Available November 12, 2026

Episode 041: The Board Problem Nobody Wants to Face: Why You Cannot Govern Your Way Out of a Behavioral Problem

DURATION: 53 minutes
HOST: Kevin Novak
GUEST: Gail Perry, MBA, CFRE, Founder and President of the Gail Perry Group and Author of Fired-Up Fundraising and Easy Fundraising and Friendmaking for Board Members

FORMAT: Guest Conversation

SHOW: The Human Factor Podcast

COLD OPEN

Kevin Novak: Picture a nonprofit board that has just finished fixing itself. New bylaws, a fresh committee structure, a roles and responsibilities document that everyone signed off on. A retreat with a facilitator and a wall of sticky notes that got typed up and sent around. And six months later, the same three people are doing all of the talking. The same two are doing all of the asking. The same silence falls when the executive director mentions the campaign. And everyone acts shocked that the document didn’t work at all. It didn’t work because it was never going to. Governance defines what a board should do. Group process decides whether they actually will. And those are two very different things. And organizations keep fixing the first one and expecting the second one to change. You can’t govern your way out of a behavioral problem. Today’s guest has been saying that to boards for 30 years. And she has the campaign results to prove that she’s right.

INTRODUCTION

Kevin Novak: I’m Kevin Novak, CEO of 2040 Digital, professor at the University of Maryland, and author of the book The Truth About Transformation: Leading in the Age of AI, Uncertainty, and Human Complexity, along with the Ideas and Innovations weekly newsletter. Welcome to the Human Factor Podcast, the show that explores the intersection of humanity, technology, and transformation, along with the psychology behind transformation success. This is season three, the season all about practice. Season one was about seeing the human factor clearly. Season two was about what you do once you can see it. This season is about building it into how an organization works, Two threads are anchoring the season: the dynamic between artificial intelligence and human beings, and measurement. Because what you measure determines what you manage. Today’s conversation takes both into a room this show hasn’t spent much time in, the nonprofit boardroom. Gail Perry got her start on Duke University’s Capital Campaign in the 1980s. She helped craft UNC Chapel Hill’s first major capital campaign as the director of development And for the last three decades, she has led the Gail Perry Group, helping organizations raise hundreds of millions of dollars through capital campaigns and major gifts. She has served on more than 30 boards. She has coached so many more. And underneath all of it is an argument I want the audience to hold on to for the next hour. Fundraising is not a money problem. Her writing on boards says it plainly. Boards pour their energy into structure, bylaws, committees, job descriptions, and they ignore the behavioral and cultural life of the group. Then, well, everyone is surprised when the same roles and responsibilities documents fail all over again. In her words, governance defines what the board should do. Group process determines whether they actually will. That is the human factor. Stated as precisely as anyone in her field has stated it. Gail is the author of Fired-Up Fundraising, and of a new book, Easy Fundraising and Friendmaking for Board Members. In the summer, we were both on stage at the Bridge conference in the National Harbor within a day of each other. She was talking about Fired-Up Fundraising. I was talking about what I call transformation theater. It turns out we were describing the same room. Gail, welcome to the Human Factor Podcast.

