Inside one of the world’s greatest fundraising operations

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1:18I will tell you, I sweated to the whole thing. I died and I know my board asked me lots of questions. Are you sure you want to do this? And I had asked a lot of questions about risk. The risk that the mission would go wrong or the risk that you couldn't raise the money to match it? Where was the risk for you in this? All of the above. I mean, the risk was about life. Rick Shadiak is no stranger to high stakes. As the head of ALSAC, the fundraising organization for St. Jude Children's Research Hospital, every dollar he raised helps save patients, support families, and find cures. On this particularly sweaty day, Rick was watching a brave group, including a former St.

2:00Jude patient, get launched into space to inspire more donations. This space mission was one of the countless scroll-stopping media efforts Rick used to get more attention for St. Jude and how he achieved the astronomical fundraising number of$2.7 billion in one year. if you look at the data and the data is telling you a story if you believe in that story then you make investments that way as data got better and better we said this is not hard guys we have to meet people where they are where are they they're on tiktok they're on instagram and you know well people will laugh at this people still watch cnn especially people of my generation okay And they will respond to direct response television ads.

2:54So let's think about who our target audiences are. The CNN audience is very different than the TikTok audience, obviously. But again, let's meet people where they are. You've got to have incredible talent at every position. It's like this huge push. There are fires burning when you're going out. Can you believe it? Such an idiot. And then you go back to, this is totally going to be amazing. There are so many easy ways. I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Oops. Working out of a three-bedroom apartment. Stuff that just seems absolutely nut balls. Ten years later, we're like, well, that's just how you do it.

3:31We haven't made it just how you do it.

3:36This is Masters of Scale.

3:42I'm Jeff Berman, your host. This week on the show, recently retired CEO Rick Shadiak Jr. reveals how he transformed the ALSAC fundraising organization into a data-driven, media-savvy powerhouse. It fuels the growing global mission of St. Jude Children's Research Hospital in Memphis, Tennessee. This is a conversation full of inspiration and actionable insights for anyone who wants to scale their ability to both do well and do good. Rick, welcome to Masters of Scale. Thank you for having me, Jeff. I'm thrilled to have you. I've been looking forward to this conversation for a long time. And my guess is that most of our audience is familiar with St.

4:32Jude's, but my guess is also a lot of them don't really know what St. Jude's is and does. So can you just give us an overview of what St. Jude's is? Sure. So St. Jude Children's Research Hospital leads the way the world understands, treats, and defeats childhood cancer. It's that special place where doctors all across the United States and literally the world send their toughest cases for kids with cancer and other catastrophic diseases. It's a very unique place, Jeff, because no family will ever receive a bill from St. Jude, not for treatment, travel, housing, or food, because we want mom and dad to focus on helping their child survive cancer.

5:06But our name is intentional. Notice we're not St. Jude Children's Hospital or St. Jude Children's Research Hospital. So about 50 % of what we do is dedicated to finding cures for kids with cancer and other catastrophic diseases. Most people don't know this, but the cure for leukemia, acute lymphoblastic leukemia, was discovered at St. Jude Children's Research Hospital in the 1970s. So it's an amazing place. The other interesting part of this is I am not the CEO of St. Jude Children's Research Hospital. I'm the CEO of what's called ALSAC, which stands for American-Lebanese-Syrian-Associated Charities.

5:40And Danny Thomas, who was the founder of St. Jude Children's Research Hospital, was Lebanese. And you have to go all the way back to the 1930s, and he was down on his luck, and he made a prayer to St. Jude, who's the patron saint of hopeless cases, and he basically said, should I get a real job or should I pursue my passion, which is comedy? And truth be known, he got a job the very next day as a singing toothbrush on the radio. Yeah, folks, they didn't have TV back in those days, okay? Got enough money to pay for his wife's medical bill. She was pregnant with what would turn out to be Marlo Thomas.

6:16And then Danny Thomas remembered his pledge. He formed American Lebanese Syrian Associated Charities for the sole purpose to build St. Jude Children's Research Hospital. And now that we built it, we've actually grown it substantially. And we are responsible for maintaining it, meaning that for about 89 % of all of the operating and capital costs of St. Jude have to be raised from the public. So ALSAC is solely responsible for raising that money. We exist for no other reason other than to raise the money to support and capitalize St. Jude. Rick, it's an incredible backstory. How did it scale? What was the founding vision and then how did it evolve over time?

