Maguire/Maguire, Inc.

Soon thereafter the National Voluntary Health Agencies of California (NVHA) retained Coleman & Christison to assist NVHA and its members in marketing for designated gifts in the Combined Federal Campaign (CFC), the federal government's annual at-work charitable fund drive. The CFC was a multi-federation fund drive, including not just United Way but also NVHA and several other federated groups. It was entering a transition period where more and more donors - but not yet a majority of them - were exercising their right to decide for themselves which of the participating charities to support, rather than leave the decision to campaign authorities. Funds that were not earmarked to specific charities by donors were apportioned among the federated groups by local committees of federal executives.

 

This was never a fair process. United Ways simply appointed these federal executives to their boards of directors, and the executives, in turn, favored United Way in their CFC allocations. Thus, CFC income growth for the NVHA could only be produced by increasing NVHA's share of the donor-designated pool of funds.

 

Maguire succeeded in increasing NVHA's CFC market share and overall revenues substantially. By 1986 NVHA felt it was ready to take the next step in its development. It bid on the federal contract to manage the CFC in the San Francisco Bay Area. Its proposal specified subcontracting most services out to Coleman & Christison. This was the first time in the history of the CFC that a private sector firm was awarded this responsibility. NVHA got the contract.

 

The ensuing Fall 1986 Bay Area CFC was unlike any CFC before it. Maguire introduced "eagle pins" to replace the United Way look-alike lapel pins used before. "Premiums" were introduced - most notably desk statues of eagles for more generous contributors. The national campaign film, which had always focused on United Way and given short shrift to the other federated groups, was re-edited and included different versions for different federal elements - civilian, military, and postal service. Instead of housing the campaign's "loaned executives" at United Way headquarters, as had always been done before, Maguire moved the executives into a new CFC-specific headquarters on a local Navy base.

 

These modifications ensured that the CFC had its own separate identity. It had previously been thought of as a kind of federal adjunct to the United Way campaign. Indeed, in previous years the CFC kickoff had been part of the United Way kickoff, and the CFC chairman had sat on the United Way campaign cabinet.

 

Federal givers responded enthusiastically. The campaign broke all previous records for income growth and employee participation. Yet at the same time the campaign's operating costs were reduced; Maguire charged lower fees than the United Way had charged and got better deals from campaign supply vendors. When the General Counsel for the U.S. Office of Personnel Management announced he was coming to visit, the Bay Area Federal Executive Board (FEB) expected he would be bringing Washington's recognition for a job well done.

 

Instead, the General Counsel brought a rebuke. Washington had been lobbied hard by United Way of America (UWA), which had argued that allowing a private sector company to "benefit" from the CFC was nothing less than immoral and, in their words, "destructive to the community." The General Counsel forbade the Federal Executive Board from awarding the next year's campaign management contract to NVHA and Coleman & Christison, effectively sending it back United Way. The FEB members were stunned. They were also insulted.

 

1987-1988: Local Independent Charities of San Francisco
The next year OPM issued new regulations governing the CFC. Those regulations provided specifically that private companies could not bid on CFC contracts and that CFC federations could not employ private companies in a "decision-making or policy-making" capacities. This provision came to be known as "the Maguire rule."

 

But the new regulations also provided - for the first time - that charities in the CFC could organize their own federations. Leaders of the San Francisco FEB quickly organized themselves into a charitable board of directors and recruited local charities that were not included in the United Way into a new local federation. It was named the Local Independent Charities of the San Francisco Bay Area.

 

Then the new board of directors did something that had never been done before. They outsourced virtually all the federation's operations, including its headquarters, to the Association Management Division of Coleman & Christison, being careful to retain all "decision-making" and "policy-making" functions with the board.

 

All previous CFC federations had been based on the United Way-type model - a full-time year-round staff housed in local and regional offices. It was a very expensive, very inefficient model for what were basically seasonal fundraising organizations. The new outsource model eliminated this fixed overhead. In addition, the contract provided for Maguire's fee not to be fixed but rather to be based on revenues raised. Maguire was also responsible for paying all campaign-related expenses out of his fee. Thus, the member charities participated in the federation at no financial risk to themselves.

