Where is American Lung going?

(Editor Bill Olcott talked with John R. Garrison, managing director, American Lung Association, about his plans for the organization. The following is a transcript of their conversation.)

Q. Is it true that you are different than most of the people who head national health organizations

A. Well, I guess I would characterize myself as being a leader and manager in the healthcare field. I've come more from the administrative side of things, but I do put a lot of emphasis on fund raising. I did not come up through the program ranks, and I didn't really come up through the fund-raising ranks either. I was with the New York State Health Department as deputy commissioner for administration. Then I went with the Hospital Association of New York as executive vice president and then with Easter Seals as CEO. So I've come up through the management ranks as opposed to fund raising. However, particularly at the American Lung Association (ALA), which has been so program-oriented and so dependent on Christmas Seal income and other direct mail for revenues, I have put a strong emphasis on diversifying the fund-raising portfolio. I'm trying to get us into far more activities and increase direct mail, but get us involved in planned giving, major gifts, corporate support and larger special events.

What I've done here is come up with a strategy that I call "Mission Plus Four," which I've been talking about for the last two years. I think it's beginning to pay off. We start with a mission. I know why we're here--we're here to fight lung disease. That's our mission and certainly anything we do is in that context. But my concern is that with direct mail leveling off and Christmas Seal income falling, if we're going to get the revenue we need in the fight against lung disease, we've got to develop and implement this Mission Plus Four strategy. The four are all "M" words--mutual cooperation, marketing, media and money.

Mutual cooperation is important to an organization like the ALA because we're in essence 120 separate lung associations across the country, separately incorporated. That gives us the advantage of a lot of grassroots energy and creativity. I believe that will work to our benefit if we work together and cooperate.

Q. Were they not cooperating before?

A. I think that they had been cooperating, but as we get into more development activities with more corporate sponsors that cut across local boundaries, it will make cooperation more difficult. There's not much of a problem with direct mail--it's so direct, you know which ZIP Code it's going to, there's no need to worry about who it belongs to. But when you start getting corporate sponsors--they may work on a regional basis, they may work across states. They don't really make a distinction between one local lung association and another, they think in terms of the ALA. We've got to cooperate. I've got to convince 120 lung associations that they should be working with a particular hotel chain when maybe some of them have a relationship with other hotel chains. In some instances we may have several associations in a given metropolitan area.

We have something called the Clean Air Challenge, which is a bike trek tied in with Clean Air Week. They've got to cooperate throughout the metropolitan area or another voluntary health agency may put on a special event and be more successful. So that's part of what I mean by mutual cooperation.

We completed a strategic marketing plan and what it really said was that we have to clarify our mission and our focus. So we have been talking in terms of fighting lung disease as our mission and getting the public to understand that lung disease is important. Seventy-five percent of the public doesn't smoke, and so they feel that because they don't smoke, their lungs are in pretty good shape. They tend to equate lung disease with cigarettes, which is a problem. Lung disease is the third leading cause of death. It's the fastest growing cause of death after AIDS. And while cancer and heart disease death rates are going down, lung disease is increasing. So we've been trying to focus more on the fact that lung disease is important and increase the sense of urgency of the American people. We've been including that message in our PSAs and press releases.

We've become more aggressive in getting national media placements and we've gotten more aggressive across the country. We've developed a very strong media program and it's starting to pay off. We do Gallup surveys periodically and our total awareness in our Gallup surveys jumped from 70 percent to 80 percent in 18 months. I believe a jump from 70 to 80 is unprecedented in voluntary health surveying. It's very good because there is a direct correlation between public awareness and voluntary health agencies and where they stand on the ladder of getting public support.

We've typically been running around sixth, and with this jump we should be getting more public support. The people ahead of us all have higher awareness than we do--Cancer, Heart, March of Dimes and Muscular Dystrophy.

I think a CEO has got to be involved in the communications area, not just in management and not just in program. I'm a CEO who believes very strongly that you've got to get out there in the forefront both in fund raising and communications.

