Mission: Impact podcast & blog
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 In episode 101 of Mission: Impact, Carol Hamilton and Michael Randel discuss
Episode highlights: [00:09:30] Mackenzie Scott's Trust-Based Philanthropy Philanthropy Approach - Mackenzie Scott’s “quiet giving” process. - Discussion on how Scott’s approach differs from traditional philanthropy with no application process and minimal reporting requirements. - The concept of trust-based philanthropy and its implications for recipient organizations. [00:13:30] Research on organization’s receiving Scott gifts - Michael’s initial hypothesis and surprising positive research findings - Insights from interviewing CEOs of recipient organizations about managing large gifts. [00:15:30] Patterns in Recipient Organizations - the characteristics and sectors of organizations that received funding. - The importance of organizational preparedness and strategic clarity. [00:18:30] Organizational Preparedness - Key elements that made organizations ready for large donations: - Clarity of purpose and identity. - Strategic priorities. - Proven approaches and evidence-based strategies. - Aligned leadership and governance. - Strengthened capacity and systems. - Learning and adaptation capabilities. [00:27:30] Organizational Development Lessons - Michael’s observations on the sustainability of organizations not centered around a charismatic leader. - Importance of multiple levels of system attention within an organization. [00:30:30] Holistic Organizational Approach - Carol and Michael discuss the benefits of a holistic view in organizational development. - The shift in the consulting field towards addressing multiple aspects of organizational life. [00:32:30] Taking a comprehensive approach - Emphasizing a comprehensive look at all organizational components, not just programmatic aspects. - The role of communication and visibility in securing funding. [00:35:30] Practical Advice for Handling Large Gifts Five good practices for organizations receiving large donations: - Advisor for the CEO. - Thoughtful sharing of news about the gift. - Strategic investment planning. - Establishing a working group for decision-making. - Effective communication with stakeholders. Guest Bio: Michael Randel Michael Randel helps leaders and their teams move through Change and Growth with Calm and Confidence. He developed the RCA Seasons of GrowthTM framework to help people understand and move through the three common phases of change. This allows leaders to navigate the challenges of change and bring about transformational results. With 30 years of experience, Michael works with philanthropic foundations, nonprofit organizations, corporations, and public sector agencies to help them navigate change with success and poise with his expertise in organizational change. The influence and impact of Michael’s work has been recognized with multiple global awards, and his clients include Amnesty International, AstraZeneca, NASA, United Nations, and the World Bank. Important Links and Resources: Yield Giving: https://yieldgiving.com/ Michael Randel: https://www.linkedin.com/in/michaelrandel/ https://rcachangeadvisors.com/ Gestalt approach to organization development https://www.gestaltosd.org/ Related Episodes: Episode 15 The Nonprofit executive director-board chair relationship Episode 17 Program evaluation Episode 67: Get that money honey Episode 69: Designing for strategy Episode 70: Values based strategic planning Episode 76: You don’t have to go it alone Click "Read More" for a transcript of the interview Carol: Well, welcome, Michael. Welcome to Mission Impact.
Michael: Thank you, Carol. It's nice to be here. Carol: So I'd like to start out each episode with the question around what drew you to the work that you do? What would you say motivates you or what would you describe as your why? Michael: So, for me, it's really clear. I grew up in South Africa and I was a college student during the late, middle, late 80s, so there was a lot of anti apartheid activism. And through student organizing and other things, I got involved in, quite early on working with non profit organizations. And so that's really been a very strong feature of my work ever since then, it's probably 35 plus years now. And, what particularly interested me and the experience there was how organizations needed to change and adapt as we move from an apartheid period to the new democratic period. So the Structure didn't fit with the new reality. that's been my work and my fascination is that 35 years around makes for effective organizations, mission focused organizations, and what organizational capacity and structure and things like that do they need to deliver on their mission and bring about lasting impact. Carol: You and I have a lot in common there in terms of kind of the focus of our work and helping non-profit organizations specifically be more effective, , connect with the realities that they're dealing with in the moment, build those capacities, adaptability, all of that. But today we're actually going to hone in on a more specific element of the work. You've recently done some research with organizations who've received funding from Mackenzie Scott's Foundation Yield Giving. Scott is famous for giving substantially from her Amazon generated wealth by giving large unsolicited gifts to nonprofits. And she and her team identified them. Organizations that, that she's, that she identifies through a process that she calls quiet giving. And I, I looked this up to see what kind of thing, how does she describe it? And it was a process of evaluating the organizations carefully, doing that research really as privately and anonymously as possible to not put burdens on the organization. And then to give them a gift. and have them choose how they choose to use it. So it's not a restricted