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September 16, 2019 Shownotes:
As artificial intelligence continues to transform key industries, Futurus Group noticed one critical area that it wasn’t reaching: healthcare philanthropy. Seeking to bridge the gap between individuals’ desire to give and lack of inspiration on who to give to, Futurus Group built the first algorithm to identify donors based on gratitude, instead of wealth. In today’s episode of The 19: Healthcare, Orange Label President Rochelle Reiter sat down with Futurus Group President Nathan Chappell to discuss how Futurus is combining the art of giving with artificial intelligence.
This is The 19. In 19 minutes or less, game-changing insights in Healthcare from Orange Label, the leading response marketing agency for established brands that are driven by a fearless entrepreneurial mindset.
Hi! I’m Rochelle Reiter, President of Orange Label. Today we are going to talk about generosity in healthcare, which some of you may know as healthcare philanthropy, and Artificial Intelligence, commonly known as AI. On the surface these two topics are unrelated. However, we’ll connect the dots for you today, and more importantly provide access on how to inspire people to give generously on today’s episode of The 19: Healthcare.
According to Giving USA’s Annual Report on Philanthropy, total philanthropic giving in the U.S. in 2018 was over $427 billion dollars, representing 2.1% of the U.S. GDP. Giving in healthcare represents roughly 10% of that total giving. Surprisingly, individuals are the largest source of giving, representing 68% of all charitable dollars.
So, what makes people give? What are the common factors among individuals that typically give back to healthcare organizations? Wouldn’t it be great if there was technology that helped identify the signs?
Here to tell us more about a game-changer in the healthcare philanthropy space is Futurus Group President Nathan Chappell. Nathan, welcome to The 19.
Nathan: Thanks for having me.
Rochelle: So tell me a little bit about your career path and background.
Nathan: I’ve been in the nonprofit sector for about 18 years. Before that, actually during undergrad, I started a company which then led to starting another company which was one of the first internet companies to sell skis on the internet. So 1997, did that, and then ended up in the nonprofit sector, now full circle back into the tech world but focused in nonprofit.
Rochelle. Awesome. So what specifically led you to Futurus Group?
Nathan: Probably more out of 18 years of frustration as being a fundraiser and a fundraising manager, leading teams that were raising 150 to 200 million a year. Probably the lack of motivation in the nonprofit sector. But also I think the rise of machine learning, and AI and the availability of that. And looking at applying that technology into a field that is somewhat slow to adopt to new technologies.
Rochelle: Sure. So, explain what Futurus Group is as an organization and its role specifically in philanthropy.
Nathan: So we set out really to disrupt how philanthropies were. And one of the things that I knew for a long time and others have known but didn’t know what to do about it was that the philanthropy nonprofit or fundraising sector has been very reliant on using wealth data to find donors. And so in healthcare specifically we talk about grateful patient fundraising, and when we’re talking about grateful patients, it often translated to wealthy patients. We knew intrinsically that’s not right, but there wasn’t really another way to go about it. So Futurus Group is this idea of helping non-profit organizations, specifically healthcare, find the patients and donors that resonate with them the most but has nothing to do with wealth. So we’re a completely new fresh approach to finding prospects without using wealth data.
Rochelle: Oh I love that. So how does Futurus group predict generosity specifically? How do they know who is more likely to give?
Nathan: Similar in marketing, there are telltale signs of an individual’s experience. And those telltale signs are captured in different data points. And so our approach two and a half years ago is really trying to build an algorithm. And so we set off, we actually built three different algorithms, built-in machine learning and deep learning. The idea was that if we could capture the essence of a patient’s experience, that we would be closer aligned with people that care or had positive experiences. The idea, or hypothesis was, that people who had better experiences were most likely to make a gift of generosity. And so, we were able to pull lots of disparate data sets that are in healthcare HIPAA approved for us to do this, and some of it is patient satisfaction information, how patients are rating a facility, how they feel about it, and by capturing about 150 different data points, we can produce about 4,000 calculations of a person’s experience. The idea it to help provide that data a really good shortcut to nonprofit organizations to go and meet and talk and engage with the people that are already aligned with their values.
Rochelle: That’s fantastic. So, are there other companies that does this, and what makes Futurus Group unique?
Nathan: So it’s interesting, you know again like I said the nonprofit sector is slow to adapt or bring in new technologies and typically it’s the risk and reward and all that. So when we started this we were the first company to do anything really in AI. There’s one other company that’s doing AI automation, but in the last say six months to a year, there are a lot more. There has been probably about five to ten others that have cropped up in the last couple months, and it’s exciting to see. People are looking up new technology and finally applying it to a field that desperately needs ways to make our work more efficient.
Rochelle. So what are the benefits to healthcare organizations that use Futurus Group?
