On a Wing and a Prayer

When Craig Carpenter took over as director of development at Seattle’s Union Gospel Mission in March 2002, it was the worst of times and, well, it was the worst of times. The country was still in shock from the events of Sept. 11, 2001. War was looming, the economy was reeling, and the stock market was tumbling. People were afraid to open their mail for fear of being infected with anthrax.

And UGM’s men’s shelter was in need of about $2 million worth of structural re-engineering to guarantee that it could continue to safely house the mission’s many residents and programs. UGM could thank the 6.8-magnitude earthquake that had hit Seattle a year earlier for that little slap in the face. When the city inspected the $850,000 worth of damage that the building sustained in the quake, officials decided that they couldn’t certify the building as safe unless it underwent a retrofit, which involved starting in the basement and reinforcing the walls with crisscrossing steel beams all the way to the top.

Because of the shelter’s location in the heart of the city — just a block from an area where homeless people gather — UGM was determined not to move to another building. And it was equally as determined not to curtail services while the construction was going on.

But good intentions aside, things weren’t looking too promising. Like at most nonprofits, UGM’s development program was feeling the effects of a world gone mad.

“With everything that had been going on in the world and the country, we had seen revenues plummet; we had seen responses plummet in cultivation and acquisitions; acquisitions was very poor, so it really did impact migration through the donor files, and it impacted giving,” Carpenter says. “Retention rates were poor, and giving was just down.

“There were a variety of these kinds of problems,” he adds. “And on top of that, we now had a $2 million bill to pay. Construction was slated to start in two months, and the bill had to be paid off in 12 months.”

Welcome to your new job, Craig Carpenter.

‘A God thing’
Working in what could easily be described as crisis mode, the development staff hunkered down and accomplished what many of the folks involved still say could best be described as an act of God. They increased individual giving by $500,000 and, with the addition of board-designated funds from the sale of some peripheral properties, paid off the construction bill in May 2003 — before it even came due. As an extra little treat, the retrofit job came in under budget and was completed in April 2003 — two months before it was expected to be done.

In the words of UGM Executive Director Herb Pfiffner, “there was definitely a God thing going on.”

Being that it’s a faith-based organization, UGM makes no bones about the role of God in all its work. And no one doubts that there was an extra dose of divine intervention in the case of the retrofit and the campaign that paid for it. But there’s also no denying that fundraising for the project took a whole lot of earth-based hard work.

As soon as it became clear that the $2 million project was unavoidable, UGM wrote a case statement to outline what had to be done and the best way to do it. Carpenter realized right away that it would take more than direct mail to raise that kind of cash in that kind of time. So he started to look at major donors — an income stream that had all but dried up in the months immediately preceding the start of the campaign.

“In the prior 12-14 months [2001], there had been a lot of turnover in the development department, maybe a 50 percent turnover in staff,” Carpenter says. “And that hurts things because these were major-donor officers and corporate-giving officers [who were leaving], so those relationships [with donors and potential donors] didn’t exist anymore.”

In March 2002, UGM invited about 500 potential major donors to participate in a conference call led by Pfiffner. One hundred chose to listen in, and what they heard was the straight-forward news that the mission needed $2 million for the retrofit project. But they didn’t get hit with an ask. The point of the call was to fill them in about what was going to be happening and to “invite questions and be as upfront as possible,” Carpenter says.

The conference call itself generated a few extra gifts, Carpenter said, and fell short of the anticipated 25 percent to 30 percent response rate. But soliciting gifts, at that point, wasn’t the main objective of the call.

The full-court press came soon after.

Carpenter and his team had to rethink how it approached major donors and, simply, get more aggressive. The goal: to develop 300 to 350 major donors and make some level of contact with each of them within three months.

More challenges
But the challenge didn’t stop there. Because UGM was determined to keep programming going unabated throughout the construction, development had to raise funds not only for the project itself but also for ongoing services, which already were facing the prospect of dwindling revenues.

So UGM launched into a bold dual campaign that used direct mail to ask folks not only for money for the capital expenses but also for the general fund — something that many nonprofits would hesitate to do for fear of alienating their donor base. But in this case, at least, it worked.

“One of the most exciting things about it is that the special appeals for the crisis situation have not affected regular direct mail responses,” Pfiffner says. “People did not transfer their support. It was extra, over and above.