SEGMENT 1: WHAT THE MONEY CONVERSATIONS TEACH

Gail Perry: Hello, Kevin. I’m so glad to be here on this great Friday afternoon.
Kevin Novak: So happy to have you. So, Gail, I want to start where you started. Duke, 1986, a capital campaign. Fundraising may be the most psychologically exposed work an organization does. It asks staff and volunteers to risk rejection on behalf of a mission. Out loud, with their names attached. Most of what happens in organizations lets people hide behind a process. The ask doesn’t. So if you spent 40 years watching people do the one thing organizations are worst at, which is to say they want and they wait for an answer. What did the money conversations teach you about human behavior that no strategic plan ever could?
Gail Perry: What a great question. And there’s so many levels to that. You know, there’s the history, there’s the challenge of people trying to make a request and risk rejection. And what have I seen that works perhaps? And deeper under that is what is psychology, what is really going on in everybody’s head. And so I’m a southerner. And I’m gonna take the long answer and was raised in South. And we take things a little bit slowly, we sort of get to know people, we find out a little bit more about them, we cozy up to them a little bit. We in fundraising we call it we nurture the relationship. And the best fundraising almost doesn’t have an ask because if it’s done skillfully and I’ll break down the psychology behind this, but if it’s done skillfully and slowly, the donor often comes forward themselves and say, I really want to help and this is what I want to do. And so the psychology is of course, nobody wants to be affronted. Everybody wants to have agency. Everyone needs to have emotional intelligence skills and social intelligence skills to read the room and read the donor and be able to pick up on cues and There’s enormous amount of behavior research and fundraising about slowing down and making friends with your donor first and slowing down the ask
Kevin Novak: So you move from doing the asking, to coaching people who do it. What do you see from the outside that you couldn’t see when it was your name on the proposal?
Gail Perry: Ooh, well, when you’re fly on the wall watching the room, and lots of times when there’s a big ask, important ask, a formal ask conversation, when you’ve asked the donor if you can sit down and talk about a gift and you’ve done your research and you bring your CEO in usually because I have functioned as a consultant and staffer in these situations. It’s always good to have somebody who is functioning watch as the watcher of the room. And once I had to nudge a college president under the table. I really did and I didn’t get fired as his consultant. And he
Gail Perry: But what happened was we were meeting with this really important family. They had given us eleven minutes, and this guy was an academic. And what academics do? They’re trained to talk. And so he’s very comfortable talking and he gets really eloquent. And he’s going past the eleven minutes. And then the two chairs of our campaign are looking at me because I’m sitting next to him. The family’s looking at me because I’m sitting next to him. And so after another maybe we went over another few minutes and I finally just nudged him under the table. And he was really charming. He said, Whoop, I’ve gotten a nudge under the table. I guess I better wrap up. And everybody was very relieved. So, I try to tell, I try to do this teaching in a storytelling format, because I have so many interesting stories from my career, my checkered and an exciting career as a major gift fundraiser and coach and consultant. That people of course learn, there’s another psychological principle here. People learn better when there’s a narrative attached to the point you’re trying to make.