Q. Could you give a couple of examples of what you've done in media?

A. The primary thing we have done is that we have started letting the media know what we are doing. What I found was that nationally, certainly in the national office and across the country, the ALA, which is so program-oriented, really wasn't telling the media or the public what it was doing. We were in a sense taking ourselves for granted. And so both our Washington office and our national office here have been holding press conferences on tuberculosis and on our environmental programs particularly. We look for opportunities where we have a message to take to the public to hold a press conference. We've had a series of both press briefings and press conferences on major issues. That's the first thing.

The second thing we've done, we have made an effort to be certain that key media producers and newspaper people are aware of what we're doing. We've tried to get onto the media's rolodexes, as a prime resource, so that if they have a question about smoking or anything in conjunction with lung disease, they'll think of ALA. We provide a lot of background tape to the networks for national newscasts on anti-smoking programs. We provide tape and we make an effort to let them know we've got it. Of course, it always says American Lung Association somewhere in the background. So we've been aggressively going out and seeking media exposure, making sure the people know what we're doing, publicizing the results of some of our Gallup polls at press conferences and developing a rapport with producers and reporters and others who write the news or present the news.

Q. How about going on TV yourself?

A. We have three or four volunteers who go on TV frequently. I go on TV frequently, so does our government relations person in Washington. Lee Reichman, who's my current president, is an expert on tuberculosis. He's constantly being interviewed by The New York Times or by CNN. Whenever anything on TB breaks, which is often, he gets a call. And he's an M.D. There's also Dr. Al Munzer from Washington who's our president-elect. Both of them are very fine volunteer spokespeople. We have picked up the tempo considerably in the whole media area.

All four "M"s of the Mission Plus Four focus--media, marketing, mutual cooperation, money--are related. You can't do one without the other. If the program is to be successful the 120 local associations must get involved. For example, we're getting to the national media here in New York and Washington. But if the field isn't, then our efforts are only going to be at best half successful. But the fact of the matter is our field has really responded. I've been traveling around the country. We have 58 constituents--that's for the most part state associations. I visited 34 of them and I've visited many of the affiliates--locals that report to the states. We have those in 15 states. I can see the difference just in the two years that I've been here. At the state and local level we've gotten much more active in going to the media. When we have a good asthma camp program or a flu campaign, we're going out and getting the local newspapers and radio stations involved.

That's all part of positioning the ALA so that we get our fair share of revenues and grow, because I don't think our growth is going to come from direct mail. I think our growth is going to come from the development activities I mentioned earlier. We now raise about $65 million from direct mail and about $30 million from all other development activities. I know from my previous experience at Easter Seals that we can jump that development income from $30 million up to $60 million to $65 million in about four years. I'm expecting that by 1995-96 that our total revenues will increase to about $170 million. We're now at $125 million. And that's not all from fund raising. We get some government support as well. We can also increase our revenues by marketing anti-smoking programs to corporations.

One of the reasons I felt excited about taking the ALA position was I saw we have so much potential in the development area. We never really had focused in that area. Even in a tough economy I think we can jump from $30 million to $60 million once you get people oriented and trained to think that way. Then when you get up around $60 million to $70 million it gets a little more difficult. The more mature fund-raising organizations like Easter Seals and the March of Dimes and MDA, can still grow, but it gets a little tougher when you get up there at that level. Some of the newer ones that are moving in that direction--Alzheimer's, arthritis--when they get to that level they're going to find that it gets a little heavier. We've got so much potential and all we have to do is start thinking in terms of accumulating more revenues. Our program component is there. It's been there since 1904. We've got a long way to go before anybody can accuse the ALA of being too oriented toward fund raising. The staff is program-oriented, the volunteers are program-oriented and for decades all we had to do was do the program and let direct mail support it. Now it's a new ball game.

Q. How many pieces do you mail a year?

A. We have about 10 million donors. We mail about 85 million pieces a year.

Q. How many times do you mail a year?

A. We have 15 different mailings each year.

Q. Do you have any plans for direct mail?

A. Yes, we're trying to do some things in direct mail too. Number one, we're looking at our file to see what we can do about cultivating donors. And we're also looking at our file to see if we can become more selective in targeting some of our donors. We're seeing what we can do to improve what is right now, I think, the most sophisticated direct-mail program of any voluntary health agency. That's a major asset for us. We are the leaders of all the voluntary health agencies in direct mail and I want to be sure we stay the leader. And so we're looking at everything from whether we should use our computer capabilities differently to how we can use our file more effectively and perhaps be more efficient in our mailing. We're certainly not giving up on direct mail. We think we can bring it back. We think we can bring Christmas Seals back too. Our strategy is to hold that $65 million base essentially and grow it as much as we can. I'd like to increase that to about $75 million and really make our major advances in the development area.

