The Rise of a Fundraising Powerhouse

How ALSAC has become one of the world's most prominent charities.

by

What began as one man’s promise in a Detroit church half a century ago has morphed into a nearly billion-dollar corporation promoted by A-list celebrities and underwritten by common people and business giants alike. It’s impossible to know what St. Jude Children’s Research Hospital founder Danny Thomas would think of the institution he opened in 1962, but chances are the legendary entertainer would be gratified by its continued momentum. 

“I think he would be surprised at how rapidly we’ve grown since he passed [in 1991],” says David McKee, chief operating officer of American Lebanese Syrian Associated Charities, or ALSAC, the fundraising arm of St. Jude. McKee has served in a variety of roles in his 34 years there and knew Thomas personally. “He would just be blown away with what’s happening, and I think he’d be proud that we’ve kept his focus.” 

For ALSAC, begun in 1957 as a reflection of Thomas’ Arab-American heritage, focus on the hospital’s mission is all-consuming. It’s about scientists finding cures for catastrophic childhood diseases because, in Thomas’ words, “No child should die in the dawn of life.” 

“Our whole reason for living is to fund the needs of St. Jude,” McKee says. And that fundraising takes many forms: “I think we were raising around $13 million [a year] when I started, and now we’re in the area of $750 million.” 

St. Jude is considered the second-largest healthcare charity in the U.S., according to the Chronicle of Philanthropy’s Philanthropy 400 list. It’s also the 15th largest charity in America. By all accounts, it takes $1.7 million to operate St. Jude for a single day. Together, the hospital and ALSAC have about 4,000 employees. 

Seventy-four percent of the hospital’s annual budget comes from donations, and the rest derives either from research grants or patients’ health insurance coverage if they have it. However, St. Jude does not charge families for even the most advanced treatment protocols. That concept was central to Thomas’ founding of the organization and continues to be the case now. 

It’s a concept with which Gabriela Salinas is intimately acquainted. Salinas, 23, is a research technologist at St. Jude and participates as a volunteer in fundraising events. Originally from Bolivia, Salinas was diagnosed with Ewing sarcoma when she was 7. After being misdiagnosed initially, the young girl visited a specialist in New York who found a tumor at the base of her spine. Her family was told she would need treatment immediately, but the hospital there wanted a $250,000 deposit. 

 “So when they said how much [that would cost], we knew we couldn’t do that amount,” Salinas says. A New York Daily News reporter overheard one of Salinas’ relatives crying on the phone and asked what was wrong. The woman explained and the reporter decided to write a story about the family’s predicament. The article ended up on the desk of Danny Thomas’ daughter, actress Marlo Thomas. “Within two days I was here in Memphis.” 

Of Marlo Thomas, a passionate spokeswoman and fundraiser for the hospital, Salinas says, “She’s great. I think the way she came into my life is very much the role of the hospital — letting people know St. Jude is here.” 

In 2004, Marlo, national outreach director for the hospital, and siblings Terre and Tony Thomas started St. Jude’s annual Thanks and Giving campaign, which runs in November and December. Actor Steve Guttenberg launched 2011’s campaign when he rang the NASDAQ’s closing bell along with representatives from St. Jude partner Expedia Inc. Guttenberg is starring in a new Broadway play with Marlo.

“St. Jude has deep roots in the entertainment community,” says Richard Shadyac Jr., ALSAC’s CEO since 2009. “In the hospital’s early days, Danny’s fellow entertainers lent their time and talents to help raise awareness about St. Jude.” Over the years, hundreds of well-known celebrities from the film, television, music, and sports industries have carried on this tradition by serving as campaign ambassadors, participating in radiothon events, performing at high-profile galas, visiting patients at the hospital, and much more. So it’s only natural that Thanks and Giving would recruit entertainers as well; stars such as Jennifer Aniston, Robin Williams, Morgan Freeman, and George Lopez appeared in advertising spots with St. Jude patients. The campaign raised $62 million in 2010 alone. 

 Thanks and Giving’s 60 corporate partners include Target, Kmart, Kay Jewelers, Williams-Sonoma, Ann Taylor, Domino’s, and CVS/pharmacy, and others have joined the campaign too. Although International Paper has been involved with St. Jude since the late 1980s, this year, as part of Thanks and Giving, it put artwork made by children being treated at the hospital on its reams of Hammermill-brand paper, with 10 percent of all proceeds going to St. Jude. The company’s projected fund- raising total for the 2011 holiday season was $250,000. 

“A few years back we moved our corporate headquarters from Stamford, Connecticut, to here, and we felt that St. Jude is a great organization right here in our own backyard,” says David Apollonio, vice president and general manager of Converting Papers at IP. “We needed to develop a closer relationship with them.”

