Episode 132: Proper Engagement to Get to Transformational

Welcome to another edition of "Around with Randall", your weekly podcast for making your nonprofit more effective for your community. And here is your host, the CEO and founder of Hallett Philanthropy, Randall Hallett. It's a great day right here on another edition of "Around with Randall". Today's conversation topic is one that, really, I've been sitting with and fighting for and fighting against for all number of years.

I wish, and we'll talk about in a moment, I had the ability to articulate it in the way that a couple good friends have, but we need to really think about how do we maximize people's philanthropy. And the term that I tend to use most often is transactional gifts versus transformational gifts, and we've see this constantly where whether it's our incentivization of metrics that incentivizes, probably, more transactional conversations that we see it in the fact that we've got a number of very wealthy people commenting all the time about wanting to make a bigger difference. I think about here in Omaha that we, for years, have heard from the philanthropic community that they're tired of multiple organizations showing up for the same small thing. Why aren't you working together to do something bigger for the Greater Community? I think it shows up in many different ways and particularly in a time when we see less people giving, which is what the Giving Institute through the Get You Giving Report shows us. Comes out in July I think. We're going to see 2022 be flat, if down a little bit. I think we're all concerned about what in a year from now 2023 numbers are going to look like. But that we have so much transaction and we're teaching our young gift officers to be transactional instead of transformational.

You probably have not tracked this because you may not be from the Midwest like I am, but it's important to note that the Chronicle Philanthropy highlighted here recently story that I actually knew something about. Although I thought the reporting on it in this particular case was fantastic and it's really a story about McPherson College which is a Kansas Liberal Arts institution of about 100 or 850 students or so. So this is a really small place, and I'm guessing maybe one or two people who might listen to this have ever heard of it. The story highlights the fact that they have announced a half a billion dollar gift from an anonymous person or couple or entity that has profound effects on this small liberal arts college, almost all of it going for some type of scholarship process or scholarships to keep the cost of debt down. And I think we all agree there's been lots of conversations around debt being a major issue for many young people coming out of their college experience. I loved it not because of the gift, although it's kind of cool to think about a $500 million gift, half a billion. That's kind of cool. It's what the article said.

So let's start with this idea of transformational. And I reach here behind me, I have trumpeted in any way possible if you're on YouTube you can see it Nathan Chappelle, Brian Crimmins and Michael Ashley's book on the Generosity Crisis. It is mandatory reading because it talks about this idea as they call it radical connections or transformational relationships that if we want to maximize the opportunity for someone to make a difference, philanthropically, that it has to be a couple of things. Number one the issue has to be grand. Number two the solution needs to be just as grand. And if you want to get to grand in terms of philanthropy, it isn't a transactional conversation, it's transformational. It's a deeper relationship.

So how did McPherson do this? Well it's interesting. It's what I talk about in so many different ways, and the trainings I do and all kinds of other things so I'm not, I don't have the success story, at least in public, that this one does. But it's what I think many of us have tried to talk about as educators in this profession. So I'll start with the first thing is that their President, Michael Schneider, was before becoming president of the school are we listening Healthcare are we listening arts and culture are we listening zoology are we listening everybody ready he was and if you're in this profession you know what I'm going to say he was the vice president of advancement before coming the president of the school. So I give McPherson credit which is what we're going to talk a lot more about in coming podcasts in healthcare and in other areas about who we're hiring as our CEOs.

I want to be careful how I say this, but I'm just going to be blunt. If they had hired the CFO I don't think they get this kind of thought process. Doesn't mean there's not great CFOs out there. I think of, in particular, someone like Sue Anderson Marion who is just spectacular as a CEO, who came out of Finance, but that's the anomaly in my opinion. Most often I think we believe that if we had more input into the CEO, more of the CEO's time we could think about these kind of things. So that's first thing. The second thing is he brought a new way of thinking about this so he really created an opportunity for McPherson to have this ambitious strategic planning process and really talked about what would be possible from a very grandiose scale, and he began to incorporate some of the people who would be the biggest inputs of philanthropy to make this dream come true because they weren't going to 830 we're going to get there with tuition dollars by increasing it.

Considering the market and what's going on in education, higher ed, he began to sit down with people and say tell me what you think and here's the biggest challenge, the underlying root cause of the issue. One of the people he spent some time with was a couple by the name of Lundquist and brought one of them onto the board and engaged both of them they were major major donors before and the direct quote out of the Chronicle of Higher Ed, Chronicle excuse me is important from Melanie Lundquist. I'm going to read it. The bigger the vision of the that institution has, the bigger donors they're going to attract. That simple statement by that donor is what's missing most of the time because we worry about transactional things we need this tomorrow.

