9/11 fall-out: Red Cross changes to generic wording. (Fundraising).

American Red Cross (ARC) advertising and fundraising pleas will use generic headlines that don't identify a specific disaster and move higher a description of its Disaster Relief Fund in response to admitted mistakes about its handling of September 11 funds that misled donors.

"The Red Cross has been in the disaster business for a long time, and most of the time, year after year, disaster after disaster we usually get things right," said Chairman David McLaughlin at a June press conference to announce changes to ARC's disaster relief fundraising. "But in the case of September 11, the Alpine fire in San Diego, and a few other large disasters over the last 14 years, we've made some unintended mistakes. Mistakes that have raised important questions about our fundraising practices."

ARC spent $100,000 on months of research, talking with charitable experts and more than 1,000 people in focus groups and polls to create new guidelines.

Differences hinge around educating donors about where their money goes, identifying donor intent, acknowledging their contributions, and publicizing when a specific disaster receives enough donations, said Harold Decker, ARC interim president and chief executive officer.

"We've learned in our research that when we do a better job of explaining how our disaster fundraising and relief efforts work, donors put even greater trust in the American Red Cross," Mclaughlin said.

One step is explaining that the relief fund is a money pool available for a myriad of disasters, ARC officials said.

New language ARC will use: "You can help the victims of this disaster and thousands of other disasters across the country each year by making a financial gift to the American Red Cross Disaster Relief Fund, which enables the Red Cross to provide shelter, food, counseling and other assistance to those in need."

Although ARC will recognize donor intent, Mclaughlin encouraged undesignated contributions, so the relief fund doesn't turn into a "disaster menu," where donors are encouraged to pick the victims of their choice.

ARC will create "redundancy" in its disaster relief fundraising process, Decker said.

For example, when donors receive a written solicitation they will check a box that notes they understand money will go to the Disaster Relief Fund, said Michael Farley, vice president, chapter fundraising.

Telephone solicitors will confirm people understand money will go toward a specific disaster and others. Online donors will click on an icon to confirm they understand before a gift is processed.

"From the very front end we're trying to create a confirmation process that engages the donor's initiative in signaling that they understand the purpose for the gift and how it will be used," Farley said.

Once a donation is received, ARC will contact donors, such as via a telephone call or email, to reconfirm the money went where they wanted, and provide them with an opportunity to change the money's designation.

ARC also will announce when a specific disaster has received enough money and encourage donors to give unrestricted money, Decker said.

"Once the transition policy decision is made, we will aggressively communicate it so donors are clear about how any future contributions will be used," Decker said.

ARC didn't do a financial analysis to determine the impact changes will have on fundraising revenues, but Decker believes the changes could help ARC raise money for disasters.

ARC officials said they believe the research suggests the program is about how donors prefer to receive information.

Expenses will be allocated in the general fundraising budget, Decker said in a telephone interview after the conference.

Costs to run the program aren't considerable because ARC does most of them already, an official said.

Changes, which are scheduled to take effect across all chapters by July 31, won't apply retroactively to September 11 money, officials said.

New York State Attorney General Eliot Spitzer, who threatened to sue ARC last fall about its handling of September 11 money, applauded ARC's acknowledgment that "there is a gap between their expectations and the public's understanding of where money that's donated is being allocated;' a Spitzer spokeswoman said.

Art Taylor, president and CEO of the Arlington, Va.-based BBB Wise Giving Alliance a watchdog group, called the changes significant and will help avoid donor confusion.

"I hope it will encourage all nonprofits to take a look at its communications," Taylor said.