Nathan: I think based on my experience which was running a major gift and principal gift fundraising programs. So really I knew that I had a limited resource, which were my fundraisers, the most expensive resource. And I knew that my fundraisers could only go out to lunch with one person every day. I had this fairly large business analytics and business intelligence team. And the idea for that team was to find the very best people to send our fundraisers out to lunch with. For the past forty years we’ve been using wealth data to do that, and what we found when we started testing this early on is that wealth by itself only predicts whether someone will make a donation about ten percent of the time. It’s highly inaccurate and inefficient because you identify a wealthy patient, someone goes to lunch with them, it takes a year and a half and you find out that the person really has no interest and never had any interest in the organization or maybe a year and a half later they make a gift, but that process is just so long and it’s been that way basically for forty years. So what we’re able to do with our algorithm is identify these patients that already resonate with the organization. Then when we cultivate them and engage them and share opportunities for them to give, it really shortens that life cycle. And what we can prove through our algorithm in each case whenever we implement our algorithm in a healthcare institution, is that we can produce over four to five times the results than wealth screening alone. And we just completed a survey, 76% of at least the clients that we surveyed use wealth screening as their primary way of finding prospects. So when we’re talking four to five X on the return, it’s pretty remarkable and it really becomes about efficiency and helping these organizations work better, faster, and in a more meaningful way.
Rochelle: Yeah, smarter. Definitely. So how are you currently getting the word out about Futurus Group?
Nathan: Yeah, so we have the struggle that every startup has, which is, you know, limited budget and it’s a big world. The nice thing is that healthcare is a very defined market, and healthcare philanthropy is even more defined. It’s a very tight-knit, almost tribal – everyone is like two degrees of separation. I think a lot of our growth trajectory, and it’s been just amazing, just faster and better than we could have anticipated – has been just based on relationships. A lot of relationships over twenty years, myself and Chad Gobel who has really created this idea when we started talking three years ago about this, have been in the field for almost twenty years each. So that has helped a lot. What’s also interesting in the philanthropy sector is that frankly three years ago there were no podcasts in healthcare philanthropy or in philanthropy in general. And now there’s a half dozen. And so there’s podcasts, I do a lot of public speaking all over the country, and at this point it’s just getting on an airplane and flying and being in front of clients.
Rochelle: What has been your biggest marketing challenge with this initiative?
Nathan: It is a tribal type atmosphere, healthcare philanthropy. And so, breaking into that, there are late adopters, often on purpose, because fundraising organizations try to spend the most amount of their money on their mission, not on their infrastructure. So, we’re having to not only introduce a new product, we’re actually introducing an entirely new way of thinking. For forty years, everyone has been conditioned to think about wealth as a primary way of finding prospects, and we’re trying to change that conversation from wealth to gratitude. So it’s not something that these organizations can compare to. They don’t have a comparison to say “Oh, that product is just like this other product that we’ve used for ten years.” It’s a new product, but it’s an entirely different way of thinking and a different approach. And that takes a lot longer.
Rochelle: A mindshift, yeah you’re really having to educate. So aside from the speaking and the podcasts, are there any other things that you have been doing to educate?
Nathan: Just the basic. Enhancing our website, we just launched two videos. We’ve got plans for more videos. Really the idea for us, hopefully in the near future – we’re going after funding and really getting to the point where we can scale what we’re doing and fast. It’s really putting out to the world this notion of gratitude over wealth. And I think that’s probably been one of the nicest, or ancillary benefits of doing this. We didn’t anticipate that. We built this model because we wanted to find an efficient way to find people who care about an organization. But what is done especially outside of philanthropy I think softened, I think, what fundraising is. Fundraising has that sometimes negative connotation that you’re only after the wealthy people. And so I think that’s where we can be leaders and really start sharing content out there in the world outside of healthcare, outside of fundraising about the marriage or the partnership between fundraising and philanthropy and what it does to help improve humanity.
Rochelle: I love the word generosity in general. It just sounds so much better than fundraising, and it’s so open and really, really talks about gratitude and speaks to the heart, so I love that. What are the implications for marketing on healthcare organizations that adopt AI? The AI specifically that you provide.
Nathan: Yeah so it’s been interesting, because even though we’ve developed this within a philanthropy context, we have been brought into many conversations in marketing. Marketing actually has been one of the earliest, probably best adopters of using AI to drive content delivery and things like that for many years in the private sector. Our approach inside healthcare is a little bit interesting because all we’re doing is identifying champions. And often, that’s extremely aligned with what marketing is trying to do. Trying to find the greatest, best champions either to leverage those champions to help them spread the word, or find people who are resonation. So it’s actually very aligned because we’re not just looking for the wealthy people anymore. We’re looking for people who care, or resonate with an organization.
Rochelle: Yeah, when the values are aligned is when people feel generous and they give.
Nathan: Right, right.
Rochelle: So how have specific organizations of different sizes and specialties responded to your technology? Is it more a large hospital organization or is it smaller organizations that have adopted it?
