Perceptions of Nonprofit Special Interest Groups
and the Effects on the Political Dialogue
Frank Luntz, Ph.D.
I'm Harriet Trudell with the Feminist Majority and I'm here this morning to introduce the panel for you on the "Perceptions of Non- Profit Special Interest Groups: The Effects on the Political Dialogue."
We have three panelists with us this morning. The first one who will lead off is John McLaughlin. He's a partner with the national political opinion polling and strategic consulting firm of Fabrizio-McLaughlin and Associates. He previously served as a political analyst and vice president of Arthur J. Finkelstein and Associates and Diversified Research, Incorporated.
He is a veteran of Republican campaigns, including North Carolina Senator Jesse Helms' 1990 Senate race, Frank Rizzo's 1991 upset in the Republican primary for Philadelphia Mayor, Senator Faircloth's 1992 upset victory over incumbent Terry Sanford in North Carolina and George Allen's 1993 successful campaign for Governor of Virginia.
A graduate of Fordham College with a Bachelor's Degree in political science, McLaughlin has a Master's in business administration from Fordham University.
Want to start?
MR. McLAUGHLIN: If anyone was expecting the other John McLaughlin --
MR. MCLAUGHLIN: -- he was a Jesuit priest but I just went to a Jesuit school. So, I'm not his son so we'll dispel that rumor.
But, my partner, Tony Fabrizio, he is the real Tony Fabrizio, but he couldn't be here today so I had to pinch hit. So, we're taking a break from political, non-profit and corporate polling and public opinion research. A lot of what we do is for political and non- profits. We help them raise money.
I'm not going to release any proprietary data, but we often find that, just like you get votes, you all here know that you have to go and you have to get people to contribute and invest in your ideas and invest in your causes. We do a great deal of business in that regard.
I want to talk a bit about the environment.
First, let me ask a question. How many people here can tell me who the first justice of the Supreme Court was, the United States Supreme Court.
One, two -- yes, sir.
MR. MCLAUGHLIN: Two people in a conference on free speech -- three people, okay.
PARTICIPANT: There are a lot of chickens. What is the answer.
MR. MCLAUGHLIN: It's John Jay.
How many people could name the judge presiding over the O.J. Simpson Case?
MR. MCLAUGHLIN: Is this a great country or what? My point is made. In this society, you're dealing with people who know what they want to know and whatever they don't want to know, they don't care about. The information they deal with needs to be free. Just wait until they find out that Jimmy Carter promised the Haitian government the Panama Canal.
MR. MCLAUGHLIN: But the reality is, you're dealing with a society where we have moved from a government which won its freedom by force and in a way a society that has moved public opinion to some degree. Before the American democracy, et cetera, we were a civilization that made its progress by force. Then, we learned to substitute money for force.
Today, you are substituting information for force. In fact, that's the power that's driving your members and people to invest in your ideas and your personality.
You define yourself by information. It's ideas and the people that are associated with you. You have an (inaudible), post- industrial, technology-fragmented society and who controls the information. There are great opportunities to you, because you can control that information about your organization.
I'm not going to tell -- there's very different groups here. I've never worked for the Feminist Majority. It would have made my wife happy, but you know. I tend to work for --
MS. TRUDELL: It might have made you happy, too. (Laughter)
MR. MCLAUGHLIN: What is amazing is, we're on a panel today to talk about free speech and ideas. We are on the same side. We all support the Bill of Rights and we all have the ability to control information about our groups and about our causes.
The great part is, with the changes and what's going on, the government is trying to stop that. You have a political environment where through new election laws, through new lobbying laws, through laws on the media, through financial laws, through new laws on computers, they are trying to, in effect, take control of that, to control the information.
The political environment is such that the majority of Americans and more so -- I'm not sure about the feminist majority, but most Americans -- I think it is probably true. They say that today, they favor smaller government, a smaller government over a larger government.
They absolutely do. They've tracked this through. It was about dead even in 1988 and our polls this year, we have Americans this year telling us 58.8 percent. In the last poll, we asked this year, if you have a smaller government, fewer services, versus 32 percent, larger government with larger services, with more services.
