Steve Zabilski & Rethinking the Overhead Myth

This week on Givers, Doers, & Thinkers, Jeremy Beer sits down with Steve Zabilski, president and CEO of the Virginia G. Piper Charitable Trust, to explore how investing in fundraising and capacity can transform nonprofits. Drawing on his experience leading St. Vincent de Paul in Phoenix, Steve shares how bold bets on development and marketing led to sustained growth for the organization and its programs. 

Let’s go!

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Transcript

SPEAKER_00 0:00

Join us on the next Givers, Doers, and Thinkers as we speak with Steve Zabilski from the Virginia Piper Trust about why givers should invest in the fundraising capabilities of the nonprofits they support. Let's go. And this season, our 10th, we are highlighting some of the most interesting, innovative, and strategic things currently being done by American givers, especially in light of the celebration of America 250, the semi-quincentennial, which is finally upon us. So private philanthropy is, of course, uh an American distinctive and something well worth celebrating. So we're going to be concentrating on that for the next couple of months. And to that end, excited to have with us today Steve Zabilski, president and CEO of the Virginia G. Piper Charitable Trust in Phoenix, Arizona. Before becoming the CEO of Piper, Steve served for 25 years as the CEO of the Society of St. Vincent of Paul's Phoenix Diocesan Council. And before that, he had a corporate career as a senior vice president with Trans-America Insurance Group and audit manager for the accounting firm KPMG. Steve, welcome.

SPEAKER_02 1:31

Oh, I'm honored to be with you, Chair. I mean, thank you for inviting me.

SPEAKER_00 1:35

Given that your um wife is a and her whole family are Purdue people, I am tempted to start this whole podcast with a discussion of where I was last week in Miami watching uh Indiana complete the greatest sports turnaround uh in history. Uh, but I I guess we can leave that off to the side, unless there's something you'd like to say.

SPEAKER_02 1:54

Well, there they're actually very briefly. So I'm a big IU fan. I love Bobby Knight. And I remember when I was flying back to Indiana for the first time with Denise to meet her family. We were seriously, we weren't married, but we were thinking about giving, and she said to me on the plane, very clearly, I just want you to know that if you continue to be an IU fan, this will be a deal breaker. And she wasn't joking. I kind of laughed and she said, No, no, I need you to understand this. I want you to. And so, God bless Bobby Knight. I liked my wife better, my to be wife better. And in the end of stuff, so I converted. I'm a boilermaker today, although I hope my wife isn't watching this.

SPEAKER_00 2:32

Anyway, I did have a couple of my some of my Purdue friends were able to um find within themselves uh the ability to root for IU in that game. But now, I'm sure that was the one-time-only deal, which I totally agree. Yeah. Look, we're gonna talk about the giving that Piper does. Piper's one of the largest foundations in the in the Southwest, one of the two or three largest in Arizona. But as context for that, we need to kind of go back to your experience in the nonprofit world and maybe even a little bit in the corporate world, because I know that's shaped decisively how you look at giving. Let's start with St. Vincent de Paul in Phoenix, now the largest or second largest SVDP council in the world. You got there in what, 2003 or so? 1996. Oh, earlier than that, 96, I'm sorry. And so it wasn't the biggest or second biggest council uh in the world at that time. What was it? What was St. Vincent de Paul doing? Tell people who don't know. And um, and what was it like when you got there in 1996?

SPEAKER_02 3:33

Well, it was a wonderful organization. It really it really was. And and the focus really primarily was on the work of our 80 food pantries, our conferences in St. Vincent of Paul makes home visits, they deliver food boxes, say hey, they help people with rent and utilities and so forth. And the organization was raising literally a million dollars a year from individuals, and then a little bit more, a little bit more from businesses. And over the course of the year, the the board of directors, to their great credit, wanted to grow the organization. And so we embarked upon that journey.

SPEAKER_00 4:07

You you built it up. Uh, first of all, by the way, you say your conferences, you mean the uh groups of St. Fitz and Apollo. Chapters that are parish-based, yes, in the parishes.

SPEAKER_02 4:16

So there were 80 churches throughout the state where we had a food pantry and people would, the volunteers there would deliver food boxes and help people with rent and utilities and so forth.

SPEAKER_00 4:27

It's a wonderful model uh for people who anybody that's actually listening to this podcast before knows that uh I've talked about it in the past because it's a very um personal model, very face-to-face model for how one can bring uh not it's not just help, it's not just material goods to those in need, but relationship to those in need.

SPEAKER_02 4:47

It's friendship and fellowship and real support.

SPEAKER_00 4:50

Yeah. So you, you know, you came from the corporate world. You had what was your goal in those years? Just to keep the lights on? Were you hoping to build it up quickly? What were you learning how to Well in the early years?

