Cover Story: Lives in the Balance

Debra Neuman is on intimate terms with the tsunami that devastated southern Asia in December 2004. Just as you would never refer to a friend as “the Bill” or “the Mary,” she calls the killer storm simply “tsunami” — no preceding article — as though the word should be spelled with a capital T.

It’s unnerving at first, but it makes sense. The storm killed thousands of people in an area where a few expensive resorts stood out among large patches of widespread poverty like diamonds set against a backdrop of pitch. As senior vice president of external relations for CARE USA, an organization that works exclusively with “the poorest of the poor” around the world, Neuman was keenly aware of the developing needs of storm victims and worked with her staff to raise funds to meet those needs. She certainly doesn’t consider the tsunami a friendly force, but it reached deep into the heart of the organization that employs her.

CARE USA, which recently was named 2005 Nonprofit Organization of the Year by the Direct Marketing Association Nonprofit Federation, raised $44 million for tsunami relief between Dec. 26, 2004, and March 31 of this year — without any significant disruption to its regular fundraising programs. The organization had set a tsunami-related fundraising goal of $50 million in the United States, which it eventually exceeded by more than $6 million — $10 million of which was donated online via www.careusa.org.

In the wake of Hurricane Katrina, which raged across the Gulf Coast in August, many organizations are facing some of the same challenges faced by CARE earlier this year. Disasters of this magnitude require an immediate, all-out response in terms of service and, accordingly, fundraising, but it’s equally vital to keep an organizational sense of balance to avoid funding shortfalls later on.

“There are very sudden, large-impact crises like tsunami that become, for a short period of time, not only all encompassing for our staff to deal with, but also in the minds of the donor,” Neuman says. “And so it becomes almost — even if you have the capacity — inappropriate within the first weeks of something of that magnitude to be going on with business as usual.

“There’s a moment in time where that changes and then, of course, our whole team comes back and starts to fold back into the regular ways of doing business.”

Adam Hicks, vice president of marketing and communications for CARE USA, explains that the immediate response after a major disaster requires second-by-second assessment of funding needs.

“It becomes all encompassing very quickly. When an organization focuses very much on the poorest and most vulnerable people of the world, on the ultimate realization of human dignity and the value of human life, when something of that proportion happens, it begins to change the focus to sort of an all-hands-on-deck mentality,” he says.

“Certainly from a fundraising perspective, what we try very quickly to do is to work with our programmatic colleagues to understand the scope of the disaster, to determine the nature of what CARE’s response is going to be in it and to try to make an initial read as to what kinds of funds might be required,” he adds. “And in the case of the tsunami, we knew that the funds required were going to be very significant, and we knew that very quickly.”

Hicks describes the approach as a “two-pronged thing,” where the organization responds to the public’s demands for help and information, while getting the word out to donors about what’s needed.

“To business managers, I would be less than honest if I didn’t say you have some worries about the kind of impact this is going to have on the rest of the organization over time. But I think what we’ve strived to do is to pay proper attention to an unfolding tragedy but to try to think about timing very carefully,” he says.

Adds Neuman: “It was particularly clear to me in tsunami, which was probably everybody’s biggest disaster up until what we’re seeing now with Katrina, that at the same time you’re doing the immediate response, for an organization like CARE, which is also focused on long-term development, we made it very clear right from the beginning with our fundraising messaging that this is going to be a long-term problem … which then helps us as we transition back into our ongoing fundraising program.”

After Sept. 11
CARE USA is the founding and largest of 11 CARE chapters around the world, each of which raises money in its own region for ongoing humanitarian-aid programs that span the globe. As such, it’s not directly involved in the Katrina relief effort. It isn’t programmatically operational in afflicted areas and isn’t raising money in connection with Katrina. It has, however, invited organizations that have people and programs “on the ground” along the Gulf to request specific information and expertise if they feel they need it — helping, without forcing itself into the middle of an operation where it doesn’t have a pre-existing presence.

CARE faced a similar scenario in the months following the Sept. 11, 2001, terrorist attacks on the Pentagon and World Trade Center. Only then, tension and anger rivaled shock and sorrow in the American psyche. In addition to funneling massive amounts of money into funds specifically created in response to the attacks, Americans looked inward and focusedon organizations that did work within their own borders.

