CONFIDENTIAL FUNDRAISING STRATEGY NealL?vack Chief Development Officer American cm. Confidential I ??rmatz'on for Internal Use 0729/ CONFIDENTIAL ARC Situation Analysis Contributions Federated Income By Fiscal Year (Excludes Legacy and Bequest) FY02 $1.5 Billion FY05 $1.1 Billion FY06 $2.8 Billion FY10 1,000,000,000 900,000,000 800,000,000 700,000,000 600,000,000 500,000,000 400,000,000 300,000,000 200,000,000 100,000,000 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Sept 11 Tsunami Katrina Haiti American Red Cross Con?dential Information for Internal Use 0729/ Situation Analysis (continued) 9 Currently raising $520 million per year (excluding major disasters) . effect from Haiti and other major relief activity . declining Federated (UW) income 9 Strength of brand and competitive benchmarking justify results in $1-2 billion range . glarket research indicates that people wantto give money to the Red ross". . but we need to be making more asks! . non-donors cite ?not being asked? as the major reason for not giving 0 Recent pilot programs focused on expanding fundraising capacity have generated attractive paybacks American Red Cross sz?dem?z'a/ I n?rmalz?on for Infernal U56 0725/ CONFIDENTIAL Fundraising Sources FY11 Reforecast i $1,000 gift sizei/ $1,000 gift size i Corporate Foundation Individual Major Gifts Legacies Bequests Federated Special Events All Other I Alternate channels] American Redes Cm?dem?z'a/ I 7gf0rmaz?z'on for Infernal Use 0724/ CONFIDENTIAL Fundraising Capacity Gap 650 Bonn <$1,0009iftgap 10M 1 ?Legacy&Bequestgap\ 550 - f5 gift gap 450 . FY11 Budget FY11 Reforecast American RedCross Coiy?identia/ I Iz?rmaz?im for I ntermz/ U56 0719/ CONFIDENTIAL Fundraising Taskforce Members Executive Sponsors Neal Litvack, Chief Development Officer Jerry DeFrancisco, President, Humanitarian Services Co-Leads Anna Trefethen, DVP Southeast Division (5) Michael Keith, Development Advisor Field Resources Lori Bents, Development Officer - Twin Cities Area ARC Susy Smith, Chief Development Officer - Greater Houston Area Chapter Ron Horvat, CDO - Greater Cleveland Chapter Colleen Sandrin, CDO - Mile High Chapter Deborah Jackson, CEO, ARC Eastern Massachusetts John Taylor, DVP Ohio-Michigan Division Biomedical Services American Red Cross Con?dential In?rmaz?z'on?r Internal 0724/ CONFIDENTIAL Fundraising Taskforce Members (continued) NHQ Resources Michael Brown, VP, Corporate Foundation Partnerships Jethro Miller, VP, Principal Planned Gifts Roger LaGreca, VP, Major Leadership Gifts Linda Sheaffer, Sr. Director, Development Services Tim McKeown, Sr. Director, Total Rewards Policy Michael Cleary, Director, Financial Planning for Fundraising Patricia Frustace, Executive Director, Grants Office CEO Resource Group Louise Welch, CEO Carolina Lowcountry Chapter Betsy Pratt, CEO American Red Cross of the Quad Cities Area Patricia M. Waldinger, CEO American Red Cross Southwest PA Chapter Maxine Margaritis, CEO - Utah Region/Greater Salt Lake Area Chapter Sara Peller, Regional CEO Cincinnati Region Linda Mathes, Regional CEO National Capital Area Chapter American Red Cross Cai?denlz'a/ I Igformaz?z'on for I Mama! U56 0715/ CONFIDENTIAL Baseline Revenue Projections (FY1 1 -1 6) Fundraising Revenue Forecast $800 Revenue $700 Margin $600 Baseline revenue $500 $430 CAGR 45% $400 $300 - $350 I I I I FY11 FY12 FY13 FY14 FY15 FY16 American sz?dmz?z'a/ [#0777241an for Internal Use Only CONFIDENTIAL Baseline vs. Initiatives Implemented Projections Fundraising Revenue