SPEAKER_02 5:03

I'm not sure I knew what I was doing. And so it was. People would say to me early on, you know, so what's the long-term plan? And I would look at them. And so sometimes I would say, oh, the long-term plan, we want to grow the bubble. But sometimes I would say I remember this more than once, more than twice, saying, Do you really want to know the long-term plan? And they'd say, Yeah, really, really do. I said, I'll tell you, but you can't tell anyone. I said, Okay. And and I'd say, I hope we make payroll on Friday, because we struggle sometimes. I'll I'll never forget our CFO walking in once and saying, Steve, I have a question for you. And I could tell by the tone in his voice that this was some, and I said, sure, what's that? And he said, Um, do you want to pay the employees this week or do you want to pay the rent and the utilities? I said, Well, I'd like to do both. And he'd say, that's not an option, you know. So um, so no, there were some or there were some early challenges. I remember once, prior to I when I got there, the the society had to be bailed out, even by the diocese of Phoenix, and the bishop had to step in and and and fund some money. And he made it very clear, I'm not doing this again. And so we had to run like a business. And like a business, you want to have your revenues exceed your expenses and and so forth. So we were dealing with both the short-term issues of making payroll as well as this idea of we wanted to grow the organization and help more people.

SPEAKER_00 6:20

Common story that many a nonprofit leader is familiar with. I suspect everyone. And you started and you realized, and you had to kind of convince people to invest in fundraising and building a development program.

SPEAKER_02 6:33

I I remember, I remember it was looked at as overhead, and overhead is bad as we all know. We're gonna get to that. Yeah, right. Yeah. And I remember saying to the board, you know, we don't have a development director, and they said, number one, we can't afford one. And to make a long story short, the first development director that I hired, we we gave her the title of special projects. The board was okay with special projects. And I told her, the only special project you have is to raise money. That's your only special. So our first development director was a special projects coordinator manager who reported to me. And that's how we started.

SPEAKER_00 7:10

Yeah. And over time, so you know, in the 15 years until 2011 or so, you made progress. Like you guys, by by the time we get to 2011, which is a data I'm not just picking out of the air, but there's got something key happens at this point. You what built it up to what, maybe six, seven, eight million dollars a year or something. In total.

SPEAKER_02 7:29

In total, yeah. We had we had done, prior to that, we hadn't done direct mail. And so we started doing direct mail. We had never done really an event. We were doing an annual event, a fundraiser, that would help us raise more than a million dollars. And so we did, we did strategically add different components to it, but it wasn't what I would call the big bet or the big investment at the time.

SPEAKER_00 7:49

You were known, you were, you were certainly uh had a good reputation here, but there's only so much a six to eight million dollar or whatever organization.

SPEAKER_02 7:56

We were like many other human service nonprofits, like many other.

SPEAKER_00 8:00

And then something happened. A man named Dan Pallotta happened. Talk about that story of why you were in Philadelphia and uh and what you heard.

SPEAKER_02 8:12

So, our chief executive of the Virginia Piper Trust, her name was Judy Mores, and Judy was an educator. She'd been a university president. She was a big believer in knowledge and knowledge dissemination. And there was a conference by the council on foundations who was in Philadelphia, and she said to the trustees that she was going to attend, and she thought it would be good for us to attend. And you were a trustee of the Piper Trust. I was a trustee, yeah. I was a trustee at the Piper Trust. And so uh a number of us went to the conference, and I'll never forget it was the first day, and there was a speaker. His name was Dan Pilate, he was the luncheon speaker, and I was eating my lunch and I guess sort of paying attention, but I probably was paying more attention to the food than I was to the speaker. But then he started talking about investing in development and this overhead myth and the idea that nonprofits play by a whole different set of rules than for-profit companies. And I could really relate to that. And all of a sudden, I really started paying more and more attention, and my food became less important, and listening to Dan became more important, so much so that that afternoon I had signed up to go to one of the breakout sessions, and it was on like taxation of nonprofit entities. My background is an accountant, and I realized I need to go learn more about Dan Pilata, and I went to his breakout session, and he was transformational. And he had a book called Uncharitable, and I bought the book and I bought several copies of it. Judy Moraz, our CEO, read the book on the way home. I read the book on the way home, and that just changed everything.

SPEAKER_00 9:42

And his main argument, right? Pilata's main argument in the book, and then at the talk you heard at the Council and Foundations was yeah, that that why it was a question, right? Why must nonprofits play by a different set of rules than for-profit companies? And it was the three things I think he picked out. If you tell me if I'm wrong, one was why must they get paid less? Most leaders of nonprofits get paid less. Why must they watch how much they spend? Why is there an arbitrary limit on how much they spend on anything other than programs? Am I missing? Is there a third thing? Yeah, why are they not allowed to spend on advertising and marketing?

SPEAKER_02 10:21

Yeah. I mean, he asked a simple question. Why is Pepsi advertising on TV? Why is General Motors? Why is all the all the companies? Why is Star Wars, why aren't all these companies advertising on TV spending in some cases millions and millions of millions of dollars? Are they either dumb, which they're not, because they're Fortune 100 companies, or do they know something, and i.e., the whole return on investment and so forth? And he said, well, why don't nonprofits do that? The reason we don't do it is because we get criticized. You paid for that ad. I you know, you shouldn't be paying for that. And what's your overhead ratio? And oftentimes people would select a charity. I mean, I was asked this many times, what's your overhead ratio? And you'd say, Oh, it's 8%. Well, I'm going to give to this other nonprofit because they're at 4% or 2% or 1% or and so Dan just said, This is silly. This is just silly. He was attacking the overhead myth. He was. And he was really the first person to do this. And to me, particularly coming from the corporate world, it made so much sense. Why all of a sudden did the rules change for me when I now that I'm not at Trans America or not that now that I'm not at KPMG, why did these rules change? They're no different. We're trying to grow the organization. We want revenues to exceed expenses. We want to do it, we want to do it in an intelligent way, but but if we want to grow, we need to invest. And and it just made so much. And Judy, to her great credit, agreed and said, we need to bring him out to Phoenix. Let's invite Dan Pilata out to Phoenix to speak to our entire board of directors, as well as to nonprofits and other foundations. And Judy set that all up. She invited Dan out, he came, and and it just caught everyone's attention.

