Episode 168: Critical Thinking - Challenging the Status Quo in Philanthropy

Welcome to another edition of "Around with Randall" your weekly podcast on making your nonprofit more effective for your community. And here is your host, the CEO and founder of Hallett Philanthropy, Randall Hallett.

I appreciate your time as you join this episode of "Around with Randall." Little bit of philosophical start to our conversation to our discussion today around critical thinking and then we're going to tie that into the idea of philanthropy and what's going on in our profession. I think people know of the term critical thinking but when I ask others about what are your thoughts as to what it is and what it means and how you do it there seems to be a little bit of a distance. So I want to spend just a couple minutes level-setting to talk a little bit about critical thinking and then the bulk will be more based on what's actually occurring in our philanthropic nonprofit charity world and why it's so important.

So critical thinking is really the process of thinking clearly, rationally, and understanding connections about ideas. And this goes back to Plato and Sophocles and the ancient Greek philosophers. What it is is it's this idea of questioning, kind of challenging the approach to knowledge, perceived wisdom, how things are done. It's really can be helpful when you're making decisions because your decisions normally are based on inputs that data or that information is coming from somewhere, and you're trying to figure out based on that information what should we do.

People who are really strong critical thinkers have certain attributes. They're able to connect ideas together that may not be quite as obvious or simple. They notice, they see, they feel the implications of people's commentary, or the data, or the argument. I would almost put this as kind of a bias. They understand bias, and that I have to take certain things with a grain of salt. I think the best way to put this is, unfortunately in our political landscape, and this isn't for conservatives, liberals, Left, Right, Democrats, Republicans, if all you do is get data, information, news from one side of the spectrum or the other all it does is actually reinforce your belief system, which may or may not be based on actual facts.

And so that's why this, I think the term is Echo chamber, where it just the same commentary is being bounced around. And I talk about this from my own perspective. I read an awful lot every morning. I'm reading the New York Times and the Wall Street Journal because I want two perspectives, much of the time, on the same issue, so that I get my critical thinking at a higher level to challenge that one side or the other may have all of it correct. Just an example. Critical thinkers are also really good at weighing the information. Who has better information, data? Information should not come in and all be equal. It's like you have friends and one friend tells you one thing and the other friend tells you the other, and they happen to be diametrically on the opposite side of each other. The question becomes which one do you believe, and normally there's trust built up with one or or the other a little more deeply. So what you end up with is the ability to understand the importance and relevance of people and their Comon or the data that comes to you.

Critical thinkers are able to build and really assess arguments effectively. My wife would tell you that she doesn't, and the kids have kind of learned this, don't like to argue with me when it's more just for fun. If it's serious, I'm probably wrong. They're probably right, because because I can pick things out of the commentary and spin it on them, and I begin to turn those arguments against them. That's kind of an aspect of critical thinking that can be helpful when you're trying to articulate a particular point. Critical thinkers are really good at picking up on inconsistencies, and errors, and reason. The logic doesn't make sense. There is a weakness in the argument. Great critical thinkers can go one step further and not get frustrated by that weakness and turn it on others. Critical thinkers try to approach most things in a consistent and systemized or systematic way.

I am such a process oriented person where much of the time the decisions I make as a parent, business consultant are more based on did I go through the steps that I wanted to to figure out what should be done rather than just worrying about what the answer is. And that creates a consistency. Much of the time critical thinkers are also, and I, this is connected to something I talk about probably more often than I probably should because I'm no expert. But Maslow, Abraham Maslow, the hierarchy of needs, the thought of self-actualization they're able to reflect on their own assumptions, and beliefs, and values, and in doing so realize the look in the mirror as I talk about it, from self-actualization. Be okay with who they are but realize they could improve, and maybe they need to adjust their thinking based on new facts, new data, new evidence.

Critical thinkers are all about observation and analysis. They're about interpretation. They're interpreting data as it comes in. They reflect on those moments as we talked about in terms of looking in the mirror, the ability to say yeah maybe I need to adjust a little bit. They evaluate really well, and they're pretty good problem solvers and decision makers. And the best critical thinkers can make decisions very quickly because they can process things quickly.