gift. So many ways in which the way she approaches her philanthropy is quite different from the way the rest of foundations and, and giving tends to work. And with that kind of sudden change, a big gift can be disruptive for an organization. Changing both positive and negative can be disruptive, but I'm wondering if you could tell me a little bit about your research and some of the impacts that you saw on organizations that received those gifts. Michael: Interesting, . She's given away just over 17 billion dollars so far, since 2020 when she began making these gifts. And in the perversity of capitalism, I believe she still is worth more now than when she started. What happened for me is, in about 2021, I began hearing that a number of organizations I'd worked with that either were clients of mine or, or their leaders had been part of community peer learning groups that I'd been facilitating. a few of these began to get these gifts, 2021, 2022. And because I knew something about these organizations, I was very curious about what happens when this money lands on you. . And so what's, what's interesting about the way she is doing this, different from others, as you said, there's this quiet process of due diligence, ? So in some cases, the organizations have no idea that this is Carol: hmm. Michael: until they get a phone call saying, please, can we have your banking details? In other cases, there was a kind of a call to the CEO saying, we need you to sign a non disclosure agreement. We're calling on behalf of an anonymous donor. We want to get a little bit of information. But after that process basically the whole gift arrives in one lump sum. And the average gift is just under 5 million. So you can imagine just all of a sudden you wake up one morning. And in fact, one of the CEOs said, , she discovered the gift because her CFO called her and said, , there's a bunch of money in our bank account that wasn't there yesterday. Do anything about Carol: Oh, my God! Michael: . And so that CEO had signed the NDA and had. Carol: Right, right. Michael: it, but she didn't have any idea of what the gift size was going to be. This approach that she's using has been called trust based philanthropy. Trusting the organizations to know how best to use the money. And, and from, from almost every other donor. There's no application process, with one exception I can talk about a bit later. there's no application process. You get all the funds at once. So none of this tranched payment or anything like that. Carol: Right. Michael: The reporting requirement is very simple, please give us an update once a year for three years. So they're not interested in what are the goals that you're establishing, what you're monitoring progress and things like that. They just said, just check in with us once a year and let us know how it's going. And then one final thing I would say that's important is that these are one time gifts, So while she's done a couple recently of a second gift, to maybe three or four organizations, and large, it's a one time gift, which has sometimes been called a transformational gift, Carol: Mm. Michael: it's very different from other kinds of funding. I knew these organizations, I knew that they were getting these gifts, I knew what they were trying to do, what they were working on. So I got curious about So what happens when $10 million, $50 million, drops into your bank account? And, and I had a hypothesis, which I'm really happy to say I was wrong, but my hypothesis is that the money was gonna be disruptive and not in a good way, Carol: Mm. Michael: There was gonna be conflict, there was gonna be competing agendas about what to do with the money. There was going to be, I dunno, like throwing fuel on a fire. It would be really rapid. Sort of investment in scaling and growth, then it would come crashing down because there wasn't any other funding to sustain it. And so my research basically was starting to make phone calls to these CEOs that I knew just saying, help me tell me the story about what's going on, what's happened, how are you managing the money? And I was really pleasantly surprised. So I've spoken to just about three dozen organizations and just hearing, sort of being able to see what's the pattern, , what's What kinds of organizations were being selected? Carol: Mm. Michael: Are there some clues about the things that the veterans are looking for? And then how these organizations are able to make fruitful and productive use of these investments. Carol: So what were some of the things that you noticed in terms of those patterns of maybe let's start with the first one of, , kind of why, why those, why those organizations, why, why do you, I mean, and obviously you don't know, you're not able to ask directly to the folks who are making the decisions, but , what clues were you able to kind of uncover? Michael: . Well, if you look at the pattern of who were getting the gifts in 2020, 2021, those were some of the big name organizations. The YMCA of the USA and a lot of local affiliates, boys and Girls, clubs of America and various local affiliates. Habitat humanity a a range of kind of quite well-known organizations. Although also interesting, there were lots of smaller organizations in more rural areas or smaller cities that were also getting them, even community colleges and HBCUs. So a lot of those organizations, I think, particularly during that period around the pandemic, were direct service organizations. So they were providing and meeting the needs of people in local communities. Quite a lot of them had an education or a youth development focus. , and there's some who've done the analysis of all the different sectors and the volume and things like that. Carol: Sure. . Michael: attention to who, which organizations are well positioned. To use this money well and be able to