Host: Welcome, everyone, to another episode of the Go Beyond Fundraising podcast. Trent Ricker, our Chief Strategy Officer here at Allegiance Group + Pursuant, is joining me again, and we are thrilled to have Christa Stelzmuller, the Chief Technology Officer at charity: water, with us today. Christa, welcome to the show.

Christa Stelzmuller: Thanks so much for having me here.

Host: charity: water is one of those nonprofits that everybody would jump up and down to talk with and learn from. So, once again, we’re so happy to have you with us today.

Christa, I would love to start with you sharing your journey from working in tech startups in the for-profit sector to joining charity: water. What did that journey look like, and what motivated the switch?

Christa Stelzmuller: My journey started before startups. I worked in consulting early in my career, but then the dot-com boom took off. I knew I wanted to work in a disruptive and innovative space, so I switched to startups.

As I made the switch to startups, much was happening in the world of innovation and disruption. What permeated the environment over the years I worked in them was this idea that you were changing things — you were making an impact in some way. But at the end of the day, we’re running businesses. Most startups wanted to succeed and make a profit.

It was interesting to see the evolution of startups from the early aughts to when I finally left the space. Early on, it was about disruption and finding new, creative ways to tackle different problems. But on a more personal level, I always wanted to work in a space where we tried to do something positive with our disruption.

Making money is great. Don’t get me wrong. We all feel like we need to keep that in mind — it’s part of the reason we’re able to make the impact we’re making. But overall, I was searching for those moments or trying to find a place where I could have a special impact in some way.

More leaders in the startup space also wanted to start doing something in that area, so you saw the unveiling of startups focused on social good — mission-based startups. I quickly attached myself to a mission-based startup, which was highly fulfilling. When I made my last move, B Corps had exploded on the scene. The entire world of mission-based corporations was growing, and I wanted to attach myself to one.

Then I started thinking about it. I’d started my career right out of college in a nonprofit. I couldn’t afford to work at that nonprofit, which is why I’d made the switch to begin with. But by the time I was leaving my last startup, I was at a point where I could do this now — why would I stop with a B Corp? Why wouldn’t I go the whole way and look for a nonprofit that could use someone with my skillset? I was focused on a particular-sized organization, an aggressive growth strategy, and how we could put technology to work to further a mission overall.

So, I decided not to go to a B Corps and search for the right nonprofit instead. I didn’t find it overnight. There was quite the process of talking to different organizations, but that’s how I landed at charity: water. The stars aligned, and they were looking at the same time I was looking. charity: water spoke to the fact that there’s real innovation and a desire to use technology to make a difference. It felt like a great fit, and that was how I made the switch.

Trent Ricker: Thanks, Christa. It’s great to have you on our podcast today. Over my years serving the nonprofit space and our clients, I’ve seen many folks move with the same spirit you have from the for-profit space into this heart for social good and betterment and usually end up with some level of culture shock at times.

I’d love to hear about your experience and some big takeaways from moving. You mentioned that you started working with a nonprofit and realized you couldn’t quite afford it. You’re based in Northern California; is that correct?

Christa Stelzmuller: I’m in Southern California.

Trent Ricker: California is pretty expensive. You’ve also spent some time with Yahoo and MySpace in your earlier days. I think there’s some tension for those who want to do well for the social good but have the opportunity to work where there are financial rewards. I would imagine that tension drew you away from nonprofits. But as you said, you had a chance to establish yourself and then get back into the nonprofit space.

That will permeate some of our themes today. I love the journey you’ve taken, and I very much admire those who have served in the for-profit space, gotten some experience, and brought it over to nonprofits.

In your first couple of months at charity: water, you got to know Scott (Harrison) a bit. Tell me what was so different. What were some of those key takeaways for you?

Christa Stelzmuller: First, we all know if we’re going to work in a nonprofit space, it will be harder, and you’ll make less money because a different set of rules apply to us overall. Unless you’re working in it, you don’t necessarily realize how different those rules truly are.

I came from many years of startups, and they can grow because they don’t have to profit immediately. They’re focused on user growth or revenue growth and on demonstrating how they can achieve a stable trajectory. There’s not much stopping them from making the investments they need to make. It’s about making great decisions.