6:52Yeah. So you have to go back to 1957, which is when ALSAC was actually formed, okay? Because ALSAC needed to raise the money to build St. Jude Children's Research Hospital. They opened their doors on February 4, 1962. So it took about five years to raise the money. The interesting part is they raised enough money to build it, but they didn't raise enough money to operate it. Okay. So some of the very early founders were actually writing checks out of their own checkbook to keep the operations going at the institution. Jeff, I'm proud to tell you one of those persons was my father. Now he wasn't one of the ones writing the checks because he was a department of justice lawyer.

7:24They didn't make a lot of money. They still don't make a lot of money, but dad was one of the early founders. And then there were several CEOs. You And I want to give my father a lot of credit because he was a CEO there for about 13 years. And I think he really professionalized the organization. But during the Great Recession, that was when I started. And we decided to do a few things very, very differently than we had done in the past. My background is as a lawyer. So, you know, I needed to learn how to be a CEO. So what I really wanted to do is early on, I attached myself to some of the best brains in the whole world.

7:55I then went out to Google and to Facebook, and they embraced St. Jude Children's Research Hospital. And, you know, I learned from them. This one piece of advice that I got from our friends at Google that said, Rick, you guys have got to get outside your rivers of thinking. In philanthropy, everybody kind of just does the same thing. Do something different. The fact that you're even here tells us that you're probably going to think differently. Rick, before we get to your move into the CEO seat and your journey and how you've evolved the organization, Just if you would take us from 1957, we're going to do this, raise capital, open in 62, but have no funding for operations to what you inherited in 2009.

8:35Yeah. You know, I would go back to say, why was St. Jude Children's Research Hospital put in Memphis, Tennessee? And, you know, I think that's part of what underlays the beauty of this mission. So folks, for those of you that don't remember the 50s and the 60s, Memphis, Tennessee and much of the South was segregated. Kids who look different than you and I, Jeff, black children throughout the South are literally being turned away from hospitals simply because of the color of their skin. Okay. Our founder, Danny Thomas, and that first generation said that's completely unacceptable. He chose to put it in a segregated city.

9:10He chose to open the doors from day one to kids of all races, creeds, and religions. and he took the economics completely out of the equation because everybody was going to get treated the same, whether you were the richest person from Saudi Arabia or the poorest person from the heart of the South. And that's been our ethos. Now, he got a lot of pushback. I mean, the early designs of St. Jude, he got in trouble for not having separate bathrooms and separate water fountains. Yeah, folks, that was the reality. Unfortunately, I think we sometimes forget that wasn't that long ago. So slowly but surely, the organization was starting to build.

9:44And then in the 1970s, this amazing doctor, the first CEO of St. Jude, Dr. Donald Pinkle, who came from New York, okay, he found the cure for leukemia. And what did that mean? It meant that more than 50 % of the kids who were being diagnosed were actually surviving childhood cancer. So it was a remarkable discovery. And I think that set us on the path to just absolutely tremendous success. and then kids started coming from all across the United States because of the uniqueness of what we offered. We struggled for a long time. I mean, we had debt and we raised barely enough money in some years, probably not enough in other years.

10:23So you came in in 2009 after a storied career as a lawyer. How did you come in and start working with the team to define where you were going to go during your tenure? Well, the first thing I had to do was to lay out kind of an operating vision. So I I worked with our board on this, and I said, guys, what do you want here? Do you want to run this mission for the long term, or do you want to try to extract every possible dollar out of this? What does that mean? Okay, so when people come to St. Jude's, a typical kid that has cancer, they're with us for two and a half to three years. And on top of that, okay, we treat these kids for life.

11:01So I said to the board, look, we've got to think about how we're going to fund this mission, not just for one year, two years, three years, but for decades into the future. If we're going to fund research that you all are telling me, you very bright scientists, I'm just a dumb lawyer, okay? If you guys are telling me these are going to be 10 to 15, 20-year projects, okay? This is running an organization for the long term. You need to let me invest back in this organization, okay? And the board ultimately agreed that we were operating for the long term. So what that meant was that I was able to make investments.

