Vibrant Vulnerability: The Changing Nature of Leadership for Nonprofits

The role of CEO, whether in healthcare or as leader of a church, is drastically changing to include being the “chief fundraising officer.” The choice is not whether one likes the change, but rather whether or not one chooses to embrace the change.

Randall Hallett is the CEO and Founder of Hallett Philanthropy, a full-service philanthropy consulting firm. Having spent his entire career in philanthropy, Randall is passionate about helping organizations seek funding to meet their mission. He believes giving is good for one’s emotional and physical well-being. Before founding Hallett Philanthropy, Randall served as President and Principal Consultant for a large consulting firm. He oversaw all client programs on behalf of the 30+ person firm. The final four years of his seven-year tenure were the most profitable for the organization. Randall has worked with systems, hospitals, and medical centers here in the US and across the globe, including Intermountain Health System, Catholic Health Initiatives (CHI) System, Dignity Health System, AdventHealth System, Indiana University Health System, University of California Irvine, Baylor University Medical Center, University of Missouri, University of Miami, Marshfield Clinic Health, Manitoba Children’s Hospital (Canada), and St. Vincent’s Current (Australia) Genesis Health. Before joining Gobel Consulting, Randall was the Chief Development Officer (CDO) and MedCenter Senior Executive at the Nebraska Medical Center, where he was responsible for all aspects of fundraising, including the introduction of a major gift solicitations program through physician engagement, a concierge program, and a planned giving effort which led to a 600 percent increase during his tenure. Randall and his team supported the $370 million 18-month fundraising effort for the Fred and Pamela Buffett Cancer Center. Before working with MedCenter, Randall spent 15 years in various fundraising positions, all in the chief development officer role. Randall holds a Bachelor’s Degree in business and finance from the University of Nebraska-Omaha, a Master’s Degree in Business Administration from the University of Missouri-Kansas City, a Juris Doctorate with a personal focus in taxation issues of estates and trusts from the University of Missouri-Kansas City, and an Educational Doctorate in leadership from the University of St. Thomas. Randall believes in being an industry leader. He has written his book on the CEO in nonprofits, Vibrant Vulnerability. Randall also hosts his weekly 20-minute podcast (now more than 170 available), each with its nonprofit challenge and tactical answers. He also authors two “90-second read” blog posts each week on various nonprofit and leadership observations.

More information at https://www.hallettphilanthropy.com/

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The Interview Transcript

0:01 – Hugh Ballou This is Hugh Ballou. Welcome to episode 380 something. I’ll count it later. But we’ve had some remarkable. Interviews over the last and an 8 half years and today are no exception. And

0:14 – Hugh Ballou We keep finding people who have a unique specific niche. So, if you’re watching this online video, sit down, take a note, and share it like it. Comment on it. We don’t want to know what you’re thinking. So two-way conversation. It’s the nonprofit exchange th e Nonprofit exchange and you can find us wherever you get Podcasts would love you to get on and listen and this one will be at the top of the pile Our guest today is Randall Hallett Randall tells people a little bit about who you are in your background and your passion for this work Sure, and thank you so much for having me.

0:52 – Randall Hallett I like to tell people that I’m a son and I’m a dad and I’m a husband and a brother and those things are what I value the most. What it is I do every day is I try to be a little bit of a pain in the backside. I believe since I was a little kid that you don’t see improvement and get better in life unless you’re a little bit uncomfortable. And frankly, the work that I do is based on that, and have spent my whole life in the nonprofit space, which We’ve all, if you have enough gray hair, didn’t have the intro into the professions I think like most.

1:31 – Randall Hallett And now we’re in a situation where we have education. I got started coming out of law school as a fundraiser, as a chief development officer in my first job, and spent the first part of my career doing that in both education and healthcare. Now I’m a consultant who wants to find a better way of doing philanthropy, of affecting philanthropy with people who want to make a difference in our communities. And the numbers say it, but I see it with the clients I have around the world.

1:59 – Randall Hallett Philanthropy is needed more now today than it ever has been for those who are the not heard, the missed, the organizations we believe in the most that fall between the cracks between private enterprise and government that make a difference. And so I spend my time really pushing into those spaces and trying to figure out how to help organizations be more effective in the missions that they believe in. And at the end of the day, I feel like, in many ways, I haven’t worked a day in my life.