You've had your six minute definition on critical thinking. For some this may be like wow, I don't know. For some it's well, I already knew that. The more important question is how is this related to philanthropy, nonprofits, and charity? And to dovetail into this we have to steal, take, borrow not only from my book but I've talked about it on different podcasts the story of the five monkeys. There was an experiment done that five monkeys were put into a very large cage and in the cage there was a ladder and there was bananas at the top of the ladder on the shelf and the monkeys see the banana and they start rushing up the the ladder because they want the bananas. What's interesting is that the those conducting experiment would start to spray the monkeys with cold water once they start up the ladder. Monkeys don't like cold water, and so after a period of time not ever getting to the to the bananas they realize it's just not worth it. There's other food here, and so they see the bananas but they know it's not worth it. But the experiment isn't that. It's what happens next. It's those who are running the experiment pull one monkey out. The new monkey, a new monkey put in its place so there's still five. One of them's new. The new one looks up, sees the bananas, says I'm going to go get them, goes up the ladder, and the other four pull the monkey down until the point where the monkey says, well obviously I don't want the banana. I'm getting beat up here. Then a second monkey is brought in new and replaced, replacing a monkey that's taken out. And the second one starts up the ladder and is pulled down by all four monkeys until he realizes that it doesn't work. That it's not worth it. And they do this with the last three monkeys, one in, one out, until the point where there's five monkeys who've never been sprayed by water, and none of them go get the bananas. And if you were to ask the question why aren't they going up the ladder the answer is something that is probably a response we all, if you have any inclination at getting better in life, make your organization better, having improved movement, seeing progress, we hate this response, Well that's the way it's always been done. Monkeys don't know any different. None of them were actually ever sprayed, but they know every time they went in they were pulled down.

Philanthropy is running into this more often and we desperately need critical thinking to challenge some of these status quo decisions. And I want to spend a few minutes talking about examples, and in doing so, what I'm hoping you'll do is when you sit down if you're Chief development officer, Chief philanthropy officer, and you go to a budget meeting or a projections meeting or challenge the status quo, you're a leader. And you've got a team reporting to, and we're talking about portfolios, and what we're doing with donors challenge the status quo. Look at the data. Find out better answers. If we're dealing with our boards and our volunteers and what they should do, challenge the status quo. Don't be accepting of the fact, well this is the way we've always done it, when we're dealing with executive leaders who don't understand philanthropy like we do. Don't accept it. Challenge status quo. Use critical thinking, the ability to challenge the approach based on great data to say there's a different way of looking at this. Could we find a better solution that can maximize what we're looking to do?

I got six, maybe seven, because there's an A and a B in one. Reduced number of donors, the way in which we look at transactional giving, the fact that the number of people giving to any charity in the United States is dropping tremendously and it has been for a decade, 2002 two-thirds of the households made some type of gift to a charity under 50%. And if you look back into 2023 and this was my first podcast of 2024 I think there's a hollowing out of our annual giving platforms, where inflation is eating into people's disposable income and they're not making gifts. There's an article in the Chronicle of Philanthropy that just talked about this. I wish I was wrong, to be honest. If we don't change the way we work with our donors where we have a better opportunity to identify which we'll get to our second one, pipeline, the best possible opportunities which is not based on wealth. It's based on connection, likelihood not capacity, how are we connected to them, do they know us, do they like us. If we don't do that we're going to continue to see individually, and maybe depending on the sectors or geographic area, maybe everyone's doing it. But you're going to see less donors.

Number two's pipeline portfolio size. I tell the same story every time. My first conference 1996 I was an intern at the Weston in Kansas City. There was a a speaker in a very long not very deep room. Portfolio size needs to be 120 to 150. After the meeting I went up and I said this was tremendous. That's my first conference. I'm learning. Where'd you come up with 120 to 150, and they said that's the best standard, best practice. I said well where' that number come from. I'm looking for math, for data. All I got was, well this is the way it's always been done, and I'm like this is the dumbest thing I've ever heard. Who came up with 120. And then the leadership at Northwestern, there was further study by EAB there was last year some work done by Blackbaud that finally came back and said no, your portfolio size for a gift officer should be a third of that to concentrate on the people that are actually most likely to give, which informs pipeline. How many people do you need? Where do they come from? Challenge the status quo, critical thinking. Using data, see the connections. Less donors means smaller portfolio with higher dollar opportunities. That critical thinking gets us to results.

Number three is stewardship. We get the gift. It's become so transactional, I think half the time we don't Steward anybody doing anything. In fact, I've got a number of people I've like they give you $25,000, 15,000, 10,000, 5,000, what did you do? What do you mean? Did you call them? Send them a note? Stop by their house? Take him a can of Coke? I don't care. But show them you care because every day to piece we know says that the best future donor is a current one. We just don't seem to Steward. I've got a good friend and a leader of a system who told me about a conversation he had with a company that I'm not familiar with. It's not what I do where they have a mass ability to individualize stewardship communication. Now it's Mass level so it's emails and newsletters and stuff like that, but they will adjust the story, the content based on interests. And I thought now somebody's using their head. If you're giving $25,000, $50,000 that's individual stewardship, but we don't have enough people to Steward everyone who's giving $1 to $250. If this company costs, I'm picking fig because I have no idea, $10,000 a year but it helps us maintain not only $10,000 but elevates others another $10,000 it's a 2 to1 ROI. Another name for stewardship, you've heard me say this countless times, recultivation, re-qualification. Moving back into the stewardship becomes important. Critical thinking, less donors.

