Episode 214: Institutionalist vs. Change - How to Keep the Basic Core of who you are While Embracing Change
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 Halette Philanthropy, Randall Hallett.
Thank you so much for taking a few minutes of your day to join me, Randall, on this edition of Around with Randall. I had the opportunity to do some reading and a little bit of watching of one of my favorite, what I'll think of as, political thinkers—an outsider who got into the conversation about the power of institutions and how important it is to keep your perspective as an institutionalist without being afraid of change. Where does all of this come from, and how does it connect with philanthropy?
As we evolve into 2025, I'm finding myself more and more often with boards, advancement offices, foundations, development, or however you want to call them—fundraising offices—and to some degree with donors (but not as much), talking about how we have seen, over the last 10 years or so (and some might argue 20), a revolutionary change in philanthropy. Over the next 30 seconds, it's not going to be a surprise when I tell you, but we have fewer people making donations.
The stat on that is about two-thirds of households in 2002 made gifts or a gift to a nonprofit. Now, that number is below probably 47%. The 80/20 model that I kind of started my career with—80% of our dollars come from 20% of our donors—is probably more often closer to 97/3 or 95/5. That means 3 or 5% of our donors make up 95 to 97% of our dollars. Larger donors are making a bigger difference, and we're seeing a decaying of our annual giving platforms. These aren't driving dollars the way people need or want.
All this is to say that there is a change occurring in philanthropy, and I see a lot of challenges in the willingness or desire to change. So today, I want to talk about this idea of institutions and institutionalists versus change. No matter what nonprofit area or sector you're in, no matter how big the office or organization, if you're not evolving—and evolution is about change or morphing to the current status or situation—you'll struggle.
If we take it into its primary thought process of evolution from Darwin, animals that didn't adjust as the world changed became extinct. Certainly, humans had input on that in many regards. But those that have evolved are the ones that elevated, stayed, and survived—survival of the fittest. I think there's some truth in this in the nonprofit world.
The challenge becomes that we have institutions that we don't want to see change. Here's the great mystery of today: How do we change our organizations without changing the institutions? What do I mean by that? Well, to do that, let me go back in history and tell you about a couple of amazing institutionalists. They believed in the institution but changed it to make it better.
One is Martin Luther King. He believed in the institution of equality and that the way in which we look at people needed to change and how we treat people. What he did was keep the institution but change the process—non-violence. What came out of it was a complete augmentation of America's perspective on race. It's a journey, not a destination. We're not there yet, but there were huge steps. The institution remained, but the process changed.
Another is Abraham Lincoln—maybe one of the most famous institutionalists. He believed in the Union but recognized the need to change the process, particularly his internal view of slavery. If you've watched Daniel Day-Lewis in the movie Lincoln (which I recommend to anyone), that's what this is about. The change of the 13th Amendment in Congress in early 1865 was an effort to figure out how to move this forward. Fascinating—an institutionalist, but willing to change.
Another example is Franklin Delano Roosevelt. He believed in capitalism. As the Depression set in during the Hoover administration, Roosevelt, from a distance in New York, prepared to run for president. He didn’t change the institution but changed the process. He added things like the SEC and the Federal Reserve system—things we hold dearly today. He evolved his idea of capitalism without altering the institution.
My all-time favorite, and an under-discussed American leader in my opinion, is George C. Marshall. Many of you are probably saying, "Who the heck is this guy?" He was the Secretary of War. Some of you might wonder, "What is that?" Well, that's the predecessor to being Secretary of Defense. Going into World War II, we had the War Department and separate Departments for the Navy and Army. We didn’t have an Air Force, and the Marines were kind of under the Navy. We had a very confined military.
George C. Marshall was tasked by the president to reinvent the military to go into World War II after December 7, 1941.
