Mergers, acquisitions, spin-offs — all pretty common buzzwords in the for-profit world. But, increasingly, savvy nonprofits are realizing the benefits of looking outside themselves and introducing a variety of new ventures under the umbrella of their firmly established brand.
The right projects can help an organization expand or enhance the breadth of services it offers or the reach of its service area. They can bring in new supporters and volunteers, or engage existing ones in new ways. And they can, ultimately, mean more donations.
As savvy as they come, Mercy Corps, a worldwide provider of emergency relief and economic development strategies, recently took on one such venture and is in the process of bringing another to life.
Based in Portland, Ore., Mercy Corps is highly skilled at quickly generating large amounts of donated money and goods for victims of disasters, and at helping with economic development strategies. Since 1979, it has provided $1 billion in assistance to people in 94 countries and currently runs development programs in more than 40 countries. So when exciting new opportunities surfaced in New York City, the largest philanthropic market in the world, Mercy Corps didn’t hesitate to explore them.
In January, Mercy Corps absorbed NetAid, the organization that had been formed in support of the 1999 world poverty-awareness concerts of the same name in New York, London and Geneva. The concerts themselves raised $15 million, but the Web-based organization left in their wake — dedicated to educating high-school students about world poverty and engaging them in advocacy — never became the robust fundraising vehicle organizers had hoped it would.
By merging with NetAid, Mercy Corps taps into a young audience with an already-demonstrated interest in its mission.
The organization’s other project, an interactive world hunger and poverty education center called the World Hunger Action Center, will open in New York in 2008. The 4,200-square-foot facility is being constructed on the ground floor of a condominium building in Manhattan’s Battery Park City, about a block from where the World Trade Center once stood.
Made possible by a rent-free lease and a $1.25 million grant from the Battery Park City Authority, WHAC is expected to draw about 100,000 visitors a year. Exhibits and films will explain the plight of poverty-stricken earthquake survivors in Pakistan, war refugees in Somalia, flood victims on the Gulf Coast and others. Once hooked by riveting true stories, visitors are more likely to listen when staffers explain to them how to get involved with groups and causes that fight poverty and hunger.
“Both new ventures will help fulfill our wish to become more active in the fields of youth engagement and global education,” explains Matthew De Galan, senior vice president for resource development and communications at Mercy Corps.
The mission, the money
De Galan, who has been with Mercy Corps for nine years, says he has visited with staffers at Mercy Corps centers around the world and often is asked what the organization is doing to educate Americans about their work.
“The perception in many countries is that Americans just don’t understand the world outside their borders,” he says. “The perception is not that Americans don’t care, but that they don’t quite understand the reality of the hardships that other people deal with on a daily basis.
“The hunger center will be a place where people, in a relatively short time, can learn to become active, educated and energized,” De Galan adds.
WHAC’s brick-and-mortar presence will be complemented by NetAid’s online efforts to inspire young people to get involved. NetAid will benefit from Mercy Corps’ significant fundraising experience and its many connections to global anti-poverty initiatives.
“We have staff on the ground, pictures and video, all the things that can make NetAid’s mission real to the high-school kids they work with across the country,” he says.
Although WHAC and NetAid are departures from Mercy Corps’ usual strategies, both are in sync with its mission to build productive, secure communities around the world.
In his position, De Galan oversees the organization’s total fundraising program, but he points out that while Mercy Corps’ New York-based ventures will enhance its mission, they aren’t specifically expected to generate a large influx of new donors — especially not NetAid.
“Young people just don’t have a lot of money, and we’re not expecting them to be a major part of our fundraising strategy,” he says. “What we’re looking for is another way to achieve our mission, and that’s to build a new constituency of people in the United States who care about our work.
“The payoff would be a more enlightened and engaged citizenry,” he adds. “Ultimately, it would mean more donations and an increase in the percentage of the U.S. federal budget spent on humanitarian missions.”
De Galan is betting that, in pursuing new ventures, Mercy Corps will come up with new models for fundraising that other organizations can use as well.
“The hunger center is meant to be a place where people can come and learn,” he says. “We’re looking for ways to combine it with the kind of work that NetAid does — using the Internet for peer-to-peer education. The combination can potentially be very powerful.”
Meanwhile, Mercy Corps continues to refine what it already excels at — raising money for disaster relief and economic development through conventional techniques such as direct marketing, telemarketing and street canvassing.
‘Explosion of giving’
According to De Galan, Mercy Corps’ total operational budget was about $200 million in 2006, and its total private income was $73 million, including $43 million in donated monies and another $30 million in gifts in kind.
Of that $43 million, about $15 million was raised online and another $13 million resulted from direct mail and other marketing efforts. The balance, about $15 million, was from major gifts, foundation and corporate donations, and planned giving.
The figures look even more impressive when you measure Mercy Corps’ progress over the past decade.
“When I started, we were raising about $2.5 million a year, and over the course of about seven or eight years we experienced steady growth and increased that figure to about $10 million a year,” De Galan recalls. “And then a series of natural disasters occurred, and we had an explosion of giving.”
Those disasters included the Indian Ocean tsunami in December 2004, Hurricane Katrina in August 2005 and the Pakistan earthquake in October 2005 — all within a 10-month span that spread out across two fiscal years.
From 2004 to 2005, the donated cash total at Mercy Corps grew from $10 million to $42 million, and last year it went up another million to $43 million.