I really believe that people with the resources that can change the world are tired of being asked to do the very least that they can. So what she's saying is a bold vision attracts investment. This case is philanthropy. What they're saying is we want McPherson to be the primo liberal arts school but we want to keep tuition down so our so our graduates don't have debt coming out. I mean I think it's brilliant. It's kind of what you think of with Langone in New York City. The Langone family who basically said we're endowing all medical scholarships medical school. There are no tuition, doesn't exist. You're gonna be held accountable but you're not gonna have debt. Big thoughts.

Michael Schneider, the president, indicated that it was that big visioning not the fact he understood philanthropy, which he did, that got them the anonymous $500 million gift. It was changing the conversation thinking bigger than what tends to happen in a limiting strategic planning process. It wasn't about the dollars as it was as he says and I quote him about the college's future. Instead of working directly with people about the technicalities of their estate and their wealth we went to work inspiring them on the vision that they helped create. Transformation can occur. Transformational gifts can occur when we think big enough.

So how do we do that? That's the tactical piece of today's conversation. I got six things that you need to be thinking about. If that means influencing your senior executive team because you're on the team as a chief philanthropy officer, wherever you are it's that if you're the CEO or you have access to the board of the chair of the board it's getting to that what are the six things you can do to get to transformational gifts. Yes, but vision that's going to attract those kind of individuals who want to change the world who believe in you and the cause that you're trying to talk about and to execute.

Number one, challenge the status of being ordinary. There's a great story about the five monkeys. They're in a cage. University researchers are studying them and they put a banana up on a shelf and there's a ladder that leads to that shelf and the bananas the monkeys see the banana and they go up and we've told this story before and they get sprayed with water and they realize very quickly this cold water they don't like, so they just leave the banana and then they start replacing the monkeys and every time a new monkey comes in and an old one goes out he sees the banana or she sees the banana. She starts up the ladder and the other monkeys now pull him down because like we don't want to get sprayed. And pretty soon there's no monkeys left that were actually ever sprayed. And what happens is, there's a new monkey introduced and they pull them down because that's the way they've always done it.

I'm tired and I hope others are of this is the way we've always done it. I don't care. What is it that we need to do?

How do we get to what that looks like? So the first thing is is challenging the ordinary, the status quo, the way we've always done it.

Which leads me into my second. Do not put dollar restrictions on dreams. If you tell me in our family use a smaller example that we can dream but we can only spend $100,000 the minute you do that you've limited my dreams. Can I pay off the house? Not if it's more than $100,000. Can I put my kids through college without a scholarship? Not for less than $100,000 unless they go to a certain couple schools. Talk about the dreams without the limitations. What is it that we want to do? I've got a client who is in rural Health Care and there's this internal conversation, not in philanthropy and not actually amongst some of the good leaders in the institution, but that they want to do something pretty cool in rural Health that you just don't see very often. It's going to cost a lot of money and their chief philanthropy officer, she's fabulous. She and I and certainly, more 90 her 10 me kind of helping where needed, have pushed this dreaming process and they're going to get there tens of millions of dollars that I think they think some people think a year or two ago wasn't even possible because they didn't put limitations on it. Let the dreaming happen without dollars involved and then figure out what it's going to take to get to the dream or at least steps in the dream.

Number three is really try to deal with the core issue and not the kind of surface level problem. When doing the research for my dissertation, I tend to tell this story often, that I was studying Tulsa public schools and they're raising a great deal of money. And I sat down with a number of people as I did a number of different places and what came out of the conversation in Tulsa, which I found to be the most remarkable is 87, if I remember correctly, or 88 percent of their students were free and reduced lunch. So there's not a lot of wealth in the district and so they had to find a different way of looking at this and finally someone asked the superintendent not what he would do with the money, they asked him what's the major problem and he said truancy, attendance. And then somebody really smart who, his name was Lucky Layman's who'd come out of the legislation with the executive director of the foundation and did a fabulous job for many years, and the chair of the board of the foundation said okay. Absenteeism or not being present is your problem. What are the causes? And that's when the superintendent said well we know that it's actually not what you think. The kids are hungry and they're embarrassed their clothes aren't clean. Well once you knew the root cause you could then create a strategy, a philanthropy dream that actually gets to the root cause. They ended up moving food processing from the city, from the food bank, the city food bank, as well as some other nonprofits, into the school. So the kids would show up and get food and then they raised money to put in laundry facilities so they could wash the kids clothes. And guess what happened? The kids started showing up more. There was less truancy and test scores went up. What is the root cause you're trying to deal with? That's important. Get down to the core of it so that you begin to to dream the solution correctly. That's transformational.

