Fund Raiser’s Bold Plans Could Pay Off for American Cancer Society

No. 2

By Brad Wolverton

When Rob Mitchell became chief fund raiser at the American Cancer Society

three years ago, he took over the donation campaign at one of the country’s largest and most well-known charities — but one that was not keeping up with many of the aggressive fund-raising tactics at other organizations.

The charity was having trouble winning gifts of more than $100,000 — even though such gifts were growing fast at other organizations. The society had rarely run annual campaigns in any of its 14 divisions or from its national office in Atlanta. And although it continued to attract millions of small donations through such traditional approaches as special events, direct-mail efforts, and United Way drives, it received repeat gifts from only one-third of its donors every year.

$794-Million

But an ambitious plan Mr. Mitchell helped put in place two years ago has started to transform the organization into a bolder fund-raising institution. The plan is a big reason that the American Cancer Society raised $794-million last year and moved to No. 2 from No. 4 in The Chronicle’s annual ranking of the 400 nonprofit groups that raised the most private money.

Among the highlights of the cancer group’s plan:

• In the past year, as part of an increasing focus on attracting big gifts, the organization has created more than 50 new positions for fund raisers who specialize in bringing in large donations. Within the next three years, Mr. Mitchell expects to hire about 120 more such fund raisers.
• Plans are under way to start 13 new regional campaigns across the country that will attempt to bring in nearly $500-million for the organization in the next five years.
• The charity is seeking to build relationships with large companies such as Wal-Mart and Walgreens to establish on-the-job campaigns and other fund-raising efforts that Mr. Mitchell thinks could start yielding new annual income of about $500-million within the next decade.

The organization’s far-reaching moves are not designed to help solidify it as one of the nation’s largest fund-raising institutions, Mr. Mitchell says. Rather, he says, the society needs the new programs to help fight the growing scourge of one of the country’s most deadly diseases.

To do a more effective job of getting financial support to conduct research on ways to fight cancer and to educate people about preventive measures they can take to help avoid getting the disease, Mr. Mitchell decided that he needed to make big changes in how his organization brought in money.

Aside from bolstering efforts to seek big gifts, run regional campaigns, and expand efforts to work with companies, he also thought that his organization could gain more donations than before from a large fund-raising event it holds every year called Relay for Life, a team walkathon that spreads awareness about the disease and requires each participating team to raise at least $2,000. And he wanted to help cut costs in the organization’s many divisions and to help American Cancer Society fund raisers throughout the country collaborate more to identify approaches that bring in the most money with the least cost to the organization.

While many of the changes the organization is making might not yield big results for many years, if ever, the society’s work with large corporations is showing some of the earliest promise.

The organization has begun to approach Fortune 500 companies and other large businesses from which it hopes to receive donations and to whose employees it wants to provide information about where they can get such services as early-detection screenings for cancer.

Participating companies help the American Cancer Society in several ways. Thousands of employees from the companies already have signed up to participate in Relay for Life, which reached 3,500 cities this year.

Mr. Mitchell credits revenue from Relay for Life, which topped $300-million in its 2004 fiscal year, for helping the American Cancer Society’s overall income to grow by an estimated 6 percent, to $841.6-million during that period. That increase follows a 3.79-percent gain in the society’s 2003 fiscal year.

Some large companies that are starting to work with the American Cancer Society have set up programs allowing employees to contribute directly to the health charity through deductions in their paychecks, Mr. Mitchell says. The society decided to focus on big employers with on-the-job solicitations after revenue it had been receiving from United Ways started to decline, Mr. Mitchell says. He notes that, since 2001, money received through United Way has declined by 23.5 percent.

The society hopes that its work with large companies also will help it attract more large corporate donations than it has in the past.

“Our employer initiatives are just now getting their legs,” Mr. Mitchell says. “We expect really significant returns in the next few years.”

Regional and National Drives

The increasing focus on large gifts is already starting to pay off. In the 2004 fiscal year, the charity attracted 49 gifts of more than $100,000 each — more than it has ever brought in. The society also netted a $7.5-million gift about a year ago, its largest amount ever to not come from a bequest.

While it is still too early for another move the society has made — adding regional fund-raising campaigns — to pay off, the change holds tremendous potential, Mr. Mitchell says.

Until the past year, the society had rarely held regional or national campaigns. It had run some endowment campaigns to raise money for buildings and for research needs, but the organization’s long-held tradition was to use unrestricted donations it got from traditional appeals and from special events to do the work that top officials and board members wanted done.

“There was never a culture at the organization of building anything through any sort of campaign,” Mr. Mitchell says. “It’s just not how we did business.”

It is now. Through the 13 regional campaigns it plans to hold in the next five years, the organization will attempt to raise money to build and provide endowment support for 30 residential-care facilities where patients undergoing cancer treatment can stay free.

Replacing Donors

One reason the American Cancer Society saw a need to make changes was that many of its traditional fund-raising efforts were not working as well as in the past, Mr. Mitchell says.

In the 2003 fiscal year, money the organization received through planned gifts — normally one of its strongest sources of donations — slipped 11 percent.

Many of the divisions were putting too much emphasis on fund-raising techniques that were costing a lot to run but not delivering much financial gain, Mr. Mitchell says. And the organization also was losing donors at an alarming rate, having to replace 66 percent of the people who gave it money every year.

“That’s a huge hill to climb every year,” Mr. Mitchell says. He attributes the turnover among donors in part to the organization’s failure in the past to pay enough attention to people who gave.

The society plans to put additional effort into treating donors better than it has in the past by thanking them for their gifts and by keeping a closer watch than before on what programs interest them, Mr. Mitchell says.

“We’re trying to build a donor base with a higher affinity for our cancer-fighting mission than we’ve had in the past,” Mr. Mitchell says. The group hopes that these and other efforts will lead more donors to continue their support and increase their donations over time.

“We can only surmise that with the additional money we bring in,” Mr. Mitchell says, “we can save millions more from cancer.”