own consulting firm? How did you weigh those?
Dave Raley
I love that question. Doesn't that seem like such a juxtaposition, like irony of all ironies? I don't think of myself as an innovator, by the way. Some people call me an innovator, or “Dave's really associated with innovation,” and I'm deeply passionate about innovation, but I think of myself as a friend of innovators. Do you know so-and-so or such-and-such? And I feel like I've learned so much over those, but at the same time, I am, by nature, a fairly conservative individual. Like, can somebody else go first? You know, like, my Apple watch here, right? By the way, it's a series four, so it's super epic old. They're on series 10 now, I've learned. I'm not gonna buy series. Yeah, well done. I'm not gonna buy a series one. Like, I don't need to be the early adopter. So what I'm interested in is when innovation starts to become, like, to actually make a significant difference in the world.
Ronnie Richard
I'm also series four.
Dave Raley
A lot of innovation is like very, I don't know if you're familiar with the idea of the hype cycle, and innovation―and by the way, I've come to appreciate the hype cycle, that all innovations do need to go through this what's called the peak of inflated expectations, which totally annoys me by the way, because you're like, it's not gonna make you breakfast in the morning, like, whatever the innovation is. But I've come to appreciate that that's the, that's what gets people's attention―But I'm much more interested in, if you follow the hype cycle, by the way, I just sort of dropped that in there, there's this idea of any new innovation goes through this cycle of the peak of inflated expectations, which is like, it's the best thing ever! It's gonna change everything! Nothing's gonna be the same, crypto, AI, certainly. And then there's the inevitable what's called the trough of disillusionment, which is like, well, I guess it isn't all it's cracked up to be, or it turns out there are issues or whatever. I'm interested in the next part of that cycle, which is called the plateau of productivity. Like when you get past the hype, and you get into the real, like, how is this really making a difference? And so for me, innovation is about helping people to see that, not just about hype. Although, again, I've learned to appreciate hype.
But to me, it's about when is whatever this thing going to make an actual difference in the world and how can people take advantage of that? You asked the question about starting the company. For me, it was partly that learning that two-year cycle and learning that, okay, about every two years or so, if I know I'm coming up on the end of a thing, I always need to be paying attention to what's next.
As I mentioned, Steve at the company was very, just, gracious, and I never had any job-security issues. It was always like, hey, what do you wanna do next? Like, very flexible, super cool that way. Like, honestly, I could not have predicted staying anywhere for 18 years, especially given the two-year rule, right? But I just always had something next, and new, and different to tackle, and I loved it.
And so I knew in early ‘20, let's see, what I've been into, that would have been about late ‘21, 2021. I knew that I was kind of coming towards the next sort of part of that hype, not hype cycle, the two-year sort of situation. And so I knew that I was coming up, and I have started companies before, obviously, we talked about our skate company. And so that wasn't scary to me. Now in the mid-career, with a mortgage and kids at home and all that kind of stuff, the financial stability was a major question mark.
Justin McCord
Mm-hmm.
Dave Raley
And I, I had a friend that I was talking to, another mentor/coach type of personality in my life. And he said, Dave, you just―’cause I was debating like, okay, I definitely can go on to whatever the next opportunity is at the agency. yeah, but what if, what if I started a thing? Like, I've thought about that. Like I, I had learned more about myself in terms of my ability to help people see and understand things. And I wanted to invest more time in that. But, and you guys know, when you're running an agency, you know, 96 % of my time was helping to run the agency and do all the important things to keep the company moving and growing and all those sorts of things. And I could spend maybe 4 % of my time on this kind of thoughtful research, helping people to see and understand things, writing, which I wanted to do more of.
And so those two things came together and this friend of mine said, Dave, you're just, you are wired as an entrepreneur. You're either going to scratch that itch and do that at some point, as far as like, not an entrepreneur, or you're not. And that's fine. But you know, just so you know, you're always going to have that itch. And so for me, it was a combination of all those things that said like, you know what? I think I, I think I'm going to do this. I prayed a lot about it, candidly, and just felt like, a peace about, okay, I think I'm going to start a thing. I think it's going to look like an advisory practice so that I can spend 50% of my time helping people to see, and understand, and think differently to do what I call sustainable innovation. And then 50% of my time applied to specific organizations and helping them do something. And that was more than two years ago now.