2:28 – Randall Hallett I’ve been very fortunate to enjoy what I do every day.

2:31 – Hugh Ballou I can relate to that. It’s fun. So we’re talking about, we had two topics today, both of which are the most misunderstood words in our language. One is leadership and one is philanthropy. So how about giving us your definition, your website, which we’ll show later is how it is philanthropy, but talk about what that word means.

2:52 – Randall Hallett Well, I think first and foremost, philanthropy is misunderstood by those of us outside of this industry. And if you were stuck with a Jesuit priest and a mother who forced you to take Latin, you actually would know that philos and anthropos don’t mean money. Philanthropy means love of mankind and love of humankind. And there are lots of ways philanthropy occurs every day. And so the first misconception is it’s about what it is we do. Leadership fits into this component because what I see and have seen is that we have over the years, whether it’s chief development officer or chief philanthropy officer, Organizations have forced the idea of philanthropy being run by that particular person.

3:36 – Randall Hallett And what I’ve come to the conclusion of is the organizations who do it the best, the CEO is the chief fundraising officer. They have a tremendous partnership with the person who executes the strategy on a daily basis. But organizations, whether it’s in healthcare, so when you’re talking about some of the best, Cleveland Clinic, Mayo, certainly academic medical centers, their chancellors and deans, they’re spending 40, of 50, 60% their time on philanthropy. Inside social services, you have organizations that are serving the, whether it’s food insecurity or housing insecurity, The ones that are doing it the best, those organizations are spending 30, of 40, 50% their CEO’s time in philanthropy.

4:21 – Randall Hallett Education’s probably the most measured, and that’s why I wrote the book, is to kind of compare it because it’s tracked the data the best. When you hire a university chancellor or president anymore, you don’t hire a chemistry professor. The board of regents or whoever’s running the organization, governance-wise, doesn’t even care if they know they teach chemistry on the campus. They’re strategists, they’re communicators, they’re community leaders, they’re fundraisers.

4:45 – Randall Hallett And unfortunately, our CEOs in most organizations aren’t prepared. They’re just simply not taught in their educational upbringing, whether it’s in any one of those fields, particularly in healthcare when you get a master’s in public administration or a master’s in healthcare administration. They don’t even talk about philanthropy and you’re in a two or three-year program. It’s never discussed, but yet we know that eventually, you’re going to be on the front lines of this.

5:12 – Randall Hallett And so I spend more and more of my time talking about what we need to do to, first of all, engender trust with these CEOs who don’t understand what we do. And number two, the second part of the title of my book, establishes some vulnerability with those CEOs to be okay with them looking at themselves in the mirror and saying, I don’t understand or know all of this as I should. What do I have to do to learn? And who are the partners that I can do that with that’s really where I spend more and more of my time kind of as a thought leader industry leader about how we need their leadership to really drive philanthropic results

5:49 – Hugh Ballou and that’s been a change it is it been a change recently or has it always been that way we just didn’t recognize it well I think it depended on the need for private if we take private schools as an

5:59 – Randall Hallett example in higher ed Even if you go back into the religious sects, you talk about the Jesuit schools across the United States or even Catholic schools or other private schools. Philanthropy’s always been a part of their revenue streams because they needed it. The real pivot came in the 1980s and 90s as universities saw a decreasing amount of state funding and they still wanted buildings and research and all of these things that go along with what you think of in a university. And all of a sudden the revenue stream that they were most dependent on, state dollars and public higher ed, began to pull back.

6:39 – Randall Hallett And, but the needs continue to grow. So they had to find a new revenue stream. That’s when this pivot began. And you can see when you look at the kind of longevity of tracking data, this huge spike in about 1995, where all of a sudden the uptick began where universities started raising more money. And it’s at the exact time that the Board of Regents, curators, and other governance bodies said, your job’s changing. And whether you like it or not, this is what you’re going to be doing because there are too many demands for the money.

7:10 – Randall Hallett And as a result, that was the first big moment. And others have been trailing in the public sectors along those lines, but they’re slow to make the adjustments.

