How I Get Things Done: Successful Fundraising with Josh Birkholz at BWF

If necessity is the mother of invention, as the old adage goes, then efficiency has to be a parent of innovation. For nonprofit fundraising teams, with small budgets and an even smaller pool of donors, doing more with less is the only way to get ahead. To help tighten up operations or launch well-executed campaigns, many organizations will seek the help of fundraising consultants like BWF. With decades of experience using technology to improve advancement operations, the team at BWF has special expertise in how to hone your tech stack for optimal results.

We chatted with Josh Birkholz, CEO at BWF, about the current state of fundraising and where it’s headed. Learn about the value of authenticity in your outreach, the critical work that ensures frontline fundraising success, and how to get started with AI—even if it’s daunting at first.

OS (Omatic Software): Tell us about yourself, BWF and how you began partnering with nonprofit organizations.

Josh Birkholz (JB): I was a data scientist at the University of Minnesota, one of the first nonprofits to apply predictive analytics to their fundraising program.  I joined BWF in 2004 to help launch analytics for fundraising across the nonprofit landscape.  When I joined BWF, it was already a market leader in designing campaigns, engineering new innovations such as the advent of prospect research, and building productive fundraising programs.

Today BWF is a comprehensive fundraising company bringing about groundbreaking pivots for nonprofits in multiplying fundraising production, equipping them with the latest technology, and building sustainable programs.  Similar to how top medical centers have integrated specialty care, BWF is perhaps the most equipped with industry leading specialists across all functional areas of fundraising.

OS: What kinds of challenges do you solve for your nonprofit customers?

JB: Most of our clients come to us when they want to make a difficult but program defining change.  We routinely help programs significantly increase their gift production, design high net worth giving strategies, turn the tide on everyday donor giving, build or fix their technology ecosystem, integrate AI into their pipeline, and execute truly transformational campaigns.

OS: How do you see nonprofit fundraising evolving in the next few years?

JB: Major giving has seen strong gains in recent years from a foundation of long-term, well-cultivated constituencies.  Because many large gifts also came from donors with passion alignment to credentialed institutions, many nonprofits divested or at least decreased the focus on building the base of support.  This poses great risk for the sector.  Programs continuing to invest in growing their constituency will be the top producers in the next generation.

Leadership in fundraising was historically comprised of the best fundraiser climbing the ranks.  Today, large nonprofits are complex business operations.  The thriving fundraising leader is no longer just the top fundraiser, they are business leaders setting visions for their programs, building multi-faceted distributed teams, and managing relations with the chief executive and board members.

As the ecosystem of companies accelerating nonprofit success matures, we will see continued consolidation.  This may feel a little different from the days of working with the generalist local consultant.  While these companies will be able to do more, the expectations will also be more.  The professional services sector needs to be able to guide real change, have basis in data and multiple perspectives behind recommendations, and the ability to execute in a managed services perspective.  We are rising to the occasion and see many of our peers in the industry doing the same.

OS: How do you see AI changing the nonprofit fundraising landscape?

JB: Nonprofits have had too few staff for the opportunity as long as I’ve been in the business.  We’ve always had to do more with less.  Many of the innovations to date have happened because of the need for efficiency and traction with limited staffing.   Although many people fear AI will take away jobs (the sentiment may be accurate when considering shifting roles), I believe it will ultimately help close the opportunity gap.

The sector is the most mature in applying predictive science to the pipeline.  So, it is no surprise that many of the early offerings began with lead generation.  We see the subsequent stages of the pipeline as future areas of growth.  This would include lead verification, assignment protocols, discovery/qualification applications, officer enablement, and custom donor experience management.  Although many of the identification algorithms are somewhat general, like predicting philanthropic propensity, we’ve been proud of the custom targeting advances we’ve made with our DonorAI platform.  If there is an outcome such as giving to capital project, to a specific priority, or with an alternative gift instrument, our platform can build a machine learning approach with an ongoing flow of prospects for the specific outcome.

Generative AI integration is akin to internet integration a generation ago.  People used the internet at home, so it was natural to use it in the workplace.  While there are privacy risks using first party data without closed instances, for the most part organizations are probably using more than they realize.  I’ve met many people fast-tracking copy and code, cataloguing data, building out processes, and finding decision support without there being an “AI initiative” at their nonprofit.  While it might make sense to formalize some strategies, I would find out what’s already happening, provide some organizational parameters, and encourage the organic evolution to go where it will.

OS: What can nonprofit fundraisers do to become more AI-savvy?

JB: Kids learn new things through play.  We’ve found adults can do the same.  This is why we see gamification in so many learning apps.  For AI, we can learn quite a bit by simply playing with it.  If nothing else, try out different things in ChatGPT, Perplexity, or whichever avenue you choose.