“What we’ve done over the years,” De Galan says, “is elevate the size of our fundraising by a factor of four. It was due to the incredible generosity of Americans in the wake of all the disasters that happened over the past few years.”
It also was due to Mercy Corps having met one of the biggest challenges in the world of emergency relief — putting into place the technology and manpower to handle the significant increase in donations to be processed when disaster hits. It’s something that not all nonprofits — even large, deeply rooted or high-profile ones — have been able to do when the need arose.
Preparedness is key, De Galan says. Let’s say you normally raise $5,000 to $6,000 a day online and suddenly are faced with processing $1 million in donations in one day. When this happens, you’d better have people on staff who have created a Web site, or sites, flexible enough to handle a burst of altruism. You’d better have a phone system that works smoothly when the volume of calls soars. And you’d better have managers with the ability to quickly hire new people who can handle a huge volume of donations smoothly enough to keep would-be donors from getting frustrated.
“We’ve always prided ourselves on first being really prepared to react and then, when the disaster hits, acting very quickly,” De Galan says. “We have all our money-raising systems ready to go, whether it’s online or direct mail or telemarketing.”
An integration challenge
However, De Galan concedes that integrating the many channels through which gifts are received — especially in the frenetic environment of a disaster scenario — can be a challenge.
“We always have to make sure the message we’re sending out online is consistent with the one we’re sending out via direct mail or telemarketing,” he says. “It’s tough, in a fast-paced environment, to keep everyone on the same page.”
De Galan says he has about 65 people on his Portland team now, including a group of managers on whom he can depend to steer fundraising, marketing, communications and other aspects of the operation on regular business days, and to integrate fundraising channels smoothly in sudden high-volume situations.
But it’s not only the gift-processing systems that need to be ready when disaster hits. De Galan notes that managers need to have ready a list of phone numbers of people outside the organization who are important to the fundraising effort, such as partner agencies and technology providers and, per-haps most importantly, previous donors, who might give elsewhere if you fail to contact them quickly for their support after a disaster.
This is particularly true in the case of corporate donors. De Galan says that after the tsunami and again after Hurricane Katrina, corporations were eager to make gifts because they wanted to show their customers, shareholders, media outlets and the public at large that they were doing something to help.
“If you’re not calling your corporate contacts within a couple of hours after a disaster hits, they’re going to use somebody else,” he says. “You’ve got to have the contact information at your fingertips at all times and be ready to react.
“If you’re off skiing in the Rockies and disaster hits and you’re not ready to deal with it,” he cautions, “you’re going to miss out on a lot of money.”
De Galan notes that the tsunami was “without a doubt” the biggest and most complicated challenge to Mercy Corps’ rapid-response capabilities. The disaster affected many countries at the same time and inspired some donors who wanted to give to Sri Lanka, some who wanted to give to Indonesia and others who didn’t care which country got their gifts. Also, Mercy Corps’ efforts to serve areas that were in many ways hard to get to caused big organizational headaches.
“On the other hand, we raised $32 million for tsunami [relief], which was by far the most we ever raised for a single disaster or a single cause,” he says. “You had people motivated to give in ways that the world has never before seen, and hopefully will never see again, because it would take something unbelievably catastrophic to get that kind of response.”
Although justifiably proud of Mercy Corps’ fundraising achievements to date, De Galan also is eager for the organization to begin taking advantage of more cutting-edge fundraising tools.
“There are a lot of new technologies coming out, and you need to make sure they don’t pass you by,” he says. “Mobile phone technology is an interesting one. We haven’t done anything with that. I see a lot of groups using the Internet for podcasts. We haven’t done anything with that either.”
In general, De Galan and other Mercy Corps leaders realize that the digital age offers nonprofits a chance to connect donors with the organization in a way that’s fast and very real.
This is especially important if you’re raising money for work that’s being done on a global scale, as opposed to, say, the local symphony orchestra or opera company or some entity to which donors would have ready access.
“How do you make real for donors what we do in Sudan or Uganda?” De Galan asks, and then answers his own question: “We need to be pushing hard and using a combination of Internet, video and really good storytelling to make experiences real without donors actually going to those places.”
If Mercy Corps has been innovative in any way, De Galan says, it’s been in demonstrating how fundraisers can use speed to make their strategies more successful.
“Total preparation and total speed have been our contributions,” he says. “Every time there’s a disaster, our radio and Internet ads are out first, way ahead of any others. We learned to use speed effectively because ours is a fast business, and the Internet has been key to making the speed work for us.
“We married Internet fundraising to disaster relief in a way that few others had done,” he says.
It’s all about the DRM
But soliciting and processing gifts through creative use of technology is only the half of it. As any fundraiser knows, the other half is all about good old customer service. Fundraising, after all, is still about building relationships with donors.
“In football you can put in a lot of fancy plays, double reverses and flea-flickers, but if you don’t block and tackle, you won’t win a lot of games,” De Galan says.
“It’s the same way in fundraising. You can have a really great Web site, and you can be doing mobile-phone giving — and we’re absolutely investing in that — but if you’re not doing basic, strong relationship building, especially with major donors, getting out and talking with them, having a cup of coffee with them, you’re not going to have a lot of success.”
David McKenna is a Philadelphia-based freelance writer who last wrote for FundRaising Success about emerging trends in e-philanthropy.