use it relatively quickly. . So I think that was some of the screening that they did then. In the last couple of years, I think there's a kind of a real diversity of organizations getting funding. I think what people are, when they analyze, is it now? It's sort of three, just over 2000, 2300 organizations. , they're sort of seeing a lot of attention around human rights. Healthcare, education, environment. So certain sectors tend to be selected. My updated hypothesis is this, that the money's going to organizations that have been identified as being prepared to make good use of the investments. And I want to put an emphasis on that word prepared because it's like ready to go. Carol: . Talking to the folks that you talked to, what were ways in which you could see that they were prepared, that they did have that kind of ready to go, , what, what have they done to, to get to that point too? Michael: . So this was, this was really interesting. because it wasn't necessarily what I was expecting to learn about, theme. and, and so actually one, one of the CEOs I spoke to had a very interesting way of putting it. So they got funding in early 2022. And again, it was a surprise. It wasn't expected, but they had seen 2020, 21 other organizations getting funding. they began to wonder, they were a national organization with affiliates across the country, began to wonder when they might get some, ? And so they did something really interesting. They didn't start making big plans and, , like, we'll do this and we'll do that and do the next thing. Ask themselves the question of, will we be ready when the money comes? Carol: hmm. Michael: What do we need to do so that , we're clear about our priorities that it's not going to be something that's going to bring Conflict and tension and and rip us apart as an organization so, , I think that that's the kind of a really good attitude and I would say it's important because She's given to 2, 300 organizations over the last four years That includes a number of non US organizations and people working globally. So it's a really small, small sliver of all of the US based non profits getting funding. And the vast majority of them are never going to see anything from her, ? However, I think this lesson about being prepared is a really useful lesson that positions them well for visibility or, or attention to other funders, ? And whether that, again, is kind of this trust based philanthropy where people come to you or where you're putting in proposals. So I think all of that is really good. And then, , another area of funding for nonprofits would be government contracts, local, city, state, even federal contracts. And again, benefit from being prepared in these important areas. Carol: So you talked about clarity of goals as one of the ways in which folks were in that kind of ready position. Were there other things that they did to either prepare themselves intentionally or just because they were working on being more effective that you saw, , and you heard about as people were describing the process. Michael: There are a number of things, and I kind of, I've identified six and I think that doing more of the six you better than just picking one or two. And they're, they're in a little bit of a hierarchy. So I think the very first one is, is it a fundamental one for any organization, which is, are we clear about our purpose and identity? Who are we? What kind of organizations are we? Are we direct service? Are we advocating? Are we an intermediary organization? But that question of identity is really, really fundamental because it means then that your strategic priorities, your delivery mechanisms will be aligned and coherent with that identity, ? Because again organizations that do not have that alignment can then experience a lot of confusion and a lot of problems for sort of different pockets of the organization believing that they're about doing different kinds of things. Carol: Right. Michael: That's really important. That's the first thing. And that's not about mission and vision and values. That's, that's a kind of a tactic you might use to help you do that. But it's really, me that, , the piece about identity is being able to say, this is who we are as an organization. And that we as an organization are all in agreement about that. The second piece then has to do with strategic priorities, ? If this is who we are, what's the difference we're trying to make in the world and what are the avenues that we use to make that happen? And so this was, this was the, the, what was really, I found so interesting where I thought organizations were going to be in a tiz this money and what do we do with it. And they were like, no, no, we know what we're going to do with it. We've got these three or four priorities. So this allows us to expand that priority. It allows us to do this one sooner than we had expected. know, so they were very clear that there wasn't debate. There was a process of engagement and refining and Carol: Sure. Michael: But they knew what mattered most, what would make the biggest difference. So again, being prepared in that way, , with which I call having a guiding strategy. I think it is really a really important piece to be able to then be successful with the rest of it. The third, the third element links to that, which is around, do you have a proven approach. And in some places they talk about evidence based approaches, evidence based strategy, , whether it's your own approach or you're working with somebody else's model or framework, but do you have confidence that this approach works? That can then help you when it comes to questions of scaling and growth. , what are the conditions within which this works really well? If we're opening up new locations I would sort of say, take care to not simply be doing cookie cutters of what worked in one