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Welcome to the Click & Pledge Fundraising Command Center Podcast!
Welcome to the Click & Pledge Fundraising Command Center Podcast – your mission control for mastering modern philanthropy. Every month, we equip you with the insights, tools, and strategies you need to elevate your impact. We believe in understanding the why, mastering the what, and showcasing the how of successful fundraising. Tune in every Monday for a new perspective:
The Why
Start your month with the big picture. "The Why" is our thought-leadership series that dives into the deep, foundational concepts behind our work. Every first Monday, we explore the science, philosophy, and psychology of fundraising, technology, and giving. This show isn't just about what you do; it's about providing a framework for why you do it. Join us as we connect big ideas from neuroscience, behavioral economics, and cognitive science to the future of philanthropy.
The What
Get to know your toolkit. "The What" is our product-focused series where we go "under the hood" of the Click & Pledge platform. Every second Monday, we deconstruct our features, reveal the "story behind the product," and explain what our technology is designed to do. If you want to understand the architecture, the design, and the specific problems our tools solve, this is your guide to the blueprint.
The How
Learn from the leaders. "The How" is our community showcase, where we pass the microphone to the experts: your peers. Every third Monday, we invite nonprofit leaders, fundraisers, and innovators to share how they are using our platform to run successful campaigns, engage donors, and grow their impact. These are their stories, their strategies, and your real-world templates for success.
Welcome to this edition of the Click and Pledge's fundraising command center podcast where we talk the why, the what, and the how in the Click and Pledge's ecosystem. Today, we are launching into a really critical deep dive. This is part of our why series. And we're not just talking about, you know, fundraising mechanics.
Speaker 2:No, not at all. We're going deeper. We're actually going to look at the fundamental physics of the brain to make, I think a pretty sophisticated argument.
Speaker 1:Which is that Suteriar fundraising is actually a science. It's the science of minimizing resistance.
Speaker 2:Exactly. Our whole mission today is to show that successful, sustained fundraising, the kind that turns a one time impulse into a stable recurring relationship, is really an exercise in minimizing free energy.
Speaker 1:Okay, and let's define that term right away because free energy sounds like something out of a science fiction movie.
Speaker 2:Right, it's not about power grids. In this context, think of it as cognitive load, it's confusion, it's friction, and most importantly, it's surprise.
Speaker 1:And we recommend that the second a donor is surprised or confused by your process.
Speaker 2:The impulse to give, it just, it's gone. It dies on the spot.
Speaker 1:So we're going show how technology, the right can remove those obstacles, those cognitive roadblocks.
Speaker 2:And turn that single emotional decision into a long term membership. Which secures not just your financial stability but the donor's psychological stability too.
Speaker 1:Alright. Let's dive into the science then. If the brain is a prediction machine, not a computer, what does that mean for something as simple as a nonprofit's donation form?
Speaker 2:It means everything is governed by a principle called active inference. The brain, it constantly builds these little models of the world. Okay. And it acts to minimize the gap between its expectations and what it actually senses. And that gap, that error between what it predicted and what actually happened.
Speaker 1:That's the free energy.
Speaker 2:That's the free energy. The brain hates it. It wants to maintain a low energy predictable state.
Speaker 1:That makes perfect sense. So, an emotional impulse, that desire to help a cause, that's a very low energy drive. The brain's already decided, I want to feel good, I'll click donate.
Speaker 2:Precisely. The expectation is simple, instantaneous emotional release. But what happens on so many donation pages, the old way of doing things
Speaker 1:I think I know the answer.
Speaker 2:The donor clicks donate, and instead of that simple transaction they're just they're slammed with complexity. A pop up form demanding their full street address, their phone number.
Speaker 1:Oh the dreaded bureaucratic complexity, the captchas, find the bicycles in the grid.
Speaker 2:It's worse than just bureaucratic. From the brain's perspective, it's a sudden jarring prediction error. The emotional part of your brain, the fast ancient system is ready to go. This complexity forces the frontal cortex, the high energy thinking part of the brain to kick in and it has to start processing all this data that has nothing to do with the emotional decision. Wait, what's my zip code again?
Speaker 1:Do I have my credit card? I thought my browser would remember this.