Even when we look at our marketing budget. This is something I love to talk about. I read somewhere that putting 15% of your revenue toward marketing is typical for a startup. Then I came to the nonprofit space, and we only get 20% of everything or 25% if you’re pushing it. That’s where you need to hold the line on your operating expenses. This idea of running in the red isn’t possible, and so much growth relies on being able to do that — especially when you’re starting from scratch.

You’re operating in a model that’s not set up to facilitate growth. It’s not a model that’s set up to allow nonprofits to have massive success in the same way that we see businesses in the for-profit sector go from humble beginnings into a juggernaut of a company. Everything operates against us in how the rules are set up, and I understand why. Still, it’s amazing to see nonprofits and charities growing because I know the obstacles they have in front of them.

Trent Ricker: It’s fascinating. Having run a for-profit company over the years and understanding the investment world, venture capital, private equity, etc., I know that investors want to see growth and scalability first and foremost. For some reason, those principles and that logic don’t apply to the nonprofit market, but they should. That’s why I have so much respect for Pat Harrison, Dan Pilat, and others who have preached the investment thesis in nonprofits.

We think about stewardship appropriately to invest wisely in our mission for delivery. But in many cases, that stewardship can scale to a longer-term impact rather than a short-term turnaround. How much does the dollar I give today return on the mission versus multiplying many times over in the long term? That’s how we think in the for-profit space when building our businesses.

I’ve seen many folks come from the for-profit space to the nonprofit space excited, only to be frustrated or disillusioned by the board governance or the oversight of the watchdog agencies that hold us to different standards. I can appreciate that you’ve seen that as well.

In this case, it’s a good segue to charity: water with its unique fundraising model. Talk to me about that because I think it attracts a lot of donors to the organization — and probably the people who work there as well. There’s a mindset there. It’s known for the 100% model. Those of us in the nonprofit space recognize that all our other expenses need to be taken care of, but they’re taken care of from a different perspective. Talk a little about that and how it intrigued you, and let’s talk about charity: water.

Christa Stelzmuller: We’ve talked about the external constraints that nonprofits face. The interesting thing about charity: water is that it went one step further and added an even more challenging constraint.

Scott learned early on that the level of donor trust was quite low. It’s not like buying a bottle of water or a cup of coffee, where you pay money and immediately get something back. The transparency and instant reward of where you place your money aren’t necessarily there in the same way. There’s a lot of distrust around what happens with those dollars when you finally donate.

So, Scott took it one step further. Not only will we operate as a nonprofit, which means we’ll already have all these constraints, but we’ll make it dead simple for donors overall. Even operationally, we run those two separate bank accounts where donations to operations go into one place and donations to water go into a different place. That’s been super important overall.

It’s harder because, in my context as a CTO, I might be evaluating different solutions to incorporate into our overall experience. If any of those are built on a variable cost structure, the 100% model doesn’t enable me to look at those variable costs like someone at another organization might be able to. It forces me to make different decisions regarding how I’ll solve a specific problem. If I can’t get those costs to line up in a way that makes sense for us, I might opt for a build scenario rather than a buy scenario. It’s that extra layer of complexity.

However, it’s essential because the messaging is simple for donors overall. You’re either funding one thing or the other. That immediately solves the confusion for the many donors who ask where their money goes. It’s a critical value.

We ask the question all the time: does it still hold? Even this past week, we were together as a team and said yes, it still holds. This notion of keeping it simple for donors and making sure we’re delivering on the promise we’re making in all our marketing messages right away continues to resonate in a way that may be hard for other folks to understand if they don’t hear it from their donors every single day. But we hear it from our donors all the time — how this simple model continues to be a reason charity: water has been trusted for so long by so many of our donors.

Trent Ricker: The typical nonprofit also thinks in larger buckets of unrestricted giving and restricted giving. In the traditional mindset, the more unrestricted, the better because it gives us the freedom to do with the funds what we deem necessary to drive our mission to its completion. It makes perfect sense. Your organization decided to be 100% restricted down to the small donor, which is very unusual. In most cases, the small donor gifts are typically unrestricted.

Sponsorship organizations say your gift is sponsoring this child in this country to do these things — that’s the ultimate restricted gift as well. But even in those situations, there’s an operational component. I’ll use Compassion International as an example. I know that monthly child sponsorship goes to a specific individual, but there are also operational considerations. Laying down the gauntlet sets something apart a little differently.