7:18 – Hugh Ballou Our co-host, David Dunworth, has a series of questions to dig deeper into those topics.

7:24 – David Dunworth Yeah, Randall, you mentioned the CEO role. How has it evolved in the nonprofit sector? How should it evolve if it’s not mainstream yet?

7:42 – Randall Hallett Well, it is mainstream. It’s a great question. I would say to start with, there has to be an acceptance by the baseline educational process that they’re missing a component for whether or not you’re getting an MBA or in non-profit work, an MPA, so it’s a Master’s in Public Administration, Master’s in Healthcare Administration. One thing I did, and I did this purposely with my book, is I’ve self-published. Because I wanted it to be cheap, which may sound oxymoronic, but the value of the book isn’t for me, the money I make on it.

8:20 – Randall Hallett I make nothing by design. It’s that it’s out there. So I mailed 200 copies to administrative professors in different sectors, even throwing divinity. They don’t teach philanthropy and divinity. All of these are the baseline starting points, educationally, for many of our leaders in the future. Well, I sent it out saying, you’re not teaching this. I know it because I looked at your curriculum, and I did. And said, what are you going to do about it? Because this is where leaders are going to have to push into the nonprofit space.

8:57 – Randall Hallett And I got results immediately, like professors reaching out saying, I’ve never even thought about this. So part of this is a level setting, is an understanding that we have to start earlier in the conversation. Some people come to this naturally. They don’t know the techniques, or the details, but they have a natural affinity to building trust with people in the community, looking long-term, building strategy, and being able to bring people together. They’ve gotten there because they just had natural talents and interests to bring them to that point.

9:31 – Randall Hallett The problem is that too many leaders are pivoting as we go through financial little upheaval, inflation coming out of the pandemic, They’re looking internally. And I keep saying, how many people in the organization worry about what goes on in the organization every day? But there’s only one person that millionaire, that business owner, that community leader wants to deal with. They don’t want to deal with a mid-level leader. They’re used to dealing with the CEO. And so the pivot has to be to look externally.

10:02 – Randall Hallett And that’s uncomfortable because they don’t understand the basics. They don’t understand the importance. Even the simplicity of, Where does philanthropy from a financial perspective fit into strategic planning? How do you account for that? Because money is what drives the mission. All of those premises are the new age of where we’re going. And in year, 10 I think hospital presidents are going to look like university presidents. And museum directors or zoo directors are going to look like university presidents, where they’re not going to be worried about what animals are being fed or you know, what pieces are in the museum, or how many patients are going through the organization.

10:39 – Randall Hallett They may have dashboards to know that. The main part of their job is, what am I doing to build connections in the community to leverage philanthropy, which is cheap, quick, easy, and embraces the people that you’re supposed to be serving in the first place?

10:54 – David Dunworth You know, one of the the things you touched on is relationship building. Most nonprofits that we come across and we read about or hear about are those that are focused purely on grants and grant writing. So much time and effort is put into that and yet I wrote an article about five years back that said, get out from behind your corporate veil. You are your brand. And yet it’s been slow for that evolution to occur, especially in the nonprofit sector. And how can a CEO who, if he gets or she gets that message, how can they get ready?

11:46 – David Dunworth To be. They’ve never had any training, you say, you know, you’ve mentioned rather. And it’s it’s hard for that transition to occur, I would think.

11:56 – Multiple Speakers It is.

11:56 – Randall Hallett So you said something, I think, first of all, get your article back out, please republish it about 90,000 times. The first thing I would say is there’s very specific data. I think AHP, the Association for Healthcare Philanthropy, probably tracks the specific data pretty well. But AFP, they do some pretty good work as well about where the best performers are spending the majority of their time to maximize philanthropic results. And they come back with the same answers all the time.

12:23 – Randall Hallett And to your point, I keep asking, why aren’t we looking at the data? So the first thing I’d say is CEOs have gotten there by data. They know it may not be in philanthropy, but they’ve driven success based on data points. It could be financial data points. It could be marketing data points. It could be community input data points. The data tells us, as you well know, that the best place for us to raise money is in an individual relationship giving. Principal gifts, major gifts, planned gifts, I’ll even throw in corporations and foundations, not grants per se, because people make those decisions inside those committees or that corporation or the foundation.