SEGMENT 2: THE BOARD PROBLEM NOBODY WANTS TO FACE

Kevin Novak: Yes, yes. So the obstacle typically to your point is never really the donor, right? It is about the narrative, it is about the approach. Which brings us to the room where the obstacle usually lives. And you have lived this 30 times plus more. You’ve named something our sector talks around. The board problem that nobody wants to face. Boards focus on structure. While the behavioral and cultural life of the group goes unexamined. And every board runs on unwritten rules about who really holds power in the room. And consultants walk in expecting geese flying in formation and find a herd of cats. Right? There’s a study that says the same thing about corporate boards. In 2002, Jeffrey Sonnenfeld at Yale looked at the boards of corporations that had just collapsed. So this was Enron, WorldCom. And he found that on paper they looked completely fine. Independent directors, audit committees, they were the right size, seemingly the same structure as the boards or corporations that were doing really well. And his conclusion was that what makes a board great isn’t its rules, it’s the way people work together, whether they trust each other enough to argue. And the field’s own text on nonprofit boards, Governance as Leadership by Chait, Ryan, and Taylor. Yes.
Gail Perry: Taylor. Yes. I’ve got it back there behind me.
Kevin Novak: Okay, it made a related point. Most boards spend their time in what authors called fiduciary mode. Watching the money, approving the minutes, almost none of them spend the time in the mode where real questions get asked. And that’s what are we for? What’s changing around us and what are we afraid to say? So walk me through the anatomy of a stuck board. What are the unwritten rules that real governing doesn’t help?
Gail Perry: Well, let me start with a story. I was once serving on a board with a lady friend who was a therapist and we walked out of the board meeting together and she said, You know, I really enjoy watching the group process on this board when we meet. And I said, Group process? What do you mean? ‘Cause you know, and she said, who’s listened to and who’s not? And what informal Coalitions are there among the people on the board such that they support each other? And it blew my mind and it opened my eyes to this behavior issue that nobody talks about, that we are not paying enough attention to the underpinning, the behavioral underpinning, and underneath the behavior are things like power, as you just mentioned. And I’ve done some studying on power on boards and what I have found is that the people who’ve been there the longest and who have the most information are typically the most powerful one and they’re the ones listened to. And there’s also a phenomenon of decision by consensus, God help us. It’s just a terrible setup for bold governance in a time of crisis. And so if there’s a need to create group consensus on every decision, what kind of decisions you think are going to get made? The most conservative, the
Gail Perry: Most conservative decisions possible. And there unless you have a really strong leader who’s going to drive it home. And there are really strong leaders around, but there are not many of them. I’m fascinated by the behavioral issues of boards and also you’ve got this issue of culture and history. And culture is the they’re the culture is the habits and the informal behaviors that have taken root in a group of people. I mean a family has a culture, some are fun, some are not fun. And any group has some sort of culture that has evolved over time that people are used to being. I read somewhere that someone said that culture is the way we are when we’re together. You can really define that carefully, right? So the challenge as a board consultant trying to help boards be more effective of a serious challenge is that every board is different and every board has a different history and a different composition of powerful players on the board. And so I coach my clients on some various strategies. One is called the squeaky wheel strategy. For example, I once worked for at UNC Chapel Hill. I was head fundraiser for the Kenan-Flagler Business School. And I had my dean was the former vice chairman of IBM. And he was a scary guy. And I was young, I was in my 30s. And but I would gently say, you know, Paul, we can’t just walk in and just ask. We have to involve these people and chat with them before we ask. We can’t just ask. And I said it over and over. I was a squeaky wheel. And one day he sat in his chair looking at me, he said, Gail, you know, we can’t just walk in and ask.
Kevin Novak: I do love those moments.
Gail Perry: And so I said, Yes, I achieved my goal.
Kevin Novak: So Gail, let me take the squeaky wheel thing in a little different direction because you’ve written a lot where sometimes the process results in the same three people making the same amount of loud power noise and you know, the same two people who are gonna ask the questions in a room dynamic. And interestingly, Kahneman in the book Noise talks about cascading decision making in a room of governance, where if somebody’s opinion on who to hire or maybe what donors to seek out or what decisions to make is viewed in a power position or viewed to be authoritative, many of the others around the table may not have that confidence themselves. So they make a decision in their mind to say, well, yeah, let me just vote because he or she feels like they know what they’re talking about and doesn’t raise the questions. So how many times have you seen something like that play out in the guise of trying to get to consensus?
Gail Perry: It happens all the time. The loudest voice in the room and the most powerful in the room person in the room is catered to when it comes to decision making, but nobody acknowledges that. Nobody acknowledges it, which is a real shame. And I’m fascinated by the process that boards undertake to make key decisions. And if we can back it up to a discussion of how do we make decisions, then we might find a way forward that brings in all the voices. And frankly, I think most boards, particularly nonprofit boards, make decisions too quickly and without enough input from stakeholders who might be affected and also do not consider the ramifications of the decision that they’re in the process of making. And so slowing down a you know announcing a decision, seeking input, having some scenario planning about what’s gonna happen after this decision, especially key important decisions that can get impact an organization’s future. And just look my expertise is in fundraising. I’ve had boards where some powerful board members said, direct mail doesn’t work anymore. We need to save money and no longer you do this. And everybody’s going, okay, well I guess we better go you know, they’re literally swaying the decision. And nobody says, wait a minute, first of all, boards should not be voting on anything like that.
Kevin Novak: So when you’re looking at a board and they have bylaws, they have a structure. And when they recognize their problems for decision making and how they consider issues, why does every board look at the solution as creating a roles and responsibilities document?
Gail Perry: Well, board members don’t know what their role is. It’s it’s a terrible lack of understanding of the role of a nonprofit board. And to make matters worse, some boards are more involved operationally than others. Especially very small organizations. Board members are often very hands-on because there is no standard. And then you’ve got fully professional boards in which board members are really community facing, outward facing, not looking at operations. And then you’ve got this muddy gray area in the middle where most nonprofits are of a transition between a operational board and a board that does not involve really more oversees and just checks the boxes, but focuses on relationships external to the organization. So I have found it very difficult to create any true cases in point There’s so many different types of boards. I’ve done over a hundred hands on board workshops on fundraising with boards around the world and I’ve seen them all. Usually I can get to behave properly. I usually can.