Q. Had you dropped in direct mail?

A. We have dropped. For example, this past year, our fiscal year ended June 30, we were down 1 1/2 percent from the year before. That decline was entirely in the Christmas Seal mailing. Christ-mas Seals were down 9 1/2 percent. Christmas Seals are part of that $95 million that I mentioned. Christmas Seals run $35 million to $40 million of our direct mail total of $65 million. We have several other mailings and these were up--not a lot, but up. Our other mail was up 1.7 percent, our development income was up 3.4 percent, our bequest income was up 9.5 percent. This, of course, in a tough economy. Our total income was down 1.6 percent, but everything was up except for Christmas Seals.

Q. Tell me what you've done in other development areas?

A. First, even in lean times, we've put more financial resources into the national development department and we have a first-rate staff. This staff has made a greater effort already in all of these areas and I think that we're going to start reaping some of those benefits. We call our planned giving "The Heritage Club Program." We now have about half of our associations participating. Volunteers are going out and forming clubs with people who say, "Yes, I will make a bequest. I will name the ALA in my will." And we've got 60 of those clubs operating out of our 120 associations. I think that's growing so fast that we're going to have 100 percent participation. That's been a real success story for us.

The idea of major gifts was almost another language here at ALA. As a matter of fact, I think voluntary health agencies have not really tuned in to major gifts to the extent that they probably should. We're working with three or four of our associations. You might call them pilot associations.

At the Conference for Executives this year, I'm suggesting that we talk in terms of fund raising. Fund raising is getting my priority in staff training.

We have had a lot of success in this office in the last two years going to corporations and getting them to underwrite programs--flu programs, anti-smoking programs, asthma programs. We need to develop more support for corporations that will do projects at the local level so the money will stay at the local level. Of course, that's one of the advantages of a telethon. You can get the Century 21s and Safeway Corporations. They get involved because they can be showcased on the local shows plus the national telethon network.

Q. Would you see ALA getting involved in a telethon?

A. The ALA is looking very closely at the electronic media. We did try a radiothon which did not work for us, in terms of being a fund raiser. But we're looking at using it in a different way. To make telethons or radiothons work you really have to have participation at the local level.

But we're looking at other forms of electronic media. We're not looking at a 20-hour telethon. The 20-hour telethon for Easter Seals is very important for them and very successful and it's kind of the centerpiece of their fund raising. But for ALA to start now and try to do that would be extremely costly and would take a long time. You really need to build, to get the sophistication that Easter Seals or MDA has. But we are looking at other kinds of TV programs. Everything from two-minute shows, to half-hour shows and one- and two-hour shows. We don't have anything ready to go right now. We're also looking at TV to do some public health education as well as fund raising. I think that this is a part of our portfolio that needs to be expanded.

I've got to find out how to use electronic media as a way to get the ALA name out there. That's also very important in terms of public recognition and has that benefit as well.

Q. What other plans do you have for ALA?

A. My plan is to get to $170 million and to increase direct mail to about $75 million and to move development from $30 million to $60 million. The balance would come from investment income, program revenues and the government. We've already got planned giving under way. We've got major gifts under way. We've got corporate support under way. I would estimate corporate giving at about $5 million currently. We're working toward larger special events. Our two major special events are bicycle treks and the golf privilege card, which is raising more than $4 million a year for us.

We tie bicycle treks in with Clean Air Week. I think we're going to broaden that window and go for the Clean Air Challenge Month. Clean Air Challenge would be where you do a bicycle trek or a run or walk, any kind of outdoor exercise. It is pledge-based and it's in conjunction with Clean Air Week. We're going to make that a national event and we're going to try to make golf privilege cards national.