Justin McCord
Where did the, where did the “Purpose and Profit” podcast with Carly, where did that come into like, the, the tail end of your time at the agency before Imago? How … ‘cause there's, that's a little bit of a fun bridge.
Dave Raley
Yeah. It actually predates. Yeah, it is. And I didn't anticipate it. You know, it makes sense in hindsight, but that preceded starting my own company by two years. So we started the podcast in 2020, which, by the way, I saw a stat the other day, I think like, 900,000 podcasts were founded in 2020. So we were one of those. And Carly Berna, my cohost, she was at a charity at the time, and she and I had gotten to know each other over the years, and she had, candidly, for a thing a year or two prior to that said, Dave, you should do a podcast. And I was like, ha ha ha ha, no thanks. That sounds like a lot of work. And finally, at one point, I think she texted me, Dave, you know, look at the … basically, that there wasn't any podcast that she felt like, we're really, you know, serving the space very well at that time. And so she texted me, Hey, you should do that podcast. And I said, in a moment of weakness, I said, if you do it with me, I'll do it. And she said, yes.
And so in 2020, we started with the “Purpose and Profit” podcast. We're just finishing up season five as we record this, getting ready to launch season six. And so … but, but what I told her, and what we both felt like, is unless there's a topic that is actually, personally, just fascinating to, to she and I that, you know, classic, if nobody listened, we would still have a good time. Then let's not do it.
And so for her … and I was an associate professor, adjunct professor, at Pepperdine University, MBA, but also serving in the nonprofit space. So we both had that fascination of like, business, and brands and causes. And so that was when we were like, what if we did a show about the intersection of those two spaces? What could we learn from the world of big brands and business and apply to charities? And then vice versa, what kind of lessons can charities teach businesses? And so then, ultimately, we came up with the idea of “Purpose and Profit.
The fun thing, by the way, when we started the podcast, we thought it would be completely two separate worlds. We would be like, converging, like, we'll talk to a big-business person, and then we'll talk to a charity leader. Well, it turns out like, 95% of our guests have been on both sides, including, by the way, a certain Justin McCord, who was on the show recently talking about your background in …
Justin McCord
It's true. It's true.
Dave Raley
… minor league sports and like, how you had to get super creative with them, you know, how to get major league results with minor league budgets. I thought that was such a fascinating example of a lesson, set of lessons we can learn. ‘Cause charities definitely often feel like they have minor league budgets and resourcing. And how do you, how do you show up bigger than, than maybe your resourcing allows?
Justin McCord
Mm-hmm. Yes. Yeah. Yeah, and it's a wonderful lesson. I mean, the episode with me is amazing. Don't get me wrong, I sobbed. I was sobbing. The podcast in general―and Carly, by the way, serial podcaster, I think she has, you know, she has probably 30% of that market share of podcasts started in 2020, that she's a …
Dave Raley
That episode with Justin was incredible. It was just like, so ...
She does, yeah.
Justin McCord
… co-host of the “The Wave Report”―is your outlet of writing, and I love seeing it hit my inbox. I love right now hearing you tie together some of the things that I observe about your work, and hearing this idea of sustainable innovation, and hearing you share about it because seeing it on screen, reading it is different than hearing the inflection of the passion of your voice.
So bridge to us the idea of sustainable giving and why that is a passion or an interest for you, for the space around you.
Dave Raley
Yeah, I think, you know, as I mentioned, I do see the, I tend to see these trends, and often they're, you know, they can be micro trends, maybe individual lessons that we can learn. And you mentioned “The Wave Report.” So, I'll write an article about it. You know, I was fascinated by, in the, in the consumer side, this whole movement towards buy now, pay later services, just as an example, BNPL, they call it in the industry, which incidentally, by the way, this holiday season, the end of 2024 was the height of buy now, pay later. So I only use that as an example of like, okay, well, I wonder if that is how that particular consumer trend might eventually impact charitable giving, right? And so I just, I just can't help myself but see, you know, wonder about those sorts of things and to, and to write about them.