What they want to do is -- you're seeing a linking of an effect. People who want to cut back the size of the government and have more freedom and it's blurring a bit at the ideological lines. The second part of this is, everybody is defining personalities that they see with public policy issues like Clinton. He's brought a whole new standard to this. I mean, he's probably perceived as the most liberal president in history. At the beginning of the year, he started with a 47 percent liberal rating and a nine percent conservative rating.
But the worst part of it is the plurality of Americans that is now the majority, say they don't think he's a person of good honesty and integrity. They disagree with that statement. They also believe -- 58 percent say he favors larger government and only 29 percent smaller government. These are our polls and we have published these over the course of the years.
That's the environment you're playing in. What is interesting about here -- I was watching during this morning on the previous panels. People are monitoring what's happening with the lobbying law, in effect, to clean up the government and say okay, how are they restricting our rights of free speech. It is unifying people who are on the conservative side of the spectrum with people who are on the liberal side of the spectrum.
For your organizations, how you raise money in this kind of an environment is definitely going to be defined by, in effect, the electronic media you go through. It's going to be less and less, fewer and fewer people tend to use print media. If I were to ask somebody in the audience, when was the last time they wrote a friend, not for business reasons, but when was the last time you wrote a friend. It wouldn't be as often as people used to do it. Generationally, we've gotten away from that. Now, we pick up the phone.
With contributor groups, they're doing it more and more electronically, by cable TV, by telephone. In effect, the paper part of our society is becoming less important as the electronic becomes more important.
Also, there is a blurring of the fine line between for profit and non-profit. Probably the most well-known conservative fund raiser in the country is Rush Limbaugh and he's doing it for profit. He's on the radio. He sells products. He has his Limbaugh newsletter.
So, there is a blurring of this special interest between for profit and not for profit. People who give and invest in ideas and people don't make the distinction of, well, are they a for profit or a non- profit group unless they are educated for that. That touches on the last part about the personalities.
We'll close with the fragmentation of the media. It's more important to define your ideas and have people, in effect, who can symbolize your ideas and be able to get your point across very quickly, clearly and consistently in the public arena.
Back to Harriet. Have you sent me a contributor form yet?
MS. TRUDELL: Well, of course. Your newsletter will be in the mail in the morning.
MR. MCLAUGHLIN: Thank you very much.
MS. TRUDELL: You are welcome.
Thank you very much.
Our next speaker will be Dr. Frank Luntz. He is the President of Luntz Research Company, Incorporate, a polling firm. Luntz most recently handled the polling for New York Mayor Ralph Guilliani and conducted focus groups for the "Wall Street Journal, Newsweek," ABC News and PBS.
Mr. Luntz is an adjunct assistant professor at the University of Pennsylvania. He previously taught at George Washington University.
He is the author of "Candidates, Consultants and Campaigns", a book on American electioneering. He is a graduate of the University of Pennsylvania with a Bachelor's Degree in history and political science. He received his Ph.D. in politics in 1987 from Oxford University and in 1993 was named a Fellow at Harvard University's Institute of Politics. Mr. Luntz.
MR. LUNTZ: Thank you.
I have known John for, I don't know -- seven, eight years, and I can tell you that if there is money in the feminist majority, John will do the polling for them.
John would wear a skirt if that's what it took.
I'm going to approach this from a slightly different angle and give the you the results that our firm did -- it was a Study of the Hudson Institute on the American Dream. So, the few numbers I'm going to give you go back over time and this is going to be released on October 24th. So, I'm not going to get too far into it.
But the first question we can find that was asked how do you define the American Dream goes back to 1953 and 71 percent of Americans defined it in some sort of spiritual terms. I don't mean that in terms of religion. I mean that in terms of free speech, free press, religious freedom, some sort of non-tangible definition and only 20 percent defined it in terms of money car, house, vacations, enough money to retire on.
In 1973, that 71 percent spiritual had dropped to 51 percent and, the materialistic had risen to 39 percent. As we will release on October 24th, right now only one in three Americans define it in some sort of spiritual terms. Almost two-thirds define it in materialistic terms.
The whole concept of what this country needs is being lost on a younger generation. In a presentation yesterday with several reporters, we started getting into the concept of free speech and how it relates to Congress and how it relates to the overall governing institutions.
