Special Edition 12: Rob and Karen Hale - Smaller Is Better and Endowment Importance

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

Thank you for joining me for this edition of "Around with Randall". Of course, I'm Randall. We jump back into our delayed series of the great philanthropists. With all the upheaval in the economy and in certainly in the nonprofit sector we spent a lot of time dealing with tactical issues there, but I never want to forget the learned lessons we can get from the people who are actually making philanthropy possible by their generosity, and thus the great philanthropist series. And we've covered a number of them over the last 18 months. We jump into another one. Today we stay somewhat local in terms of a global presence and we go to Boston, Massachusetts and talk a little bit about Rob Hale and his wife Karen, and they are billionaires ranked somewhere about 200 in the world rankings, quote unquote, for wealthiest people. He founded Granite Technology or Telecommunications in Quincy, which is a kind of a suburb of the Boston area. His wife has been involved as a volunteer, quite often places like the YMCA. Rob actually is a graduate of Connecticut College and has started a business and saw it kind of fail and then built out Granite Telecommunications and now has a multi-billion dollar organization, and he and his wife obviously have done very well. You may have read about them recently even if you don't remember their name in that they have made the news based on some news reporting, particularly some local television interviews here in the last let's say month month and a half. I don't think they really intended to make a lot of news in this particular conversation but when you do what they did, which we'll talk about here in a moment, it tends to grab some attention and really hit the Zenith of media, at least media perception or media attention in general, when Fortune put them on the front page or front cover of their publication.

So what did Rob and Karen do? Well let's go back before we talk about now. They have been very very philanthropic over the last decade or more. They are major contributors to Dana Farber in the Boston area, probably as much as $500 million over let's say a decade, decade and a half. I don't have direct numbers but it's beyond significant when you kind of look at the name and look at what they're doing. They've been honored many times. They believe in, particularly, oncology and cancer research and trying to figure out how to best handle this terrible disease. They have been philanthropic throughout the New England area with various ways things like the YMCA throughout the kind of the Northeast Corridor. These are people that are philanthropists in terms of expertise. That's not why I'm talking about them today and that's not really why they've received their recognition.

As they, I'm guessing, during the pandemic because we were all kind of shut down and there was a chance for a reflection, I think they had an opportunity to think about their philanthropy. And while he is on record I've watched a television newscast interview with him talking about the amazing things that places like Harvard and Dana Farber and others do in terms of changing the world and that they are so privileged to be associated with these organizations from a philanthropic perspective. There was this kind of moment that came about at some point but what about all the smaller nonprofits, the boots on the ground so to speak, the unheralded, the the ones that get very little recognition, the ones most of us don't even know exist, and to impact them and probably to create just watching him on a couple of interviews, he seems to be very detail-oriented and actually very organized in terms of his thought process.

They said we're going to give away a million dollars per week to smaller non-profits. And he's on record as saying the first 20 or so were pretty easy because they knew of these organizations in one way, shape, or form being philanthropist in particular in the Northeast, in the Boston area, and in their hometown of Quincy. But they've kind of ran under the radar because they're at the back end of this $52 million commitment and what they've got to figure out is well, who are the next series of organizations. As they try to complete this sometime, I'm guessing in April or May based on some of the news reports, what I found interesting is number one that they focus so much on smaller non-profits. And the reason why is truly the essence of engaging in your community with people who want to make a difference. He said in this interview and said in other places that the reason that they went through these smaller non-profits is that this could be a game changer for them that these were vital impactful places like domestic abuse, counseling, homeless shelters, animal protection organizations who would view a million dollars as, quote unquote, that game changer that would change their organization.

What I think he's saying in our vernacular, in the non-profit world, is that the impact of that is so significant. It's not that the money that went to Dana Farber or Harvard or all the other places they've been generous with isn't impactful. It is. But the level of impact for a million dollar gift when you're a million dollar organization is literally like opening the doors to an enlightened world of possibilities.

This reminded me of an article that I read, gosh it's got to be 15 years ago, in the Wall Street Journal. I cut it out and it's still, I'd have to go find it with some of the movement in my life, but I still have it. Was an article written in a brilliant editorial or at least an opinion piece by Ben Stein, now depending on how old you are or how well you know history Ben Stein will come to you in different ways. For those who are kind of the older part of generation or younger part of generation X like me or you're a millennial you might know Ben Stein from Ben Stein's Money on MTV which was a game show where he challenged people to answer questions smarter than he was. It's almost was the predecessor of what we think of as the chase today or a lot of other common shows about you versus the expert or team versus the expert. Ben Stein was the expert brilliant man. I think Jimmy Kimmel actually hosted that show if I remember correctly, but if you're older like me and you like history and politics you would know that Ben Stein was an advisor and a writer for multiple presidents including Richard Nixon, and he was a Yale graduate, or is a Yale graduate. They wrote an article many years ago or editorial or opinion piece that said we need to stop giving money to places like Yale. He is a Yale graduate who loves you he is a tried true and true believer in that educational experience. He'll advocate all day long about its importance, and its culture, and how it affected his life, and how it affects other people's lives. But he also said I'm stopping to give them money because they don't need it anymore. There are lots of other people. I'm going to find other ways to help. And in some manner, shape, or form, and I don't know Rob Hale and his wife Karen at, all never really heard of him until the last probably six months when I started reading the story. I hear Ben Stein. I hear him saying in some of the interviews that were done, I love what we've done with these other places but there are unbelievable people with unbelievable missions that serve our community on the ground at the precipice of where the challenge is that we need a reward.