“People knew the need was real, he explains. “Having lived through the earthquake, they understood the need. They knew we had to keep our doors open, so they went the extra mile.”

The mission also branched out into radio, but not just the tried-and-true Christian stations. Because UGM has developed a solid reputation within its community and can show results and success stories, Carpenter decided to go with secular stations too, including jazz, classical and adult contemporary.

“Each station was selected based on audience delivery of our primary target audience — females 25-54,” he explains. “A broad target, but it’s clearly loaded with decision-makers when it comes to charitable giving. Broadcast is also our medium for reaching a younger target.”

UGM ventured into television, as well. And even though that test had a “soft benefit of increasing awareness” for the mission, Carpenter says the amount of revenue generated was disappointing, producing only about 50 percent of the amount needed to break even.

He adds that, because of the nature of the mission, creative for the TV test was generic and not especially compelling.

“Not very many clients are eager to go live with the details of a life they are in the process of putting behind them,” he explains, adding that the disappointing returns on the test also can be attributed to the fact that UGM was testing a new offer — a continuity program — to a market that responds primarily with single gifts. Plus, it was a new medium for UGM.

The mission also revived its telemarketing campaign to lure back lapsed donors — not a new technique but one that hadn’t been done in a while.

As far as direct mail was concerned, even with the crisis situation that UGM faced, the development team was cautious about increasing frequency. It focused, instead, on messaging.

“Earthquake damage, people understand. We didn’t have to explain that,” Carpenter says. “So we never talked about bricks and mortar. We talked about lives changed and results and the importance of the services we provide.”

As a rule, the UGM newsletter never contains an ask. It focuses instead on success stories, program notes and other news. The May 2003 edition focused entirely on the retrofit project and, even without a solicitation, generated twice as much money as normal for the time frame, Carpenter says.

“The whole thing became an integrated approach to generate new donors at higher levels and to replace people we had lost from years prior, to reactivate them at higher levels of support,” he adds.

It’s the rep that counts
Pfiffner acknowledges the hard work of the development staff in regard to the retrofit campaign, as well as “the God thing,” but also is quick to point out that UGM has a solid reputation in the community.

Building a rep based on pertinent programming and ethical fundraising, and backing it up with true, local success stories, is the foundation for UGM’s continued growth, he says. And that’s exactly why support for UGM transcends religious boundaries and comes even from folks who aren’t necessarily true believers.

“We are faith based. We don’t try to use clever words to get around the issue of who are; we’re open about it,” Pfiffner says. “People respect that we’re honest about who we are. Being faith based keeps us straight and honest because we believe we need to hold ourselves to higher standards than anyone else in our community. For people of faith, that reinforces their beliefs, and they talk to their friends who might not be people of faith but who respect what they’re saying.

“Seattle isn’t a religious town, and I know there are people who will never write a check for a faith-based organization,” he says. “But God is in control and will find us other givers to make up for whatever we might lose on that side.”

Construction on the retrofit project was complete in April 2003, and the men’s shelter is up and running — though both Carpenter and Pfiffner are proud to point out that the shelter never stopped dishing out meals (about 1,000 a day) or providing rooms for the homeless and addicted men it serves.

Throughout the construction, parts of the kitchen had to be moved or closed off, seating was lost or moved, etc. And every night, the construction crew cleaned up to the point that the kitchen was usable the next day.

The men’s shelter is one of nine buildings owned by UGM, along with a women’s shelter, two drug- rehab centers for men, a transitional housing space for women, two retail outlets, a low-income apartment building and the administrative building.

Looking ahead
Now that the project’s over, you have to figure that Carpenter and his crew can take it easy, right? After all, they earned it.

Mention that to him, and what you get is a chuckle and a “yeah, right” smile.

“We paid [the retrofit project] off in May 2003, and in June my executive director came to me and said, ‘Now, Craig, what about the new building?’ There was a capital campaign being discussed as far back as 1997 … there had been a feasibility study and lots of discussion was going on, then the earthquake hit,” Carpenter says.

“So we’re gearing up to do it all over again,” he adds, with a roll of his eyes. “It’s a brand-new building, a $20 million campaign. It’s something this mission has never done. The last capital campaign was 14 years ago, and it was for less than $3 million.”