Q. What is your biggest problem?

A. My biggest problem, I call it a challenge really, is bringing about a change in the fund-raising culture of the ALA where everybody has been so dependent on direct mail. I've got to get the volunteers and staff interested in other forms of fund raising. I feel that CEOS have got to be active in fund raising. I don't care whether their background is management, program or what it might be, they have got to take a lead role in going out and raising funds, particularly when you get into things like major gift campaigns. The other thing I'm trying to establish and talk about wherever I go is that volunteers and boards of directors must participate in fund raising. I don't think it's fair for volunteers to point to the CEO and the staff and say, "Go out and raise the money." They've got to participate as well. They've got to help in doing the asking. They've got to help open the doors. So my challenge is to broaden our thinking into other forms of fund raising besides direct mail. It's nothing short of changing the culture of the organization.

Our organization was founded in 1904 and we are the oldest voluntary health agency. There are four other voluntary health agencies that are raising more money than we are. There's no reason why we can't raise as much money--we've got the grassroots network, we've got the dedicated people, we've got the managers out there. It's just a question of changing the fund-raising culture.

Q. What strategies should voluntary health agencies follow in the '90s?

A. Not only are there more local non-profits, but there are more national non-profits coming on the scene. For example, in 1978, when I joined Easter Seals, there was no Alzheimer's Association. Now Alzheimer's is a major player. Same thing for AIDS. Nobody heard of AIDS in 1978. And now AIDS is a major player. What's happening is you've had all these new organizations come on the scene throughout the '80s. And the older organizations have gotten better at raising money. The strategy has got to be mutual cooperation, marketing, media and money, with a diversified portfolio. And it's important that in conjunction with all that we not forget our mission. You hear the same stories I hear about the people who are just in the business to raise money, particularly some of the direct-mail firms. But I think the mission is important and that's the key to marketing and media. You've got to tell the people what you're raising the money for. I always work in the context of our mission.

Q. Do you see any possibilities in the new technologies as a way to help raise funds?

A. Well, that's one of the things we're looking at in direct mail. We want to make sure we're using the latest technology in our direct-mail operations for starters. I think the speed of communication is very helpful, too. We recently established an electronic bulletin board. If someone in the field has success in some kind of event, we want them to put it up on the bulletin board for all to see. The other area we're starting to do more work in is telemarketing. And that's possible because of advances in electronic phone equipment.

Q. Do you see the fax helping in fund raising? The American Red Cross used faxes to raise funds after the 1989 earthquake in San Francisco.

A. We haven't done that yet, but we might. When I came here two years ago, only about 25 of our 120 associations had fax machines. We put a machine in New York and a machine in Washington to send faxes overnight to our associations.

We're getting all kinds of information out, particularly on press briefings and breaking stories. It has worked like a charm. Now I think all but three or four local associations have faxes because they want to get the news quickly. They want to know when a story is breaking on second-hand smoke. When Cancer, Heart and Lung are being attacked by some professor who says that we shouldn't be spending our money on lobbying against the cigarette companies, we should be putting it all in research. As we get more into major gifts, for example, I think there are going to be all kinds of uses for the fax. We might be able to send major donors current information. We're using faxes now to communicate among ourselves. Whether we can use it to communicate externally is something that holds a great deal of promise.

Q. How about videos?

A. We're using videos quite frequently, primarily to take to corporations to convince them to underwrite all that we're trying to put together. For example, we're working on a four-part public health education series that Walter Cronkite will narrate. And we have a video we're taking to corporations, a case statement kind of thing.

Q. You used "social responsibility marketing" at Easter Seals. Can you use it here?

A. Social responsibility marketing is essentially getting a corporation to underwrite a program because it's to their benefit as well as yours. They get so interested they want to stay on and be volunteers and help the program and the organization. They buy into it beyond just having it be part of their marketing plan.

I've not come up with another term for it, but that is exactly my strategy for any corporate sponsor we have--to get them involved in the organization to the extent that they will go beyond the marketing approach. And that's not an easy thing to do. I think we have a couple of companies that are getting very close to that point. We've got some pharmaceutical companies that are part of the ALA volunteer fabric now. I guess the most tangible proof is when you see executives from these companies volunteer.

Q. What are the main issues that you have to be aware of?

A. We're constantly looking at what's happening with the government--whether we're talking about postal rates or unrelated business income or exemption from taxes. I think staying abreast of technology is going to be very important. It's not good enough to think that you've got the best telephone system or the best computer system or the best direct-mail operation. You may have it in 1992, but with technology advancing so fast, you could easily slip from first to third overnight and somebody could climb from last place to first.

