funding deficit

This was a headline in the New York Times today:
"Facing a $200 million operating deficit, the American Red Cross is preparing to cut as much as one-third of its headquarters staff, up to 1,000 employees, and pare regional management."
To get this in perspective, they raise about $3.45 billion annually -- most of us are out of their league. But before we push the thought out of our mind,I think we'd do well to consider a couple of issues.
Between 911 and Katrina, the Red Cross had some pretty good years. Raising funds for high profile emergencies is much different than the hard, systematic work of cultivating long term donors. Our studies show that emergency donors are a unique breed. They are not interested in being committed to one organization. Rather, they respond to highly profiled need when it happens. They rarely transform to long term donors. Your loyal supporters will also respond at an increased level to emergencies that are perceived to be gi-normous (to quote my daughter). Your fiscal planning must take into account the highs of emergency situations.
In response to increases, Red Cross increased their staff -- not necessarily their effectiveness.
Watch your numbers. Return on investment and prudent, strategic acquisition and cultivation cannot be underestimated.
I know, spread sheets are really sexy. They don't make headlines like "$1 million gift given to..." Cultivating monthly donors is not that sexy either. Charity Village never features Mrs. Smith who has given $35 a month to one organization for 50 years (That's $21,000). The organization that has 50,000 Mrs. Smiths is raising more than $21 million each year!
While we need to ensure that our organizations are equipped to respond quickly to emergencies -- we also need to respond with integrity. Doctors without Borders stopped their fund raising for the Tsunami when they hit their response capacity -- good for them! BUT they didn't stop fund raising. Instead, they stuck to their central mission and helped the general public understand that the Tsunami was certainly high need -- but it was one of many humanitarian disasters in the world.
The fund raiser's job is to effectively tell the stories of the organization's real work and inspire people to respond. We need to be innovative, engaged and focused on effectiveness.