Episode 149: Passion in Giving - Breaking Down Expenses for More Transformational Giving

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.

I can't thank you enough for taking a few minutes of your time and joining me, Randall, on this edition of "Around with Randall." Today we talk about the idea of transformational giving, and really about passion. This all stems from two individual isolated situations where I had interaction and realized that maybe there's more here to be discussed than what really we tend not to do. We worry about so much about the basic metrics, about the day-to-day. And in the world where finance, and particular non-profit work is more challenging, we think about health care and its financial challenges challenges, education, social service, museums, zoos anywhere in the nonprofit world there's this constant drum beat. It appears and feels as if we gotta have the money. We gotta have the money. We gotta have the money. And that's defeating the purpose of transformational.

So let me start with the premise of how I define transformational. Then I'm going to jump into something that happened here recently about some comments or or remarks that I made at a at a small gathering and then what are we going to do about it. To me transformational isn't a dollar figure. I say this as much as I possibly can. Transformational giving is where the person is giving the largest, most impactful gift that they feel like they can. I tell the same story all the time and if you've heard it from me I apologize, but I think it references this point incredibly well. The most transformational gift I've ever been a part of didn't come in eight and nine figure gifts from donors. It came in a 20 gift early on in my career. A mother sent in an envelope when I was working at Rockhurst High School in Kansas City Missouri and in the envelope were four or five dollar bills and her son was on full scholarship and the note indicated how much she knew that the education that was being provided to her son and the fact that they had almost no tuition dollars was going to change his life and that of the entire families be the first to go to college, and she saved four or five dollar bills, four or five dollar bills out of our grocery money four months in a row, twenty dollars. That is the single most transformational gift I've ever been a part of because it was the maximum amount that they could do, and most importantly, not just the dollars but the the emotional impact that came from that gift and their values of what they wanted to do to be a part of the philanthropic drive with parents even though they were at the lowest end of probably the socioeconomic status. Transformational giving is about a perspective. You might think of it like in the number six or the number nine. One person might look at it as a six, and if you are standing on the other side it looks like a nine.

Transformational giving is when someone steps up and does something that's meaningful that has emotion. I guess that can be nine figures. It must be twenty dollars. The reason this becomes important is I had the privilege of speaking here in Omaha to a group of ministers, priests, imams, rabbis about giving in the church, in religious settings, and I challenged them based on the book that I wrote, the Vibrant Vulnerability, that the idea of obligated giving, which all or almost all religious doctrines have some connection to some put a percentage on it. Some say you should give what you can, but there's an assumption if you belong to a church or a mosque or or a parish or synagogue that you're giving. And what I said was is, hey you stand up there in the pulpit and you talk about this obligated giving and what you get is a lot of people who give but give begrudgingly at times. And they certainly don't become transformational. And I challenged them to say think about the conversation that can occur if you spend a little time listening to what your congregants were telling you. I'll use the story of my mom.

Some of you know, and or most of you know, unfortunately my dad passed away this last summer. Miss him terribly. Really he was the only man I ever wanted to be. But in that process mom began to articulate as soon after dad passed about memorials and what she wanted, what she thought dad would value, one of which was the family scholarship that my sisters and I started for my dad and mom or in honor of my mom and dad 15 years ago. The second though was for the church. And we're sitting in the minister's office two days after dad had passed to talk about the memorial service that would follow his burial and mom said I want it to go to the scholarship fund and I want it to go to the church memorial, is that is okay, and then she added very quickly, and I want it to be restricted for the church for the endowment.

Now the minister knows mom and knew dad incredibly well, and I'm sitting there off to the side with my two great sisters. And I'm watching this and I'm thinking does anybody realize what was just said? And unfortunately you can't take the fundraiser out of the son. Unfortunately in that moment a little bit of fundraising popped up. My mom was telling JD that this was an important priority to her so if we go all the way back to this concept of obligated giving bleeding away from transformational giving, it was were you more likely to get a gift down the road from my mom for the church in general, make it obligated, or could you go to my mom and say some point when it's appropriate, Vicky we'd like for you to consider giving to the endowment. Could we talk about an estate gift because it seems like it's important to you, which is, she more likely to do in the most emotional moment of my mother's life after 55 years of marriage. You are raw. You are emotional. And there are no hurdles. It's just, there, it's, the world is in front of you. And with no barriers my mom's heart came forth to say where the priority was for her now. She didn't know it. JD missed it. The ministers, my sisters, I don't think paid any attention to it. But I sat on that and I told that story to this group of religious leaders and said if you would sit down and actually listen to your congregants and find out what they're interested in, break it down, are they interested in making sure that there is a ministerial or or church leader, and we think about education and could you could you start endowments, chairs for the different positions in the church if they wanted that, or if they're really big on children meaning we want to provide for education for the next generation of Jewish people or the Muslim faith or Christianity or the Catholic in Catholicism, could we fund some of those particular things. And I got these looks from these ministers and Priests and rabbis and imams. I'm like I know that you're not thinking about this and a few of them have come back to me and said, I'm going to change the way I do this.

