Cold Cash: What to Do When Unexpected Money Pours In

The ALS Association St. Louis Regional Chapter

Five summers ago, buckets of ice water splashed on Bill Gates, Taylor Swift, LeBron James, and hundreds of other willing participants, who channeled tens of millions of dollars to a charity fighting amyotrophic lateral sclerosis, or ALS, a fatal disease that causes paralysis and suffering. Better known as Lou Gehrig’s disease, it has no cure.

The ALS Association suddenly had $115 million in hand from the Ice Bucket Challenge, a grassroots effort that encouraged people to either dump icy water on their heads or give money. The sum was nearly twice as much as the charity raised in a typical year.

Now the organization is marking the five-year anniversary of that success, with a new fundraising campaign and a commitment to tell the public what has been accomplished with all that money. That’s important because a lot of people have questioned why so much money went to a disease that affects no more than 15,000 Americans, according to Centers for Disease Control and Prevention estimates.

The organization has a good story to tell about where the money went: It has spent more than $80 million to fund research breakthroughs that are likely to prolong the lives of those afflicted with the ailment, and it has improved treatment for many patients. ALS destroys motor neurons in the brain and spinal cord, leading to diminished muscle control and eventual paralysis. Most patients retain full mental capacity even as the disease robs them of mobility.

What’s less clear is the extent to which the organization can sustain that research spending, given that it has failed to persuade many of the people who made an Ice Bucket gift to make more donations. Less than 1 percent of those who gave for the first time during the challenge have donated again.

That hasn’t stopped the association from trying new approaches to fundraising that will help ensure it doesn’t need another set of ice buckets gone viral.

Its finances still allow it to spend more than it did before the Ice Bucket Challenge, but it is doing so at a deficit of more than $1 million. During the fiscal year before that campaign, the ALS Association’s budget was $65 million. In the fiscal year that ended this past January, its budget was $92 million, and it expects to reach $100 million by the end of the next fiscal year. The number of mid-level and major donors has grown by 40 percent since 2014. The average gift size went from $44 in 2014 to $129 in 2018.

‘Help Them Where They’re At’

The ALS Association’s mission is to both treat and cure the disease, and deciding how to split its dollars between those needs was tricky even before the Ice Bucket Challenge.

“There’s always a little bit of tension there,” says Calaneet Balas, the chief executive, who joined the group in 2016 to lead its strategy work. She previously served as CEO of the Ovarian Cancer National Alliance.

All donations in response to the Ice Bucket Challenge that were earmarked for research went to the ALS national office, while local chapters were free to spend any direct donations they received to provide care and treatment of people in their regions. “The research is 100 percent important, but we have people living with ALS now, and we want to help them where they’re at,” said Jennifer Hjelle, executive director of the chapter comprising Minnesota, North Dakota, and South Dakota.

The increased name recognition as a result of the Ice Bucket Challenge helped Hjelle’s chapter get help from the Best Buy stores’ Geek Squad, a digital-services unit that outfitted ALS patients’ houses with purchased devices controlled by voice, hand, or eyes. Such technology helps ALS patients have more independence and continue to live in their own homes.

“ALS is a disease of loss,” said Hjelle. “You’re constantly losing the next thing. And with this technology, it’s actually giving them something back that they had lost.”

Her chapter used money from the challenge to buy equipment, such as power wheelchairs, walkers, and shower benches, to lend to ALS patients. The waitlist that had existed throughout the loan program’s 20-year history has evaporated since the Ice Bucket Challenge.

Nationally, the ALS Association said it has increased the number of patients served by 28 percent, to reach more than 20,000 people.

‘People Living Longer With ALS’

A far bigger share of the ice-bucket dollars has gone to research, which has paid off in numerous ways.

Since the Ice Bucket Challenge, research funded by the ALS Association has discovered five ALS-associated genes. Most ALS patients do not inherit the disease, but the linked genes give researchers a starting point from which to develop treatments.