That’s a good segue because I want to discuss your specific role. I admire your role in technology and operations related to the correlation between the gift and the particular outcome. charity: water was founded in 2006. Scott’s entrepreneurial background set the nonprofit space on its ear a little, which we needed. That was around the time I got involved in this space, along with Lance Armstrong and the Livestrong Fund. Some entrepreneurial outside voices were disruptive, challenging the way people think.

One of the most essential aspects is stewardship and leveraging technology to provide transparency and almost instant gratification for this generation’s expectations. Given your background, some of that must have attracted you to charity: water. Talk about that uniqueness, especially in the context of the 100% model versus the necessary things like stewardship, video, and on-the-ground service.

Christa Stelzmuller: The technology has always been a vital component of the transparency. It’s great to say we have a 100% model, but there’s the second half of that: we must prove it, and not only through our auditors. That doesn’t mean much to our donors. We must be able to prove it to our donors specifically.

Early on, technology was used to scale how we shared information back to the donors when they donated. We communicated where their money went and how we deployed it on different projects. It’s been a process over time.

We started by showing the GPS coordinates of every project. The next step was connecting a portion of our donors to those projects more directly — peeling back the onion so we could show precisely how the money goes from your donation to a project and back again. When I joined, one of the best challenges was scaling that — taking it to the mass donor and ensuring we could do it for every donation. That’s a scaling problem that I’m sure other nonprofits have encountered: how do you make that connection back again?

It’s a bit easier in our case because we’re saying 100%. We don’t have to subtract a portion for operations; we can say 100% went to a water project. We had to develop an algorithm to make this happen, but we have it set up now. I’ll give you a sneak preview of our end-of-year release: we’re in the process of unveiling what we’ve been doing for donors at our major donor segment and bringing that to our mass donors overall at a scale we’re super proud of. Whether you give $5, $5,000, or $50,000, we can share where those dollars went and the project we connected you with.

Trent Ricker: That’s amazing. It’s very exciting, and there’s a lot of anticipation. I’d love for you to talk more about this intersection of storytelling, technology, and the specificity of stewardship.

I’m using language our listeners might appreciate and understand — that closed loop where people can invest and see the impact immediately. Good stewardship of the funds creates deeper loyalty and a long-standing lifetime value upgrade.

We work with our clients to align money to the mission and further work with individuals so the organization becomes a philanthropic priority. In doing so, experiencing the mission is critical. First, talk to us about the upcoming experience lab. Then, talk about this intersection of storytelling, technology, and stewardship, which should further ingratiate donor loyalty and lifetime value. I’m so excited about what y’all are doing.

Christa Stelzmuller: I’m excited to share it. Before we switch to the experience lab, I’ll give you another sneak preview of what we’re doing on the impact side of the house in making those connections. This will lead into storytelling.

Much of this can feel like data that we can connect. It’s always been important for us to tell the story behind the data. Ideally, the next place we’ll deploy our technology is to ensure we share where those communities are located, how many folks live there, and so on. We’d love to show you more photos of the community overall and tell you a little more about the story of that community. I love the before-and-after stories we tell when a community first gets water and what happens after.

We’ll deliver those stories at scale to connect you with more than the data — the humans behind the data. This gets us to the experience lab. Making that connection between the data and the humans behind it and building empathy and compassion is in the DNA of charity: water. We had a sneak preview this week, and about 300 people came through the lab to experience this.

We built an in-person experience with technology. We have some hologram boxes that allow you to see real folks from the communities you’ve donated to. Our theater has an experience that introduces you to the overall problem. Our goal is to take you through a narrative. First, you meet a few folks who are impacted; then you understand the problem. Then, we have a solutions center where folks can understand what dirty water really is and what it looks like. Then, we take you through a series of solutions.

We’re a solution-agnostic organization. We’ll find the right solution for the community we’re working in and show you what that looks like. Then, near the end of the experience, we share a story. Now that you’ve been introduced to the problem, what it looks like, and its solutions, we want to connect the dots. Otherwise, it’s just information: Here’s the problem, what it looks like, and solutions. That’s all very helpful and informational, but we add a story at the end.

The story of a girl named Grace is a virtual reality (VR) component. We try to make this immersive, so the VR component allows you to hear Grace’s story.