The reason this is important is that we spend so much time either by the, driven by the metrics or the needs that we're hearing from the CFO or the board or the fact that this is, we just have to churn and get through these people and into possible prospects and build out. We're going too fast. We're missing transformational opportunities where people will actually meet you and want to change the world through your organization. Yes it takes longer. Yes it takes some extra work. But the value of it just takes away the dollars for the organization and what they do as well as the person who's trying to express this. It becomes exponentially more powerful.

Now I've got a couple people here that are sitting here saying well wait a minute. We have you know this idea of needs and maybe somebody wants to over fund this area. The children if we go back to the churches, children, but we don't have enough money for ministerial support. We don't get any money over here. Money's fungible behind the scenes as long as you don't overload one particular area terribly. Fungible meaning it can be moved if the budget for the kids, if we use that example and throughout from you know kindergarten through confirmation, if we use Christianity as an example, different ways of looking at how children matriculate through their faiths. In case any of them does make a difference, if you need $100,000 and you know you're going to spend $100,000 and you can find people to give you $100,000. You take the $100,000 you're gonna spend there and move it to the places that don't have that kind of financial support - redoing the parking lot, updating something, and we got to pay the music people and maybe music's not as important in your church as it is in mine. That takes time though. That takes time to put them in the buckets and that you have to help leaders understand that we can fund certain things and we can't fund others. If we put more emphasis on what we can fund and what the passion is, which we're going to get to in a moment, passion is coming in, then we will use and leverage those dollars to higher levels. And then get into planned giving. What happens if someone endowed the Children's Program, gave a $2M gift. So $100,000 every year came to restricted into that Children's Program that you were going to spend anyway, and then use the other money in other areas and you're more likely to do that if someone tells you, we love kids, we love the future of faith-based learning or sentiment or whatever you want to call it. Let's get there. You'll exponentially increase your dollars, this is true in education. And this is why they have chairs and research, education, higher ed's figured this out probably better than most the ones that are trailing is Health Care.

We don't, we're struggling to get leaders to break apart what they need. so what is this all? Do, how do you make this better for you? The tactical pieces. The first thing is a philosophical thing, and this comes from a client. So the first thing I talked about was the church and this this opportunity for me to speak and how I kind of challenged the way they look at their expenditures and how philanthropy supports them. The second thing is all about passion, and this is true of everything. If we as gift officers, if we as organizations would strive to figure out what the passion is for each person that we're dealing with as a prospect or donor we would exponentially increase philanthropy overnight.

I give to the law school where I went, a lot, where I attended for three years. I owe it an immense amount. We give a standard amount, and yes, it's increased over the number of years. But nobody's ever come and asked me what I value. And you might probably have things you support. If someone actually came and sat down with you said if we could take your money and put it exactly where you want it would you give us less or more, the answer is going to be more because then you're stoking that passion that they're trying to accomplish whatever it is they need to do or want to do through your organization. So how do you do this?

The first thing is you've got to break your budgets down, and you've got to help leaders be able to do that. I call them pots, you call them groups. You can call them budget lines. You can call them budget areas. I don't care, pots of dollars. Where are we spending money? Now don't get down to the nickel, but if we go back to our church example, there's ministerial leadership so someone to lead the church. That costs money. There is children. That costs money. There's music. That costs money. There's the building structure. That costs money. There's just four things maybe you, maybe it's outreach. Maybe there's our programming. For those who are maybe spousal, widowed, support maybe there is alcoholics anonymous that your church is a part of. Maybe it's outreach to the poor, the sick, the hungry, the needy. I've just named seven pots of money I have no idea how if you're not in the church you're in health care you can do the same. If you're in education you do the same. Help our leaders figure out the pots and make sure the pots are things that we can actually fund. And then help the CFO figure out well if we raised all the money we needed here then you could move the money over here in the things we don't have the resources or passion for.

So the first thing is think about pods and then partner with the leaders to say we can look at this differently. Second is shifting for what we need to what a donor or donors or prospects want. Passion is asking them what is it you're trying to accomplish. Passion is so much better than obligation. I'll give because I'm obligated. I'll give you more if I have a passion for it. That's how we get to transformational.