Nathan: Yeah, it’s been interesting. So we started with smaller, and it’s been interesting the progression of how that’s changed. So we started with a few smaller clients, and it’s actually now almost reversed. So the larger health systems, and there’s just so many mergers and acquisitions, and healthcare is just enormous, so we’re working with hospital systems that have between ten and over a hundred hospitals under their umbrella. To us it comes out to which organizations actually have the bandwidth to make use of the data. We can provide the very best data in the world, but if they don’t have a team to put it into action, it’s not a sustainable business model. What’s working out mostly for us are the mid-sized to larger-sized healthcare organizations. One is they have need and desire for increased philanthropy. As reimbursements are shrinking, they’re looking for alternative ways to bring in money to the organization, and philanthropy is one of those. And those organizations are putting in infrastructures and prioritizing data in a way that will make use of it. Some of the smaller organizations just don’t – if you’re raising ten million dollars a year – you might have three or four people. You might not have the infrastructure to put it ot use.
Rochelle: To really support it. So in an earlier conversation we talked about Futurus Group being experts in generosity. How has that landed with prospects, or when you’re meeting with potential clients?
Nathan: I was in the middle of my MBA when I had this epiphany of spending my time while I’m alive to do good in the world. And I further narrowed that down a few years ago. And I wanted to use my time and now really as a vision of Futurus Group is to go after a net increase in philanthropy. So our drive is to inspire a one percent increase in generosity in the United States. That would be 200 billion dollars a year. Just a one percent increase. And so when you talk about a one percent increase, it sounds very reasonable. Like, everybody could give one percent more. But it’s getting that out to scale. For us, it’s really changing the conversation like I said from wealth to gratitude and that’s not just in our sector, but that’s out in the world and really focusing on and understanding really that people make gifts. Making a philanthropic gift is probably the ultimate testimonial or thing that you can do to show that you care about an organization. You’re giving a financial sacrifice. You care about it that much. And I believe that people want to give more. And I believe that people are either just not inspired, or not connected to organizations in a way that would inspire them to do that. And so everything we do is really focused on this idea of connecting through the essence of what people resonate with. And if it’s not your organization, then it’s another organization. Not to say wealth is not important, it is an important tool for deciding how much someone might give, but everything we do is centered around this idea of if we can identify the traits and the characteristics and data points that indicate whether or not someone cares about an organization, that’s what we’re about.
Rochelle: So I can imagine that beyond health care, there’s many implications for this as well. So are you in other industries right now as well?
Nathan: So, you know that’s been another interesting thing that’s actually transpired over the last several months. We started this solely in healthcare and really my personal drive was to want to inspire philanthropy in general, but we have a lot of depth in health care. And healthcare is one of the most difficult, complicated, expensive areas to work in, and we’re very comfortable with it because we’ve been in it for so long. So that was a natural start. But what’s happened over the last several months, even, is we’ve been contacted by one of the largest groups in the U.K., and they have a lot of issues in fundraising after GDPR hit. Most nonprofits lost over 50% of their constituents overnight. And so working on ways that we can use AI in the U.K. to help reignite philanthropy there, and now the list goes on and on. It actually has been overwhelming in terms of the number of opportunities. Part of it’s because there’s really not a lot of people out there, or none out there other than us that have this depth of experience in AI and fundraising. Most people that are doing AI machine learning are 35 years old and they won’t work for less than a million dollars a year. We’ve assembled this great team of people that are altruistic that are incredibly brilliant and want to do good in the world. They want to see AI put to good use, so it’s really exciting.
Rochelle: That’s awesome. So to sum it up, what advice would you give healthcare organizations about the role of philanthropy and how to best leverage their existing efforts?
Nathan: There’s actually a couple pieces of advice. I mean, one is to treat philanthropy as a partner, not as an add-on. Not as, it’s not the cherry on top, it’s not the thing that’s nice to have. Philanthropy, when it’s successful within a healthcare organization is embedded in everything that happens in the healthcare organization. And that typically starts with employee giving, just at the base level. Organizations that have some sort of culture of philanthropy, it’s where their employees are also giving generously. And the last place that I was at had over 65% of their employees, 7,00 employees, were giving to the organization. So I think it needs to be embedded in almost all facets of the organizations. Philanthropy needs to be at the leadership table, they need to have deep relationships and partnerships with marketing. And I think when you do that, it becomes not an add-on, it becomes a driver. Second to that, I think healthcare organizations don’t understand the role that philanthropy plays in the healing process. And there is a lot of studies on this. And it’s real, I’ve seen it happen in real life where someone has a life-saving procedure or someone loses someone. And there’s a psychological imbalance between the person and the care provider. And that psychological balance sometimes is actually equalized by the person making a gift. And that’s why people either traditionally – some people bake cookies for their doctor, or send a bottle of wine. Because they want to contribute back to that healing process. They want to be partners in that. And I think when healthcare organizations understand that, it’s really powerful. When healthcare providers – physicians and nurses – understand that philanthropy can play that important part of a person’s healing process, it’s really powerful when you see all that come together.
Rochelle: Absolutely. Well, thank you so much for joining us today on The 19. I loved learning about the generosity in healthcare and what you’re bringing to the table, and your mission and vision for your company.
Nathan: Thanks for having me.
Thank you for listening to The 19: Healthcare – Leveraging Generosity in Healthcare
To learn more about Futurus Group, check out our show notes or visit futurusgroup.com. If you have additional thoughts on this topic, send us an email! You can send questions, comments and more to firstname.lastname@example.org.
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