With groundbreaking scheduled for 2007, the new building will be comprised of two five-story towers that will house a women’s shelter including classrooms and living space; a drug- and alcohol-recovery unit; new administrative offices; open space for future use; and retail space for use by UGM.

Lessons learned
Despite his mock exasperation, Carpenter admits that his staff’s trial by fire has left UGM in a much better position to take on a campaign of this size. Lessons learned, he says, will serve them well.

“You go into a situation like that, and you stretch yourself every which way just to get through it and you learn and you grow,” he says. “Everybody’s on a learning curve. No, it wasn’t a learning curve; it was a learning cliff.

“Having gone through that, our level of passion for what we do and our level of confidence about overcoming obstacles is so much greater,” he adds.

Those lessons — the saving grace, if you will, of the arduous campaign that left his team in a state of “stunned silence” — are considerable.

First off, Carpenter says, UGM had been relying on direct mail “too heavily for too long,” at the expense of major donors.

Was the mission itself a victim of the perception that shelters and other similar nonprofits simply don’t do well with major donors? After all, if you compare major-donor perks from, say, the ballet (a free performance) or a hospital (a gala party with music and a gourmet spread) to those from a homeless shelter, well …

“You give a major gift to a homeless shelter and think ‘Great, I get to go have dinner with the drunks and the bums.’” Carpenter says. “How exciting is that?

“It goes back to branding. When people think of a mission, they think of a soup kitchen and some down-and-out old guy who’s just barely able to lift his eyes off the plate,” he adds. “How do you get excited about that old guy?”

In reality, that image represents just a fraction of what UGM does and is a throwback to its origins. It was founded in 1932 with the goal of providing meals to men who lost their jobs during the Depression. Since then, UGM has expanded its programs to serve women and children, and homeless and addicted persons of both sexes and all ages.

It also provides much more than food, though walk-in emergency meals certainly are available. Long-term addiction treatment, education, life-skills development, and employment counseling are among the many services offered.

So why is it then that the first image you see on the UGM Web site is of an elderly man enjoying a meal? Here, UGM finds itself in something of a catch-22. Major donors don’t respond well to the old perception and it’s not really accurate anymore anyway, but the fact remains that it’s the perception people have had for 70 years and they’re not going to let go of it easily.

The case statement created for the retrofit campaign featured instead a young mother, and while the response was positive, UGM staff sensed a “disconnect” that could erode the public trust it took the mission so long to build.

“That was one of the things we learned: While we would like people to think of us in a much broader view, we have to accept that this is how they think of us,” Carpenter says. “Changing that perception will take years. We could do it in a shorter amount of time, but then we would be spending all our funding trying to change perceptions.”

Other venues
The retrofit campaign also underscored the fickleness of direct mail response and UGM’s need to look beyond it. Like many nonprofits, the mission is always straddling the fence between sending too much direct mail and not enough. There’s always a fear that a hardcore direct mail program will alienate donors whose mailboxes already are overstuffed. But if you cut back, you’ll likely lose revenue. So how to make that up in the least amount of time?

Thanks to the retrofit campaign, UGM is staying with radio, both Christian and secular, carrying on radiothons, and blanket and toy drives. It’s also looking more closely at the Internet, which, at less than 5 percent of contributed income, is still, Carpenter says, UGM’s fastest-growing revenue stream.

“We want to develop an online strategy and learn what that means in how we relate to donors one on one,” he explains. “We’re finding that the direct mail person is different from the online donor is different from the radio donor.”

Finally, Carpenter says, his 14-person team came through the campaign more unified than it ever had been. Right now, the development office has a director of donor relations handling major gifts, planned giving and corporate gifts; a director of marketing handling PR and marketing; a managing director of direct response; a database administrator; graphic artist; and church-relations manager.

Years of high turnover had left the team mottled and unsure of itself, so taking on such a challenge amounted to “starting at the bottom and working our way up,” Carpenter says.

“It helped us to realize that, in the face of all this adversity, we could do great things,” he says. “We could learn to trust each other. And it became a catalyst for the team to pull together and rally.

“From that day in May [when the retrofit bill was paid], we realized we had the opportunity to do so much better. We could look back and say, ‘Look what our PR was able to do. Look how we totally shifted an inert major donor program and turned that around,’” he says. “We saw revenue and momentum build, and the trickle effect throughout the department was a real success not only for the mission, but it was transformational for the department as well.”