I should add that, by this time, we’ve also taken you on a walk for water through an immersive room that’s very hot. You can carry something heavy, too.

Trent Ricker: This is all physical. You’re feeling all this physically, so all your senses are engaged.

Christa Stelzmuller: Yes, all your senses are engaged in this process. So, you’ve gone through this entire process of understanding the problem and its possible solutions. Then, you’re immersed in Grace’s story. We take you through what Grace’s life is like before water, how it looks as the drilling rigs are coming out and bringing water, and what it feels like now. Having been to Malawi, I got to experience some of this in person. The VR experience brought me back in an incredible way.

I was helping the folks who came in and toured with our VR station, and they told us they felt like they were there. You get to know Grace as a human and connect with her and her mother on a level you might not otherwise be able to do. We’re trying to use technology to make that connection. Not everyone can travel to the countries where we work. While we’d love to take everyone over there for a personal experience, it’s not practical for most folks or us.

This experience was designed to be taken on the road. The hope is to take it on the road and allow people to visit and experience firsthand what it might be like to live without water. Because for so many of us, we turn on our taps. It’s hard even to imagine what it must be like to live without water, so we want to close that gap. You don’t need to imagine this; we can show you what it’s like. We’re using a little technology to do that.

Trent Ricker: You’re selling yourself short. It sounds like more than a bit of technology. That’s a lot of technology.

Christa Stelzmuller: Yes, it’s a lot of technology. As I watched it, it was hard not to notice people’s emotions when they connected. It was an incredibly moving experience.

Trent Ricker: In general, I’ve categorized nonprofits as open-loop and closed-loop. In a closed loop, the donor may benefit from their giving. For example, if I’m at a hospital and receive great care, I may give to that hospital so they can continue to provide good care for me and future generations. If I love the orchestra, I may give to the local arts to bring an orchestra to a wonderful theater and hold that legacy.

In an open loop, I’m giving for someone else’s benefit. I don’t experience anything other than the altruistic nature of giving. That’s harder to experience because you don’t get to go to the orchestra, concert hall, or university. So, for charity: water, taking that experience to them is essential.

I’m on a board in Dallas that serves poverty. To upgrade donors, we encourage them to experience our food pantry, meet our neighbors, and see the problem. Locally, that’s easier. I’ve worked with others in international ministry who try to get major donors to go on a mission trip with them. Of course, that will bring significant connection. We’re trying to bridge that gap, but it’s difficult to transport somebody to another place to experience the problem and your solutions.

I mentioned Compassion International. Years ago, they had Compassion Sundays at churches. They would set up a trailer that you could walk through and see museum-type exhibits, but you’re integrating technology to a whole new level.

What might the prospect or existing donor expect in their city in the coming months or years? Would charity: water come to Dallas so I could visit the experience?

Christa Stelzmuller: That’s what we’re hoping for. We’re early in this process and looking to learn from our established location to hone what that experience can be like. As we strengthen how we communicate that story and build that connection, we hope to take this on the road, whether through pop-ups or another location. That’s how we’ve been discussing it.

So, yes, bring it to Dallas and create an event around it, especially if it’s a pop-up. Create an event to introduce people who might never have heard of the water crisis and use our existing communities and cities to help spread the word and share what it might be like.

Even the novelty of being able to understand who you might benefit at such a close level changes things a bit. There’s much we can do on a website, but a website can’t come close to what we can do with in-person experiences.

Trent Ricker: In general, acquiring new supporters is becoming increasingly challenging. Gone are the days when we would rent a list of like-minded people and do front-end premium acquisition to get that first gift. Those with more means might do direct response television ad placement, but the specificity of the relevance is becoming more difficult.

Not to suggest that what you’re doing is cheap, because it’s not. It’s a heavy front-end investment. But there’s always a cost to acquire that new supporter or invest in upgrading a supporter who can give more. I challenge our listeners to think differently. In this emerging landscape, we have to meet people where they are.

I’m sure you’re considering festivals, shopping complexes, or entertainment complexes where people might already be. Then, you interrupt them and say, “Slow down; you should check this out. There are people in this world who need your help, and we’d like to show you that challenge.”

Some nonprofits have resorted to street canvassing, which works to some extent. They say, “Do you have a few minutes? I’d love to talk to you about Greenpeace,” or fill in the blank with your organization. But again, it’s interrupting without experience. I love this vision and this entrepreneurial nature.