SPEAKER_00 12:01

So at this point, the ideas have been tested, but only by himself. He had sort of raised money for like these AIDS rides and breasts. Exactly. Formed a company to do that and raised tons of money, spent a lot of money. Spent a lot of money, raised a lot of money. And got criticized by how much he spent. So he added whatever,$50 million more to breast cancer research, but because he spent$20 million to get there, people lost their minds. Yeah.

SPEAKER_02 12:28

So I mean, literally, literally lost their minds. And as a result, Dan essentially lost his company because there was so much criticism directed at him. How can you do this? How can you just ignore the end results of what Dan likes to say is, well, we can have a lemonade stand and we can get a couple of kids and they'll we'll pay them a dollar and they can sell lemonade and they'll raise$12 for the lemonade. They'll raise$12 for the lemonade stand. Or we can invest in a commercial and it might cost us$50,000. But what if that raises$500,000? Which is better? You want the lemonade stand that raises$12? Or do you want, and Dan would ask those type of questions. And again, I came back to my business. I was a business major in school, but my time in in the private sector, and I go, this makes so much sense. Why are we afraid to do this?

SPEAKER_00 13:14

Unfortunately, it also made sense to your fellow trustees. So it's interesting, uh, Pilato, all of a sudden, he's got a foundation that's really interested in his ideas. And then once to right, you essentially the trustees decided, well, let's test this out.

SPEAKER_02 13:28

That was Judy Moraz coming to the trustees and said, This makes so much sense. And we've now read the book, we've now met with Dan and talked with Dan and so forth. Let's do it. Why don't we select a nonprofit organization and let's hire Dan's firm advertising for humanity, and let's do a multi-year, multi-million dollar grant, and let's see what happens. And um, the rest is history.

SPEAKER_00 13:55

Well, yes, it's history to you, but I'm gonna make you tell it. We got to tell the story because it turned out there were a couple of nonprofits. The last thing anybody wanted was for this to fail. Because they were thinking Judy and the trusty were not thinking small. It wasn't like, we'll test this out with$100,000 or$500,000. Part because Dan was very insistent, I think, on like this has got to be a big bet. This has got to be a, you only move the needle with a big investment here. So you had to choose the right or an organization that could absorb that and that was all in and no questions asked, everybody's aligned. There were two organizations that were the trustees were considering, and then you weren't didn't get to be a part of this, but they ended up choosing St. Vincent de Paul to invest five million dollars in, right, over five years. And not didn't all go to St. Vincent DePaul. Some went to advertising for humanity. Good job.

SPEAKER_02 14:46

Half of it essentially was for advertising for humanity for their services, and the other half was for St. Vincent de Paul to hire some additional staff members and so forth.

SPEAKER_00 14:56

So talk about what it was about. Like I know at first some of the big questions were like, what do we, okay, what do we do with this money? Like you, you know, what do you at the at the big stressful moment? I would feel like, okay, what do we do? We cannot waste this.

SPEAKER_02 15:08

There is a part of me, Jeremy, honestly, I shouldn't say this, but Sethina that said, oh my God, what do they get us into? This, this, this, if this fails, I'm done. And and the whole concept is done. And I may have hurt St. Vincent de Paul in the process. And that was the last thing I wanted to do. But um, so yeah, we were a little bit nervous when the trustees and Judy said, Hey, Steve, guess what? We've selected St. Vincent de Paul. And I went, You what? And we want you to do it, you understand it. We had a good team at St. Vincent DePaul. It was a very small team, but our chief philanthropy officer, Shannon Clancy, was very committed. She understood this intellectually and agreed with it. And our board of directors agreed with it. And I mean, Judy even came and met with our board and talked with our board president, and everyone was, everyone was all in and just said this is a moment in time where we have the opportunity to do something like special.

SPEAKER_00 16:02

Was there a number that anybody ever laid out? Like, okay, because okay, the point we need to make this clear. The point of this investment was to be used for increasing your fundraising. Is it you're gonna be investing in your fundraising department, investing in advertising, investing in a rebrand, investing in marketing, all of that, this overhead. Yeah.

SPEAKER_02 16:22

It wasn't to buy food, it wasn't to buy medicine, it wasn't to pay rents, it wasn't to hire social workers, it wasn't for any of that stuff. It was a concept of if we invest in the development and marketing efforts, will we grow the organization?

SPEAKER_00 16:37

Was there a goal that you were ever told or had in mind that you needed to get we all acknowledged we weren't smart enough to know.

