Emphasis on Accountability Lifts Returns for International Aid Charity

When James Cavnar started a new international aid group five years ago, he wanted to give donors more confidence in how

their money was spent.

To accomplish that goal, Cross International Alliance, which raises a large share of its money from Catholic churchgoers and other Christians, makes it a point to always tell donors explicitly how their money will be used. Donors are also given opportunities to earmark money for specific projects that interest them, such as laying pipe in Haiti or supporting an AIDS orphanage in Africa.

Many charities “send out appeals that tell specific stories of concrete needs, and then ask for gifts,” says Mr. Cavnar, president of the Pompano Beach, Fla., organization. “But somewhere on the appeal, they state that the project described is merely an example. All gifts go into the general fund.”

Cross International, however, vows that when it asks for money to ship medicine, for example, the money will go only toward that need. To follow through on its promise, it sends donors receipts for their gifts that tell them just how their donations were spent.

Cross International also lets donors choose from among efforts they will support through an online catalog, and will soon allow them to tap into an online database that will allow them to see the progress of each cause for which they have given money, plus examine how much has been raised and spent for it.

“We want to create a very high level of transparency in the use of contributions,” Mr. Cavnar says.

Fast Growth

Mr. Cavnar says he knew from his 33 years of working for Christian charities that major donors value the reports charities give them that describe exactly how their donations have been spent, and he wanted all donors to have that same experience.

“I had talked to average donors for years who would say things like, ‘I always wonder where my money goes. I trust you, but I feel like it goes into a black hole,’” he says.

The emphasis on making sure donors know how their money is spent is a key reason the five-year-old nonprofit group has grown into one of the most successful fund-raising organizations in the country, say its officials.

Donations of medicine, clothing, and household goods make up the bulk of the charity’s income, accounting for nearly $160-million of the $171-million Cross International raised in 2005.

But cash gifts from Catholic congregations and other Christian donors totaled $11.8-million last year, up from $7.6-million in 2004.

The growth in cash gifts had a catalytic effect.

In 2004, Cross International was able to handle only $89- million worth of donated goods; it had to turn down many offers of products because it didn’t have enough money to pay for shipping and other costs; last year, the cash donations allowed it to distribute items worth nearly twice as much.

Seeking New Approach

Cross International was founded in 2001 with the support and financial backing of Mark Kielar and Joe White, two Floridians who were finding it burdensome to do all the recordkeeping and monitoring involved in running their own organizations to support Haitian charities. But Mr. Kielar and Mr. White didn’t want to hand their charitable work to existing organizations, because they were dissatisfied with the way most groups accounted for their spending.

Cross International’s emphasis on disclosing information may stem in part from Mr. Cavnar’s experiences six years ago at Food for the Poor, another Christian aid group.

In August 2000, an internal audit found that the president, Ferdinand Mahfood, who had founded Food for the Poor in 1982, gave $275,000 of the charity’s money to two female employees. Mr. Mahfood was suspended and later resigned.

Mr. Cavnar declines to discuss what happened, citing a nondisclosure agreement with Food for the Poor.

According to news accounts, Mr. Cavnar was among those who recommended stricter controls in the wake of the scandal. He left the charity in October 2000.

Cross International seeks to reinforce its message of accountability to donors by arranging for people who run charitable projects overseas to visit local churches.

Not only do they explain what has been done with the money, but they also make a general pitch for donations to Cross International.

One visitor is Father Marc Boisvert, a former Marine Corps chaplain. He tells Catholic parishes about Pwoje Espwa (Creole for “Project Hope”), the charity he started in Haiti. After getting to know Haitian refugees as part of his military service, he visited Haiti and was so shocked by the plight of poor children there he decided to dedicate his life to helping them.

Other Catholic priests who are staff members of Cross International also travel regularly to parishes to make pitches on behalf of the charity. The personal interaction with donors is among the most effective ways for the organization to raise cash, its officials say. Cross International eventually hopes to reach Protestant churchgoers, too.

The church visits are not the only means by which Cross International raises money. It also relies on direct mail and advertisements in religious publications.