11:36We always had a budget. I had to meet that budget, okay? I had to keep the cost down. But if I was particularly efficient in a year, I would then go back to the board and say, I want to make some additional investments to drive more revenue longer term. So we went in on direct mail and also direct response television. and we just grew exponentially as a result of that, acquiring new supporters, getting our mission out. We invested in marketing. We didn't have a chief marketing officer at St. Jude Children's Research. Yeah, I'm guessing most people don't think about not-for-profits as needing a marketing function.

12:11So you all didn't actually even have a CMO at the time. We did not. And I said, this is not gonna work. I've seen the power of storytelling. I said, we have to invest in it. We've got amazing stories. Look at these kids. They're young kids and look at how courageous they are, tenacious that they are. These are amazing kids. People will relate to them and want to help them. So I hired an amazing chief marketing officer. It's one thing to understand the power of storytelling. It's another thing to understand what direct marketing is, how it works, what's going to be effective for you. How did you get smart about it?

12:45I did something that most people, when I've told other for-profit CEOs about it, they're like, you did what? And I was like, well, I made everybody in the organization not only responsible for revenue, but for our brand goals. It's amazing to me that more organizations don't work this way. How did you see that that was something that you needed to do? Well, I saw that we were operating in silos and I don't like silos. OK, so the way to get out of the silos was, hey, if you're responsible for both brand and revenue, you guys have got to work together and you've got to cooperate. And we just kept building and building and building and it worked.

13:17Were there moments where you saw something click, where you're like, that's what I'm talking about, that's what I want to see? Well, yeah, you know, especially as we march through time, performance marketing will tell you how often were you getting calls, how often were people hitting the website, how effective was your email, how effective was social. Did that TikTok video actually generate any revenue or is it just cute? It was measurable, right? And you would see the upticks. You know, and there's different reasons for doing things, right? Sometimes you are creating awareness. Sometimes all you're trying to do is get an email address, right?

13:51So it really depends upon what your marketing goal is. And then there are bigger campaigns that go off the charts too, which we can talk about, like when we made a really important decision, risky decision to take our mission to space. How do you take this mission to space? What does that look like? It was a crazy story. So I know somebody you know, Ross Martin. Ross Martin, just an amazing guy, the president of Known here in New York. and a marketing company. Ross is a friend of both of ours, a mutual friend. Yeah, Ross is an amazing guy. He is. He's a great supporter of St. Jude. So Ross asked me if I would be interested in meeting a gentleman by the name of Jared Isaacman.

14:28Jared was a young entrepreneur who started a company called Shift4 Payments, a digital payments company. And Jared had entered into a deal with Elon Musk and SpaceX to purchase several missions to space. And Jared wanted to approach it very, very differently. He was all about democratizing space, and he wanted it not just to be a rich person's game, but he wanted regular people that could go up into space. So he was looking for a charitable component behind it. We talked. I will tell you, Jeff, you reminded me of a young Danny Thomas, okay? He's like a visionary, truly a visionary, and you could just tell how big his heart was, okay?

15:03He cares deeply about kids, especially kids with catastrophic disease, and he was looking for a charitable partner. He asked me lots and lots of questions about St. Jude. And I asked him lots of questions about going to space because I was concerned. And he was interested in potentially having a patient or one of our doctors or scientists go into space. This is a big idea. And then he said, with one of the other seats, I want to make it so that anybody can get a ticket for$2 or$1. More like a lottery than an auction. More like a lottery than an auction. That way it was democratized, right? And we entered into a partnership and he said, Rick, I'm going to give you$125 million.

15:40He, personally,$125 million. Wow. I want you to match it, okay? And I said, Jared, we'll match it. And truth be told, we did match it, Jeff. We raised$250 million to support the mission of St. Jude. A young former patient of St. Jude, who was a nurse practitioner by the name of Haley Arsenault, went up into space with Jared Isaacman and three other people. and I will tell you, I sweated through the whole thing. I died and, you know, my Lord asked me lots of questions. Are you sure you want to do this? And I had asked a lot of questions about risk. Yeah, the risk that the mission would go wrong or the risk that you couldn't raise the money to match it.