He believed in the institution, all the things that made it great, but he changed the process. But the key to George Marshall is then he did it again because you may have heard of the Marshall Plan after World War II. The United States had to go in and help rebuild Europe. In doing so, he reframed the Marshall Plan as humanitarian, positioning America as having a responsibility to engage with the world. However, this approach was not from a military perspective, as they aimed to de-prioritize military action after four and a half long years of war. Marshall repositioned it as humanitarian, focused on restoring dignity, protecting democracy, and bringing stabilization to a free world.
Yes, those are big examples, but I think one of the things we should be cognizant of is what we can learn from them. The institutions, the missions, the nonprofit work we do is non-negotiable. We want to continue doing that work. The question is how we do it. If we don't evolve, we run the risk of stagnation, eventually decline, and possibly going out of business.
So how do you do this? What I want to do today over the next 10 to 12 minutes is, at a very high level, talk about how to maintain institutions while evolving with change. Each situation is a little different as we're all dealing with unique challenges. However, most of my clients are trying to evolve into higher levels of philanthropy. Those who do, I can show the results—growth of millions and millions of philanthropic dollars being pushed back into the organization for good. Then there are examples of organizations fighting this change. Those are the ones where I’m hearing statements like, "I’ve got a budget problem now," or "I don't have enough money in the organization." This is often because they’re not willing to evolve.
Let’s start with why this is necessary. As we discussed earlier, Darwin’s theory of survival of the fittest shows that if you don’t change, you won’t survive. How do you get to the point where you are willing to adjust—not just because it’s the only option but because it’s what’s best for you and your organization? At the same time, why are institutions important? Institutions are critical, especially in nonprofit work, because they preserve trust—with staff, donors, board members, and the community. Institutions serve as a cornerstone, ensuring that the mission of the nonprofit remains intact, fulfilling its unique role in the greater world.
This doesn’t mean change should drive us to completely alter what we do. Instead, the question is: how do we stay true to what we do while making necessary changes to improve? Balancing change and institutionalism starts with identifying sacred values. What are the cornerstones of your organization? One obvious sacred value is the mission—what you do, the difference you aim to make, and the impact you strive for. In philanthropy, other sacred values might include being donor-centered, maximizing conversations with donors to honor their gifts, and prioritizing transparency. Stewardship is another critical value, although, as an industry, we sometimes fall short in this area. In a previous podcast, I talked about stewardship in philanthropy compared to the car-buying process. These values are essential to who we are and what we believe in as philanthropic organizations.
Once you identify these sacred values, the next step is to anchor the necessary changes within them and align them with the mission. In my experience, I’ve rarely encountered situations where people oppose doing more or better to achieve the mission. If we agree on the need to elevate the mission, we should also agree to make adjustments that enable us to achieve more. When framing these changes, they must be aligned with the mission and the sacred values. This alignment is why starting with sacred values and mission clarity is crucial. If someone resists change despite this alignment, it might indicate they’re not the right fit for the organization. Elevating the mission requires a commitment to improvement, which often translates to securing more funding to make the nonprofit more effective, impactful, and stronger.
The third step is to prioritize your stakeholders. Who needs to be part of these conversations? Stakeholders include leadership, key volunteers, and staff.
I remember as an example many years ago, and I give one of my two mentors, Glenn Fosdeck, and I meant some on a credit when the University of Nebraska Medical Center was moving from a pension program to a 401(k) program, like many organizations have over the last 20 years, the institutional priority was retirement. We need to provide a strong, engaged program to ensure that our employees could retire. The difference was that the change was going from a pension program to having them have their own 401(k)s in a large match. Well, when he stepped into that as a core, our core is to make sure you can retire. That made it easier for the change to occur.
You have to embrace and engage those internal stakeholders. Who are the people that need to be involved in the conversation and direction for these changes to actually occur and be successful? Then there are the external stakeholders, funders, donors, community partners, community leaders. You need to list them and what is their impact and then, secondarily, how do we bring them together? Maybe separately in smaller groups and eventually into a little bit larger groups and eventually into a large group that is all looking to be embracing for that change. So, prioritize and identify those stakeholders.