Speaker 2:Exactly. And that jump in mental effort, that surprise of the complexity, that's free energy spiking. And the brain's immediate evolutionary response is to just abort the mission.
Speaker 1:Just get out. Restore balance. It's just too much work for what was supposed to be a simple feel good action.
Speaker 2:It literally kills the impulse by making the brain work too hard on things that are totally extraneous to the goal.
Speaker 1:Which brings us right to the mechanical friction. The payment page. You know, lot of organizations still feel they have to get that data. The full address, the phone number, for validation, you know, know your customer rules.
Speaker 2:Or just inertia, that's how our CRM is built.
Speaker 1:Right. Are we suggesting they just throw all that out?
Speaker 2:We're suggesting that the industry needs to recognize that asking for a physical street address or zip code is, for most digital transactions, fundamentally obsolete.
Speaker 1:Obsolete. That's a strong word.
Speaker 2:It is, but it's true. Modern payment systems, digital wallets, they handle identity verification and fraud prevention far more efficiently in the background.
Speaker 1:So forcing someone to use their thumbs to type out their full address on a phone is it's just an outdated security model.
Speaker 2:It is the primary source of what we call mechanical free energy. Why force a user with Apple Pay or Google Pay systems that have already validated their entire identity to manually input it all over again?
Speaker 1:It's redundant friction.
Speaker 2:It is. And that's exactly why we engineered Pay Quickly. It's designed to be a cognitive smoother.
Speaker 1:Okay. So Pay Quickly as a direct application of this free energy minimization idea.
Speaker 2:That's precisely what it is. It's designed to minimize that mechanical error. It makes sure the input aligns perfectly with the donor's impulse. We recommend organizations just strip it down to the absolute essentials,
Speaker 1:which are
Speaker 2:name, email, and the payment method. That's it.
Speaker 1:So name and email for the receipt and for communication and the payment system handles the rest securely.
Speaker 2:Correct. By cutting out all those other fields, we keep the entire system in that low energy, low surprise state. The donor goes from decision to done, instantly. The brain doesn't have time to flag the complexity and the giving impulse actually completes.
Speaker 1:Okay, so that solves the single transaction. But the real goal, the big challenge is always sustainability. Getting that second gift. How does this brain physics explain the leap from a one time donor to a long term member?
Speaker 2:Ah, now this is where we go a bit deeper into the active inference model. It's this idea of the self model. Humans are constantly, subconsciously gathering evidence to confirm their identity. A donor doesn't just want to do good one time, they are seeking to confirm their internal model that says, 'I am a helpful, generous person.'
Speaker 1:So the donation process itself has to serve as evidence for their identity.
Speaker 2:Precisely. And a single one time donation. It provides a fleeting burst of that evidence. It's a high energy decision and it confirms the identity for a moment. But then the thank you email gets archived and that evidence fades.
Speaker 1:And to get that feeling again next year, have to repeat the whole high effort loop. Find a cause, decide an amount, go through another form. It sounds exhausting.
Speaker 2:It is exhausting and it's inherently volatile, but by shifting the user from a donor to a recurring member we stabilize their self model dramatically.
Speaker 1:How so?
Speaker 2:It takes vastly less cognitive energy to maintain a stable identity of I am a member of this community than it does to constantly have to re decide to be a donor.
Speaker 1:Membership provides the ultimate stabilizer, it's the belonging effect.
Speaker 2:You're changing the perception from a temporary action to a continuous state of being. You're not just doing something, you are something, you're part of the tribe.
Speaker 1:That is the key. They don't just do good, they are a supporter. And that stability, it minimizes the internal pressure to constantly reevaluate. The commitment becomes a low entropy process.
Speaker 2:Okay, that makes so much sense. But there's one last source of friction we have to talk about: the decision itself. Even with a smooth form, if I land on a page and it says give $10 $50 $100 or other, I now have a job to do. You do. And that burden of choice creates high entropy.
Speaker 2:It creates uncertainty. The brain now has to start calculating what can I afford? What's the right amount for this organization? Am I cheap if I only give $10
Speaker 1:And that little calculation, that moment of hesitation, that's where people just bail or they just default to the lowest number to escape the cognitive bane of the decision.
Speaker 2:Which is why we recommend using a tool like Intellibooster to act as a precision guide. It analyzes parameters past giving, the campaign context, even external data, and it serves the donor the single optimal button string for them.
