Episode 303: Realizing the Requirements of the Role You Want, i.e. CDO, vs the One You Have
I'm so honored that you would take a few minutes of your day to join me, Randall, on this edition of Around with Randall. I've had the privilege of working with some amazing clients over the years, and keeping a lot of them for longer periods of time, some as many as more than a decade. Doing various things. It's a real privilege, to be quite honest.
But there's also a real energizing factor when you bring on a new client and kind of figure out where they're at and how you can best serve them. Which brings us to today's episode. I'm working with a client that is going through the learning stages at least. Chief philanthropy officer. Chief development officer of being a chief development officer, a chief philanthropic officer, which really talks to us about what is the role that we are trying to not only just meet objectives, but to achieve, to excel at.
And it's been fascinating in our unofficial discussions, which really aren't a part of the scope of work that I'm doing for them or with them around what it is to be a chief development officer. And I've been taking notes and thinking about it, and that's what I want to talk about today. That the role of being a leader inside a nonprofit may be a lot less in today's world about particularly the more complicated organizations, less about fundraising and more about organizational knowledge.
And I want to, hopefully, by the end of this, give people who aspire for growth. So this will be in the context of a chief philanthropy officer. But frankly, this could be about leading a team that it's not the skill set that you know, in the job you have, but realizing what the job that you want might actually entail or what's needed.
And today we're going to talk about this in the context of a development officer role. But really it's about thinking in the future, about your future, about what maybe you want. And that could be a board member to become a board chair. I think what we're going to talk about will cross over a lot of different aspects of this, and I'll try to keep that in mind as we go.
So it's not so singularly dedicated to the CPO CDO role. What we do know is, is that leadership is becoming more complicated. And in the framework of a chief development officer, it's more difficult that we think about the role or maybe a leadership role in the context of what we do now. So in the chief development officer role, most of the time they're coming through a major gifts or principal gifts platform or a series of experiences.
And so there are things that they think about around major gifts. And then all I got to worry about giving campaigns, playing, giving, stewardship, CRM, all those kind of things. In today's world of being a leader inside an organization that is a responsive has a responsibility for being a chief development officer. It's much grander than that. It's much more robust.
The spectrum of engagement is much larger. It's dealing with financing and budgeting and organizational strategy and marketing, communications, data and analytics. And I'm not talking about your CRM. It's about technology. It's about governance. It's about legal issues, program strategy, institutional reputation. These experiences that we have in coming out of philanthropy sometimes create a narrow band of knowledge that I want to try to help you overcome.
And I'll refer to my experiences to one of my great mentors, Glen Fosdick, in how he helped shape this. For me, that's going to fit into maybe the narrative that you might look at for your career. If you go back and look at episode 266, I talked about the chief philanthropy officer as being the chief political officer and really do a deep dive or did a deep dive into that episode.
266 into how the politics of an internal organization affect the leadership components of philanthropy. I'm going to steer away from that today. This is about skill set, knowledge, wisdom and experience. But if you're interested in that, this is going to be paralleling it. So you might do two for one today's episode and go back to 266 and pick that up as well.
So why does this broad understanding actually matter? Well, nobody is asking the chief philanthropy officer to become the CFO, the CIO, the CMO and attorney, the chief marketing officer, or the CEO directly. But we have to have in philanthropy if we want to be seated at the leadership table or if you're, as we talked about, elevating into maybe a leadership or managerial supervisory role, a broader understanding than just what we are working with in today's existence inside our nonprofit or inside our department.
Financial knowledge is critical. Branding becomes critical. Reputation becomes critical because that's what the CEO works about. The CEO also will worry about technology and governance, big issue and operational knowledge of what we actually do. The goal should not be to be an expert at things that we don't need to be. The goal should be an understanding of all of these different aspects or areas, enough to be able to ask the right questions.
And as we'll talk about in a moment, also know who to go to ask further kind of developmental opportunities for learning people that we trust.