One of the major issues is cultural diversity. Lung disease is increasing more in minority populations, whether we're talking about asthma, emphysema, smoking. If we're going to accomplish our mission, we've got to do more in culturally diverse areas. The demographics of the nation are changing, and if we're going to be relevant into the next century we've got to make sure that we are a culturally diverse organization.

I think that the key is being oriented toward leadership. If your orientation is strictly management, I don't think you're going to do too well because things are changing so fast. When I talk in terms of leadership I mean providing ideas and vision into the future, trying to break the mold of a bureaucracy, having the people empowered, having the organization flexible enough to respond to opportunities. I think we're going to have to be leaders as well as managers. If we're just going to be managers, we're not going to be able to compete with organizations that are flexible, that have drive, creativity and energy. The competition is going to get stiffer. The expectations of voluntary health agencies and non-profits in general are higher, particularly as government cutbacks occur. It's a much tougher and more unpredictable situation than it was even 10 years ago.

Q. Could you give me some examples of how an organization becomes more culturally diverse?

A. The first thing is to start looking at the volunteer base and reach out into culturally diverse communities to get African-Americans, Hispanics, Asian-Americans or Native Americans involved. Start getting representation on the board as well as on the staff. But you just can't go into a community and say, "Look, we're here to help you." You've got to get the community to buy into your organization and the way to do that is by having them participate as volunteers, as leaders of the organization, as decision makers. A Gallup survey said there is a lot of potential in the African-American communities and other minority communities. The survey indicates that African-Americans are willing and able to give money, but nobody is asking them. This is a real opportunity.

Q. How about using Spanish in direct mail and brochures?

A. The problem that I have right now is I just don't have the money. We do have some of our program material in Spanish. We do some Spanish PSAs too, but I would like to do more. But you get caught in a catch-22, because the volume is not as great for Spanish publications the cost is higher. This national office is operating very lean and I need to find more revenue and that's an area where I would like to do something.

Q. Why did you leave Easter Seals?

A. There were three reasons why. And all three had to be in place and all three of them were in place. One, it had to be an organization whose mission I agreed with and through my work in the National Health Council I knew the ALA. I felt the mission was good. Second, my wife and I really did like Chicago, but we felt at this stage after having been there for 12 years we'd like to come to the East Coast. My definition of East Coast is between Washington and Boston. And third, it was a very fair compensation package.

I've always felt that a CEO should probably move about every five years. My theory was it takes you two-and-a-half years to get your organization up and running and two-and-a-half years to get it running well. After five years you start defending what you got going in the first five. After I stayed 12 years at Easter Seals, people asked me what happened to your five-year theory? What happened with me at Easter Seals was I had a very fine staff and they were constantly coming up with new ideas. Plus the field. I liked working in an organization where you've got this field with all kinds of ideas and I felt like I was being renewed. But I still feel there's some validity in a change of scenery for the CEO as well as giving the organization a chance to have new leadership. But Easter Seals had gone very well and it was tough to leave.

Q. A friend of mine who was with United Way when Bill Aramony came, said Aramony wanted to stay with UW for 10 years. If he had stayed for 10 years he probably would have been better off. What do you think?

A. I think that's right. Bill was there 22 years. I have a five-year contract here. I didn't have a contract initially with Easter Seals, but I gave them an oral five-year commitment. I wouldn't even look at another position during that five years.

Q. What was involved in that recent lawsuit between Easter Seals and ALA?

A. That has been resolved. The issue was that in 1988 the ALA started sending out seals at Easter. It started when I was at Easter Seals and every year there would be discussion back and forth between the two organizations to try to make certain the two mailings did not look alike so as not to confuse the public. When I arrived here the mailing went out. My friends at Easter Seals felt the mailing still was too close to their mailing and was confusing the public. That was the issue. And so they filed a lawsuit. What happened after that was there were negotiations through the summer of 1991 and the issues essentially were resolved.

Q. I thought it had something to do with your coming over from Easter Seals.

A. No, no. My relations with Easter Seals are very good. It was strictly a business difference of opinion which we feel has been resolved.