SPEAKER_02 16:44

But the goal was to significantly increase revenues, whether that was to if you went from eight to eight point five a year. Yeah, that probably, let's be honest, if you're investing five million, you want to make at least five million. At least. That way you did kind of did no harm. You know, the omega did no harm and so forth. But I think we were all thinking bigger than that. Now, whether it would be six or seven or eight or ten or twelve or fifteen, we didn't know. We this hadn't been done before. And and we didn't want to pretend that, oh, we know this, but we wanted it to be a significant uh increase over time. And uh, and it took it took some time, you know, to hire people and get them on board and to expand these programs. You just don't put a marketing together plan overnight. We didn't have an ad the next day and so forth. So it took a number of years, but every single year, starting with the year of the investment, we saw increased revenues and pretty significant increase in revenues, particularly in you know, years three and four and five, when it allowed us to have staff on board, staff trained, getting our name out in the community, much more so than we had building relationships. I mean, relationships take time. You just don't call someone up and go, hi, I'm Steve with St. Vincent of Paul. You want to give us a million dollars?

SPEAKER_00 17:56

What were the key factors? I know that just looking at this research the other day. After five years, I think you were already able to report something like a 700, you'd already you had a marginal increase of like$36 million or something like that. And money coming into St. Vincent de Paul, kind of thanks to this$5 million this investment. What were the key factors? First of all, there was this incredible rebrand. I think that was part, that was a key factor, right?

SPEAKER_02 18:24

That was huge. I mean, having advertising for humanity at our side, walking us through this, the rebrand was huge, how we presented ourselves. I mean, they did focus groups, you know, they listened to people, what's St. Vincent of Paul's perception in the community, and then helped us to really tell our story in a different way to new audiences, to have a website that really speaks to people, to get involved with social media, and we added to staff. I mean, we added development officers and people on our team. We did plan giving, we did estates and trusts, we did major giving, all the things we hadn't done before because we just couldn't afford it. And now all of a sudden we're doing all of this. And so it went from literally, you know, just a couple of people to like a symphony of people.

SPEAKER_01 19:12

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SPEAKER_00 19:42

So you're just able to build more relationships in the community and among your donors. With that, along with the rebrand, but everybody should know. Feed, clothe, house, heel was the tagline that was come up with, which is this this unbelievably succinct and beautiful. You know, and each of those words has a different color associated with it. It just ramified into everything St. Fitzball did.

SPEAKER_02 20:02

I mean, it was lovely. You would have thought this was done by like Pepsi or Coke or I mean it was that good. The other thing that that was part of this, Jeremy, that that was impressed upon me is that in my role as the CEO, I had to pretty much delegate so many of my day-to-day responsibilities. It was a little bit hard for me because I came up as an operations person. You know, I liked the business side of it. I like the leases, I like the uh accounting, I like the finance. I was just an I was comfortable with that. Fundraising, I wasn't a trained fundraiser and so forth, but but Dan really impressed upon me, Steve, major donors are gonna want to meet with the CEO. They want to get to know you, they want to understand your vision, they want to understand where the organization's going. And you've got to take all this other stuff off your schedule and leave that to others. And I really, I had to learn how to delegate without advocating. I mean, I mean, I was still CEO and I couldn't advocate my responsibility as CEO, but I had to understand that I didn't need to be at the HR meeting. I didn't need to be at the meeting on the new trucks, I didn't need to be at the meeting on how we're gonna do the lease. I needed to be with donors.

SPEAKER_00 21:12

And yeah, you needed to be with donors, and even with you were able to, I think you tell me if I'm wrong, but I think largely because of the size of the bet that you were making on yourselves, this kind of huge, risky proposition you were doing, and what it promised to potentially end up doing, you were able to put together an advisory council of these really heavy hitters for lack of a better term, people who had a lot of experience in business, former CEO of Pepsi to go back to right, a Walton. That had to be part of the magic, too.

SPEAKER_02 21:46

It was huge. No, it was huge. It was absolutely huge. Our board is a wonderful board of directors, but they were not fundraisers. They were not fun. And the couple of times that I tried to impress upon them to To become fundraisers, they said, Steve, that's why we hired you. And they just weren't our board, they literally were involved in the day-to-day operation. They would do home visits, they'd work in the dining room, and they were true servants of the poor, but they weren't fundraisers. And so we realized early on again that we're going to need some help. I mean, I'm one person, I'm not a very good fundraiser. And so we enlisted uh Craig Weatherup, who had been the worldwide CEO of Pepsi. He was chairman of the board of Starbucks at the time. And Craig was able to bring in many of his business contacts. Like you said, Melanie Walton was one of the people, the head of our largest utility, many of the people who were the movers and shakers in Phoenix, who I had gotten to know over the years, who Craig knew, who really liked our organization, didn't know we were doing this, and were really intrigued by it. And they helped us to raise millions of dollars. Just as an example, there was one individual who had come to our event every year, and they'd give us a check for$1,000. When Melanie Walton invited them to the event to sit at her table, they wrote us a check for$100,000. Same individual, essentially the same event, but the fact that they were invited by Melanie Walton, they sat at Melanie Walton's table, and all of a sudden the gift went up a hundredfold. And you know, those are the types of things that we just didn't imagine that. But you realize it's the power of relationships. It's the power of reaching out, telling a story at our event, and then asking. We we talked a lot about creating a culture of philanthropy and how important that was, not just for the development people, but for everyone.