We have to also ask what an executive, a leader or chief officer organizationally really owns. And part of the challenge is, is we think too often that we own only keyword, only the philanthropy piece. We don't. When I was at the Rescue Medical Center, part of the University Academic Medical Center, my mentor, I was very young 20 years ago when I started her, a little, little, just a little bit less.
Now, my boss, my mentor, the CEO Glenn Fosdick, very quickly explained to me that I wasn't a philanthropy expert who was a chief executive or an executive in the organization. I was in a in the organization who had who had an extreme knowledge of philanthropy. That didn't mitigate my responsibilities to the other aspects. That was a shock to me that I hadn't thought about.
I had come out of education where I had had an immense amount of experiences, so some of that came more naturally. I hadn't been in healthcare. So the way in which a hospital works, the nuances, the acronyms, the way in which we budgeted, the way in which revenue streams occurred, all organizational strategy, how to build, how do we merge, how do we look at strategy for growth?
All were critically important. And so a chief developing officer's ownership isn't necessarily in philanthropy alone. It's an organizational direction. It's about the strategy that the organization is trying to execute. Can you participate in in conversations where there is an active, engaged interaction about what the future of the entire organization, but most importantly, why we're trying to do these things.
And we can't be just in the business of receiving a strategic plan and then going to raise money for it. What is our role in developing that strategy? We also have to have immense knowledge of finance. So I'm talking about it from a healthcare lens. Let's say you're in social service with a governmental funding aspect.
What does that look like? Give you money. State give you money. The federal government. How does that work? How do you report this? Financial stability or sustainability is maybe a better way of putting it is really about where revenues come from. What are our margins in these areas? Do we require that subsidy that I was talking about a moment ago?
What's this push and pull with restricted versus unrestricted philanthropy needs? Where do our investments come from? All of these things are critical in understanding how we explain what we do. And we'll talk about this in our as we do at the end of each podcast or the last part, tactical things that you can do to, to, to raise this or overcome this particular challenge.
In this case, it's a broader perspective of the roles of leadership. How do you talk about this in the public? The other thing that we don't talk a lot about is a knowledge of the external factors, pressures, power bases, maybe intelligence that comes from our community. We think about it from a limited frame of donors, which is a good one.
But there's also community leaders. I'm working with another client that has a really big political problem, and it's not a problem that they've actually are causing in any way, shape or form. They may actually be the answer to the problem, but this particular CEO in a large organization is dealing with the mayor and the city council and actually in the governmental agencies, because there is an enormous challenge based upon the market structure, and that has political implications.
That's external intelligence knowledge. What are people saying? What are people interested in? How does it affect them? Who has vested interest? Who has political interest? What opportunities are coming out of this? This is the idea of understanding the greater kind of community or environment that we live in. We also have to have an immense knowledge of what I would call institutional messaging.
Reputation brand. Why does our organization matter? Why do we want to do what we're doing now? What does it mean to want to make that difference? How are we going to define that? What do we produce? What do we serve? Where are we going? These are all hard questions to answer because some of the time the answers are a little bit more nebulous.
Sometimes they involve politics. This is where I think Glenn really helped me. He helped me understand that my limited lens of incredibly influential and incredibly wealthy people were important, but there were other factors to consider.
The last piece of the puzzle, in kind of a broader perspective of why this is really important from the modern chief development chief philanthropy officer is you have to have an understanding of what the organizational leadership component is.
It's really hard to realize because most of the time we've been trained because I think sometimes people don't think that philanthropies at the table is not considered a valuable asset or resource, or our opinions aren't taken. We walk into rooms thinking, more often than not that philanthropy is under or misrepresented, so we're there to do that. When you reach certain levels and maybe this is this gift officer team or the, the, the operations or infrastructure.