How did this come about? Was this vision already in place and drew you there, or are these concepts you’d been socializing and culturalizing before you came? Talk about how charity: water got to this point.

Christa Stelzmuller: There’s quite a bit of history of charity: water doing in-person experiences, and it’s been an interesting road. They used to be very quick moments set up in the middle of New York City to show folks what dirty water might look like. I remember charity: water once took water out of the Hudson River and showed folks what it would mean to drink it.

There’s been a history of wanting to connect in person and create more unique experiences, and things have evolved. Back in 2006, that would have been the way to do it. Then, the internet and everything around it kept growing, and eCommerce exploded. So, everyone was using technology to make sure they were capturing mass donations online. Walking away from physical, in-person experiences happens because you have to shift your focus to where everyone is and ensure you’re using technology in the right way.

And then COVID-19 came along. While we were shifting our focus to building a recurring donation business and using technology, we always maintained an office to walk donors through and share with them. The office was explicitly designed to share these types of experiences. Those things charity: water learned on the street were brought into the office so people could experience them in some capacity. But then 2020 happened, and the office shut down.

We’ve been asking ourselves when the right moment is to bring that back again. Also, how can we reimagine it in 2023 or 2024, not the 2010 way? It felt like a space in the middle of a retail environment with a lot of foot traffic so people would notice it. They don’t necessarily have to be invited to it right away. Putting it in that context and seeing if we could make it work is how it evolved.

These in-person experiences that help drive the overall message have always been part of our DNA.

Trent Ricker: It’s a great time, too, because the consumer is also thirsting for next-generation immersive experiences. I had the pleasure of seeing U2 at the Sphere in Las Vegas. It was an amazing experience, and this is where entertainment’s going. Here in Dallas, there’s an entertainment district called Grandscape that’s very much on the cutting edge of entertainment and art. Meow Wolf is there, I believe. People are coming to expect immersive and interactive experiences like the Van Gogh exhibit and Meow Wolf.

charity: water has always done a better job than many others in connecting with the next-generation supporter who has a different mindset, wants to solve problems half a globe away, and seeks instant gratification. “How did you use my $20?” “What’s my impact today?” “I don’t really trust you.” I think that’s particularly true for the younger generation. They don’t have much trust in nonprofit organizations. There’s a significant gap between those legacy organizations that are celebrating their 100-year anniversaries and those that are a little more emergent. It’s fascinating to see.

When might you begin to pilot some events? What’s the timeline?

Christa Stelzmuller: We open officially in December, so we have some work to do before then.

Trent Ricker: And that’s a physical location. Where is it?

Christa Stelzmuller: It’s in Franklin, Tennessee, right outside Nashville. Anyone in the Nashville area can see it at a location called The Factory. By all means, plan to check it out if you’re there. We have some work to do before opening. It will be a tour-based approach. The idea is to begin with tours, school field trips, and other such activities because we need to take you through the narrative overall. We’re still building our reservation system.

I expect that to be about a year of learning. Maybe I’m being conservative, but I assume we’d want to do at least a year of learning in this space. Then, we would discuss what taking it on the road means and see what we can do.

Trent Ricker: I love the audacity of charity: water and the level of investment and vision. I want to make sure I’m clear for all our listeners: don’t be discouraged from thinking big. There’s no reason not to question what’s business as usual and ask what would have to happen for your organization to change how prospective and existing supporters experience you. I encourage all nonprofits to think in possibilities and challenge their existing thinking.

Some of our listeners might not have that level of brand awareness or investment. Based on your learnings, what challenges do you see in the nonprofit space in general? What advice would you give those running local, regional, or older-thinking, business-as-usual nonprofits?

Christa Stelzmuller: This could start a whole other conversation, but the nonprofit space is facing competition on a level we haven’t seen before. Think of the rise of B Corps and the instant gratification of purchasing something and feeling like you’ve done good. It poses a real challenge.

Trent Ricker: Can you share more about B Corps? They’re fairly new, or at least they’re getting more visibility. I find them fascinating. Describe them, their emergence, and how they may impact nonprofits.

Christa Stelzmuller: These corporations have built a social good component into their actual business model. They don’t just want to maximize profits; they promise to ensure a portion of their profits goes toward a particular social good. They pick a specific area to focus on.