13:02 – Randall Hallett So the first part is sharing the data as to the average gift is the highest and the most amount of money comes from those sources. The Giving Institute does a tremendous job of collecting that data on an annual basis. The last number I saw was if you add bequests and individual giving, almost 80% of all the dollars in the United States come from individuals because bequests are individuals, individuals are individuals. The second part then is how you help CEOs get ready for that. So data is the first reason that they should consider it.

13:34 – Randall Hallett The second thing is what’s happening in higher ed. If you become a dean for the first time, there are curriculums where you go away for two days and the basics are taught. And the premise of those, and I think of my friend Jim Langley, who does a tremendous job in this space, it’s about what we overuse, probably transformational relationships. It’s long-term. Transformational isn’t a dollar figure. It’s when the donor thinks that the impact is the greatest. And that’s a mentality shift from transactional.

14:06 – Randall Hallett We need the dollars now. That’s a you problem. A donor problem is figuring out how they can make a difference. And that gets into different levels of conversation about passion and impact and outcome, which can’t happen in one or two meetings. As we all know, it takes time if you want a million $5 gift to really be transformational. It takes time to explain what it is we’re about and then figure out what they’re about and find out where the connection is and then how we’re going to measure that impact and what those dollars are going to do that meets with the initial intent of that particular donor or prospect, couple, whomever.

14:46 – Randall Hallett So the first thing is data should help us inform our leaders as to where we should be spending our resources, time, and dollars. And second is explaining that it takes time to build the relationships that are going to really change the organization, its mission, and its impact on the community. And that’s just hard conversations. And I gave my former boss and my mentor, one of my two mentors, Glenn Fosdick, who was the CEO of the medical center. And I write about it in the book. He told me when I interviewed me at I think I was 35, to take over philanthropy in an academic medical center.

15:20 – Randall Hallett I’m like, why are you interviewing me? I mean, I like what I do, but there are a lot more qualified people. And he says, you just strike me as someone who’s not going to be afraid to tell me what I don’t know. And I said, well, the answer is you don’t know anything. The question is, do you want to learn it? Because actually, I’m interviewing you more than you’re interviewing me. I don’t need this job. But I’m interested if you’re willing to figure out how to get to where we want to go. His vulnerability was the basis of the book because he was willing to learn.

15:50 – Randall Hallett And it took us a while. But once we got cooking, it was so much fun. And he would say constantly, this is the best part of my job. No one’s yelling at me. I don’t have to cut budgets. People feel good. They smile. He goes, I’ll do this more often than I have to do the other things that seem to be making everybody mad every day. So it’s a long-term journey in trust and relationships that’ll make it work.

16:10 – Multiple Speakers What are you thinking, Hugh? You’ve got that look on your face.

16:15 – Hugh Ballou You mentioned a book.

16:16 – Multiple Speakers Tell us, you got a copy of it there? You mentioned your book.

16:19 – Randall Hallett Well, you’re kind. The title is Vibrant Vulnerability. It came out in late 2023. And it’s, you can get it on Amazon. I mean, it’s $12. If you do it electronically, I think it’s five. And it’s built not to make me money. It’s built to get into the hands of people. And it’s kind of where we’re at in our nonprofit world. It focuses a little bit more on health care, but it’s applicable anywhere. Number two, then, is, so the first part is how we got here, and the challenges, and about power, and about omnipotence, and about the issues involving trying to figure out who’s done it well and do some comparisons.

17:01 – Randall Hallett And then the last part of the book, the last five chapters, are the solutions. How we have to look at relationships, how we have to build from the community with our boards and what their real role is, how we have to talk about. I’m embracing kind of this idea of what goes on in terms of of where it fits into strategic planning. What are the characteristics you want in a great. Chief development officer and it’s not what you might think there are a lot of other attributes that I think are more important.

17:31 – Randall Hallett And then about. Other parts of the organization, because CFOs don’t like philanthropy because they can’t control it. Somebody else controls when the dollars come in. How do you work with CFOs? How do you work with the C-suite or the administrative team who don’t understand what you do? The book is based on, here’s the problem, here are the solutions. And they’re right there. I give them away because I think it’s that important.