place and assuming it'll work in something else. have you really drilled into it to understand what are some of the key fundamental pieces that you must have? in every, every location, every site, and what are the areas where it's important to do the contextual adaptation. So having, having something that's not just based on a gut feeling, but there's some evidence behind it, whether that's a, a, a sort of scientific, formulated base basis, whether you've had independent evaluations taking place, but that what you're doing works and will make a difference when it gets scaled up. So I think those are kind of really core. foundational elements, , who we are, what we know we want to do, to kind of grow and expand and what we'll be doing to grow and expand. . And then the three other things that then get more into some of the internal dynamics. So one is about aligned leadership. And this is something that I saw in a number of places. They had had a new executive director or CEO relatively recently. And what that person had then done was work on strengthening the relationship between leadership and board, ? So getting clarity and alignment again, again, purpose and identity, guiding strategy. What do we do? , if we get funding, where do we want to go with it? So there's agreement and alignment there, but then also agreement down into the organization. So with the executive team, with the different departments and functions, there is clarity. They're all kind of playing from the same sheet music, if you will. So I think that's really important because that also helps to decrease tension and conflict when a large amount of money arrives. The other piece of things that we saw happening in a lot of places is organizations had already invested in strengthening their capacity, their processes, their systems, their people, ? They may not have completed all of what they'd wanted to do, but they had, for example, updated their IT systems or the different platforms that they were using that they were ready for growth. And now this is tricky, of course, because not everybody's going to have the resources to build up this infrastructure beforehand. So I don't think this is necessarily a critical deal breaker, if you've been able to do so, You're more ready, more prepared to start making good use of the funding. And then the final piece is about learning and adaptation. Now, do you have ways in which you not only have confidence in what you want to do and how you go about it, you've also got the humility and the curiosity to pay attention to how it goes as you roll things out, . And to be able to take in feedback, take in data, to really be able to look critically, is it working as we intended? Or what external conditions are changing that might be a risk to successful implementation. So I think, , again, all of those things are not necessarily fully mature when the funding arrives, ? Some of the funding can be used to speed that up, but the organization is paying attention to those six areas and is doing things to strengthen and mature all of those things to be a more prepared organization. Carol: So you and I both have been doing organization development work for a long time, and there are lots of, , principles and theories and ways of thinking about things that people have commonly had to what extent would you say what you discovered either aligned with what you kind of already believed about organizations and to what extent Did you see new things that maybe weren't part of your frame of reference before? Michael: . So I think what I observed and I have to be mindful that maybe I've got blinkers or biases Carol: Sure. Michael: show up Carol: We all do. Michael: But I've been working with a variety of organizations over the last 35 years and in a huge number of different contexts and one of the things that I've learned is that Organizations that sustain their effectiveness over time are not centered around a charismatic leader, mean, charismatic leaders have their place. They can be very the founding stages. They can be very important as advocates and the voice of the organization or of the issue, But one of the ways we kind of talk about these things is that an organization that has that strong leader and everything revolves around them is a little bit like a pioneer organization. . flows through the leader and people position themselves in relationship to the leader. And so that's not, that's fine during startup and getting going when you've got to make quick decisions, quick responses. particularly then if you're looking to have consistent performance. impact, scaling programs. You need more systems and procedures. And so I think what I, what I observed in a lot of these organizations is they were giving attention to what we would call from an organizational perspective, multiple levels of system, Carol: Hmm. Michael: They weren't just looking at leadership capacity. They weren't just looking at strategy. They weren't just attending to governance. They were doing a whole range of things. that needed attention. And some of that was developing individual capacity. Some of it was developing group and team capabilities. Some of it was about the whole organization. But I think, , the, the wiser organizations and the more effective ones knew that there were a whole range of different things going on that needed thoughtful attention and support. Carol: It makes me kind of think of , when you're, when you're cross training for, for when you're getting fit, that you're not just focused on one type of exercise. You're not just working out or walking or running or doing whatever, whatever it is that you enjoy, but doing a multitude of things so that you're really. Working all parts of your bodily system. So kind of, , and, and being able to take that more holistic view of, and I, I think that also goes