 

1988-1995: Independent Charities of America
Local Independent Charities was so successful with CFC donors that the following year some of the same federal executives that had been involved with its formation started a national-level version - Independent Charities of America (ICA). ICA's operations were also outsourced to Coleman & Christison and Maguire, using the same percentage-based fee schedule and no-risk-to-members model.

 

The results of ICA's debut in the CFC shocked United Way of America and the other national federations. The initial seventeen national charity members had a CFC "card value" of less than a million dollars, based on their results in previous campaigns. As a new federated group they raised $3,000,000 the first year and $7,000,000 the next. Over the course of the next several years ICA doubled, then tripled, then quadrupled in membership and revenue.

 

Meanwhile, the Local Independent Charities of the San Francisco Bay Area had grown into Local Independent Charities of America (LICA) - a multi-state operation with chapters in most major cities. Both ICA and LICA expanded into state and municipal employee fund drives. LICA won back its CFC management contract in the Bay Area from the United Way. ICA was invited by the CFCs in Los Angeles and St. Louis to come in and "redesign" their campaigns, which it did.

 

Maguire introduced marketing techniques for his federation clients that were commonplace in the private sector but unheard of in nonprofit workplace fundraising. For example, establishing "blind pools" of donor names and addresses so that large-scale donor market research could be conducted without violating donor confidentiality and publishing targeted direct mail charity "yellow pages" catalogs with display advertising to supplement the official, print-only, campaign brochures.

 

The most important innovation Maguire introduced, however, was the expansion of the affinity group federation concept from very broad categories to very narrow categories. Under his guidance, ICA and LICA began to reinvent their brands by dividing themselves into smaller, custom federations. ICA for example, spun off its diverse membership into Children's Charities of America, Animal Charities of America, and Educate America, among others.

 

The results were dramatic. These new "bite-sized" federation lists made it much easier for donors to discover charities of their own particular interest. They responded with more gifts - 40 percent more.

 

1995: Maguire/Maguire Incorporated
In 1995 Patrick Maguire purchased the Association Management Division from Coleman & Christison, renamed it Maguire/Maguire Incorporated, and moved its personnel to Marin County, north of the Golden Gate Bridge. The new firm continued to introduce efficiencies and new products for its federation clients.

 

For example, online credit card giving was at the time a new but growing fundraising technique, but implementation was difficult for many charities. Maguire provided a one-stop turnkey system (GiveDirect) that worked better and cost less than the systems offered by the commercial vendors.

Another internet-based solution Maguire introduced was the "members online portfolio," an interactive repository of all the information a federation member charity needed to access federation services to full potential, from campaign results to donor names and addresses. Maguire introduced a similar portal for federation boards.

 

When charity regulators began to complain about abuses in vehicle donation programs, Maguire joined with another private firm, V-DAC (Vehicle Donation Any Charity), to give his clients a clean, honest, no-risk system for accepting cars, trucks, and other vehicles. Using this system, Independent Charities of America now processes thousands of vehicle donations a year, including those made through National Public Radio's "Car Talk" program.

 

In another first, Maguire negotiated "partnership" relationships between ICA/LICA and the United Ways in San Francisco and Washington DC. ICA and LICA members charities were included in the United Way corporate fund drives.

 

The "Pipevine" scandal of 2003, however, upset the traditional United Way-corporate relationship. Many larger companies were no longer willing to depend on United Way to run their employee fund drives or to transmit their employees' contributions. And when these companies abandoned the United Way model in favor of administering their funds drives in-house, they also abandoned the concept of using federations to act as "gatekeepers" to their fund drives. Instead, employees were empowered to give to virtually any charity at all, and the funds were transmitted directly to the employee-chosen charities by the company. The funds did not go first to the federations for redistribution to the charities.

 

For United Way and its charities this sea change was a disaster. But for Maguire/Maguire and its clients, the change presented an opportunity to reach corporate employee givers who previously had been "walled off" by the United Way. Maguire devised techniques for reaching these givers, and his federation clients' member charities began to see more dollars from company campaigns.

Today, Maguire/Maguire works with 27 charitable federated groups representing more than 2,000 members and raising more than $125 million dollars a year. Maguire's federation clients generally operate with administrative and fundraising overhead of five percent or less. By comparison, the average overhead for other federations is 20 percent.