Car parts giant AutoZone also threw in with Thanks and Giving in 2006. So far, the company has raised almost $8.8 million, although the retailer has been involved with St. Jude in some form since 2001, says Brandon Williams, a marketing specialist for AutoZone. Customers are asked if they want to donate at least $1 to St. Jude along with their normal purchases. 

“The culmination of the Thanks and Giving campaign in our stores is the presentation of a check to St. Jude at the AutoZone Liberty Bowl,” he says. In 2003, AutoZone became title sponsor of the bowl, making St. Jude the only charity recognized in the logo of a national college bowl game. 

But support from corporations extends far beyond one annual campaign. The mega-retailer Target Stores has been an official corporate sponsor since 1996 and has raised millions of dollars for the hospital. Originally, Target executives committed to building a long-term residential facility for patients and their families. The result was the opening of the St. Jude Target House in 1999. It had 50 apartments, a Tiger Woods Library, an Amy Grant Music Room, and a playground sponsored by the PGA TOUR Wives Association. Then, in 2002, the facility in Midtown expanded to include 48 more apartments, a fitness center, an arts and crafts room, a day spa, a dining room, and other amenities. 

“Since Target House opened, I have been fortunate to be part of a life-sustaining mission that helps patients and their family members from around the world have a home away from home during one of the most difficult journeys of their lives,” says Karri Morgan, house manager at Target House. 

Over the years, Target House has hosted more than 2,400 families to date. Other housing facilities for families are the Memphis Grizzlies House, sponsored by the NBA team,  for short-term-stay patients; and the Ronald McDonald House, sponsored by Ronald McDonald House Charities of Memphis,  for midterm stays of up to 90 days.

Meanwhile, in addition to the many special events Target participates in each year, the corporation also sponsors the St. Jude School Program, which provides six teachers for kids in grades K-12. The program has existed since about 1970, but was formalized in 1999. In 2010 Target contributed to classroom renovations that added space and brought an interactive white board for enhanced instruction.

No discussion of corporate support is complete without mention of the $134 million Chili’s Care Center that opened at St. Jude in 2007. The building was made possible with support from Chili’s Grill & Bar and concentrates on serving patients with tumors or those in need of bone marrow transplants. In 2006, Chili’s began a campaign to raise $50 million over 10 years — an effort St. Jude calls the largest single partner donation in the hospital’s history. So the care center was named in honor of the corporate partnership. It is the fifth building dedicated on the St. Jude campus since 1999, when hospital officials embarked on a $1 billion expansion plan. 

Now construction should begin on a $190 million facility next to the Chili’s Center this year if plans are approved. Its projected completion is 2016. The new medical tower, a mirror image of the Chili’s Center, will house several programs and services for patient treatment and research, and is part of the hospital’s master plan. Some of the new services will include surgical and intensive care units, a Global Education and Collaboration Center, and a proton-beam therapy center for outpatients. The proton beam can target and isolate tumors more effectively than traditional radiation. 

Kay Jewelers is another retailer stepping up its giving. Last year St. Jude launched a $65 million Pediatric Cancer Genome Project in which scientists investigate genetic mistakes that trigger cancer. Kay Jewelers — whose parent company Sterling Jewelers has been a strong St. Jude supporter since 1999 — is lead sponsor providing $20 million for the project. 

 But fundraising isn’t confined to corporate support. McKee, who served as interim CEO of ALSAC when John P. Moses stepped down in 2008, says one of the organization’s biggest fundraising vehicles by far is direct mail, reaching 9.5 million active donors worldwide. Their gifts average a little more than $30 apiece. About $100 million a year comes from estate planning and bequests. 

At the heart of many donors’ continued support is ALSAC/St. Jude’s ability to direct 81 cents of every dollar toward patient care. Its accountability and transparency score ranks at the very top, according to the Charity Navigator, a guide to intelligent giving. The hospital enjoys a four-star rating. And as St. Jude has pushed up childhood cancer survival rates (see “Conquering Leukemia,” page 40), attracting and retaining donors have improved. “It’s easier to motivate people because of our medical and scientific successes,” says McKee.

“The most important asset we have is our name and we go to great lengths to protect the brand and keep it pure,” he continues. “We make sure that our messaging is correct and accurate.” 

A primary reason the joint entity of ALSAC/St. Jude has clung to its mission is because, although the hospital and fundraising arm’s boards have different officers, they share the same members. Many of those members are children or grandchildren of the people who helped get St. Jude off the ground along with Danny Thomas. 

Shadyac Jr. is a prime example of continuity between generations. His father, Richard Shadyac Sr., served as ALSAC CEO from 1992 until retiring in 2005. Before that, the elder Shadyac had served on the hospital’s board for 30 years. 