So it's not just about the chief philanthropy officer. It could be about jumping in leadership into a departmental role. Sometimes the best decisions are a negative consequence to chief officer to philanthropy a little bit. There's no direct benefit to us. Maybe it's a negative, but organizationally it's the right thing to do. I remember once when I really thought we could raise money for an amount of money for a particular project, and what came out of it was a realization that if we tried this, it would actually have a negative impact to our finances, even though we raising a ton of money because it was health care, the reimbursement rates in that particular area, we could
never raise enough money to out to, to, to cover. And actually we needed to close that area or reduce it dramatically. And I was like, but that's going to kill philanthropy. And I was challenged by my boss and mentor, Glenn. Well, are you thinking about it from that lens? Are you thinking about it from the organizational wide lens?
As you sit at a table with seven other people who are seeing it from a wider perspective? And I went, whoa. I only had one lens on. We have to think about this from the vantage point of that, we don't represent just our area. When we reach a certain level of leadership, we represent the entire organization or the entire department, and sometimes decisions have to be reached.
This idea of organizational leadership, that perspective, we have to have a vested interest in the bigger perspective, bigger, bigger interest. It's really no different than what we tell board members in terms of conflict of interest. Don't bring your personal interest into the board meeting. You may have to put that same kind of thought process into leadership. So let's also delineate knowledge basis.
And then we'll get into the five. Only five today sorry. Usually it's six. But we have five things that will help. You can overcome this. But understanding knowledge and the level of knowledge is critical. There is an enormous difference between the idea of expertise versus fluency. I think of myself as an expert in plan giving tax study in law school.
Doing it for 30 years. Just had a fascinating conversation, as I do. A little bit more fractional playing, giving with a amazing couple who wants to try to figure out their estate plans and be philanthropic. And I could do it off the top of my head. I have an expertise. I don't need a lot of external, although I'm always double checking things.
What we're really talking about is how you grow your fluency.
Fluency is really about knowing the basics of some terminology issues, implications, and questions. So if we think about philanthropy in this particular avenue and I've mentioned some of these before, you need a fluency even though you may have an expertise in philanthropy. But the fluency in those areas of finance, governance and politics, basic communication technology strategy, awareness of when you need to take your expertise and apply it forward, versus sitting back and letting others kind of move.
All these things aren't directly related to some of the experiences that we have coming out of to be into leadership or out of a department, into a leadership position within the department. You don't have to have every answer. And as important in this particular process, and we'll talk about this in the in the five different ways. Tactically you can help yourself is you have to know where to go to get the answers or to ask the right questions.
Law school was a fascinating experience. I'd actually go back and do it again, as long as I don't have to take a test and have to pay for it. I loved it. I loved law school because of the learning. But the greatest lesson I learned in the in law school is there is no expert in the law. None.
They don't exist. But there are incredible experts in fractions or parts of the law for which they spend all of their time. I have a unique understanding of tax issues related to plan giving. I'd be a fool to say I know anything about the criminal law at the level of a prosecutor or defense attorney. I don't know anything about intellectual property law.
Law school taught me that you can maybe have an incredible knowledge in the Pacific area, but really what you're looking for is a basic fluency of maybe some basic issues. But the most important piece is where can I go to get the answers that I'm looking for? Because they're out there and you have to be vulnerable enough to ask and to know who to trust.
So know the difference between expertise and fluency. And then for fluency, know where you can go to get more details when you need them. Which brings us to our five ways that we can help ourselves. Five tactical solutions to be ready for a grander perspective of our roles and what leadership is coming into a department leadership or a group leadership, or even in obviously to the top to being the Chief Development officer, chief philanthropy officer.
Number one is conduct a personal audit of what you know and what you don't know based upon fluency and expertise. There's nothing worse than someone who thinks they know something. They start talking and you're like, you have no idea. I had a unique situation where there was a leader who was responsible for an area and within literally 10s.
I could tell you she knew nothing about what was going on, and she was faking it, and she wasn't even faking it very well. The point being is, is that it's okay to say I don't know. It's not okay to say, well, I know and then be wrong, particularly as you move up in an organization. So that inventory certainly with fundraising, basic skills, things of that nature.