SPEAKER_00 23:43

Well, and so to the point of what um we're gonna get to here, what you're doing with as a CEO of the Virginia Piper Trust now, uh yourself. That all that was spurred by this major investment of a funder into your capacity.

SPEAKER_02 23:55

Yeah. 100%. 100%. Just go back a few years earlier, and I'm hiring a special gifts, special projects person to do our fundraising, because I can't even call them a fundraiser. You know, so you I mean, you look at it, you this is a significant transition in a short period of time.

SPEAKER_00 24:11

It changed the entire calculus, it changed the entire way the organization thought about itself and therefore changed the way others outside the organization thought about the organization.

SPEAKER_02 24:18

Had we had we not been in Philadelphia that day, had Judy Moraz not had the vision of bringing Dan in and then and then testing this, none of this would have been none of this. We would have been fine-tuning the edges. Maybe we would have added one additional development person a couple years later, something like you know, but nothing like this.

SPEAKER_00 24:35

Aaron Powell So instead, your your your fundraising staff expanded dramatically, um, your your marketing staff uh expanded, you have a new rebrand, you got all these new relationships. Uh you're able to show Piper that there's this really good ROI. And then they did it again.

SPEAKER_02 24:50

Aaron Powell The question became, and I think it was a fair question, everybody acknowledged this was extraordinarily successful. Everyone acknowledged that. So the question is, is this the ceiling? Or did we just go find some low-hanging fruit that anyone could have done? Did we get lucky and so forth? Or can we take this to a whole nother level? And we didn't know the answer. We really did not know the answer to that. But again, the Piper Trust and their great wisdom and their risk taking, they were willing to take a risk. You know, they just didn't want to play it safe, um, said, let's find out and let's do it again. And they did it a second time. And the numbers just continued to grow and to grow to where St. Vincent de Paul is today.

SPEAKER_00 25:33

Today would be, do you know what sort of annual uh fundraising would be today for?

SPEAKER_02 25:38

Oh, well, if you take into account the entire organization, it's increased by a factor. Uh it's probably sixty million dollars north of that, even north of that, if you if you were to encounter all of everything. And again, this is an organization that just a few years earlier had been raising a fract a tiny fraction.

SPEAKER_00 25:53

Aaron Powell A fraction of that. Another very big human services organization to be uh raising that much money today.

SPEAKER_02 25:59

Aaron Powell Oh, huge. Especially again, Kimek, just a few years earlier, we weren't doing anything. No events, no direct mail, a special projects person who was the only person trying to raise money. I didn't raise any money. I was busy doing the budget or, you know, some accounting stuff. And it just it changed the whole culture.

SPEAKER_00 26:16

Aaron Powell And the results, of course, is we're just talking about the money because this is a podcast about philanthropy, but also about civil society. The result has been the housing you're able to provide as at St. Vincent de Paul. I say you, it's not you anymore. Um, but St. Vincent de Paul is able to provide as well.

SPEAKER_02 26:30

We've gone from 30 people housing to hundreds, hundreds of people housing, from a few thousand meals to 7,000 meals a day, every day. The million, millions of dollars that we pay in rental, in utility assistance to prevent homelessness.

SPEAKER_00 26:48

I think I just saw some numbers on this from 2025. It was like 10,000 people prevented from becoming homeless. Might have been more than that.

SPEAKER_02 26:55

Yeah. The only thing that's the same is the name of the organization, other than it's completely transparent.

SPEAKER_00 27:00

Yeah, that's my point. The money, money all ramifies into this much greater impact in the community. Lord knows it's needed. It's needed everywhere today. Well, what happened was, um, I'm sure to your surprise, as much as to everyone else's, you end up becoming the CEO of the Piper Trust yourself. You've been there since 2023. You made an early decision to make investment in fundraising capacity a major focus. Talk about that at Piper and why you went in that direction and what you've been learning about that kind of grant making, whether anybody else is doing it, all that.

SPEAKER_02 27:34

Well, the latter question is anyone else doing it? Not very many. It's you don't find a lot of organizations who stand up and say, we want to fund your capacity building efforts, we want to fund your fund. You just don't hear that very often. I won't say no one does it, but I'm not sure I could tell you who the other people are. I guess there's a couple who do it at a limited basis. And I saw the success of this, and our trustees saw the success of this, and we concluded that there was nothing that was, quote, unique about St. Vincent de Paul that said, well, it'll work here, but it won't work elsewhere. Now, you do have to have certain things in place. You have to have a CEO that wants to do this, you have to have a board of directors that says, yes, we're all in on this and we want to be part of this, because it is a little bit hard. Sometimes people are going to say, why are you spending half a million dollars on commercials? You know, we should be buying food or we should be doing. And that's, I guess, a fair question. But the answer needs to be because we think this half million dollars or whatever the number is will increase by a factor of five or a factor of six or a factor of eight, whatever, whatever it is. And so you have to have some courage. It's, you know, it's one of those things you could lose your job over if this doesn't work. All of a sudden you come in one day and they go, that was a dumb idea, and we don't need you anymore. So you have to find an organization that are willing to do this. But at the trust, we said, let's find some of these organizations who want to do this, and let's do this again and again and again. And today it's one of the largest components of our fundraising in all of our core areas. We have we have we have different core areas that we fund arts and culture, we fund education, we fund healthcare, we find, we fund children, we fund older adults. But in every single one of those instances, we say, would you like us? Let's talk about funding the capacity building efforts of your organization versus just giving you money for whatever, whatever your mission is. And so um we're happy to do that, and we're seeing some good results. I mean, it's a lot of work and it does take time. It does take patience.