Kevin Novak: So with and particularly in the nonprofit and association space, most organizations have moved to create a board orientation that new board members have to go through. Where do you think the break happens? Because often you don’t see that in the information that they gained in that process actually take shape in the room.
Gail Perry: Well, first of all, orientation is considered a brain dump. And adults can only comprehend but so much information. And a half a day brain dump, you’re gonna miss a lot. And it’s also somewhat boring because it’s often death by PowerPoint and just lecturing. Yeah, and so that orientation falls flat and you it’s like a box we checked off. We had orientation. But I have coached orientation much differently. First of all, on the board I serve on at UNC Chapel Hill, I finally persuaded to let them let me have a role in it as I’m development chair of course of the board. And so I take the mic and I invite All the new board members to introduce themselves to the overall group, and we try to get current board members in the room. So my goal in an orientation is far more psychological than knowledge-based. It is my goal is to help the new board members feel a member of the group. Because
Gail Perry: What you really want, you want your new board members to come in strongly. And if they the five dysfunctions of a team that you just referred to those levels is that they don’t feel like they have a personal relationship with the board members, other board members they’re gonna hold back. In fact I wanna write an article one day on why walking into a nonprofit board is like middle school. And the fact is that human behavior, to go back to your original point. Our number one need and goal is to be accepted in the group. And so that supersedes good voting, good behavior, everything is to be felt like you’re an equal member in the group. And so if we can acknowledge that and work with that, that is a true fact that is never said out loud. I remember years it was even last century, I think, that the National Red Cross Board allowed their CEO to create a nine million dollar pay package or something, something totally excessive. And it got on the front pages of all the paper papers, and it was quite a difficult situation, and the CEO had to resign. And I looked at the members of that board, and they were the captains of business and industry. And I’m thinking, all these smart people in this room did not ask a question. And I was thinking from the psychological standpoint I’ve felt this on a board too. I see this glaring thing but nobody has ever said a word about it. Am I gonna be the one raising my hand? So I do think this the group process, the need for belongingness is an interesting way to look at dysfunctions or functions on a nonprofit board. I want to share with you a story of how I really got started on this psychological track in fundraising and boards. Earlier in my career I was a single consultant running successful capital campaigns in the Southeast. And I was young, female I’m petite, and there were two boards, there were a bunch of boards, but there were two boards that would not do They would not do, they’re paying me a fortune, but they wouldn’t follow my advice. And I actually had to resign one of the projects. I hired as a business coach, an organizational behavior expert. And I asked him to teach me his skill set and we he was a coach, he coached me on my client load. He taught me facilitation skills, leadership skills, the concepts of both and, trying on a idea like a hat, basic group process skills that a lot of people have learned, but I wasn’t exposed to as a fundraising consultant. And so that helped me really come at boards very differently. And since my I focus in the fundraising area, we’re dealing with an area that people are so afraid of. They really don’t want to talk about fundraising. And here I am coming in for a board workshop on fundraising and everybody’s really glad, right? And so I mean I have a number of strategies to create a sense of team, to create a sense of fun and camaraderie. And all of those strategies I learned from my business coach watching him in action with groups. So I do think that there’s a skill set that we’re missing. When we try to be successful with groups. But I but the thing is that I was training board members in how to make friends first before the ask, you know, and so trying to use all these psychological principles to make it easy for them to understand how all that works.
Kevin Novak: Yeah, absolutely. Cause because we forget. We again we forget we’re human and what works with humans. I align with what you said about no one wants to talk about fundraising. In my own experience in associations, no one wants to talk about the revenue. And it’s always we’re a nonprofit, we’re here for X reason, we’re here for the members. And It’s always a hard conversation to say you’re actually a business because you need to make that money in order to serve who you’re serving. And that’s the same with the fundraising side. You need to get that money in the door to continue to fulfill your purpose. And many nonprofits feel they have this great purpose that they’re making an impact and sometimes they miss the criticality of that level of it so that they can continue to do all those things.
Gail Perry: I don’t know. I think a lot of people are very focused on the money these days, especially with the government grants. Yeah. And you know, board members have a lot of opinions about how to raise money. I’d love to talk about fundraising at some point because there’s a lot of money out there, but you have to be careful you have to be careful about it. You have to use the same psychology that you use with boards. You use it you think about when you’re in middle school and you wanna ask this person out to go to the prom. Maybe you’re a freshman, you’re young, a teenager, you wanna ask the person. You might do a drive by of their house. You might try to walk around from school with them. You might ask around and see if they might like you. You know, do a lot of small steps to get up to the point of being able to be friends with somebody. And that’s all We do this intuitively, but when we think about approaching somebody for a gift, we d we lose all of that.
Kevin Novak: Yeah. Well, it because the donors want or they need, I should say, some ownership. They want that information. They want to feel good about what they’re doing. And that comes through the relationship and helping them understand. And to your point, that’s a completely different outcome than if you’re just like, Hey, I want fifty thousand dollars from you. Please give me a check. And yeah, you can look at our website and read about us.
Gail Perry: Nobody’s gonna give that money. There’s something called trust that has to develop.
Kevin Novak: Yes. Yes. And trust is much larger, I think, than people recognize it to be. So I wanna ask you so and one of the things that I bring up a lot on this show, and it’s a researcher, Ronald Heifetz, and because he has framed out that a technical problem has a known answer. Adaptive challenges require the group itself to change. So bylaws become a technical fix. Board culture is an adaptive challenge. And applying the first to the second is why, in your words, it may all be for naught. So when you walk into a board that has fixed its structure three times, what’s the first thing you do that the structure never did?
Gail Perry: I try to create a social experience for the board members. I try to help them forge closer friendships. Because if you remember the five dysfunctions of a team, the first function is lack of trust in the next sphere of conflict. And behind all of those is lack of personal relationships. And you know, if you want a board to function as a team and make good decisions, you’re not if they don’t know each other. It’s very awkward. And so that’s what I do. I try to loosen everybody up and help them smile. I mean and we all need to have a little bit more fun. And frankly, personally, one of my hobbies is having parties. And I have my top ten tips to a great party, and I have a whole session about When in doubt, throw a party. And what I mean is if you can make it fun for people, you will attract more energy, you will attract more money, you will attract more volunteers and donors and you’ll change the world faster. So,