In addition, Christian radio stations ran 25 fund-raising campaigns for the charity last year, each broadcasting appeals for about a day and a half, Mr. Cavnar says.

Cross International channels the goods it collects to churches and charities that are based in needy countries rather than setting up its own offices around the world. Mr. Cavnar says that approach is the most effective, low-cost way to get money directly to the people who can use it.

For example, Cross International recently completed a project in northwest Haiti to pipe fresh water to 14 villages from three mountain springs. It was supervised by local pastors with the aid of a Haitian construction firm, Mr. Cavnar says. “This whole project, which took years and thousands of volunteers to dig the trenches and lay the pipe, ended up costing $180,000,” Mr. Cavnar says. “If we’d sent a team of U.S. engineers and construction crews in, you would have spent that much just on their accommodations.”

Building Relationships

Last year’s fund-raising growth was aided by donors’ responses to emergencies, including the earthquake and tsunamis in South Asia.

Nonetheless, giving for this year seems likely to increase, Mr. Cavnar says, due to the charity’s continued building of relationships not only with donors, but also with the charities it supports.

Cross International seeks to distinguish itself from other organizations by trying to build long-term relationships with the charities it serves, and by providing them with operating support, not just money for one-time projects.

Although Cross International insists on financial accountability, it recognizes how difficult that can be for small groups in poor countries. When Cross International employees visit overseas groups to check out their projects, they often teach local officials about basic accounting principles and how to create financial reports, sometimes providing computers and software.

As a result, Cross employees become intimately familiar with the organizations. Once Cross International is confident that an organization is doing good work, it encourages the groups to turn to it again as new needs arise.

Such relationships can pay off in unexpected ways, Mr. Cavnar and Father Boisvert say.

Cross International was already providing operating support to Pwoje Espwa when Father Boisvert called last December seeking more help.

Another orphanage had shut down. Its 65 children were sleeping in an abandoned schoolhouse, and the orphanage could find no one else willing to take them. But Father Boisvert wasn’t sure his charity could take them in either.

“He said it was going to cost $13,000 just to bring them in and get them settled,” Mr. Cavnar recalls, for transportation, medical treatment, food and housing, and supervision. It would cost about $4,000 a month to keep the children permanently.

Because Cross’s board and staff members were so familiar with Pwoje Espwa, they responded quickly.

“In a couple of hours, we called him back and said we were sending him $17,000,” Mr. Cavnar says. “We adjusted his monthly support so it was $4,000 higher. That’s because we had the kind of relationship where we had confidence and trust in what he was doing. We get plenty of reports from him, and we send staff there regularly, but because of our relationship we don’t need a lot of documentation for a quick turnaround.”

Cross International raised the money it needed to help Father Boisvert in two weeks, asking priests who were visiting American congregations on behalf of the charity to make a pitch for the Haiti effort.

Father Boisvert appreciates the effort. “We can’t help everyone who comes to us, because it’s so hard to find money,” he says. “Most of the time you’re dealing with bureaucracies. They want feasibility studies. You don’t have that with Cross. There is accountability, but they’re more partners with us than most groups.”

CROSS INTERNATIONAL ALLIANCE Mission: To provide aid to poor people around the world. Year charity was founded: 2001 Headquarters: Pompano Beach, Fla. Key officials: James Cavnar, president; Brian Schutt, vice president. Why it made it onto the list: An increase in cash gifts gave the charity the ability to distribute more noncash gifts. As a result, noncash donations to Cross nearly doubled, to nearly $160-million, last year. The biggest fund-raising challenge ahead: Building a cushion so it will not be harmed by any sudden interruptions in giving to international groups, such as occurred at some organizations after the 2001 terrorist attacks. Donations From Private Sources (In Millions) 2001 $3.3 2002 $18.2 2003 $63.8 2004 $95.9 2005 $171 Where Donations Come From Corporations 93.1% Individuals 6.8% Foundations less than 1.0% Total $170,999,297 NOTE: May not total 100 percent.