Transformational giving should be 50 to 75 percent of everything we do in philanthropy. Yes some gifts are going to be a thousand dollars. Yes some gifts are going to be $10M. But if you find a passion in each one of those, we have a winning solution.

Well how do you get to this transformational? I think there are three things that you need to identify. It's like a Venn diagram, and if you're missing one of the three you're never going to reach transformation. Let me tell you what the three are and then I'm going to tell you if you have two of the three and if you're missing one what's gonna happen. I can actually predict it. So the three major areas you need to worry about to get to transformational giving, $1,000 to $100M.

Number one is organizational need, that we can do something with the money to make a difference. Because we know from Gerald Panis and from a million other places that people with those kind of resources, passion, want to know their gifts going to make a difference. Can the organization do that? Need number two is timing. Is it the right time to ask for the gift and for them to give it. And number three, is it in their wheelhouse, their interest? Do they care? So we have need, timing, and interest. If you have timing and interest but you're missing organizational need you're probably going to get a gift, but it's going to be smaller than you expect because the donor or prospect doesn't think you can manufacture outcome the way they should or the way you should to make it transformational, to change lives, to make a difference. So if you're missing need or what your organization can do to help outcomes, it's just not going to go into a black pot. We can show you what the, from a stewardship perspective, what was done, how it was done, how it affected people. If you're missing that you're going to get smaller gifts.

Scenario two. You have need and interest, but you don't have timing. What's going to happen here is you're going to get a much smaller gift and there's going to be a lot of activity, meaning that that we're going to spin our wheels and everybody's going to get frustrated. I used to be a person, and my wife and I who gave every month because I was a budget fundraiser or budget philanthropist, small p on our philanthropy please, but it was important to us. I did that because I'm a budget guy. I started my company. For tax reasons, I'm doing it at the end of the year. If you show up now and ask me for a gift I might give you some, but I know what the pot may look like much better from a tax perspective next year when I make those decisions, or when we make those decisions in November and December. Timing is important.

If you have the third option or third scenario, timing and need but you don't have their interests, you're probably gonna get a gift but it's going to be much smaller and chances are this is where we have this cultivation spinning. Meaning, some gift officers cultivate, and cultivating, cultivating culture. And I always ask do you know exactly what they want to give to. No but I know what I'm trying to tell them we need. And I'm like well that's why we're cultivating like crazy here, because they're trying to figure out how we might help them reach their passion, their ability to be transformational in their philanthropy. And yet we just keep talking about what we need instead of saying what is it you want to do.

Every gift we go through that where there's an individual relationship for doing annual giving mailings and online, that's what we're talking about. What we're talking about is where you're face-to-face with somebody. Think about these three. What is our need, but that's the last thing we should worry about. What is the timing, that's in the middle. Is it the right time to ask them? But the most important is what is it they want to accomplish. If you start with what they want to accomplish and figure out if the timing's correct you can go back and figure out what is the need that we do that. We have that. We're trying to accomplish that, they, fits in their passion and the timing to make the gift. Passion first. Is it the right time second. And how do we use that gift to make the world a better place. In a Venn diagram, three circles that's the overlapping piece where their interest, at the time where they want to make the gift, meets with what we're trying to do to make the world a better place. As a nonprofit, more transformational giving, please. It's not a z, number of zeros. It's maximizing when we're in a conversation somebody's desire to help someone else. By the way, what is the definition of philanthropy? It isn't dollars. It's love of mankind, love of humankind. It's about helping others. That's what we got to worry more about.

Please check out the blogs at Hallett philanthropy. 90 second reads and they're just things I see and hear and feel and maybe something to think about, whether it's legal, or a client situation, or donor situation, or just something I read in the newspaper. Check them out. You can get an RSS feed right to your inbox. Also let me know if you have a thought or concern or a recommendation for a subject. That's podcast@hallettphilanthropy.com. We live in interesting times. It's challenging right now. Finances are up in the air. I'm not sure we know where the economy is going. That makes what you do even more important. Don't forget my favorite saying, some people make things happen, some people watch things happen, then there are those who wondered what happened. Philanthropy in general, nonprofit work in general, are people, donors and what you do making things happen for the people and things in our communities that are wondering what happened, and I don't know a better way to spend a career. I don't know what I would do every morning if I didn't have the ability to influence, to teach, to affect that paradigm. And the only reason that happens is because of the great work you do every day. So realize you have an impact and it's important. I hope today will get you to think a little bit more about how to increase the opportunities for people to be transformational so they can be people who make things happen. I'll look forward to seeing you next time right back here on another edition of "Around with Randall." Don't forget you make it a great day!