Trent Ricker: A business like Toms has been doing that for a while. You buy a pair of shoes, and they give a pair of shoes.

Christa Stelzmuller: Yes, or Bombas gives a pair of socks for every pair you purchase. This is a competition that nonprofits face today, especially with younger consumers who say, “Maybe I don’t need to donate to that homeless shelter because I bought my socks. And because of the socks I bought, another pair was already donated. So, I don’t need to worry about it now.”

We need to consider that in the nonprofit sector as we talk about innovation. Clearly, the for-profit space is innovating. They see a group of folks who want to make a positive impact, and they’re using that in their business models. They’re setting up their business models to take advantage of people’s natural desire to make a positive impact.

We must have an eye on that overall as we’re innovating, and we can do this at every level. The largest and smallest nonprofits can think about this particular use case to determine how they can make it simple for folks to make a positive impact. Through our transparency requirements, nonprofits have a natural winning lane overall. I would love to see nonprofits take advantage of the fact that we must be as transparent as possible about everything we do. Quite frankly, B Corps don’t have to be as transparent.

Trent Ricker: That’s true because they’re a full-profit company, to begin with.

Christa Stelzmuller: Exactly, so we can take advantage of our transparency to highlight why the nonprofit space is where you can do social good overall.

Trent Ricker: It turns the traditional premium model on its head. Before, if I donated, you might give me something in return, like premium tickets to the orchestra. It may be, “Make a donation, and you’ll get a free pair of socks.” Now, it’s flipped: “Buy a pair of socks, and we’ll give a pair.” Given their altruistic nature, people want to hold those they shop with accountable for their social impact.

But to your point, they’re held to different transparency standards. Not to suggest that they aren’t doing wonderful work — they absolutely are. But they don’t have the same stewardship requirements. We’re required to be transparent with our reporting because our stewardship of gifts matters. So, I think you’re right. I agree that it’s becoming more competitive, certainly with younger generations and their philanthropic efforts.

As we wrap up, is there anything else from a technology standpoint that you might give as advice? How might they leverage technology in a simpler and more cost-efficient fashion? Are you seeing anything that could serve as a tip for nonprofit leaders?

Christa Stelzmuller: The main tip I always want to share is to focus on the foundation early and often. Sometimes, in the desire to move quickly, we don’t revisit the things that might hold us back. In the long term, when it comes to scale, we say, “Oh, it’s always been this way,” or “This is a problem we’re used to having.”

It’s not so much about any one solution as a system of thinking you apply. You need to be nimble and agile. You must do what needs to happen to get it out the door. But don’t let that become a legacy. Continue to close the loop. Make it part of your foundation so you can grow effectively moving forward.

So, think of it more as a system of thinking you apply to your technology every day as you make decisions.

Trent Ricker: We’re completely aligned there. How you think changes everything. Believe you can achieve some breakthrough things or look at your systems differently. It’s also a good reminder that we need to be constituent-centric rather than organizational-centric. It’s not necessarily about how we use the tools available.

Part of my background was in customer relationship management (CRM) software for nonprofits. However, nonprofits couldn’t necessarily invest in research and development to create their own critical CRM and marketing automation tools. Your experience should focus more on your constituents — what you communicate and how they need to be communicated with. It’s less about the tools and whether you’re using them by the operating manual but what the constituent is looking for and anticipating. Meeting them where they are and using your available tools are essential aspects of technology today.

Well, Christa, it’s been fascinating. I loved our conversation. We could do two or three different parts because there were several things we hit on that I wanted to discuss more. Still, it’s exciting to hear what’s happening at charity: water.

We’d love to have you back next year to hear more about the progress, and the successes I’m sure will follow. I’m eager to hear about the success of acquiring new supporters through this organic point of origin and immersive experience and how they might be more loyal and valuable. I’m sure you’re tracking all that.

Christa Stelzmuller: We’re definitely going to be tracking all of that.

Trent Ricker: Yes, and hopefully, some key learnings. Is there anything else you’d like to share today before we say goodbye?

Christa Stelzmuller: I don’t think so. This was such a great conversation. Thank you for all the great topics.

Trent Ricker: Thank you, Christa. Best of luck to you and charity: water and all your great work. Thank you very much for joining us today.

Christa Stelzmuller: Thank you so much.