Forecast $800 Initiatives Revenue $750 . $700 - - - nitiatives Margin $600 $550 $500 - - $480 - - Baselinerevenue $400 - $350 $300 $200 . . FY11 FY12 FY13 FY14 FY15 FY16 CAGR $1,000 gift size $450101 $509101 10% $1,000 gift size 6% Alternate channels 50% Federated $101 Total: 7.6% American Red Cross Cowdem?z'a/ I n?rmalz'on for I ntema/ U56 0779/ CONFIDENTIAL Fundraising Initiatives Contribution towards goals: total objective Strengthen fundraising systems Increase effectiveness of fundraising staff 15% Expand fundraising capacity 30% Improve impact of fundraising programs Engage local boards goose American Red Cross Coi?dem?z'a/ I ?arwaz?m for I ntema/ Use 0an CONFIDENTIAL Strengthen Fundraising Systems . Unified and consistent planning process 9 Single revenuetarget Data-based target setting 9 Transition to portfolio management approach . Tracking of activity metrics calls, visits, proposals, asks) results Performance review and evaluation . System of rewards and accountability Con?dem?z'a/ I ly?ormaz?z?on for Inlema/ U36 0719/ CONFIDENTIAL Increase Effectiveness of Fundraising Staff 0 Standardized roles and responsibilities Increased time allocation to donor contact 9 Talent assessment Fundraising leadership at division level 9 Donor segment training/specialization corporations, foundations, individuals) 9 Uniform adoption of nationally-produced programs 33?33: Caig?dem?z'a/ Information for Im?ema/ Use 0714/ CONFIDENTIAL Expand Fundraising Capacity 9 Productivity enhancements, particularly in the ?back 9 office? . Reinvigorate staff focus on major donors 9 Net headcount add of 30 . Fill gaps in major markets . Further decentralization of donor-facing NHQ resources American Red Cross Information for I?temcz/ Um 0719/ II- CONFIDENTIAL Improve Impact of Fundraising Programs 9 American Red Cross 9 Refocus to programs with highest returns Target programs by market size and potential Improved benefits/recognition for corporate programsl giving circles More compelling case statements/selling materials Centralized sales support function New opportunities for large donations corporate middle market, local foundations, principal gifts Con?dential I wromzmz'on for Internal U56 07(1)} CONFIDENTIAL Engage Local Boards 6 9 Focus on fundraising 0 Recruit talent/leadership, as appropriate . Giving guidelines . Expectations about fundraising facilitation (?gets?) 9 Relationship with BOG sz?dem?z?a/ I for 1711mm! Use 0719/ NFI DEN TIAL . . . . 40 Impact of Fundralsmg InItIatIves and Investment Budgeted Revenue Target Initiatives Investment 6 Gap 4 9 0 9 L?gm 0 Strengthen fundraising systems 9 Increase effectiveness of fundraising staff 9 Expand fundraising capacity FY 11 Projected Revenue at Current Course speed 9 Improve impact of fundraising programs 6 Engage local boards American Red Cross Con?dential I?formatz'on?r Internal U56 0an CONFIDENTIAL Alternate Channels for Fundraising Growth 9 Third party face-to-face fundraisers . Telemarketing Workplace Giving . focus on ?menus? of Fortune 1000 . partnership with Amerigives American Red Cross Con?dential Information for Internal U56 0725/ CONFIDENTIAL Implementation Plan for Fundraising Initiatives December 2010 March 2011 June 2011 September 2011 December 2011 March 2012 June 2012 0 Strengthen Fundraising Systems Effectiveness of Fundraising Staff 6 Expand Fundraising Capacity 6 Improve Impact of Fundraising Programs 6 Engage Local Boards Alternate Channels American Confidential I nformaz?z'on for Internal Use 0an