SEGMENT 3: THE FEAR OF THE ASK

Kevin Novak: So I want to dive into the first book, So Fired-Up Fundraising. And it’s a book about converting passion into behavior. And your new book takes aim at the fear underneath the ask. Board members who believe in the mission completely still go silent when asking enters the room. So I see the same pattern in transformation work. Stated commitment is literally everywhere. Revealed commitment almost nowhere. So here’s a piece of research that should be required reading for every board. In 2008, Francis Flynn, Vanessa Bohns ran a series of experiments where people had to ask strangers for help. And I’m have no doubt you’re gonna have a lot to say about this. So they would fill out a survey, borrow a phone, walk them to a building, and before they asked, the people guessed how many strangers would say yes. Then they went and asked. Across the studies, they underestimated how many people would say yes by roughly half. And people are far more willing to help than the person asking believes, right? The fear isn’t about the answer. It’s about imagining the answer. So, what is the fear of the ask actually made of?
Gail Perry: Well nobody wants to be pushy and nobody wants to be blatantly asking, especially for money, you know. But hit let me reframe this idea of the ask. There are a lot of psychological principles we use with donors and with our volunteers to make everybody more comfortable. And one is we ask the donor for permission. Would you like to have this conversation? There’s another permission question. You back up at the beginning you say, Would you like to know how you can help? And the donor says, Yeah, I would like to know. I said, Well, can we come see you and chat about your interest? Notice I say your interest in helping.
Kevin Novak: I love how you did that because I think people forget it’s the way the question is asked that is the most important strategy for yeah. Yeah.
Gail Perry: And remember if we can make it about the donor, the donor has an interest in helping. We wanna have a meeting about your interest. And so I have this horse I beat to death about listening skills and just asking the donor a question and just sitting there and letting the donor talk. And I wanna tell you a story, I just I was reading a note that somebody had sent me a client who had I’d been coaching or training or consulting with at some point and she said that she decided to make some appointments with former major donors that had sort of drifted away. And she told them she wanted to like reach back out and see how they were and find out how they might like to be re engaged. Very polite. And she asked one donor about his interest in their organization and she said the donor opened up like a flower. When you have that happening, it’s easy to say, would you like to help? Or what of our three projects are you most interested in doing something with? So it’s all about what the donor wants to do. There’s agency, psychological principle of agency. So setting it up like that, I mean, this is how all sophisticated fundraising is done. All big money is handled this way. And so poor board members, they think they have to go in and ask, and it’s not quite like that. It’s really not all you have to do is just ask for permission. Would you like I you get it you can get far by would you like to talk about a gift? Sometimes if I want if I’m tired I want to go out to dinner and I say to my husband, Would you like to talk about going out to eat? I don’t say I want to go out to eat. Would you like to talk about and so you tiptoe up. I had two daughters when they were I had an aggressive child when she was in elementary school and she come home from it’s all psychology. She come home from school and say, Mama, Mama, ice cream, ice cream, ice cream. So somebody’s coming at you like that, what do you do? You back up, you throw up a wall. But if she would come home and say, Mama, you know, what do you think about ice cream? Just like you said, it is how you ask the question. And so the whole idea of being pushy is not a good approach.
Kevin Novak: Well, in many teams, actually even leadership teams don’t see the dynamic when they’re intending to have a serious conversation. And they’ll ask the questions to put the others on defensive, opposed to generalizing the question or keeping the question objective. And depending on how that question is asked, you’re gonna get two very different responses. If you are putting people on a defensive, immediately that negativity is gonna fill that conversation and you’re not gonna it’s not gonna move constructively.
Gail Perry: My hallmark of all my training and everything I’ve written and all my talks and keynotes and everything, yes, there’s content, there’s serious data and strategy content, but there’s also an equal dose of positivity, affirmation. You can do this smiling and engaging and lifting people up because they need both. You got it. This is the motivation stuff over here. This is the motivation. And yeah, I mean, I’m not like a motivational speaker. But I try to help people feel like yes, they can do they can open the door to a donor without being pushy and yes, they can ask for permission to have a gift conversation.
Kevin Novak: So let me build off that. So your new title, the new book that you showed, puts friend making next to fundraising. And to me, the question is really: is that a softer way in, or is it the actual mechanism? And what changes when a board member thinks of the job as making friends for the organization?
Gail Perry: Well, we have a challenge sometimes with board members who get overly enthusiastic and they think fundraising is all about an ask and if you can get an ask out on the table, he’s done a good job as a board member. And we’ve had many times board members have gone up to a major donor and just made a made an ask that was inappropriate or not well timed or And the donor walked away feeling satisfied that they had been a good board member and the donor relationship was damaged. And so we one of my another horse I beat to death is that board members think that fundraising is all about asking. And so I’ve trained them to know that there are many steps, especially the larger gifts. There’s identifying the right people so you spend your time with the right people who are really interested. And not on the people who are not interested. And then you nurture the relationship and involve them. You find out what the donor’s interested in. And then when the time is right, you ask. And then after the gift, there’s this post-gift customer experience. I leased a car from a car dealership once, and when I came in to service, get it service, they treated me like a queen. That was my post. Purchase customer experience. You think I released another car from them? You better believe I did. So I explain I explained this in my workshops with board members and they get it so quickly. So making friends first is our motto. Make friends first, ask later. Make the donor acknowledge the donor is a whole person with a heart, with feelings, with personal values, with a mission in life, not an ATM checkbook. And when people are treated for money approached for money, it makes the whole thing smaller. But when you at make friends to change the world and we both believe in the same thing and we’re stakeholders and passionate believers, it lifts everybody up and we’re we’re just like shining in the white light. You know, and you can feel yucky making it about money. That’s the dark side of fundraising, or you can make it beautiful.