Number four is being vulnerable, which you'll hear me talk a lot about over the summer in the next maybe not the next edition of the this podcast but soon to come on a series about vulnerability and Leadership. Are you willing as a leader or are you willing to push others? If you're not the leader to be vulnerable to say I don't know what I don't know and I'm going to ask a lot of questions and allow others to influence the process. When CEOs become CEOs I think they become concerned about image and that they know everything, and the best leaders I've ever worked with were the ones who said yeah other people are going to contribute a lot more than I am. My job is to harness that brilliance, that energy, and pull it all together to move the organization forward.

My favorite saying in dealing in this scenario is thinking about the people in your community. And the head of McPherson, Michael Schneider, talks about this in the article. He goes, he says look this is, this is our trouble. What do you think about this? What would you think would be a solution?

I always end the podcast with my all-time favorite saying but in terms of tactics, my favorite thing to tell people teaching-wise if you want if you want somebody's money ask them for advice. If you ask them for money you'll get their advice. There's a difference if you ask someone to contribute themselves their thoughts into this conversation you're more likely to get them to invest in it because they feel vested in the process. It mads me when people with authority walk into a room and tell someone else who's incredibly successful who has immense amount of wealth, this is what we're going to do, and I don't care what you think. Well then, why are you bothering to ask them to be involved.

If you have a plan that's 80 done, take out 60 of it, and take 20 of it and say what would you do. You'll be surprised how many more people show up and say, not only would I do this, I'm willing to put money behind it. And they're probably going to say something pretty similar to you.

Number five, surround yourself with people who are smarter and more creative than you are. If you don't have people that are smarter than you are, you're hanging with the wrong group. Find the smartest people. Put them in a room. Find the most creative people. Put them in a room. By doing so what you get is an increased series of possibilities. sSmart people don't put barriers up on themselves. Jonas Salk didn't say yeah the technology is not there so we can't solve the polio problem. Or when we went through the pandemic and we've got multiple companies trying to figure out how to do the vaccines, there weren't people in the room, dumb people saying yeah this has never happened before. They're like we're going to find a solution. We're gonna find it, three-to-six months, and by the way we're starting from zero. Get people who can dream with you.

And lastly, what I tell my son all the time, realize the concept of risk-reward, which is the quote I gave you a few minutes ago from one of the donors at McPherson, Lundquist. Bigger the dream, the bigger the investment you'll get. It's a risk-reward. I'm not saying risk everything. What I am saying is appropriate risk will get you to really big possibilities. Challenge the ordinary. Don't be satisfied with status quo. Don't keep doing the same thing over because that's what we've always done. Don't put dollar limits on dreams. Just think about the dream and how we, what could be possible. Then figure out what the root causes are of the things that are actually happening that are holding you back, the challenges, and be vulnerable as a leader and go ask other people what they think so they come with you. And then surround yourself with really smart, creative people. And finally, be willing to risk a little bit for that reward.

I highly recommend the story in the Chronicle Philanthropy about McPherson College in Kansas and the story about the giving that they have installed. I think it highlights in a very practical way, and they deserve all the credit, they're not a client, I've never met anybody from there but this is what I talk about all the time and more of us are transformational, is more important than transactional that's how we're going to change our communities. Challenge yourself to be a little bit uncomfortable with those six steps.

Don't forget the web of the website hallettphilanthropy.com and on that website the blogs, 90 second reads you can pick up there and RSS, they'll come to you. Just 90 seconds, something to think about every you know a couple days. I do about two or three a week. If you'd like to reach out to me that's how it or excuse me podcast@hallettphilanthropy.com podcast at hallettphilanthropy.com. We live in challenging times. There's a lot of moving pieces. There's people out there that want to dream. Can you dream with them? Can you figure a way to make your nonprofit more viable and impactful in the community? That's going to change lives, which brings me my all-time favorite saying. Some people watch what's happened, some people wonder what happened, and then there are those who, excuse me, there are people some people watch what happens, some people wonder what happened, they're those who wondered what happened. We need people who are going to change lives. We need people who are going to impact us. We need to be uncomfortable in partnering with them, of people who wanting to do things, who are willing to do things, versus those that are just wondering what happened. Remember that as you think about what becomes transformational. I'll look forward to seeing you next time we're right back here on "Around with Randall" and don't forget make it a great day.