Number four is really focus or embrace the idea of incrementalism. These kinds of things, if you're looking to increase the number of major gifts you have or principal gifts, plan gifts, you're looking to add a new CRM or change how you do your internal business. Maybe it's new leadership at the top. You're trying to figure out how they fit into this. Maybe it's you're the new leader, and you're looking at how do I make this better. Incrementalism is important. If you go in and overhaul, you're going to meet more resistance. The more we are in the kind of thought process of, to steal from Jason Jennings, small bats, and that we're going to take a lot of small-scale pilot initiatives of the, you know, how many resources we have, how much so we can keep doing our business and then measure them, and we're going to keep evolving step by step by step.
Now, for someone like me, that is incredibly frustrating. I'm probably not very good at it because I see something and I'm like, we got to change it right now. Let's go. But most people don't like that. So, you have to embrace the idea of incrementalism because you want it to work over the long term. Think about weight loss. You don't have a doctor say you need to lose a hundred pounds next week. First of all, it's pretty not possible. But number two, what they know is that it's life change that causes health change, not just drop a bunch of weight and then go back to—that's why weight bounces up and down. Go right back to what you were doing before. Slow incremental change.
The last is you have to communicate, over-communicate, communicate again. Then when you're done communicating, you do more communication. You have to build coalitions in the communication. Who are the people on board who have seen success? How do you share that success? An example, I'm building a grateful patient program in a system. There are all these hospitals that have maybe a little bit of independence and some want to do this. Some don't, but the system said this is what we're going to do. We're using communication as some raise more money, institutionalism. We need to raise more money. The change is we need to be probably more aggressive with our grateful patients. What's interesting is that we're using success where we'll say, this place did this, what was the result? And they say, oh my gosh, we got A, B, and C as a result of this. What that's led to is others embracing it.
So, creating those cohorts, those coalitions, and communicating what we're looking to do. Is everybody on board? Let's answer questions. Let's say it again, what we're trying to do. Let's have a small plan. Let's show that plan, build credibility to get to those changes while not stripping away the institution in which we believe. So, you want to clarify the core values. What are the things that are sacred? Number two, anchor what you change in those things. Number three is really figure out who your key stakeholders are. Number four is really focus on the incrementalism, small changes over time that gets you to that final goal. And number five is communicate, communicate, over-communicate, and communicate again.
The plan, the successes, the challenges, be open. A couple of seconds here on understanding what are the challenges. The first is that you may need some outside help in kind of assessing and diagnosing where you're at and where you need to go. I find myself doing more development audits. I'm not selling it. I'm just saying, what's the starting point and what's your goal, and then how do I help build a plan over two, three, four, five years to do that? It's almost like a mini-strategic planning process, but the auditing kind of gives a baseline. That's going to help identify bottlenecks and efficiencies. You're going to need data. You're going to need to have a ton of data to actually show and prove why this is important. Because if you audit correctly and you kind of have understanding of bottlenecks, then you can begin the process of figuring out how to design and plan this entire process.
This is where it's really important. This communication, remember that last thing, is communicating the plan. You need buy-in. Because when you talk about creating and designing a plan, everybody's going to have an opinion. How do you remain open but still move forward? How do you take the good suggestions and implement them? How are you open enough, and are you open enough, to appreciate others' perspectives that might make it even better? That's all about buy-in. For those that want to be actively involved and for those that are skeptical, the more you do buy-in, the better off you are.
The other thing that should come, particularly when it comes to philanthropy, is understanding what you're asking for. Most of the things that I'm dealing with—nonprofits, social service, healthcare, education—doesn't make any difference. You have a lot of things to do with the money. It's okay to fail on small parts. No good development in an organization, or an improvement, or an evolution ever came without failure. The key is to monitor, evaluate, and adjust. Do you have key performance indicators? A map? Key dates? Are you trying to figure out how to ensure that you're moving forward and adjust as you go? Because if you don't do this, you're not ready for the change that's to come.