But every so often there's a topic that is so, not only so massive, but so like, title shift for the industry that it like, becomes a much bigger, bigger deal. And so for me, starting about a decade ago, I started to notice that, that my own personal consumption habits with regards to subscriptions was completely changing. Like, 10 years ago, the only types of recurring transactions I had were basically, you know, power bill, utilities, mortgage payment, and then child sponsorship, World Vision, Compassion. We sponsored a child when each of our daughters were born. And then I started to, you know, Netflix, and then Pandora and, you know, Amazon Prime. And like, I started to just feel like, subscriptions are like, kind of everywhere, right? And then over time, so basically starting about eight years ago, I started―well, now 10 years ago now as we record this―I started talking about, in the industry, like, how might the subscription economy transform the way not just people consume, but the way donors give. And will we see donors comfort level interest and expectations around this whole recurring giving thing be shaped by this massive macro trend of the subscription economy?
And it's not too different, by the way, guys, from the grandfather of digital jokes, right? Like, 2006, was like, hmm, people are learning to open their wallets online and to buy products more than just books, you know, using their quote unquote digital wallets. And so you could just see that tidal wave coming in 2006, which is super fun to ride, to keep the wave metaphor going. And so just, you know, fast forward over the last 10 years I’ve been speaking about it increasingly. And candidly, when I left the company to start my firm, I thought I'd got to, I, this is a book. Like, I don't know how to write a book. I've written a lot of words in my life, you know, but I feel like this is something that is such an important wave and it's so title that we need to figure out how to make sure that charity leaders understand it.
And so for me, it was like, okay, there's 1.5 million nonprofits in the U.S. today. I've done quite a bit of research, especially over the last couple of years, writing the book. And my estimate is, 75% of nonprofit guys have been left out of strong-growing recurring giving. It's, the first charity that I ever worked with 20 years ago, the Union Rescue Mission, right, where it’s a single digit percentage of their revenue―so much work, but so little fruit―and today, because of the subscription economy, and because of the way donors’ behaviors and expectations have changed, now represents an opportunity where 10 years ago, this was not an opportunity for 75% of charities. Guys, that's 1.1 million charities that stand to benefit from this. Now, many of those are smaller charities. They're not going to hire Imago Consulting. They're not going to hire RKD. They're not going to. So, part of writing the book was to just be the flag waver in the industry.
I am deeply passionate about moving the entire sector forward with regards to sustainable fundraising, period, but the chief type of sustainable fundraising is recurring, resilient, recurring giving. And so, what can we do to help those 1.1 million nonprofits and get that word out?
Justin McCord
There's so much truth in it. And it's why I'm super excited about the book itself. It's heavier than I wanted it to be.
Dave Raley
I have been told by some that I'm verbose. The good news is, it won't even, I don't even think I should tell you the, by the way, it's normal. I've been told, by the way, that a typical business book is 40 to 60,000 words, and it's just under the upper limit.
Justin McCord
Nah. Okay, all right, all right. Now I'm excited about it and excited. We're excited about the work that you're doing on it because we see eye to eye. It is, it is a title shift. It's not the only title shift, but it is a major title shift right now. And the opportunity is too important to pass up.
You reference just, you know, being at the outset of digital generation one, and there are a fair number of nonprofits in the U.S. today that are still working in digital generation one. And, you know, I don't know if you would consider this to be the start of Gen 4, but it's something that the accessibility is there. I think the slope into digital generation one was pretty seismic for people mentally to wrap their minds around: Okay, what does it look like to build a website? What does it look like to build an online donation form? What does it look like to regularly communicate through these things? And how do you not make it just brochure aware? And then you go into, you know, gen two of probably the rise of ...
Dave Raley
Mm-hmm.