SPEAKER_00 29:27

You really are unique. And I've been trying to find other foundations who do more than just a little bit of this, and it's it's not easy to find, despite the success that you saw with just this kind of investment. And um, to be fair, you guys, Piper hasn't made that size of investment again in anybody else yet to this point.

SPEAKER_02 29:46

Not at that level with a single organization, but we've been investing millions of dollars in this effort just among different organizations. And to be honest, Jeremy, to be honest, if you were to ask me or if someone were to ask me, why would you make any grant other than a capacity building grant? Why would you make a grant to go buy a you know a new building or anything? I I'm not sure I could answer that. I mean, if you really believe in the theory, if you really believe in it, and if you see that it's successful, you're right. I I can help you by giving you some some food, or I can help you by giving you the ability to raise money to buy 10 times that amount of food. Trevor Burrus, Jr.

SPEAKER_00 30:24

What you're saying, Steve, that's uh the more money you spend on programs, the less money you have to spend on programs, the more money you spend on fundraising, the more money you have to spend on programs. Exactly right.

SPEAKER_02 30:36

No, it's exactly right. When you spend money on programs, it's gone. It's gone. Now, no one's saying it did it did anything poorly, but it's gone. You know, you bought food, you bought medicine, you hired a person, whatever it is, pay rent. But if you invested in development, that gives you more money to do it. And um, no, I I I believe that. You know, money spent on programs is is gone. Money spent on capacity building is increasing. So to us, we believe it.

SPEAKER_00 31:01

We'll get back to how you're doing it here in a second by just I haven't even shared these numbers with you, Steve, but uh I saw Russell James post some research the other day. This actually is from a few months ago, but I had not seen it. He did a pretty fancy study, econometric study, very academic study on how much more money does each additional fundraising dollar generate. And for secular charities, he found that each additional fundraising dollar generates uh six to seven dollars and additional contributions for secular charities, nine dollars for Christian uh charities, and then actually$14 for Muslim organizations. That's just proof of your um of your theory that there's uh it's nice to have some academic research to show this. You know, every dollar in is generating six to ten dollars more for the organization. You know, why wouldn't you why wouldn't you do that if you drove that ratio down quite a bit? Exactly.

SPEAKER_02 32:01

I would no that's right, that's right. You don't see that anywhere else in in in philanthropy, those type of returns. So if we're trying to be effective in what we do, why wouldn't we do more and more and more of this? Why wouldn't we? And uh our trustees, again, to their great credit, are very much on board with this. They love it that we're doing this, they love it that we're talking about it, we're lifting up this whole concept, this whole idea. And um, we think it's making a difference in the community. We know it's making a difference.

SPEAKER_00 32:34

Now, one of the things you do besides making grants that are um directed toward increasing a grantee's fundraising abilities, you also do some other things to support them in this way, which is leadership development, coaching, classes. Talk about that kind of stuff.

SPEAKER_02 32:51

We have a couple of different things. We have a thing called Piper Academies where we bring in outside speakers and they're typically day-long training sessions, sometimes two-day, multiple-day training sessions. We talk about a whole host of different issues, board training, governance, development, so forth. And then we've established a relatively new thing called Piper Conversations, which are much shorter. It's a two and a half, three-hour type presentation. Maybe we might have a hundred nonprofits in the room, and we talk about a particular subject. And fundraising and development and marketing has been key in this. Again, the whole idea of educating people, educating board members, educating leaders of nonprofits, that um this might work. This can work, this will work if you do it in a strategic type manner. And so you're right. It just our our money is limited. Our money is we only have a certain amount of money and so forth. But this whole knowledge dissemination, it goes back to our founding CEO, Judy Mora. As I mentioned, she was a university president. She just believes in that education can really do more for an organization, frankly, than even some limited funding that we prefer.

SPEAKER_00 33:57

What are some of the things you've seen that are determinants of failure in this regard? That you've seen, okay, now I really see, or I wouldn't even never make a grant, or if I made a grant before, I wouldn't do it again. I'm thinking of other funders here, right? They can learn something from it. Hey, I want to invest in an organization, this organization over here, I'd love to see them go from a million to five million. Because what they're doing is important. But what should I, what are some red flags if I see them like, eh, maybe it's not gonna be a good investment?