SEGMENT 4: CAMPAIGN OR INFRASTRUCTURE FIRST

Kevin Novak: So I want to turn to some of the challenges that organizations are facing. And I actually brought this up in the Bridge session So the Nonprofit Finance Fund’s 2025 State of the Nonprofit Sector Survey. So more than 2,000 organizations participated. And they found that 36% of nonprofits ended 2024 with an operating deficit. And that’s the highest share in 10 years the survey has since it’s been run. And I watched a full room full of those fundraisers at Bridge gasp at the numbers like this. Because I had a very diverse audience. Capital campaigns are your life’s work, and a campaign is really a transformation initiative wearing a fundraising costume. So a multi-year change effort that tests leadership, board behavior, and the organizational identity all at once. So in the current environment where grants have evaporated, organizations are seeking other ways to fund themselves. What separates the organization that should run a campaign from the ones that need to fix something more fundamental first?
Gail Perry: Investment in infrastructure. If you’ve got a fundraising machine of well trained professional fundraisers who are happy in their jobs and you help them get the latest training on what is working and you buy the right data that will support them, and the whole organization gets behind them and understands that fundraising is really important and we all have a job to do. We have to make our donors happy, you’re gonna see very successful. Results. And frankly, the larger the organization, the more successful they’re probably likely to be in fundraising because they look at fundraising as a mission centric fundamental part. And they’re not looking at it how can we cut costs? Because the more you spend fundraising is not an expense on the budget. It is a revenue item. It brings money in, and people want to see that revenue grow, but they don’t want to invest in the staff and the system and the technology to make it grow. But you I don’t I sp I love to spend a lot of time in the exhibit hall at these big conferences looking at all the technology. And there’s some things out there that will save a lot of time and very productive. So I have a story, and so I’ll say to board members, I’ll say, you’ve got one dollar coming in, and you’ve got hungry children, you’ve got a disease you’re trying to cure, you want to spend every bit of that dollar on making that happen. But if you don’t take some of that dollar and invest in your organization, you will never grow. You’ll stay right on the treadmill. So
Kevin Novak: So have you ever, building off that infrastructure, have you ever told an organization not to run a campaign? And what did you see and what did they do in response?
Gail Perry: Well, usually they slow down. We do things called feasibility studies in which we really take a good look at their donors and where their donors and how the donors feel. And many some lots of organizations want to have a campaign, but the donors aren’t ready because nobody’s spending any time with their donors, making the donors feel warm and fuzzy about the cause and appreciating the donors. One thing I haven’t mentioned in this conversation is the importance of the donor base itself. And I’m not talking about bringing a new donor in, which is a cold ask. I’m talking about the keeping the donors we have. And they’re your organization’s future because you want them to stick with you and keep giving. And the we have this terrible challenge with donor what we call donor retention. In fundraising, this is about fifty percent of donors don’t renew their gifts. And so you’ve got an organization with 5,000 donors. If it runs according to average, 2,500 of those donors are not going to renew. And so you have to bust your butt to bring in another 2,500 new donors. So what our goal is in true solid infrastructure investing is to invest in donor retention programs, donor communications, donor appreciation events. But lots of times if they want to cut the fundraising budget, they’ll cut the donor newsletter.
Kevin Novak: Well, and that’s what I wanna ask. So when that 50% walks out the door, is it the relationship wasn’t there?
Gail Perry: Well, we they didn’t feel good about the gift. They didn’t feel they didn’t really get acknowledged. If they get a form letter. And there’s old saying in fundraising, find seven ways to thank your donors and they’ll give again. So, there are different ways to t to thank over a course of a year or more. So it so some of this stuff I’m sharing is very basic and we’ve known these strategies and techniques a long time, but or and There new people coming in all the time and there are new board members coming in. And so once you get an organization trained and working flying like geese, a third of the board members leave and you got a whole new group. Which again I think can continues to be a cultural challenge. The new board members are gonna adapt to be like the other board members. But I have been successful in recruiting new board members and saying, listen, this is what we need from you on the board. We need you to say these things. We want you to help, we want this class to help us take this organization here or there. And you know, if you ask somebody to do something like that, they’ll do it. They’ll they’ll adopt that role, but they have to be invited.
Kevin Novak: Yeah. Absolutely. And because they have been treated that way, they feel they’ve benefited themselves that way, they will also do that. So I wanna

