Katrina and fundraising: challenges will abound for generating funds.

Hurricane Katrina on the Gulf Coast has left incalculable damage and suffering in its wake. It has also left everyone a number of questions regarding fundraising programs, and the impact this devastating tragedy will have on every charity in America.

While it is impossible to quantify Katrina's specific impact at this point, there are a number of thoughts about how fundraisers can best deal with this situation.

* How much will Katrina affect my fundraising program this fall? While each situation will be different--depending for instance on a charity's geography (whether you have centers in the affected area), mission (whether you are a relief charity), etc.--these answers are dependent upon two unknown contingencies at this point.

The first unknown is how much worse the problem will become. There is a strong school of thought that the tragedy up until now is only the tip of the iceberg, and the residual impacts (disease, financial hardship, unrest) will dwarf what we have seen.

If the upcoming weeks bring an onslaught of fresh new tragedies related to the disaster, that will make it increasingly likely that significant fundraising dollars are diverted from the average American charity. The longer this story plays out, bringing new chapters of legitimate tragedy, the more money will be diverted, until fatigue about this story eventually sets in.

No one knows yet when that point will come, but our best guess is that fresh new stories that divert America's attention and dollars will continue to unfold for some time.

The second unknown is if Americans will view their disaster relief gifts as being effectively used. The initial response to the disaster has not received high marks from the American public. While government is receiving the bulk of the blame, charities on-site still need to be careful. Indeed, many charities were roundly criticized, whether fairly or unfairly, by both the media and the American public in the months following 9/11. If this happens again, there is a strong possibility that many "disaster donors" may decide that subsequent gifts are not a good idea.

The two questions above speak specifically to how much longer the disaster will divert fundraising support. In the short term, we do know, both anecdotally and factually (for instance, one online company reported that their clients received $14 million in one day, which was seven times the previous record) that a significant portion of fundraising dollars has been already raised. Given what has already happened and what is known, this tragedy will have an impact on many charities.

* How much of an impact will it have? That answer depends primarily on the relative importance of your charity to each individual donor. In the instances where your charity is "the favorite" or among "the favorite charities," giving to your organization should hold relatively firm. In those instances when your charity is viewed as less important, giving will likely fall. Stated another way, your core segment will continue to support your mission similarly to how it did in the past. But giving from your fringe or marginal segments, and from prospects, will likely be impacted.

Furthermore, it is of course a given that fundraising support from donors who live in those affected areas will be down dramatically. How much that impacts your overall fundraising results is entirely dependent on how much support you receive from the Gulf states.

* Should I talk about the disaster in my mailings/ emails/telephone calls? It's a tried and true axiom of direct marketing that the most powerful appeals are created when you have a strong, specific, tangible need that is expressed in a compelling way. This axiom remains true at this stage.

If your mission has been directly impacted by the hurricane (you have centers/chapters in the area, etc.), then a direct appeal about the situation, and the need your mission faces, can be an extremely powerful fundraising appeal. Keeping in mind that money you raise might be classified as restricted dollars, however. In these instances, you should mail direct appeals to their constituents, asking for their support.

If your mission provides a service that can be leveraged to help those in the area (for instance, food, clothing, medicine), then there are definite opportunities to tailor an appeal along those lines.

If your charity is outside the hurricane-affected area, and does not provide direct services to the relief efforts, this presents some tricky questions.

Many organizations are considering communications (emails, mail inserts, Web pages) tied around the disaster. In some instances, these communications focus on the laudable ideal of extending sympathy to the victims on the Gulf Coast, and offering prayers.

Past testing has shown that modifying existing packages usually does not positively impact fundraising results, and indeed can have a negative impact on income. Here are two examples:

[check] During the anthrax scare after September 11, 2001, when anthrax was discovered in a handful of envelopes, many charities chose to change their existing control acquisition and renewal mail packages, and include their logo on outer envelopes that had heretofore been "blind." Testing in the Fall of 2001 showed that blind outer envelopes continued to significantly out pull "logo branded" envelopes. In other words, those charities that had stayed the course (i.e., did not change their controls) generated far better results that fall.

[check] Post 9/11, many charities chose to modify their existing control copy, to add words of sympathy/encouragement surrounding the tragedy. Here again, tests showed that those charities that did not change their message generated better results.

Along with being extraordinarily generous and giving, the American donor is also in many ways a creature of habit. What works best pre-tragedy can almost always be counted upon to work best post-tragedy.

The bottom line is that if a charity chooses to insert a slip about the tragedy in their mail piece, it probably won't raise response, and may in fact lower it.

[check] What other impacts might occur? As the situation unfolds, there is a concern that the hurricane aftermath might damage the economy in ways other tragedies have not. Measurements of Consumer Confidence should be monitored closely as a worsening economic conditions can impact fundraising.

Miscellaneous items, such as freight, will be negatively impacted, given the recent surge in gas and oil prices after Katrina. And, there is some evidence already that some paper vendors will increase prices, while many others may hold the line due to swelled inventories caused by a relatively slow business environment the first two quarters of the year.

Based on fundraising performance in previous tragedies, continue to implement their renewal and acquisition communications plans, i.e., "business as usual." This advice includes two caveats:

[check] Charities that have been specifically impacted by the disaster (for instance, charities that have chapters or centers in that area), should strongly consider implementing an emergency appeal tied into that theme.

[check] In conducting "business as usual" we will of course continue to suppress portions of the country impacted by the disaster.

As for those donors living in the affected areas, you should regularly use National Change of Address for your file to track these donors. Once things return to normal in that part of the country (which may be weeks, even months), organizations may want to consider sending their major donors in that area a letter that thanks the donor for their past support, and recognizes their anguish. This kind of humane relationship building could have a profound impact on long-term giving, besides being the right thing to do.

Tom Gaffny is executive vice president of client services for Epsilon, based in Wakefield, Mass. His email is [e-mail]