But back to what do you know about finance? How does strategy work? Governance, technology, data, human resources, operations, legal and risk, and maybe more importantly, a two step strategy. Number one, what can I read or watch that would help me better understand? So the watch piece or learn about whether it's a podcast or a or a video or there's a lot of things when I look at my kids education, I think there's a whole here.
We use Khan Academy all the time as supplemental ways for 25 minutes for them to watch a video and more. My son, because he's older, goes, oh, that's what they're talking about. Where can you get some of that basic fluency, learn some things. And then obviously, as I talked about, can you create a list where you can go?
I can trust that person to go and say, hey, look, we talked about this. It didn't make entirely all the sense in the world. I didn't get it all the way. Can we spend ten minutes and talk about this to help me better understand what it means? So number one is conduct an audit and do something about it.
Number two is actually physically engage in a study of things that you don't know. Be intellectually curious if you do not know. Budgeting finance I'm lucky enough to have an MBA in finance. So some of that comes more naturally. I kind of enjoyed it because my dad, on his own company, I kind of grew up with it at the dinner table, but I've run into a lot of people that don't understand the idea of debits and credits and accounting and revenue streams and how to read a balance sheet or income, if that's a whole.
Go find that information. If you come out of operations and you're being elevated into a leadership dive into the idea of how gifts come in, what's the move management cycle, what's the relationship process? What are we trying to aim at? If you come out of the fundraising side, dive into how a CRM and AI is being used, fluency to learn about what's there.
Development professionals, when they're at their best, are always listening and learning from our donors. The same should be true of our own basic needs or base of information. Your professional education should be broader than just philanthropy. It should be about the broader perspective of how a nonprofit works. What are the value things that we provide? What are the areas within it that I could learn about?
Number three, do a deep dive into your own organization's financial modeling. Spend some time with your CFO or if it's a big organization, someone in finance learn to read financial statements. I was talking about this earlier. No matter what we do in philanthropy, we are deeply, directly engaged with finance. In healthcare, it's a smaller portion of the overall organizational finance revenue streams than in other places, but it's still critical.
But if I don't understand how reimbursements work or why certain, you know, how we negotiate different reimbursement rates with commercial payers, tuition in education versus an endowment versus, you know, regular cash streams, whether it's a social service agency, governmental support, and how it's dependent on certain things. Learn about revenue sources, expenses, margins, endowment levels, capital needs, cash flow.
You cannot effectively lead philanthropy unless you have an organizational understanding of the economics of how it works. And that would be true if you're elevating into a department lead inside philanthropy. Unless you understand how all of this was pieced together, you can't elevate. Finance has a special place in knowledge. You got to learn it, even though it's something you might say, I don't want to do that.
It'll help you. Number four, as I talked about a few moments ago, it's so critical to have experts you can turn to financial professionals inside or outside the organization, make sure you share only the right information. If it's outside attorneys, I can't tell you how valuable my legal education is just for base understanding of things, but there are lots of times I don't have a full understanding.
I'm on the phone texting somebody, hey, you got two minutes. I got to run something past you. Technology leaders. Man, I, as you are well aware and not Mr. Technology and I always talk about my dear friend Nathan Chappelle or Scott Rosenkranz or Brantley or I'm always asking others, tell me about it. Marketing, communications, investments. How do those work?
How about an experienced CEO or someone who's had CEO experience that you could lean on? Maybe it's not your CEO because you're not close enough. The relationship isn't right, not enough time or whatever. You need to be able to access experts so you can and have them be open. And you have to be willing to ask questions so that you can broaden the specifics of what you're looking for.
The fifth and last thing is a sense of discomfort. Put yourself in moments and conversations that are a little unfamiliar. Ask if you can sit in on strategic planning. If you haven't done it, ask if you can sit in and how budgets are actually decided. What does it sound like? What are they looking at? Learn how major technology can I sit in and see how we decide how a CRM or a or a major technology decision is made?