SPEAKER_02 34:25

Many organizations, they want the money. You know, so if a funder comes and says, hey, I've got some money for you, you know, you, oh, we can do that, we can do that. But the reality is, do they really get it? Are they really on board? Because it's not gonna happen overnight. And I can promise any CEO that three months into it, six months into it, nine months into it, someone on their board or members of the board is gonna say, Why are we investing this money? And why are we you have to have the courage of your convictions and the confidence of it? It is, in some respects, a bet your job type effort. I mean, it really can be. If it doesn't work and you've been spending all this money and you know you don't have anything to show for it, someone's gonna say, you know what, maybe you're not the right person to lead this organization. So I think first and foremost, you have to know that you've got a senior leadership team, a CEO and a philanthropy officer and a board president, and so forth, that really get this and want to do it because it's gonna take time. It won't happen overnight. That to me is the biggest thing. Then you just have to be willing to learn and invest and to I talk about change, a culture of philanthropy. You know, you've got to be willing to the CEO has got to be willing to give up some of their day-to-day junk, administrative stuff, and get out there and tell the story, not be afraid to ask. And then the last thing, Jeremy, I think, is you can't say thank you enough. I probably signed 10,000 thank you letters a year. 10,000 a year. And not only do I sign them, I wrote a personal note on everyone. Personal note. Now, sometimes the note was simply, thank you, Jeremy, so much for your continued support. But everyone I personally signed, and I'll never forget. After doing this for years, I would sometimes wake up and go, you know what, I'm too busy. I can't, I can't sign. I'm not gonna do this anymore. It's just not and then somebody, I swear, Jeremy, that day would say, Thank you so much for your personal note. I just sent in another donation. Or I would come home that night, my wife would say, Oh, I was with Sally today. She loved that note that you wrote to her. I and I would go, darn, I now I can't quit doing it.

SPEAKER_00 36:32

It means so much to people. It really does. Expression of gratitude. I mean, that's what No, it does. It does.

SPEAKER_02 36:38

It really does. People want to feel important. They want to feel connected to your mission. If they're going to give you money, it means they believe in you. And you want them to know that they are making a difference. They are part of this effort, they are part of this mission, they're part of this team. I used to take thank you letters with me everywhere. Everywhere I went on vacation, I'd bring a stack of thank you letters. I'd go to my kids' baseball games, I'd bring thank you letters. I'd go to the diamondback games. I'm signing thank you letters while I'm watching the diamondback game. I got in trouble one year. I was at the Easter Vigil, and my wife and I got there an hour early. I got there an hour to get a seat, and I had thank you letters, and I'm sitting in the pew in church at St. Thomas, and I'm signing, and my wife looks at me and goes, What are you doing? And I said, Well, I'm signing some thank you letters. She goes, No, you're not. Yeah, you know, we are in church, you know. The Easter vigil is. I said, Denise, I don't think God is gonna. She goes, You are not signing. You know, it's like close the folder, set it down. You know, and I just, I guess I said some prayers, or hopefully I said some prayers. She's right. There are worse things you could have been doing, but I'm sure she's yes, she's right. But uh, I don't want to get in any more trouble. But but but you have to make, you have to, Jeremy, make the donor feel special. Because let's be honest, most donors they don't contribute to just one organization. They might contribute to two or three or five, maybe their university, maybe a hospital, you know. And if you make them feel special more than the others, they're just gonna lean into you. They they will lean into you. If you just send them a form letter with a hand in printed whatever, you know, signature or something, I I that that that doesn't make anybody feel special.

SPEAKER_00 38:13

It's almost like if you were gonna make one very targeted investment in somebody's fundraising capacity, just targeting your investment at increasing their capacity to show gratitude would probably be the first thing you'd want to invest in.

SPEAKER_02 38:24

I would submit that if you never got one additional new donor, you can double, triple, quadruple your revenue by making your existing donors feel special, important, and acknowledging them and thanking them and having coffee with them and going to their house and sending them unsolicited handwritten notes just saying, Jeremy, I was thinking of you and Kara today and all you've done for St. Vincent de Paul. And I just want you to know blah, blah, blah, blah, blah. It just if you did nothing but but that, nothing but that. I'm not even talking about rebranding or anything, you would significantly, and it's an important thing, but it took a lot of time. And I want to make sure that the leaders of the organization get that and understand.

SPEAKER_00 39:05

What advice would you have? Two more questions for you, and I'm gonna let you go. What advice would you have for other funders? Um uh you've gone in, Piper's gone into this kind of grant making, very unique, very strategic, very innovative, uh, in a pretty big way. Would you advise, uh, what would be your advice if I come to you and say, hey, should we do this too?