17:56 – David Dunworth Yeah, I was just, while you were talking, I was just thinking, you know, what teaching is going on in this book and you’ve just identified, you’ve got some solutions in there, that’s great.

18:10 – Randall Hallett So I’ll give you an example. Yeah, that would be super. So in chapter nine, I talk about integration into strategic planning. And there’s a chart that I’ve used with clients for a year. I mean, I built it for the University of Nebraska Medical Center when I was there. And in it talks through the process of wants and needs going through financial and then buckets. And it talks about buckets. Some things we’re never going to do, no matter how much money we raise, or how much money we have.

18:37 – Randall Hallett It’s not our core competence. To the bucket of, we don’t have any money, but if you can go get it philanthropically because it doesn’t cost us anything, we’ll do it. To the bucket of, hey, if you can go get some money, we’re going to pay for this anyway. It would be nice to not have to expend the money. To my favorite bucket, we can allocate of 50% the expense But we don’t have the other 50% and we need partners to make that happen. So it becomes a collaborative engagement. That simple process chart I’ve used so often just as a way to illuminate what it is we’re trying to accomplish.

19:12 – Randall Hallett Then the second part is I actually put in an Excel spreadsheet a business plan. That includes philanthropy and shows the difference in ROI when you include philanthropy versus health care, clinical dollars, or if in education, tuition dollars, which are much more expensive and take longer to get. So you begin to see the ROI of projects move in years, shorter spans of time if you include philanthropy. That kind of level of detail, I think, helps CEOs better understand because it’s the kind of things they’re used to looking at, process charts, and financial statements.

19:46 – Randall Hallett To give them a sense of comfort that this might be new. But a lot of the basics are actually things they understand and do every day.

19:55 – David Dunworth You know, you mentioned before we came on live, we talked briefly about clergy and how clergy is so ingrained in tithing. It’s an ancient concept. It’s biblical. And yet more and more organizations, more clergy groups, churches, if you will, synagogues are closing because of the lack of funding.

20:24 – Randall Hallett No, it’s it’s the idea of obligatory giving. So one of the things that I did from the book and I wrote it a little bit with a health care lens, but it applies anywhere. So we just took our plans. We just took a bunch of Methodist ministers through the conversation we’re having. And I asked them, I said, when you ask for money because you’re a nonprofit, 100% of your most, almost of 100% your money comes from the congregants. Do you ask them to give, or do you actually ask them what they want to give to?

20:53 – Randall Hallett And the answer, at least here in Omaha, was, well, we just tell them they should give. And I said, why would I give you money if you’re not willing to listen to what I want to give to? And we began to shift that a little bit. Where I said, go talk to your five or seven largest donors, congregants, supporters. And instead of saying, would you give me why $20,000, don’t you ask them what is most valuable about the church to them? And we’re getting immediate feedback, instantaneously, like, they up, they’re giving.

21:26 – Randall Hallett Yes, because you didn’t stand at the pulpit and tell them they have to give. You went and built a relationship that was asking them what they wanted to give to, and people will give more. Then what they normally would if it’s something they’re passionate about. The best example of this, is what happened last year, and it was kind of a sad moment. We lost Dad and dad and I were incredibly close and talked two or three times a day and he passed from leukemia after a valiant fight.

22:01 – Multiple Speakers Well, thank you.

22:01 – Randall Hallett And I miss him, but I, I’m who I am because of him and mom. So I, I miss him, but I’m lucky. Most men never have, as a son, understood what it means to have that kind of relationship with a dad, and I never want to forget that. We’re sitting in the minister’s office at Dundee Prez with Mom and my sisters, and the minister asks, well, memorials usually come, Vicki, what do you want to do with those? And she says, I want them to go to the endowment because, and my mom’s like one of the four or five longest members, serving members of the church since she was 15, 14, whenever she became a member.

22:39 – Randall Hallett And the minister, who’s just, JD’s a fabulous man and very important to our family, started to reposition things. And I kind of became a fundraiser rather than a son and went, JD, you’re not listening. My mother and my mom and dad have been successful in life. My dad worked really hard. Mom worked even harder taking care of Dad. She just told you what she’ll give to and you’re not listening. And it was that moment where I’m like, back, I was finishing the book. I’m like, this is exactly what I’m talking about.