SEGMENT 5: WHERE AI STOPS AND THE RELATIONSHIP BEGINS

Kevin Novak: Focus in on the other anchor of the season. And you wrote recently about what interests you most in AI for fundraising is its ability to find the most passionate, eager donor hiding in a file of thousands or millions of names. So the people who would love more attention to your point on the relationship and your firm has drawn a clear line. In your vice president Gina Vaughn’s words. AI can create efficiency. It can’t build a relationship. And I wrote about the other side of that line in an issue called the empathy outsource. What happens when organizations let AI perform the caring itself. And there’s research on how people react when they find out. So Berkeley Dietvorst and colleagues at Wharton published a series of studies in 2015 on what they called algorithm aversion. People will trust an algorithm right up until they see it makes a mistake. Then they abandon it. And it faster and more completely than they would abandon a person who made the same mistake. We forgive people. We don’t forgive machines. So where exactly does the line sit in fundraising? And what should AI take off a fundraiser’s plate? And what must it never touch?
Gail Perry: Great points. I was giving a presentation just yesterday and I looked at the two sides of the coin on AI. But the prospect research is would be so valuable because you’ve got these donor files and you’ve got donors who would love more attention. But they’re smaller donors. And yes, we have wealth screening, we can sort see how what kind of wealth what that the fact that they give to other organizations like ours. But it takes a lot of work. To plow through and Google. We they used to Google people to see what their interests might be and now they’re platforms that let you identify likely people in your donor pool who would like attention. This is not like pushy. These people would like attention. And you can map their relationships but through LinkedIn and other formats on Is there a board member who may know them? And there’s wonderful to have a list of 50 people who are far more likely than just cold owners that you’re trying to qualify. So yeah, it can save a lot. And you know, we waste a lot of time. One of the one in my trainings I teach there’s a distinction between suspects and prospects. And you know, board members will say, Well, go see so-and-so. I’ll play golf with him every Saturday. He, you know, he might be interested. That is a suspect. An unqualified suspect. We have to do discovery to find out. I mean we people fundraisers take big classes in discovery skills, you know, which is all finding out. And you know, frankly, AI can do some discovery, but an AI can never read the room. AI can never watch a donor and pick up a cue when they flick their eyelid. You know, AI cannot establish a warm trusting relationship. Human certainly not a human to human. But as long as it’s transparent. I’m happy to deal with the chat box on a website. No problem. I’d rather do that maybe than a human person sometimes.
Kevin Novak: So and I have a question for you on this, and I’ll say the question first, but then I’ll put the context down. And it’s it’s really what happens to donor trust the first time that a donor discovers the warmth they receive was completely generated. And in that regard, has there been any client of yours that has already crossed that line without realizing that they crossed the line?
Gail Perry: I think that in the fundraising world people have been slow to adopt this kind of bot interaction. I don’t think it’s happened yet. People especially people in nonprofit workers, we tend to be pretty we’re we’re we’re in a field where trust matters and credibility matters and the people who work in it tend to be I’m a non profit missionary. I was I’m not happy in the for profit sector. So that we there’s a certain personality type that I see in that’s a sweeping generalization, but it’s largely true.