SPEAKER_02 39:24

What should we do? Take any organization that you fund, if you're a foundation or any, take any organization that you already, that you like that you fund, you like the leaders, you like the mission, you like the organization. And then ask yourself, are they at capacity? Are they doing everything possible? Are they strategically, are they doing everything they can? Or is there the ability for the organization to do more? Now, now maybe they're gonna say they're only saying, we don't want to grow. Okay, that's fair enough. Fair enough. That's good to know. Good to know. But to the extent that you say, I like this organization, I like their mission, I like their vision, I like their leadership, I like their results, I'd like to see it grow. What better way would there be to help that organization grow than to say, I want to invest in your marketing and fundraising and development efforts so that you then can go out and do these things that we've been talking about, creating this culture of philanthropy, telling your story, asking, asking, saying thank you seven times, seven times for every gift. And and why wouldn't you want to do that? Why wouldn't you? I mean, assuming you want to be effective, every foundation, every business who makes a grant, every person that makes it wants to be effective. Nobody wants to make a grant and go, well, that didn't really work out. Why wouldn't you do that? Why think about that? Just think about that. Why wouldn't you do that? I'd encourage them to read Dan Pilato's book, Uncharitable. I'd encourage them to watch his TED talk 17 minutes or so. I mean, it'sn't, you don't have to go get an MBA or something just to watch a 17-minute TED talk. And then ask yourselves, is there some reason that this wouldn't apply in the world that we live in? I'd be hard pressed to think that it wouldn't. Now, I would be the first to acknowledge not every organization is ready for it. And you might determine that, you know, the organization doesn't really want to grow or wants to only that's fine, that's fair, but I'll bet you some of them do.

SPEAKER_00 41:13

Yeah, that's right. And that that leads me to my my last question, which is uh the reverse. Like, what I'm a nonprofit leader listening to this, and like, man, I want to grow. We got big vision. We think we have the team, we've got an urgent strategic mission. How do I start a conversation with a potential funder around this?

SPEAKER_02 41:36

That's a good question. So I would it would depend on the funder, you know, somebody that understands risk, reward, maybe business, the whole concept of investing. Not that you have to have been a business. I'm not saying that, but certainly if somebody had been a business person or or understood that concept of investing in the business, that would be helpful. I'd encourage them to watch Dan Pilates' TED Talk. I th I th I think it's transformational. I mean, I think it's transformational. I've probably watched it, I've probably watched it a hundred times. I watched it the other day. I hadn't seen it in three months, and I think I was as excited watching it for the hundredth time as I was for the first time. It just reinvigorates you. And then I think you can find donors, whether it's a foundation or an individual, or even your own board might say, let's take something out of our reserves and let's do this. So I think there's many different avenues and try it. You know, you don't have to do a$5 million rebranding effort. You don't have to. You can simply say, let's hire a couple of development people, let's go out and let's make sure that we tell our story and ask. The money's not going to just walk in the door. You have to be able to tell an inspiring story, create the vision, and then ask people to be part of it. Some are going to say no. That's fine. Although I tell you what I've learned. Sometimes when they say no, then they get the direct mail piece three months later and they go, Yeah, that's right. Steve was talking about this. St. Vincent Paul does this at all. Or at the year end when they're thinking about their donations and guess what? You're on that list. And so a lot of times a no is not really a no. It's a not today. Yeah, not now. Show me more. It's a show me more. Tell me your theories. Yeah. Yeah. So so I think, I really do think that any organization, any nonprofit has the ability to do this. Maybe not at this multi-million dollar level, but but start smaller, then you'd be surprised at how quickly I think you can't.

SPEAKER_00 43:29

The big takeaway here is you're underinvested. Most nonprofits are underinvested in their own ability to grow.

SPEAKER_02 43:36

So you've heard me say this before, and I carry it with me. I have a Wall Street Journal article that was published in 2018. It's about the University of Michigan. And it says in the article that the University of Michigan has 550 people in their development department. I was sitting there going, I had two. And we actually had a donor who was a graduate of the university. Of Michigan and was telling me all the great things the University of Michigan did, you know, reaching out to him. And this I marvel at about that article is they didn't go from one person to 550 people in a single day. Obviously, the University of Michigan's been around a long time. But even when they were at 400 people, they didn't stop. The president of the university didn't stop. The chief philanthropist didn't stop. They said, We need to go to 450. And they got to 450, they said, we need to go to 500. And I could just imagine walking into the budget meeting, you know, and the philanthropy officer saying, I want to add another 25 people to staff. And then someone says, Well, you already have 500. He goes, I know, but we're going to make more money. We're going to raise more money. And again, that only doesn't apply to the University of Michigan. I think that applies to every single organization, large and small. If you do it well, if you really are, if you really are invested in it, if all you're going to do is say, I'm going to take the money, I'm going to do everything the same, I'll hire some grant writer and let her or him. That's not going to be a good question.

SPEAKER_00 44:57

That's right. Yeah, it's got it's all in commitment doing things well. We're presuming that much, but presuming that, keep going. Keep going. Steve, thanks for sharing your wisdom and insights on this today. Really appreciate it.

SPEAKER_02 45:11

It's my pleasure to be with you, Jeremy. And and hopefully the things that I've learned over the years. If if I can learn it, anyone can learn. I was I wasn't a nonprofit person when I came to the organization. So uh, but it was a great blessing. So I'm happy to share the story.

SPEAKER_00 45:27

Steve Zabilski, CEO of the Virginia G Piper Charitable Trust. Thanks so much. Thank you. Thank you very much. Hey, thanks for listening to this episode in what is going to be the last season of the Givers, Doers, and Thinkers Podcast. Nevertheless, I invite you to like and follow us on Apple Podcasts, Spotify, and YouTube. And as always, if you want to learn more, check out mvil.com. Thanks.