Wednesday, September 28, 2005

Beat the Red Cross at their own game.

I don't know if any of you recently read Richard Walden's article (he's the CEO of Operation USA, an international disaster relief agency based in LA.)

It was published this past weekend and has then been followed by articles like this one

To distill this down to its essence, there are two important issues here:

The first is the brand ubiquity of the Red Cross versus other relief and development agencies and the second is the issue of donor preference to fund relief efforts as opposed to development efforts .

Survival of the biggest?
According to the Chronicle of Philanthropy, $1.2 billion has been raised amongst all reporting relief groups in the US for Hurricane Katrina Victims. Of that $1.2 billion, the Red Cross has received $826m (70% of all donations). Red Cross has succeeded in establishing itself in the minds-eye of the average donor as THE disaster donation destination. Having never stepped behind the curtain of their operations, I could nevertheless describe with a certain degree of confidence the PR/Communications aspect of their disaster response team. Their messaging is instantaneous and ubiquitous. Their total fundraising expenses exceeded 110 million dollars according to recent financial records published on their website. Because of a combination of existing brand recognition combined with proactive messaging, the Red Cross will continue to attract the majority of donations in disaster relief efforts.

Relief versus Development
The argument is that donors prefer to fund relief efforts as opposed to development. Statistically this is true today but not because of true desire but because of a lack of compelling packaging of what development means. Development agencies must co-opt the "knee-jerk" appeal of relief messaging to "strike while the iron is hot" and by contrast, show that development dollars will get "more bang for the buck" than relief efforts.

In fact, I would even suggest that development agencies make the point that between government funds and relief agencies, donors can be sure the relief effort will be covered. The fact is development IS sexy. It's the money that returns normalacy to a place where chaos and devastation ruled.

There are so many "wins" that come out of development that "relief" can't possibly match. Sure a doughnut, a cup of coffee and a sympathetic ear are helpful but isn't his ability to return to his home, regain employment and begin mending the psychological scars of what he endured even MORE helpful? It's the duty of development initiatives to co-opt the knee-jerk moments that fuel relief donations and turn the tables. Recast the role of relief all the while showcasing the power of development. The Red Cross states development isn't their business. They draw the line and that's currently their weakness.

Outcome focused initiatives
The Red Cross is the Microsoft of the Relief Agencies but small, nimble, creative agencies should be able to successfulyl chip away at the Red Cross' share of the donor relief dollar. They must exploit the perceptual issues that plague the Red Cross. Scandals aside, the red cross has by no means evolved its messaging in-step with advances in messaging and communications. The Red Cross is an administrative fund: You make a donation and hope that they allocate it efficiently. This is an increasingly antiquated mode of giving as more people want accountability, transparency and more importantly, instant gratification . The way you showcase you deliver this is not through fund-based fundraising but outcome-based fundraising. You raise money for specific projects, with specific timelines, budgets and outcomes. You use the internet to deliver in "near real-time" these results which delivers a "Return On Generosity" and builds a relationship with your donor-base in a way that a fund never could. As a small development agency, you emphasize that you're small, you've been in-country for years, have your developed networks and are trusted by local factions. This is what donors are craving.

I've created a platform by which to host this kind of fundraising which you can learn more about at

No successful entrepreneur complains that Microsoft has a huge head-start. The ones that have beaten Microsoft are the ones who used its burreaucracy, brand and reputation against it.

Hi Tom,
I think you meant to link to my recent post on the Red Cross "Money Pit" issue. Unfortunately, the link is bad -- let me try to remedy that:

You may need to paste this; I'm unsure how Blogger handles track-backs in comments.

Anyway, I wanted to let you know I have no particular ax to grind for the ARC, but the editorial viewed the facts selectively. I think my mole's eye view puts things in a different perspective. On a personal level, the experience was both profound and frustrating. There is so much more that could be done.

You make valid points -- there is just as much need for development fundraising as for relief. If Katrina has made anything obvious, it is that we cannot count on governmental agencies, especially FEMA, notwithstanding cosmetic changes in leadership. Based on my grantwriting experience for other non-profits (not the ARC), I agree that project-based fundraising is the way to go. It bolsters funders'/donors' confidence and the accountability of the organization.

I wish you well in your efforts.
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