“We have more Phase III clinical trials happening than have ever happened,” said Balas, referring to a final stage of testing before federal approval of a drug. “When I look forward in five or 10 years, we are talking about people living longer with ALS.”

Federal agencies and other sources have maintained support for ALS research that got its start with grants from the association. From 2014 to 2018, the National Institutes of Health provided more than $208 million to researchers who had previously received funding from the ALS Association, according to a report commissioned by the charity.

While those federal dollars are important, they don’t cover all that’s needed for more breakthroughs, Balas said.

Developing one type treatment from research to market costs an average of $2 billion, she noted. Compared with the $115 million raised through the Ice Bucket Challenge, “that’s 17 times the amount of money we got.”

That’s a daunting sum. But the infusion of optimism and ambition from the Ice Bucket Challenge has changed the association’s approach to setting a fundraising strategy.

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In the past, ALS fundraisers worked to meet the organization’s bottom line. Now fundraisers now set goals on the basis of the needs of the people served by the charity, said Tina Zeff, executive vice president for development. “The mission team sets those priorities to meet those needs, and then they kind of give us a road map to where we need to be and a set of known requirements. That has been a switch since the Ice Bucket Challenge.”

Balas, the chief executive, is frank about the level of fundraising that’s required. “We have to start raising as much money as we’re spending,” she said, “and that’s not happening yet.”

The association has more than doubled its spending on research since the Ice Bucket Challenge. It is hiring more fundraisers and courting corporate grant makers and people who can make big gifts. In the meantime, it will continue spending into the red in order to maintain its bigger commitment to research and care.

These added donors are essential, given the 1-percent rate of second gifts. “For an organization our size, a healthy acquisition rate is 15 to 20 percent,” said Zeff. “This wasn’t even close to that.”

While the charity made efforts to retain Ice Bucket donors by immediately thanking them for their donation, that was not enough to keep them engaged long-term.

That’s why traditional methods of obtaining donations are so important, said Eric Overman, vice president for integration at Mal Warwick Donor Digital, a fundraising consultancy.

By appealing for donations through traditional means, charities are likelier to collect email addresses and establish continuing relationships with new donors than through a viral social-media campaign like the Ice Bucket Challenge, said Overman. “They gave you money because they heard what you did,” not “because someone dumped ice on their head.”

Fundraising experts recommend that charities have on hand a rapid-response plan in case their cause unexpectedly reaches the global spotlight, as ALS did when the ice-bucket idea started spreading.

Sarah Newhall, chief strategy officer at Anne Lewis Strategies, a fundraising consulting firm, emphasizes that charities should stay in touch with supporters and prospects year-round, not just during peak moments. That means communicating constantly with donors, updating them on the charity’s efforts, and courting new donors.

Charities that do this set themselves up for success when they get unexpected attention, she said. “In these bigger moments, you really have a leg up in terms of having that kind of back-and-forth with the audience and really working towards your ultimate objective.”

‘The Greatest Impact’

While the ALS Association has not done well with repeat donors, it has taken seriously the need to understand what supporters want.

It surveyed current and lapsed donors about their motivations for giving, how they’d like the association to use their donations, and how they’d like it to communicate with them. “What they wanted,” said Zeff, “was to understand and achieve the greatest impact: treatments and a cure.”

To that end, the ALS Association is using the fifth anniversary of the challenge to report back on what it has accomplished with the Ice Bucket money.

In May the charity began its Challenge Me campaign, which aims to inspire donors to step up their commitment to finding a cure for ALS by, for example, running a marathon, increasing their donations, or adding more people to their team for a chapter walk.

“It’s a little bit of a nod to what happened five years ago, but it’s more of a look to the future for what we still need to do in development,” said Zeff.

The association does not expect to repeat the magic of the Ice Bucket Challenge. “To plan on that is not, in my estimation, what our community deserves.” said Zeff. “They deserve for us to be around serving our mission for years to come, until we work ourselves out of a job, and treatments and cures are found.”