I know the people interested me need to be the priority. If I'm not thanking them, having them understand the value of what we're trying to accomplish and what their gift meant to us, the connection becomes very clear to me, then you're losing out on donors, an opportunity. We also know connect another fact that most of our million-dollar gifts generally did not start as a million-dollar gift, they started at $25, $550, $2500, $5,000 and they grew asking the same questions as we develop relationships in particular qualification. I'm teaching more and more based on results that when we call people I'm here to talk to you, what do you want to talk about, about asking you for money. That's a bad way to enter. I want to hear about your experience. Most people are getting wise to that, and they should. And yet the simple answer is engagement. Simple. We're doing some incredible things in this area. If it's education, School, law, business, Health Care, Cardiology, community outreach, Social Service, kids, moms, homeless, Church, religious teaching, education, pastoral care, what I really want from you is an opportunity for you to read or look at something or listen to something and tell us genuinely what you think. Comes back to what I say. Try to say constantly, ask somebody for money, you get advice. Ask them for advice, they'll give you money. And I think sometimes we've just hunted on this idea. It's so transactional. It may take a few more moves to get them engaged, but if you ask for their opinion people love giving it, and what you'll find is they'll engage more quickly, board engagement we have to be honest as to why we need them and why they're critical to philanthropy success because they are. They are our conduit, a huge pipeline into the community.

Two people who want what's best for the community, if we steal from the seven faces of philanthropy, we're not critical thinking, connecting dots. We know communitarians want what's best for the community. If you can justify why that is you have better shot of getting engagement but you need introduction to those people. And then you need an advocate to say this is really important. Who we are as a community, if we take the repair, grateful patients, alums, and others, there's a much different entry point. A board plays a specific role. Yes they need to make a gift. Yes they need to read the 990s and do the governance and bylaws. I'm all for that. But the primary purpose is Introduction, credibility, trust to elevate. Instinct. Conversations with people.

The last is the one I'm talking about most often right now, and that's CEO engagement, particularly those that are not philanthropy or fundraising CEOs. My book, Vibrant Vulnerability, is all about this all. It is about what we need from them. It's written to them, for them, about what we need to be successful. And the five monkeys are the perfect example. Well this is the way we've always led, doesn't mean it's the right way to lead all of these things about critical thinking. These are just six examples of places where critical thinking could be a GameChanger for a nonprofit, for an employee, for a major gift officer. If we challenge the status quo, challenged the approach based on better data, better information, better wisdom, better experience, better expertise, the question you should ask yourself when you're in a meeting and you can do it out loud. Are we making these decisions based on the same old information and habits that we've performed in the past, or are we doing it because we think this is best for the future. You ask that question, your organization will change. Your job will change. Your performance will change. It will evolve if you ask it enough, every day. That's the value of critical thinking, using and seeing connections from good data that isn't biased that can get you to where you need to go.

My hope is it today causes you to go into planning meetings and conversations and be more of a critical thinker so that it gets you to where you need to be personally and professionally.

Don't forget to reach out to me it's podcast@hallettphilanthropy.com. And if you have commentary about this or a recommendation, email me. Also the blogs I put out every two day, every, twice a week to two three days a week, 90 second reads at hallettphilanthropy.com. Get an RSS feed right to you, just 90 seconds. Hey have you thought about this, have you heard this, did you know this, think about this, as a way of kind of getting the gears going in the brain. I think we're in for an interesting year in 2024. Critical thinking will be important part of it. I think the other thing that'll be important is that philanthropy can fill the holes that the government, Community, can't. We are the bridge, the pot fill holder, excuse me, the pot when you're driving down the pothole filler when it comes to our community. Your work in this is critical so lean in a little bit, use critical thinking, and remember some people make things happen, some people make, watch things happen, then there are those who wondered what happened. Philanthropy is all about people making things happen for the people and things in our community that are wondering what happened. And I love that because that's that gets me up in the morning, knowing I'm doing something worthwhile. I hope you feel the same. I'll look forward to seeing you next time right back here on another edition of "Around with Randall". Don't forget, make it a great day.