Justin McCord
… of email, and then Gen 3 of the mobile transformation and making all of these things up, you probably have written 13,000 words about these various generations. But then Gen 4 being, okay, well, how do you create it so that it is sustainable and that you're meeting people in a new way? And the accessibility for that, it's probably the most accessible of the previous generations compared to the previous generations.
Dave Raley
Yeah. And you know, the reason I use the wave exam metaphor is not just because that's a cool metaphor and often used with innovation, but because there is an element ... and I have studied plenty of surfing. I'm a much more personally failed surfer, by the way. So when I talk about the wave report, this is all the lessons I've learned from all the things I've done wrong trying to surf as a Southern California native. But one of the lessons you learn in surfing is that, go with the wave. Like, so much of when I was an amateur trying to learn how to surf was like, paddling, you know, too early, or paddling too late, or not getting pointed in the right direction. So the cool thing is when there's already a wave and you can catch that momentum, it's so much easier. That's why I don't buy Apple series watch one, right? Because that's not a wave yet. Like, you know, a few generations in, it's going to be, there's going to be momentum. There's going to be, you know, quality there.
And so, the way you said it with accessibility is totally right. Recurring giving has been around, by the way, for thousands of years. I have a chapter in the book, short one, for those of you that are not history buffs, but that does trace the brief history of sustainable giving. And it goes back thousands of years to the ancient Jewish people, by the way, and their whole practice of first fruits and bringing their crops, you know, to the temple. But then the temple would then distribute, you know, the proceeds to the poor and the widows. Sounds like charity to me. And so it's not new, but over the last 10 years, the subscription economy has changed, again, the way donors engage, but it's also created this momentum that we can catch. And so that's why you … when I call it the rise of sustainable giving, that's, what I'm trying to say is, guys, this is not new, but there is something different about this and you can take advantage of it.
Recurring giving is more available to more charities than at any other time in history. And that is not an exaggeration. Like, that is the reality that we're living in today. And so that's what I wanted charity leaders, particularly in North America, candidly, to, to hear and to see, and then how to take advantage of it. Hence the reason the book's so long, by the way, the book could be as half as long as I just, you said it.
Justin McCord
It's not so long. Stop. Would you stop being so self-conscious about ...
Dave Raley
Thankfully, the chapters, by the way, for those that are like, intimidated now, the chapters are like 10 pages each, maybe. But the, half of the book is literally how to build and grow a thriving recurring giving program. Because I didn't just want to the flag, so to speak, of recurring giving, but I also wanted to, literally, just give a practical how-to guide.
Justin McCord
Yeah, yeah. And some of the chapters like, fold out into multiple pages. And so that's kind of a cool party trick that you built into. I'm gonna keep messing with you about it because I know that it ...
Dave Raley
Yeah, false advertising, but there's a super cool, we do have a super cool online assessment. That is, actually, I'm very proud of that. 25 questions, seven minutes, gives you a total read on how your recurring-giving program is at a high level. So it gives you a … and it gives you a sampler of the ideas in the book, which I think is super helpful. We've put together, in fact, by the time this episode airs, we'll have out a blueprint, a seven-step blueprint for growing a recurring-giving program. So, lots of good stuff. Those are the free ones. So that's easy. Fun.
Justin McCord
Awesome. It's so cool. Well, a special preview edition of our congratulations to you on the successful launch of it because we're excited to see it out into the ether, and to see your work continue, and to get to hang with you in one of those two trips a month and all of those things. So thanks for leaning in and thanks for … It's been a time today, telling us a little bit about how you got here and why you got here. It's fun for us.
Dave Raley
Well, and it's a gift for me. You know, I love that. I love the format that you guys have and just really delving deeper, right into the backstory. So it's a gift to me.
Justin McCord
B-Side, Ronnie, he's going to come up with the best questions off the beaten path,
Dave Raley
I love it.
Justin McCord
All right, man, we'll, we'll catch up later. We'll catch up down the road.
Dave Raley
Good stuff, good stuff, glad to be on here.
Group Thinkers is a production of RKD Group. For more information, including how you can partner with RKD to accelerate growth for your fundraising and nonprofit marketing needs, visit rkdgroup.com.
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