Right now on whatever date this is, we all have been travelling so much, I've got no clue. I just know it's October and it's Thursday, I think.
Faith and trust in public institutions is at an all time low. I think the most recent figure -- and we don't even have it any more because, CNN and "USA Today" came out with something more recent. It was about 17 percent of Americans have faith and confidence in their governing institutions to represent them. You now have a four to one margin belief that people like you all -- and I'm going to lump you in with lobbyists. I'm going to lump you in with special interest groups because some of you are.
By a four to one margin people believe that it's you all that control Washington rather than they themselves.
That's why there this is this deep anger. This explains why Ross Perot still has support even today.
There is a feeling that it is the gun lobbyists, that it is the health care lobbyists, that it is the business lobbyists, that it is the feminist lobbyists, that it is all these groups that have control. It is the political action committees that are running the show and that you all, the people out there, don't get heard from.
The two debates that I found most interesting, that may relate to some of the people in this room was the crime bill debate and the health care debate.
In the health care debate you found the Chamber of Commerce to many people who would consider themselves conservative, completely abrogated their responsibilities and their representation of businesses across the country. They got hurt really badly and I think that's going to continue over the next year or two.
There are people in the business community that don't believe that the leadership of the chamber properly represented them and, that it was groups like the National Federation of Independent Business, NFIB and the Small Business Survival Committee that stepped to the plate and argued with Clinton against other organizations.
But what the public sees out there, they don't differentiate the difference between for profit and not for profit. The public sees the whole mass out there.
I found it very interesting. Andy Carter, who was in the Bush Administration stepped up to the plate for the Automobile Association, at least GM, Ford and Chrysler. He was calling for universal health care, when I have to believe that in the Bush Administration, he was an advocate against such a proposal.
The public sees people like this being paid salesmen is the nicest way to put it for their causes. The four least respected occupations in America today are, used car salesmen, lobbyists, TV talk show hosts and Congressmen.
MR. MCLAUGHLIN: You didn't ask pollsters.
MR. LUNTZ: Most people would think a pollster is someone who does couches and chairs.
My mother, when she has to explain what I do, gives that kind of a definition. She doesn't want to admit that I call strange people up on the phone after what happened to the President of American University.
I do hope that he never hears this, because he's not in the room. So, for you all and what you do you are not in good shape right now and with the GATT Bill being put off, again Americans look toward Washington and they ask the age-old question: Why? Why does this system work this way? Why can't we make government work more effectively? Why does it seem like every time we have a priority, whether it be on the left or on the right, politicians never seem to listen? Why do they spend so much money very often for programs that you want them to spend it on? Why do they tax us so much? Why don't we get our money's worth? When we get to questions, I'll give you some answers to those.
MS. TRUDELL: Thank you very much, Mr. Luntz.
Now, our third panelist, Mr. Charles Orasin. After 17 years of working to prevent gun violence, Charlie brought his movement, Building Strategic Planning, Creative and Fundraising Skills, to Craver Mathews, Smith and Company in 1992. He served as a senior vice president.
He is a graduate of Georgetown University. Charlie initially worked for Congressman Howard Robinson on Capitol Hill and in the political campaign of Senator Jacob Javitz.
In 1975, he joined a new organization formed to take on the National Rifle Association and pass effective gun laws. Charlie subsequently became President of Hand Gun Control, Incorporated and established an educational initiative, the Center to Prevent Hand Gun Violence and a political force, the Hand Gun Control Voter Education Fund. Under his guidance, numerous national and state gun laws were enacted. The recent enactment of the Brady Law and the Assault Weapons Bill is a culmination of this work.
In 1992, Charlie decided to look for a way where he could apply his wide range of experience to a variety of non-profits. Craver, Mathews and Smith has always stood as a leader for social change. It's personally gratifying to me to be able to make a difference by helping a variety of causes to make this society a better place. Mr. Orasin.
MR. ORASIN: Thank you very much.
I'd like to pick up on what my distinguished liberals to the right of me have been talking about and focus really on the progressive community that our firm specializes in.
The 1992 election was very much of a watershed event for many of our clients. As we do with many of them, we urged them to take a pulse of their donors, to see exactly how they view the political situation as well as how they view that organization every two years. It was particularly important after the 1992 election. Over the last year and a half, we have done at least 7 or 8 different polls for different non-profits.