So the first lesson of the Hales is bigger is not better. Bigger's okay, but sometimes smaller is better for impact. The second lesson is how he restricted the gift. Those of us who enjoy, and maybe have a little finger in the planned giving effort, me is you know spending three years studying at law school and my career practitioner in planned giving, primarily along with leadership have been talking about the concept of endowments and how important it is, and the reason you type in giving to endowments is because the largest gifts we know that come every year are from estates, on average. And most importantly for those that aren't the Rob Hales of the world, it's the largest opportunity we'll ever have to give is when we pass and leave something as a legacy to organizations we believe in, and that can be used as an endowment piece. So why is all this tied together? Well what he said was we will give you the million dollars but you have to put it in an endowment fund permanently restricted, and if you need help we're glad to kind of give you some direction. But not to us, but in terms of professionals, so that you can have a five percent return and create a regular income stream of fifty thousand dollars. And the number of executives that, of these nonprofits, that I read said we've never even thought about an endowment. We don't have an endowment. We never, we never could put money away because we just need to keep the doors open. What he is saying and what his wife is saying with these gifts is if you don't find long-term sustainability you will put yourself in massive jeopardy.

The genius of what he is saying isn't just about the small. If we look at the world of education and healthcare, these are two enormous sectors. I'll even throw in religion. So think about a church. Your church, some church down the street, whatever. So religion, healthcare, and higher ed. The biggest pots of philanthropic money, the largest organizations in some cases in philanthropy and in nonprofit world, all three areas are having financial challenges. The church because we see less people going to church and being philanthropic as part of their membership or association. Healthcare is going through massive change when it comes to the economic model. Higher ed is going through its changes with a reduced student population. Think about if those organizations in those three categories hadn't been endowing funds like the Harvard and Yales for generations where they'd be today. They wouldn't be as hand to mouth when it came to cash, and that's what he's saying about these smaller organizations. So the second learned lesson for those of us who are the practitioners is that we need to fight to find to direct to angle towards creating endowments for our sustainability.

And Rob and his wife Karen Hale are doing just that to push organizations to consider that in those, in that one million dollar a week, 52-week challenge that they've given themselves. So number one is if you're a smaller organization, how do you talk about the impact you have at the ground level, on the boots on the ground. You are doing the work. And number two, can you have a thought process, a strategy session with your board, with your leadership, with your donors about the value and importance of an endowment when things get tough, because that's your savings account. That's your way in which you ensure your viability and that of your mission in perpetuity.

Rob and Karen Hale, pretty amazing thought process. Smaller impact, greater, and creating sustainability for years to come. Well worth the time to read a little bit more about them. There's some interviews about them on television, you know like on the news and things of that nature. It's worth the five to ten minutes to learn a little bit more about them in their thought process, and why this is important, and how you can use it to your advantage in your nonprofit.

Please check out the blogs at Hallett Philanthropy, that's hallettphilanthropy.com. Two or three a week, 90 second reads. So just ways to think about leadership, the world in business, certainly in the nonprofit sector, just differently interesting news tidbits and things of that nature, opinions that I think of when I read and engage in the community. And if you'd like to reach out to me that's podcast@hallettphilanthropy.com. Send me an email. Tell me what you think. By the way, share this with a friend. See a lot more people listening which is very gratifying. I don't know how many, doesn't make any difference, but if this is helpful that's always great for people in our profession. And speaking about people in our profession my favorite all-time saying, some people make things happen, some people watch things happen, then there are those who wondered what happened. The joy of giving is important. We are people who find those people with that joy who want to make a difference to help the people and the things in our community that are wondering what happened. People who make things happen for those who are wondering what happened, and I'll conclude that thought process with something I found fascinating in particular about Rob Hale, though I would believe his wife was involved. The reason he did this is because he says we have unbelievable joy when we do it. We love knowing we're making a difference. To that extent at several graduation commencement speeches he handed out envelopes to all the graduates at a thousand dollars per envelope with the only restriction is is that half of it had to be given to someone else in need or an organization in need that would make a difference. They could do whatever they wanted with the other $500. And the reason why because they wanted the, he wanted, they wanted, he and his wife wanted those graduates probably who didn't have a lot of money, to experience the joy in helping someone else. Those that make things happen, those that watch things happen, and then there are those who wondered what happened. The Hales are example of people making things happen not only for those in the community that need it the most, but for those leaders of tomorrow that are trying to figure out where they're going to fit into their particular community or society. And I don't know a better way to spend a life than reading and being around people like that. Go find those people and they'll make the biggest difference for you as well. Appreciate your time. We'll see you next time right back here when we jump back in to the normal 20-minute segment on tactical challenges within our nonprofit space, but I appreciate you being here with me today. Don't forget, make it a great day.