Speaker 1:So it's not a generic menu of options, it's a specific tailored suggestion.
Speaker 2:Exactly. It resolves the uncertainty before it can create that prediction error. It minimizes the decision energy, doesn't ask the donor to do math, it just says here's the path that seems to fit you, the donor just has to agree.
Speaker 1:Which is a much, much lower load than deliberation.
Speaker 2:Infinitely lower.
Speaker 1:Okay. So the whole strategy is coming into focus. Pay quickly for the mechanical friction, Intellibooster for the decision friction, and the result is a stable, self affirming member relationship.
Speaker 2:That's the model.
Speaker 1:Let's pivot hard now. Let's put on our financial analyst hats. We have to present this to a non profit board. We need to show them the hard numbers, the financial imperative behind this whole strategy.
Speaker 2:The urgency for recurring revenue isn't just about smooth cash flow, it's about an exponential return over time, which is directly tied to this psychological stability we've been talking about.
Speaker 1:We've compared two scenarios over a three year window and the numbers are frankly undeniable. Let's start with the old way, the traditional path.
Speaker 2:Okay, scenario one. The high entropy donor. This is someone who had a strong impulse but they hit all that friction. The long form, the decision anxiety, but they pushed through. They made a generous one time gift, let's say a $100.
Speaker 1:A great gift. But because the process was high effort and the relationship isn't reinforced, it's an unstable relationship. Industry data puts first time donor retention at around what 25%?
Speaker 2:Sadly low, yes. So after three years maybe only a quarter of those donors are still around. If we model that out, that $100 donor with that retention rate their approximate three year lifetime value, their LTV is maybe a $130.
Speaker 1:Wow. So it cost all that effort, all those acquisition costs to generate just $30 of additional value over three years. That's that's not a good return.
Speaker 2:It's massive financial instability built directly on top of psychological volatility.
Speaker 1:Okay. Now let's at the alternative path, the optimized path.
Speaker 2:Scenario two, the low entropy member. This user hits the optimized form. Zero friction with pay quickly. Intellibooster suggests a monthly membership. Let's be conservative and say $20 a month.
Speaker 1:And crucially, this is stable recurring relationship. It's constantly confirming their I am a member self model, so the cognitive effort to maintain it is almost zero.
Speaker 2:Which is why retention rates for these members just soar. We can comfortably model retention around 90%.
Speaker 1:So let's do the math on that. The board needs to see this.
Speaker 2:The math is staggering. Dollars 20 a month is $240 a year. Over three years, that's $720 Even if we factor in a little bit of churn to get to that 90% retention, the three year LTV of that one member is approximately $650
Speaker 1:Let's just pause on that. The $20 a month member is worth five times more than the $100 one time donor.
Speaker 2:Five times.
Speaker 1:That's the slide you show the board. We are not just talking about making forms prettier, we are talking about transforming the financial forecast by translating psychological stability directly into financial stability.
Speaker 2:Every single field you remove, every decision you make for the donor, it's not just a convenience, it's a direct investment in their lifetime value.
Speaker 1:So the core takeaway for everyone listening for the Frontline Fundraiser is actually pretty simple.
Speaker 2:It is. We recommend using a tool like PayQuickly to just eliminate the mechanical friction.
Speaker 1:And then use something like Intellibooster to eliminate the decision friction.
Speaker 2:And the goal is never the single donation. The ultimate goal is always reinforcing the donor's identity through membership.
Speaker 1:The message couldn't be clearer. Stop making your donors think.
Speaker 2:And start letting them belong. That sense of stability is the engine of your entire recurring revenue program.
Speaker 1:So here's a final thought for you to take back to your team. Since we know confirming a stable identity requires so much less brain energy, How can you start integrating the language of belonging rather than just giving across all of your communications? Your emails, your reports, everything. How do you deepen that stable self model for your supporters? For more information about this and all Click and Pledge products, make sure to visit clickandpledge.com and request for a one on one training or demo.
Speaker 1:Whether you are a client or curious about our platform, just ask us, and we will gladly get together with you to chat.
Speaker 2:And don't forget to subscribe to this podcast to stay up to date with all the latest and greatest features of the Click and Pledge Fundraising Command Center.