We have seen a common thread through many of the survey findings that I'd like to talk a little bit about.
First, there is some good news out there and I would just like to go back to our independent sector plan. I don't know if you have done an updated one. But although the government has less and less of a high regard out there with the American people, more and more people are counting on or non-profits to fill that void.
In fact, 88 percent of the public believe that non-profits are more needed now than they did five years ago. A whopping 73 percent believe that non-profits make our communities a better place to live.
This same poll done by the independent sector -- it was a GALLUP poll -- did find some negative strands, though.
Forty-three percent, nearly half of the public did not believe that non-profits are more effective now than they were five years ago. Only 57 percent believe that non-profits are not wasteful in their use of funds. That was 1992 and we have had, as you know, different troubles with different major charities including the United Way.
I think what Frank and what John are saying is, distrust of government, when you turn on TV and you see news stories about the pay and perks of our elected representatives who we are paying with taxpayers' funds and then you see the so-called scandals in major charities where again there is the question of paying perks, it begins to sully the image of non-profits. It does have a domino effect on other non-profit organizations.
We urge our clients not only to take a pulse on their issue with the clients or their donors, but to make sure they see how the donors view them in the non-profit sector.
We've seen over the last couple of years that donors have been squeezed on many areas because of the economy. So, they are not giving as much as they did before. The Clinton election caused many donors on our side of the equation to take a pause. The good guys have now won. We don't have to be as generous as we were before. So, they cut back on their giving.
At the same time, with the United Way and other charity problems, there is a higher scrutiny in terms of how these organizations were spending their money.
There is also what I call the fuzzy factor. If you look at how many thousands of non-profits are out there, to many donors there seems to be -- it could be 15 to a dozen organizations working on the same issue. When they open up their mailbox they see a dozen solicitations for groups that all seem to be doing the same thing. They don't quite understand why there are so many, how are they spending those funds and why should I join.
So, we've seen not only a decline in giving to many organizations from long-time members, but a reluctance of individuals to join new organizations. That obviously has an impact on the organization's future.
We've also seen, I think, with everything going on in Washington, people looking to communities locally and at the state level to take care of problems. I think that also then is carried over to non-profits. Rather than send their check 3,000 miles away, they'd like to see the check sent locally to some organization where they can see the tangible impact of that contribution.
One of our clients, (inaudible), I think is a great example where somebody can see concretely, i.e., building a house where their money is going. But with the local building of homes people see where their dollar is going. To a lot of these organizations, they send a check. They don't have a clue as to how the money is being spent.
Many of our clients really had a cold shower. Not only did the Clinton administration's election have a major effect on the environment in which they were raising funds, they also found that many of the problems that major charities were finding with their donors were also carried over to their own members.
Many of these organizations had been in existence for decades, yet over the years they have somewhat lost their road map. They weren't quite certain where they were going, what their mission really is, if they have accomplished various goals, where were they now going. So, the donors were confused.
What we have urged non-profits to doing -- and I'm glad to see all the good work for the Free Speech Coalition on the regulatory side. There are things non-profits can do today on their own in a more proactive way to deal with concerns of donors out there. The first is to define or redefine the problem that they're fighting, the Devil that they're fighting, the mission of the organization. So, it's very clear to the donors who exactly they are writing a check to and why.
Secondly, it is very important, what I call nitching your organization. What is that unique nitch that you feel that no other organization does. We do a lot of work for environmental clients and there are some 15 out there fighting in the mail for money. Well, what is unique about this environmental group versus that environmental group.
Third, if buy products through the mail, through L.L. BEAN or if you are just aware of how the banks treat you and things like that, there is a higher value now to customer loyalty. People expect to be able to pick up their phone and call an 800 number if they have a problem. They expect quick answers, responses if they have a defective product.
Non-profits have to start treating their donors as more customers and investors. The same treatment that you get on the commercial side has to be translated to how you treat people on the non-profit side. If you went back to look at your membership services department, how many weeks behind are they in answering complaints from your members.