to I don't know, a shift, I think, in the field around. Consultants may be coming in and kind of, what are we going to diagnose as the problem? There are all these different parts that need to work well, and they may be different, , some may be more developed than others. Some may need strengthening, but you need to pay attention to all of the parts. Michael: That's right. . I mean, In my professional work, I have trained in and use what's called a gestalt way of working with organizations. And gestalt is a German word which has to do with sort of seeing what is whole, right? Being able to kind of pay attention to all of the parts of something. And so, , there's obviously a wide range of ways that you can kind of come in and assess and diagnose, if you want to use that word, what's going on in an organization, what needs attention. So what I tend to do is I come in with no assumptions, ? I'm not coming in with a particular assessment tool. I will come into an organization and begin talking with people and hearing from them and getting a sense of things to see what tool might be helpful to you. Dive deeper. What metaphor might be a helpful way to describe what's going on in an organization and what needs attention. So it becomes really contextual, So that you're trying to bring in support that meets this organization where it is today, as opposed to trying to force fit them into a six box strategy or a seven S model or something like that, ? Those things can be helpful to help us make sure we're not areas of organizational life, but organizations are not. sort of mechanisms that we can simply put into boxes and into categories. Carol: Even though people use a lot of machine metaphors around organizations there, , they're, they're people, they're made up of groups of people, networks of people. And it's really about that, , human network and how is it working together or has that static in the system of, , different parts kind of pulling against each other. But , I appreciate that. What would you say? What are some things that you think other organizations can really learn from the research that you've done. It sounds to me like a lot of them were chosen because they were already effective. They were already doing some of these things, they were poised maybe not completely as you said, there may have been, , parts where they were at different points of these different the, the six things that you talked about and so could be strengthened through, through the process. But I'm curious what kind of things could other organizations learn from this or take away? Michael: Well, I would say that one of the key insights would be to have a holistic look at your organization, ? I think there can be a temptation to focus a lot on the programmatic side of things. And put resources into that. But we need to remember that the other parts of the organization are necessary to sustain effective and ongoing programmatic delivery. So this, , this means things like at operations, looking at financial systems, looking at people systems thinking about things like your communications and marketing. , one thing that helped a number of the organizations get funding is because they had also been given attention to communicating out what they're about. Michael: that they do have an evidence based proven approach, ? So they're not just insular, inward looking, just doing good work in one place. They're, they're appropriately communicating what they're about, why their work matters. And so that kind of thing also will then come to the attention whether it's Mackenzie Scott's team or other funders, , that this is an organization that is, again, clear about who they are, focused on doing quality work and being visible to, to find ways to help them expand and grow their impact. Carol: Well, I really appreciate your sharing about this and it's a great gift to really, , people have talked about the impact of the, of her giving and but to be able to then look inside the organizations and see kind of, Where were they before? What, what, , what were some of the impacts after is a, is a real contribution. So I appreciate it very much. Michael: I study and just learn about these organizations. And of course, not all of them were prepared. And some of them did have tensions and conflicts, but Carol: hmm. Michael: helped to kind of illuminate what were the things being done by the ones that were better placed and more prepared to take the funds and make good use of them. Carol: They may have been 75 percent on some of those or 50 percent on some of those factors that you talked about, but and, and needed to take the time to strengthen. I, , I actually am working with an organization right now that recently got a gift and we're in the midst of doing planning with them. And so they're going to use the planning process to refine a lot of these things that you talked about. So it's going to be a, I'm going to be sharing this list with, with, with the team. Sure. Sure. . Michael: I also was able to, from my study, to identify things that people do when they first get the money. ? and so I can sort of talk a little bit about that, but it has to do with I'm just pulling it up so I can remind myself of it. I think the big issue is, once it's known that you have a gift. And so, , the one, the one different thing that happened last year was she actually did an open call. They invited organizations to nominate themselves essentially for a $1 million gift. And so they had said they were gonna give 250 gifts of a million dollars each to organizations that had budgets of between one and $5 million. So potentially for an organization, you're getting your entire annual budget as an making gifts to 360 organizations. And they actually gave most of them 2 million. , bigger than they had asked for. So, and then that list was