THE REFLECTION: WHAT BOARDS SHOULD MEASURE

Kevin Novak: There’s a question that I always ask every guest at the end. And with you, I want to frame it around measurement because it sits at the heart of this season is one of the themes. Fundraising measures itself relentlessly. Dollars raised, donors acquired, calls made, proposals out the door. Yet the thing that your work says actually drives the money, board behavior, donor relationships, and trust. And they rarely appear on any dashboard. So after 30 years and more than 30 boards and hundreds of millions of dollars that you have raised, what is the one thing you wish every nonprofit board would start measuring?
Gail Perry: Donor retention. They don’t understand it. If we could get the board to become the thank you committee of the board and put them to work making the donors feel good and bringing the donors close, it would enhance revenue so extraordinarily much because donor renewals would go up, donors would feel complimented that the board members have invited them to something or reached out. They feel acknowledged, they feel recognized. They do not feel anonymous. You know, gosh, this organization knows that I’m actually a donor or a monthly donor or whatever. That person to person contact is so powerful. You know, there’s a lot of studies that show when board members make thank you phone calls, the future gifts from the donors who got the call goes up. Yeah, I’d like to focus board members on something simple that they can measure and that they can take responsibility for. As opposed to holding the line on the staff. I’m always trying to put the board members to work in some way that they can be helpful and that they would enjoy.
Kevin Novak: So what is the one thing you wish they would stop measuring themselves by?
Gail Perry: Well, everybody counts. Board members don’t measure themselves much at all. They rarely do a self-assessment. And when they do a self-assessment, nothing happens. There’s no facilitated discussion. You know, I’ve I’ve participated in self-assessments. There’s a board member individual self-assessment and there’s a overall board self-assessment. Two different things and there’s a lot of data that comes out. But I’m not seeing so what would I what I wish they would stop measuring. You know, I think you know, the personal calls made on donors is still relevant ’cause it’s an activity that yields results. We try to measure our impact and that continues to be a squishy because how do you really define impact? What do I wish measures would stop measured? They I wish they would stop measuring attendance at meetings or something trivial. The trivial stuff they
Kevin Novak: Well, cause and so many boards default to that trivial stuff what’s on the agenda and
Gail Perry: Can stop, if you ask me. Focus on something important. Because what gets measured gets done. Right.
Kevin Novak: Gail, before we wrap, is there anything that you want to leave the audience with? And most importantly, where can people find you and the books?
Gail Perry: Well, thank you. My book, my both of my books are on Amazon. My book new book is launching September twenty third. I imagine this will run after that. The first book was written for leaders of the organization about how to mobilize your board. The second book is written for the board member themselves. So it’s a very different book. It’s an easy read with a lot of truisms that I’ve shared today. So I would be I would welcome your going to Amazon, but also considering my goal with the book is to make an impact on all these lovely board members across the world, and help them move forward with fire and passion and confidence to make friends to change the world.

CLOSING

Kevin Novak: That’s very inspirational. So Gail, thank you for being on the Human Factor Podcast.
Gail Perry: I’m so thrilled to be here. It was such a fun discussion. Thank you, Kevin, so much.
Kevin Novak: I want to close by connecting what Gail has shared to the arc of this season. We opened season three asking what organizations count, who decided, and whether anyone still has the standing to stop. Gail has taken that question into the boardroom where the counting is relentless and the things that drive the count are never on the sheet. Sonnenfeld showed us that failed boards and great boards look the same on paper. Chait, Ryan and Taylor showed us that most boards never leave fiduciary mode. Flynn and Bohns showed us that the fear of asking is mostly the fear of an answer that isn’t coming. Dietvorst and colleagues showed us that a donor will forgive a person and not a machine. And well, Gail has spent 30 years in rooms where all of that plays out, watching boards fix their structure and wondering why nothing has changed. If your organization has a board that just approved new bylaws, the question Gail would ask is simple: What are the unwritten rules? And who in the room would say them out loud? If you found today’s episode valuable, subscribe to the Human Factor Podcast wherever you watch or listen. Leave a rating and a comment and share this episode with your leadership team and with your board chair. Subscribe to the Ideas and Innovations newsletter at 2040digital.com or on Substack for weekly frameworks and research on why change succeeds or fails. And connect with me on LinkedIn. Where I post regularly about the psychology of transformation. Until next time, remember, it is never the technology, the market conditions, or the strategy that makes change and transformation successful. It’s the people. And the more deeply you understand the human factor, the more likely your transformation is to succeed. This is the Human Factor Podcast. I’m Kevin Novak. Thank you for watching or listening.