One of our clients had a three-month backlog of handling membership complaints. Yet, they were concerned about how much they were paying to bring in every new donor. Yet, over here, they were losing literally hundreds of people because of failure and neglect, failing to take care of them. It is very important that you treat these donors as customers. You answer those letters promptly and thank them. I think many non-profits think that these donors owe them the money, rather than these donors investing in you. When is the last time you picked up the phone and just said thank you and didn't ask for another gift. That's very important.
Something that John had said in the previous panel which is very important. Show the donors the success stories, what you're doing, an annual report, a newsletter, something to show them how that money is being spent. I'm surprised that some of your organizations don't send out basic information on extraordinary wins they have accomplished. With donors figuring out whether or not they should continue giving money, if they are not getting any reinforcement in the mail, why bother?
Another important factor we found in our surveys is the tangibility. Try to show what you are doing in concrete terms. Bring it back to the person's real life. If you ever read some of the environmental mail that goes out, it is so complicated, you don't know what they are fighting on, when the fact is, they are talking about the dirty water that is coming out of your faucet or when you walk down the beach, your child doesn't step on a needle.
With too many organizations, there is a disconnect between their life, in terms of how they view their issues and what their donors and the public see. You have to simplify your message and make it simple.
It is very important to provide stewardship reports. I was stunned to hear how many major charities don't quickly provide a financial report. The moment you don't quickly provide something, you just start raising questions in the donors' mind. Why did I get this financial report from this charity, but I'm not getting a financial report from this charity?
They should be easy to understand. Don't just send out your normal audited statement, which takes a financial education to understand and read. Something very simple, as simple as a pie chart to show how you're spending the money. You would be surprised how much that will mitigate concerns and questions by these donors. I think that will have a domino effect on this regulatory side. If non-profits were much more proactive in providing this information, I don't think you'd have the problems that we're seeing right now.
One major thing again which continues to surprise me is that, if you are a non-profit and you face a major crisis, deal with it promptly, forcefully and put everything on the table right away to the media. It amazes me that, what could have been a one-day story becomes a month long story because of an organization's unwillingness to deal with the media or to answer forcefully and truthful what is going on.
When a head of an organization says, come on in, I'll tell you everything and then the press calls, okay, we're here to answer your questions and they won't answer the questions, of course, now you're going to attract the media locally. You have that effect of having to go outside that region.
Again, the organization's credibility which you have often spent decades to earn out there can be lost without quick crisis response to a situation. I think that is something every organization should have on the shelf, particularly in this day and age. Finally, I know you have spent a lot of time going over the different regulations that are coming down the pike and things that non-profits have to deal with. I look upon new regulations as opportunities to your own benefit, some of these.
For example, the new IRS regulations on receipts for $250 gifts and $75 gifts, rather than having to look upon it as more financial information you're going to have to give out, look upon it as a cultivation opportunity for donors. If you sent out an envelope in 1995 that says 1994 tax receipt enclosed, you're going to have 100 percent of the people open it, because they are going to want to use that for their tax return.
You can use the letter not only to thank them for their gift, but provide that success story as we're encouraging clients to put in a bounce-back device. You are going to get contributions back from that donor who sees you are being very responsive to their concerns.
Then, the last thing. If you pick up the back of any response device, you will see this other legal gobbledy-gook that shows all the states and regulatory agency that the non-profit has filed their reports in. Turn that into more of a sell document for yourself. Before you get into all the legal gobbledy-gook, just put in a few lines that, we are pleased to provide you upon request an annual report or audited statement. At the same time, we are pleased to provide these other agencies, regulatory groups with this information. So, you can get that upon request. If you have to do it by law anyhow, take advantage of it.
The bottom line is, I think donors are increasingly skeptical. I think that their loyalties with many established organizations are now being questioned. I think there is opportunity here to repair the damage and to continue raising more funds out there for not only those donors, but from other donors.
MS. TRUDELL: Thank you.
Before I ask for questions from the audience, are there any comments from the panel? Would you all like to make some further comments? If not, I'll be very glad to take questions for the panelists.
MS. TRUDELL: Nobody has any questions? Were we that good?
MR. ORASIN: It's right before lunch.
MS. TRUDELL: Right, everybody is hungry.
Thank you all three very much. We appreciate it.