Before Shadyac Jr. took the helm in 2009, he had served as chairman of the board and in many other capacities over time. He says the biggest change he’s seen during his transition to the CEO’s post has been the explosion in wireless communications devices. That rapidly shifting landscape has forced St. Jude fundraisers to stretch quickly. 

“We are more strategic and more nimble than in the past, and I believe this presents opportunities to take advantage of a fast-changing economic and technological environment,” he says. That means appealing to potential donors via Twitter, Facebook, smart phones, and a host of other modes from which Shadyac Jr.’s dad, a fundraising wizard in his own right, was insulated. 

“My father took over as CEO not long after Danny Thomas passed away, and he replaced longtime ALSAC CEO Bud Rashid,” Shadyac Jr. says. “It was a time of great transition. Yet ALSAC rose to greater heights than ever before.”

 Shadyac says his father was close to Thomas and had the kind of leadership skills that instilled confidence in others. The elder Shadyac also wasn’t afraid to change. He increased fundraising from $100 million in 1992 to $400 million by 2005. “He saw opportunities in areas like direct marketing, gift planning, technology, and donor services,” his son says. “These investments laid the groundwork for future success.”

But losing Thomas, ALSAC/St. Jude’s most visible champion, meant someone or something else had to be relied on to communicate the message. “Dad found his answer in the children and families of St. Jude, and their stories have helped spread the mission of the hospital to donors and supporters across the country ever since,” Shadyac says. 

After Thomas’ death, his children became more involved in the hospital. The board also stepped up its efforts. So what remains today, 50 years after St. Jude’s founding, is what Shadyac calls “an iconic presence in the charitable world.” 

“As the second-largest healthcare charity in the nation, we are mindful of additional scrutiny and attention. We are also operating in an age where the number of charitable choices is increasing, and that means we must stay strategic and nimble at the same time."

 The Early Years 

As with the founding of St. Jude, the founding of ALSAC begins with Danny Thomas. Born Muzyad Yakhoob in Michigan in 1912, Thomas was of Lebanese descent, so in 1957 when it came time for the celebrity to begin raising money to operate his hospital in Memphis, Thomas turned to people of similar heritage. At the time, cities all over the U.S. had established Arab-American social clubs, but they had never been united for a single cause. 

Thomas set up a meeting in Washington with leaders of these clubs to show them artists’ renderings of St. Jude and to tell them about his dreams for the hospital. He convinced them that giving back to America in the form of helping child cancer patients regardless of their ability to pay would be an act of pride and solidarity, and would honor their ancestors who had emigrated to the U.S. generations earlier. 

“Therefore: We who are proud of our heritage have formed a nonprofit, nonsectarian, charitable corporation titled ALSAC . . .  dedicated to the parable of the Good Samaritan, to love and care for our neighbor, regardless of color or creed,” says the preamble to ALSAC’s constitution. 

One of the people listening to Thomas’ pitch that day was Michael F. Tamer, president of the Midwest Federation of Syrian Lebanese American Clubs. Thomas tapped Tamer to help spread his message about St. Jude. It was the beginning of an association that would last until 1974, when Tamer died at age 70. 

Through his efforts helping Thomas gain support for the hospital, Tamer ultimately became the first executive director of ALSAC and a voting member of its board. He initially ran the organization without pay from a small office in his wholesale tobacco and candy business in Indianapolis. Helping him, also without pay, was his friend LaVonne Rashid. 

Like Thomas before them, Tamer and Rashid had pledged themselves to St. Jude and saw their efforts as a way to fulfill their promises to the patron saint of hopeless causes. Eventually, Tamer appointed 10 regional directors of ALSAC, whose job was to organize new chapters. When his television schedule permitted, Thomas would drive around the country with Tamer to spread the word about St. Jude. 

Soon, people of every ethnicity were starting to become involved. By 1958, more than 142 chapters of ALSAC had been formed in 35 states. By the time of the organization’s national convention in Chicago that year, an operating budget of $250,000 had been established, and Tamer and Rashid became the first employees on ALSAC’s payroll. 

Meanwhile, the Memphis Steering Committee for St. Jude Hospital was in the midst of conducting feasibility studies. Thomas was raising money via the St. Jude Hospital Foundation of California, while the Memphis committee worked locally. ALSAC was raising money for hospital operations and maintenance. All of these efforts culminated on February 4, 1962, at St. Jude’s official dedication. ALSAC later moved its national headquarters from Indianapolis to Memphis in 1975. —LJ

 

Source: From His Promise: The Story of St. Jude Children’s Research Hospital and American Lebanese Syrian Associated Charities.