Fundraisers should also focus on the important things first.  Rather than trying to integrate AI into the program for the sake of alleviating professional FOMO, determine what the big challenges or obstacles are.  Then let those lead to potential AI solutions, rather than using AI to determine what we should do.

Remember that the companies using AI for fundraising are in a competitive marketplace.  They desire to produce things that help fundraisers raise more money, be more effective, and generally be happy.  Fundraisers should engage with these companies to guide what would help them raise more money, be more effective, and be happier.  The fundraisers can have significant influence on what will be developed.

OS: What strategies have you seen work best for nonprofits looking to increase donor engagement?

JB: During the pandemic, we conducted many projects to determine donor resiliency.  Why did some people keep giving when times were hard?  In that research we found the top predictor of resiliency to be connection to other donors.  When donors were friends with each other they also gave more over their lifetime.  Perhaps a new technology or innovation is what people might have in mind, but I would start by creating a community among the donors you have.  Then you can invite donors not just to give to you, but to join a group of like-minded friends that are united around this mission.  This solidifies the human need for connection and brings joy to the giving experience.

Tactically, I would recognize the need for authenticity and connection at all levels.  At BWF we’ve seen what I would call our student-led “TikTok” style video campaigns grow alumni giving because it checks all the boxes.  We can make the university or college more accessible, it’s in a format people consume regularly, and the voices are not corporate-speak but real and authentic.  Our work in engagement is like the iPhone to our Apple right now.  BWF is finding significant success for our clients here and having lots of fun.

Invest in staff and celebrate staff who build engagement.  There are way too few chief fundraising officers with backgrounds in building base-level engagement.  If they did have that experience, they realized quickly they had to jump ship to the major giving side if they wanted to rise to leadership.  The risks of only seeing promotional paths outside of engagement mean many of the smarter people who could be around to innovate don’t stick around long enough to do it.

OS: What advice would you give to a nonprofit that feels overwhelmed by all the digital tools and platforms out there today?

JB: My favorite example, although it is a myth, is the story of the Fischer pen.  As the story goes, NASA spent millions of dollars creating a pen that worked in zero-gravity because pens depend on gravity to write.  However, the Soviet Union just used pencils instead.  The reality is there was some danger to using the graphite in the spacecraft.  But the moral of the story is great.  At times we feel we need a great new technological tool, but an Excel sheet will do.

Focus on your important things and let the technology be in service to that.  Talk to peers and see what they do.  Lead with your vulnerabilities and they will likely return the favor.  Recently, I served as a panelist for an AI workshop with some of the biggest and most sophisticated nonprofits.  As the day went on the participants became increasingly honest.  The walls of professional ego came down.  As it turns out, there was a collective sense that everyone else is doing such amazing things with all the fancy tools, but I’m still trying to figure it out.

Feeling overwhelmed just means you are normal.  There is noise everywhere and it is difficult to find the signal.  There are really cool things out there.  To find them, I would say to get out there and engage with the community.  Ask the dumb questions.  And roll with it.  It’s more fun to meet the people behind these tools and learn through a genuine relationship than to sit back and read web content or conference decks.

OS: What are some of the most common missteps you see nonprofit fundraising shops making, and what would you recommend for addressing these mistakes?

JB: Many programs undervalue the ROI of the operational functions of their nonprofits.  I’ve seen so many places hire major gift fundraisers with the only support being hope.  The fundraisers end up spending their time finding prospects, prioritizing them on their own, meeting with program staff to determine gift opportunities, writing proposals, checking on how funds are managed, and on and on.  That’s like thinking the car racing only requires a car and a driver.  Many tasks can be done at scale by other professionals, jobbed out to service providers, or done better with the right people.  We had a project a few years back where our simulations showed the client doubling their dollars raised without adding a single frontline fundraiser.  We guided them through labor reallocation and operational hiring and saw the doubling in two years.

Another common mistake is to think donors give to the nonprofit so the nonprofit can achieve its mission or impact.  While technically true, it keeps the donors on the outside.  The donors are achieving the mission and impact, as much as a fundraiser, as much as a field staff member, an artist, a scientist, or a professor.  Let the donors be part of the mission.  Let them be the subject of the sentence when talking about the nonprofit’s impact.

OS: How can folks get in touch with you or the BWF if they are interested in learning more?

JB: We welcome you to visit our website.  In addition to connecting with us there, it is full of resources, success stories, research, and ideas.  We realize that we have a unique opportunity and vantage point to bring many ideas together for the greater good.  If you only check out our stuff and never reach out, it is still a win for us.  But we would love to meet you!