public. So, everybody now knows, community members, consultants, and things like that, they now know that you've got two million dollars to do what you want with. , so there's all these expectations that people are going to have about what they think you should do with your funds that will benefit them. , meet their interests. And so, , so I kind of identified five things that people were doing that I thought are good practice and are worth being known about and adopted by organizations as they continue to get them funding. So the first thing is an advisor for your CEO, ? Have somebody that's trusted that they can speak to. And ideally, I think somebody from outside of the organization who really has no stake in how the organization makes use of these funds. Because they can't necessarily talk to others within the organization about different possibilities. So give them a sounding board and support like that. The second is, , consider how you want to share the news that you've received a gift, ? These recent organizations that were in the open call. They didn't have a choice. I don't think that was their name. They were named and the money was named. But in the other settings, people can have been able to say whether or not they want the money announced, ? So when will you do this? When you still see announcements from organizations saying, we've just got a Mackenzie Scott gift, often they've had that gift for six months already, but they've held back because they were doing this internal work to then be able to communicate what are we doing with this gift? So be thoughtful about that. Don't assume that it has to be public or that the dollar amount needs to be public. And then take the time to work out how you are going to invest this money, ? Again, if you've got those guiding strategies, you've got a pretty good idea, but you don't necessarily need to put all of the money into those, those kinds of strategic priorities. Do you want to use it in a reserve fund? or an endowment, , are you going to use some of it for salary increases or for bonuses? One organization said, okay, we're going to make a plan for 50 percent of the funds over the next five years. And we're going to keep investing the other 50%. And five years from now, we'll take a look and see what the priorities are at that point. So there's a whole different range of ways people have been approaching what to do, how to use this money. And very often, and it sounds like your client is doing this, , it's a good practice to have a working group take up this question around how to prioritize where to allocate the resources. So it's not just the executive team doing it. It's not just the CEO by themselves, but it's a sort of a cross section of staff who are thoughtful, who are strategic, who consult stakeholders and develop recommendations that often then go to the board for endorsement. And then the last thing is again communication is going to be important. People are wondering what you're going to do. What's going on particularly if you're in a quiet period? With your staff, your community, and your stakeholders, keep them informed about where you are, ? So there's a sense of care. We're trying to meet your expectations. We're not going to do everything you're wanting us to do when you want us to do it But here's where we are. We're consulting. We're considering recommending that people have a sense of when they might expect to know the priorities are, where the money is going to be invested, what's going to be growing or changing. So I think those sorts of things in the first three to six months are time to be able to step back and have a thoughtful, considered decision process, rather than feeling rushed or pressured into naming what you're going to do. And then jumping too quickly into it. our priorities, but then you've got nothing left, in reserve to to deal with future opportunities Carol: . . Makes a lot of sense. So at the end of each episode, I ask each guest what permission slip or that they would give nonprofit leaders or what they would invite them to consider to avoid being a martyr to the cause. And as they work towards building a healthier organizational culture. So what permission slip or invitation would you give to leaders? Michael: Well, I think many of the leaders I work with who have risen into leadership roles because they are I'm gonna use the word technically proficient Carol: Mm. Mm. Mm. Michael: They know this sector, And so they've risen up in the organization with increasing responsibility You But as you get higher up what makes more of a difference in how you do things is not your technical smarts, but your people smarts. So what I would be encouraging leaders to do, and I do this in the work with them, is really to understand yourself as a leader. , have self awareness about your leadership style, your preferences, but also pay attention and learn about how to work effectively with and through other people. One on one. through teams, because that's really how you can expand your reach and your influence. can't do it all yourself. And so you're really wanting to develop and let loose the people around you. And so you need to know how to do that, as well as about the technical material of your work. Carol: I feel like I hear over and over again the phrase, “you can't do it all yourself” So and that's and sometimes it's hard for people to let go. So but being, being willing to, to think about how you are cultivating the whole organization to be part of it rather than just about you. We started there too with the organizations that aren't prepared with ones that are overly identified with a single leader. I really appreciate that. Well, thank you so much. Thank you, Michael. Michael: Thank you, Carol. I enjoyed the conversation. Comments are closed.
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