It was a tense time for organizations such as CARE, much of whose work takes place in the very countries that Americans associate with terrorism. Hicks says the organization saw the number of daily donations, which normally range in the thousands, dwindle to eight or 10.

“It was a real moment of panic for the organization,” he admits, “but our donors all came back to us and, indeed, in fiscal year 2001, we hit our revenue targets. The revenue pain for us was very short-lived, and we were very gratified by the way our donors responded to what was going on.”

CARE’s success in riding out the Sept. 11 fallout was due in large part, Neuman and Hicks agree, to being sensitive to the timbre of the American public. For two to three weeks after the attacks, CARE very quietly stopped fundraising, although it communicated with its donors and constituents.

“We never proclaimed that we had stopped fundraising, but our donors received letters from us where we expressed sympathy for what was happening in New York to the victims and their families. The letters didn’t ask for any money. We just thought there was a period of time when we needed to respect what was going on in New York and not be insensitive to that environment,” Hicks says.

One important thread that ran through all the post-Sept. 11 messaging, however, is that CARE’s ongoing work is vital in helping to “create the kind of world where terrorism couldn’t breed, where terrorism couldn’t foster, and that through cultural understanding, by addressing the things that cause people to turn to terrorism to begin with, the kind of extreme poverty that can create a sense of desperation that there’s nowhere else to turn, that through their work with CARE, they could take positive strides toward creating a better world,” Hicks says.

That thread was vital in helping CARE transition its donors, and the rest of the donating public, out of a general disaster-response mode and back into ongoing giving.

CARE’s involvement in and response to what are perhaps the three most cataclysmic events of the past five years varied greatly — the tsunami required almost 100 percent of the organization’s attention, while Katrina and Sept. 11 affected it only peripherally. But each event in its own way helped to bring CARE’s work into focus for donors and non-donors alike.

After Sept. 11, the world spotlight shone brightly on Afghanistan and its oppression of women, the plight of its war widows, and other human-rights issues that CARE addresses. The tsunami made it impossible for the world to turn a blind eye to its desperately poor inhabitants, and Katrina was a brutal reminder that the “poorest of the poor” are particularly vulnerable in times of crisis.

“The news about Afghanistan and the related news about Iraq has raised the whole profile of that part of the world that most Americans had not been thinking about at all, and that profile has helped to make the work [of CARE] relevant, very real,” Neuman explains. “In a very different way, I would say that as horrifying as the Katrina tragedy is here on our own soil, I think that some of the terrible displacement of people who are now refugees and the public health issues that are being talked about right in our own backyard are making Americans very much aware of the terrible tragedies natural disasters can bring.

“We’re not working in that domain, but I do think that over the long term it’s going to help people understand the same kinds of disasters that occur elsewhere.”

All of these messages were perfectly suited to helping underscore the importance of CARE’s work, and the organization was quick to incorporate them into its fundraising campaigns.

Post-tsunami, Neuman says, CARE also expanded its corporate relationships, taking advantage of corporate America’s proclivity to pitch in after major disasters.

“From a marketing perspective, it had a very positive outcome,” she says. “From a fundraising perspective, an emergency can push you in new directions and new ways. For all of the all-hands-on-deck mentality, we got to be proactive in some quite innovative ways.”

The rest of the program
But CARE isn’t just about crisis-response fundraising. The same sensitivity to the needs and desires of the donating public that kept it in good stead following those major disasters is now helping CARE take a more holistic approach to development — a subtle, paradigmatic shift it hopes will foster better, longer-lasting relationships.

On the individual-donor level, CARE is transitioning from the one-size-fits-all approach that quickly is falling out of favor across the fundraising sector and empowering donors to set the parameters of their relationship with CARE.

One of the first things a new donor receives after his thank-you/ tax-information note, Hicks says, is a donor-preference card that allows him to choose his preferred frequency and method of contact (direct mail, e-mail, phone, etc.).

“And we’re going to honor that,” he says. “We increasingly try to get more focused on the donor and what the donor wants and how the donor wants to deal with our organization … to treat donors less according to how much they give, and more according to how they want to be treated.”