23:13 – Randall Hallett If you had listened, my mother would tell you exactly what’s most important. The longevity of the church financially is critically important to her. Ask her for that. And then She might also give you some money to pay the salaries, but I know the gift is going to be much larger if you listen to what she wants to give to. And so I live this personally as well as what I teach.

23:38 – Multiple Speakers Yeah, that’s great.

23:39 – Hugh Ballou Wow. Wow. You know, Randall, that’s a huge point that we’re all guilty of We want to tell people what they ought to give to, whether it’s the community charity feeding people or it’s a multinational business. You know, I’ve fired marketers when I’ve asked them, what do our customers think? Well, I never talked to them. Come on, you know, if we ever talked to your donors or your board members or your volunteers, you know, what philanthropy is time, talent, and money. It’s the love of humankind.

24:08 – Hugh Ballou So it, it does, there’s a money component to it. It’s not only about wealthy people giving. So there’s a, there’s a mindset shift for the leader, which then prompts a mind shift, mindset shift for the, the members of the organization. So people can find you at HallettPhilanthropy.com. And for those looking at the video, I’m just showing it on the screen. But those listening on the podcast, what will they find when they go to Hallett Philanthropy?

24:40 – Randall Hallett Well, I think I believe in giving a lot of stuff away. I’m not sure it’s a good business model, but it’s one I can live with. If you go to podcast, I do a weekly 20-minute podcast where I pick one subject. And so the one you’re showing, gonna go down a little bit further on the screen, would be episode 169, how to properly ask for a raise. So you’re in this business situation, 20 minutes, here’s the problem. Each one of those is a different solution to that particular problem. Minutes, 20 so it’s literally like what you’re driving to work to or from, you can listen.

25:13 – Randall Hallett Also on the website, there’s, I post twice a week blogs, 90-second reads. These are kinds of things I see in either economics or nonprofit or leadership or different areas of things that I read on a regular basis. Also on the website there, you can get the book, Vibrant Relatability, but also you can find out what I speak about. I talk under speaking, I have speaking obligations internationally on the different subjects that I’ve been fortunate enough to learn about. There’s a lot of information, a lot of it’s free, almost all of it’s free except for the book.

25:48 – Randall Hallett Because I want, and resources, there are videos that I do about the different things that I have had the opportunity to work with, talk with, things of that nature. So it’s a kind of a place where you can go get a lot of free stuff. So I think that’s the right thing to do. The world needs to work better together to make our community stronger and more vibrant.

26:09 – Hugh Ballou And those, contact us, let’s chat. It’s Hallett, H-A-L-L-E-T-T.

26:16 – Multiple Speakers Two T’s, yep. Yeah, philanthropy.com.

26:21 – Hugh Ballou Philanthropy, learn how to spell it. So this has been chock full of really useful stuff. And I was right, David, we never had somebody quite like Randall. So there is nobody quite like Randall. Randall, thank you for the people can read the transcript and get some of your sound bites. But what do you want to leave people with today?

26:42 – Randall Hallett I truly believe that the thing we need to embrace more than anything else and I would say this beyond nonprofit with my children, as we have a 10-year-old, a seven-year-old, what they’re going through in life in terms of getting older and learning, is embracing discomfort. We don’t learn anything until, and I have way too much education with four different degrees, but I learned early on that discomfort is when we learn. If everything’s going along hunky-dory, we don’t change what we do.

27:15 – Randall Hallett And it’s not until you have that level of discomfort that you improve. And I think too much in life, we don’t embrace discomfort because it’s not comfortable. And yet the other side of discomfort is joy, knowing you’re doing something that’s better using your talents. For me, I’m a believer in God, God-given talents. I’m not wasting them. I’m sharing them. But that doesn’t come unless you embrace discomfort to get joy in knowing that you are better than you were the day before and so you want to know what I want to do most often I want to create a little discomfort and I hope people embrace discomfort so they can be the best they can be.

27:54 – Hugh Ballou Randall Howard, you’ve been an inspiration. Thank you for being our guest today on the Nonprofit Exchange.

28:00 – Randall Hallett Thank you.