What are we looking for? Understand how programs are evaluated. I mean, the whole essence of philanthropy support what we do. Do you know how it's done? And I'm not saying if you're in health care, you become a doctor, I suppose, if you want to. But the point is, if you have to know how things work, if you have access, read the entire board packet in detail, not just a philanthropy piece.
If you're a chief philanthropy officer, this exposure builds a sense of executive level thought process and judgment, and that's really what we want. So five things to help you conduct that audit. Kind of figure out what you know. Know the difference between the idea of expertise influencing. Number two, study things outside of fundraising. Build a sense of understanding of what it is you can learn that's not directly related to major gifts, principal gifts and things of that nature.
Or if you're coming out of a department, other parts of the of the department you don't have familiarity with. No matter what, you have to learn the financial model. Where's revenue come from? How does it work? How do we spend things of that nature? Build your own network of experts, people that you can trust to run things past them.
And lastly, force yourself. Ask, request, bang to get into unfamiliar conversation situations so you can sit and learn. You may not say a word, but you'll pick up a lot. So much of our careers, we prepare to be fundraisers and then we become better fundraisers, higher level fundraisers. And all of a sudden, leadership somewhere in this process comes to us.
If your goal is to be at the highest level you can obtain, you can achieve eventually your education. I don't mean that formally. I mean that formally and informally. What we talked about here today becomes quintessential. Can you see a broader picture? And once you put some level of title manager, director, chief, your responsibility elevates to a higher plane.
It's just not about that one area that you once worried about or that you worked in. Its particularly the chief development officer rule. It's the organizational wide perspective, and it's no longer the simple responsibility of raising money or of what you used to do. It's a wider perspective. You should understand your department, your organization well enough that you can create strategy.
Small s inside a department, big S for the organization, and evaluate those economics behind it that are necessary to execute it and interpret the outside environment of the people that are going to be affected by it, and help determine if it's if it's actually accomplishing what we meant it to be. We can measure it so that we know where we're going.
Wider framework. If you want to elevate, you're going to have to get uncomfortable. But I got to tell you, some of the most fun I ever had in my career was being uncomfortable, learning about new things. And it should be the same for you if you're open to it. That's how you grow, and we need great growth in nonprofit work because there's a lot of people looking for help, and you can be a part of their solution.
Don't forget check out the blogs two per week right around the world. Ironically, I think it's so fascinating. 90s you can get an RSS feed right to you from Hallettphilanthropy.com backslash blogs. If you'd like to reach out to me, it's podcast@hallettphilanthropy.com. I so appreciate the great blessing I have to do this podcast and hearing from people who say I listen to you.
I got one this week. It was like, I've never heard of this person. She said some nice things. She asked me a question very specific. I was glad to answer it, but it reaffirms my role of this being my classroom. My 21st century opportunity to teach 2025 minutes a week. And in doing so, I hope it helps you because you mean something to someone else inside the organization or out.
And it brings me to my all time favorite saying some people make things happen. Some people watch things happen. Then there are those who wondered what happened. You're someone. If you're trying to get better, improve, find a bigger picture, make a difference. You're someone who makes things happen. You partner with others internally and externally to do that for the people, the places and things in our community that are wondering what happened.
I got about 10 to 15 years left in my career. Knock on wood.
I don't know what that's all going to entail, but I hope it's making a difference. And I can't imagine a place that I'd want to do it more than in the nonprofit, philanthropic world. I hope you feel the same. Doesn't mean CC doesn't mean it's perfect, doesn't mean there's not problems. But it is important. And that value is something you can climb onto.
You can grab to be someone who makes things happen if yourself, for your teams, for your boards, your organization, and most importantly for the people you serve. That's a great way to go to work every day of the week. I'll look forward to seeing you the next time, right back here on the next edition of Around with Randall.
Don't forget. Make it a great day.