Supporting this donor-centric approach is CARE’s effort to break down walls between communication channels (for example, prefacing the drop of a direct-mail campaign with a pre-recorded 20-second phone message from CARE President Peter Bell) and also to integrate the organization’s planned and major-gifts programs to create a seamless long-term experience for donors.

“In the past, for probably good reasons, to build up the programs, planned giving and major gifts were built in parallel silos,” Neuman says. “We’re at that point where we feel we’ve built up the expertise and have relatively healthy programs in both those areas, and we’re integrating that at the field level.”

To keep donors moving seamlessly up the giving pyramid to the major- and planned-gifts levels, CARE starts tending the flock early, analyzing its files of smaller donors (up to $1,000) to see who’s on their way to moving up to mid-level status ($1,000-$5,000). The mid-level-gifts manager works closely with the major-gifts fieldfundraisers to understand not only donors’ giving patterns, but also their capacity to give at a higher level.

In a time when major organizations are struggling to find creative ways to cultivate their mid-level donors, CARE has added an interest-based component to its mid-level strategy that allows it to offer highly personalized communications and appeals based on the programmatic area that the donor has the most affinity for, whether it’s women’s empowerment, clean water or a host of other issues.

“As we pay attention to patterns increasingly here, that’s affecting how we mail. So if a person shows a pattern of only giving once a year, we’re probably going to begin to mail them somewhat less frequently,” Hicks says. “We’re looking at patterns and donors’ wishes. Again, the ultimate determinant of how we correspond to the donor or develop a relationship with a donor is in the hands of the donor.

“If they show (the) potential or proclivity to give at that $5,000 level, and they want a personal relationship with one of our professional fundraisers, then that’s the way we’ll deal with them,” he adds. “If they prefer to have a Web-based relationship with CARE, then that’s the way we’ll deal with them. Ultimately, we think that the more donor responsive we are, the better service the donor will get, the happier the donor will be with us, and therefore they’ll stay with us longer and support us at higher levels.”

The importance of a solid mid-level plan hasn’t escaped the development strategists at CARE. Those gifts of $1,000 or $2,000 a year not only add up very quickly, but they are relatively inexpensive to cultivate, and they represent the bulk of the unrestricted donations that give CARE the leeway to be innovative with its programming.

“Naturally, as donors move up into the major-gifts realm, I think the challenge becomes to keep the relationship one where they’re growing with us and interested in other programs but then, obviously, the cost of the relationship changes quite a bit with those major donors,” Hicks says. “That’s why the nature of the mid-level program is pretty important for us.”

Success all around
Over the years, CARE has managed to establish and maintain a workable balance among the channels within its development program, which has meant steady growth. In FY 2005, which of course includes a numbers-skewing spike after the tsunami, CARE took in $144 million. Of that, direct marketing was responsible for $43 ($31 million unrestricted); major gifts, $64 million; planned giving, $10 million; and other sources, which includes the Web, $26 million.

“We’re in a particularly good situation in that each of the channels that we’ve talked about, whether it’s planned giving or major gifts or direct marketing or direct mail or Web, all of them are producing a positive return for us and a very acceptable return on investment,” Hicks says, adding that even pre-tsunami, CARE’s numbers were up 12 percent to 15 percent over the same period in FY 2004.

There’s no arguing CARE’s fundraising success. In its press release announcing the organization’s designation as its 2005 Nonprofit Organization of the Year, the DMANF reported that “over the past year, their efforts have resulted in a record 191,000 new donors … CARE also excels at keeping current donors involved with a loyalty rate of 75 percent for multi-year donors.”

“The balance across our revenue channels has been very healthy for the organization,” Hicks says. “During boon economic times, that’s when we’ve seen our major-gifts program really take off and fly and be very successful for us. In times where the economy is struggling along a bit more, where we’ve seen the major-gift program flatten out a little bit, the direct-marketing program has remained very strong and helped us through economic times that might otherwise have been difficult. We see the balance across our revenue channels as one of the real strengths of our development program here at CARE.”

Neuman attributes CARE’s development successes to strategic investments both in people and programs. It’s gotten more aggressive in acquisition through direct marketing and, on the major- and planned-gifts side, consolidated and downsized its staff of officers but at the same time “invested in the quality of people on the team.”

“Long story short, it’s been some very deliberate kinds of investments both in people and in the acquisition on the DM side that are paying off,” she adds.