Cost-Saving Techniques Help Local Charities Focus On Relief Programs

The worst of nature's fury often brings out the best in people's generosity toward those affected by disasters. For example, according to national headquarters of the American Red Cross, the organization received more than $2.12 billion from September to December 2005 to help victims of Hurricane Katrina in the south-central United States, with much of the money contributed through local American Red Cross chapters around the country.

What many people may not realize is that 100 percent of those dedicated donations went straight to the national Red Cross organization, creating some unintended fund-raising challenges for local chapters in their ongoing mission to serve the needs of people closer to home.

"Americans were very generous in giving to major national and international relief campaigns throughout the past year," said Rick Hankins, director of administrative services and information technology for the Greater Cleveland Chapter of the American Red Cross.

"At the same time, events like Hurricane Katrina lead to what we call 'donor fatigue'; people feel like they've already given all they can," he said. "Meanwhile, there are still between one to three house fires in the greater Cleveland area each night, and we still depend heavily on local donations in order to help those families."

When local donations dip below expected levels, charitable organizations such as local chapters of the Red Cross must quickly adjust their budgets and reduce expenses wherever possible. One way Hankins and his fellow managers have succeeded at this is through adopting new financial management technology to help them create more accurate budgets with less administrative overhead.

"We've switched from compiling budget spreadsheets by hand, which used to take days or weeks, to a Web-based budgeting application called Microsoft Forecaster that automates the entire process," he said. "By managing our resources more effectively, we can put a bigger slice of every dollar toward helping people in need."

Other ways the Cleveland-area Red Cross and chapters elsewhere have streamlined their operations include delivering more volunteer training classes online instead of in a classroom, and using the Web and e-mail to reach a larger pool of potential donors at a lower cost compared with regular mail.

"Technology has made a big difference in helping us work smarter," Hankins said, "so our donors can know that their gifts truly have a positive impact in this community."