No one person, or even a small group at the beginning, has the answers to all of the processes, all the success, all the mapping—how you go from an event-driven staff to a major gift staff, how you increase your pipeline, how you change your CRM, how you change your priorities or strategic planning process that gets more high-level things to be raising money for. It does not come if you're looking at keeping the institution but changing a little bit of the process. It doesn't come without pain or without mistakes. I'd be remiss if I did not mention here in the last 30 seconds that there are going to be pitfalls. There are going to be challenges.
Number one is resistance from internal people who don't want to change, from external people who don't want to see change, and from boards who say, "Nope, this is what we've always done." How do you get them to see it a little bit differently? Internal people who say, "I've done this for 30 years, I'm not doing it any differently." This is where you have to realize that leadership and the journey aren't always perfect. There are going to be bumps and pitfalls. Resistance is really an internal pushback, external pushback—however you want to categorize it. There's going to be some level of resistance. If you're changing what you do, you may be changing technology.
There is a moment where your organization has technology overload, where there's too much changing. "We can't do all of these things." This is why a staged approach is important. If you're putting in a new CRM on day one, it's A) not going to work as well, and B) people are not going to know how to use it. And if you then also add planned giving technology and we're going to change the website—just an example, a series of examples—it's too much. Figure out where those pressure points are. Get feedback. Are we doing too much? But technology is changing so much that what's happening is we have fatigue.
The last thing is the further you go along, the more likelihood there is to be misalignment or a misalignment process with your mission, with the core mission of who you are. That's why, when we started this whole thing, we talked about how important it was that you start with the sacred values, who you are. And those are always the first things you come back to. Because misalignment will have people jumping off the ship if they don't want to see the change. Yes, some of this is more philosophical, probably not quite as much tactical in this particular episode. But those organizations that are willing to adapt, to grow, to evolve, to keep their institution, the values that they have, but change the way they do their business a little bit to do more of it, are the ones that will succeed.
And I promise you, because there's more examples than the ones I started with about institutionalists who were leaders that caused change but kept the institution. The Martin Luther Kings, the Abraham Lincolns, the Franklin Delano Roosevelts, the George C. Marshalls. There's a list 5,000 times longer but not as well-known of the places and people who weren't willing to change because they died off into the ashes of history. Make sure you're willing to do this and think about it a little bit, because it's coming or it's there. One or the other—who you are today is not who you will be tomorrow if you want to do all the things that are necessary to make your mission more fulfilled.
Don't forget to check out the blogs at Halette Philanthropy, two per week. Things I read, things I see—Halette Philanthropy, 90 seconds. In fact, I've gotten a little bit more feedback saying, "Wow, I hadn't heard that. Wow, I hadn't thought about that." It might be worth it. Haletteflanthropy.com/blogs or just go to Halette Philanthropy. Click on the blogs. Get an RSS feed if you'd like. Also, don't forget to reach out to me at podcasthaletteflanthropy.com. What we're doing every day is critical because—going back to my favorite saying—some people make things happen, some people watch things happen, then there are those who wonder what happened.
What we do today is critical because we are people. Hopefully, you're one of them joining—hopefully me—in this pursuit of being someone who makes something happen. For the people and the places and the organizations and the things that are community that are wondering what happened. At the end of the day, I can't imagine spending my life in any other method where I'm trying to make the world a better place. You are doing the same. Whether you're a board member or CEO, gift officer, CDO, CPO, whatever—it doesn't make a difference. You're someone trying to make things happen. Realize how important that is, the value that it brings, and how even when there's challenges, when there's process change, you're still trying to maintain that institutional direction of the organization.
Sometimes it's painful. What you do every day is a difference maker. Small, big—it doesn't make any difference. It's helping those—the organizations we love—that were wondering what happened, have the supports that's necessary. Thank you for what you do. And thank you for your commitment to our profession. And most importantly, to the community which you serve. I look forward to seeing you the next time, right back here, on the next edition of A Round with Randall. And don't forget—take it a great day.