16:16Where was the risk for you in this? All of the above. The risk was, I mean, the risk was about life. Yeah. Okay. If we didn't match it, we didn't match it. I was going to do my darndest to match it. And we did, thank God. And thanks to the support of the public. But I was much more concerned, much more concerned about the safety of the crew and Haley, who I've known since she was a patient when my dad was a CEO. So I've known her for a really long time. But she was a total space enthusiast. So she knew the risks. And so when they splashed down, I was like, man, I was so relieved. I can't even begin to tell you.

16:47And then so we got a ton of publicity out of it. And the cool part, too, also was that it introduces to new audiences. Space enthusiasts are very different than some of the other people. A lot of people that participate in charity are a little bit on the older side because they have the ability to do it. space enthusiasts are younger people too. And so it was a beautiful way for us to spread our mission to a much broader audience group. Still ahead, Rick's advice for how business leaders can have a bigger impact on issues they care about.

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19:00So if you're scaling, make it simple with Deal. Go to deel.com slash mos and get up to three months free.

19:33increase. You drove a massive increase in fundraising during your tenure, right? If I remember right, you were in the 600-something million range in 2009 and north of$2 billion. $2.7 billion. $2.7 billion. So approaching$3 billion now. I mean, that's a huge increase over that time period. With the St. Jude budget, that's over$2.2 billion. So, I mean, you've got to have perspective. Yeah. And I want to get to the impact piece next. But I'm curious, how did that ability to better collect, better analyze, and better act on data help drive from that 600-plus million up to nearly$3 billion. Look, Jeff, what I would say is a good CEO is not just strategic.

20:08A good CEO is strategic and opportunistic, okay? So if you look at the data and the data is telling you a story, okay, if you believe in that story, then you make investments that way. We saw opportunity, whether it was with corporate partners or on the acquisition front. And at the end of the day, as data got better and better and we were able to analyze that data, we said, this is not hard, guys. We have to meet people where they are. Where are they? They're on Facebook. They're on TikTok. They're on Instagram. We need to be there, okay? And, you know, while people will laugh at this, people still watch CNN, especially people of my generation, and they will respond to direct response television ads.

20:56So again, let's think about who our target audiences are. The CNN audience is very different than the TikTok audience, obviously. The Facebook audience is kind of hybrid, right? But again, let's meet people where they are and give them content at points like as we sit here today, we can serve up very personalized content because we know that you clicked on a video because you wanted to learn about brain tumors and you were particularly impressed about this patient's brain tumor journey. I know that because I saw you click on that. I can serve you up content that's about another brain tumor patient.

21:31So the content gets more personalized than I think ultimately means that it will drive you to more action. I mean, so that's how things have gotten smarter. You know, as I was leaving, we were building our own CDP in partnership with Salesforce. And then we also were building an enterprise content asset management system so that it allowed us to understand how you are interacting with our brand and content that might be meaningful to you. And then we embraced AI early on. You know, when I got there, I said, guys, we're going to do a dual transformation. Okay. We're going to keep operating our core business, but we're going to go complete digital transformation, keep doing the core.

22:05So we did it together, a dual transformation. And then we just kept on investing in digital. I was really proud of our board because our board got the idea that you needed to make investments in your tech stack, in data and analytics, because they saw that was where the world was going. And even as I sit here today, they saw the wisdom in that and are continuing to make those investments. Let's talk about impact. When you are able to increase your fundraising, how does that change the impact that you have? What's different now than when you came in? Every day I wake up knowing that cancer is the leading cause of death by disease in U.S.

22:42kids today. Okay. It's one of the leading causes of death by disease around the world, but there are other challenges around the world. So in the United States, even though we've made incredible progress doing part to the work at St. Jude, it's still - I think it's important to note that we used to have roughly 80 % child mortality for cancer, right? And now it's down to about 20 % in significant part due to the work that you all have done. That is correct. So 20 to 80 in 60 plus years, right? Take the acute lymphoblastic leukemia where the cure was found at St. Jude. When St. Jude opened, it was a 4 % cure rate.

23:14So think about that. 96 out of 100 kids who were diagnosed would pass away. So bad that parents were told, celebrate half birthdays because your child wasn't going to make it to the next birthday. Okay. It's 94 % today. And that initial cure, over 50 % was found at St. Jude Children's Research Hospital. So that's some of the impact. But what I also then think about is 20 % isn't good enough. So four out of five survive, okay? But if you're the mother or the father of the one, the one really matters, okay? So we've got to do better. And there are certain cancers that don't have cure rates, right?