It’s A Miraculous Turnaround For International Aid

October 1, 2011       Gary Morton      

International Aid, Inc., reported shipping a record $116 million worth of health products and reconditioned medical equipment to its partners around the world during its fiscal year that ended this past June 30, marking a sort of resurrection for the Christian relief agency.

Two years ago, the Spring Lake, Mich.-based relief organization announced that it would cease operations. It reported operating losses totaling $4.3 million over the previous two years. International Aid (IA) CEO Brian Anderson termed the turnabout, “nothing short of miraculous.” But he also credited such factors as a refined focus that led to the spin off or elimination of several programs, halving the agency’s workforce, an aggressive approach toward corporate donations, and economic conditions that make it conducive for corporations to assign goods and products.

The key to International Aid’s success stemmed from a decision to return to its original mission when founded in 1980, which is to acquire gifts-in-kind from corporations and ship those goods, in the medical and health fields, to its partner organizations, Anderson said. “Over time, they took on additional programs and projects, which a lot of nonprofits do,” he said. When the economy began to flounder, International Aid struggled to keep all its programs going. Only one board member, Roger Spoelman, president and CEO of Mercy Health Partners (Trinity Health) in Muskegon, Mich., remains involved with International Aid. "Otherwise, all other board members or previous CEOs, etc., are no longer involved at International Aid," said Katherine Averill, International Aid’s communications manager.

The group provided $185 million of goods to more than 300 partners in 65 countries since the previous leadership announced in June 2009 it would cease operations. The bulk of that, totaling $116 million, was shipped during the fiscal year ended June 30.

All those materials were gifts-in-kind from corporations, Anderson said. A major gift helped International Aid meet the cost of shipping and other operational expenses. The agency reported slightly more than $2.5 million in “donations, service fees, and life insurance proceeds” this past fiscal year and $133 million in gifts-in-kind.

The economic struggles that endangered the organization might have played a role in International Aid’s ability to procure those gifts-in-kind, including over-the-counter medications, prescription drugs, hygiene products and nutritional supplements, Anderson said. Some corporations “sitting on some unused inventory” were willing to donate that inventory in return for tax advantages in which they in some cases are able to take up to $2 in tax incentives for every dollar they paid for those products, Anderson said. “That’s a much better way to go than destroying all of it.”

Dan Busby, president of the Evangelical Council for Financial Accountability (ECFA) in Winchester, Va., attributed International Aid’s success more to its aggressive pursuit of gifts-in-kind rather than on any effect the economy might have played in making corporations more willing to give to charities. International Aid had been a member of ECFA but resigned from the council in 2009, before the group that brought in Anderson took over the agency.

The agency’s website provides much of the information that the Better Business Bureau’s Wise Giving Alliance in Arlington, Va., suggests potential donors consider in giving to a relief charity. Bennett Weiner, the alliance’s chief operating officer, said those items include the nature of the organization’s efforts; its governance, including background on board members to determine their expertise; financial information; and, an overview of their operations, including what countries.

IA’s rebirth began in an unlikely manner when businessman David Wisen toured its facilities in December 2009 while considering a purchase of the property for conversion to a church. Impressed by the organization’s potential, Wisen convinced its board to continue the operation and underwrote its interim operations while he studied whether it could be transformed into a viable operation. He brought in Anderson, who previously consulted with healthcare companies on financial and operations issues, to assist in that evaluation. Wisen decided to try to rejuvenate International Aid. But he realized the agency would need to overcome the damage caused by its closing announcement.

“The reputation of IA had suffered through the process,” Wisen wrote in International Aid’s 2010 annual report. “We were uncertain whether our donors, supply companies, and mission partners in the field would continue to support us.”

Success came quickly, though at a cost. During fiscal year 2010, which ended June 30, 2010, International Aid shipped goods valued at $71.3 million – an increase from an average of $46 million for the previous seven years – to 55 countries, Wisen said. Meanwhile, the agency slashed its overhead by 70 percent and finished in the black.

The cutbacks included reducing the number of employees from about 45 two years ago to 22 today; ending its participation in safe water projects in Ghana and in Honduras; and, closing offices in Ghana, Honduras and the Philippines that oversaw a number of in-country operations. Many of the water purification and other programs no longer operated by International Aid were picked up by other groups, said Anderson.

The major concern was whether the downsized organization could operate sufficiently, he said. “We wanted to make sure we would still be able to operate those [remaining] activities on donations received.” With that in mind, International Aid held off on a direct mail campaign until the summer after Wisen assumed leadership so the agency could re-establish its track record and let potential donors know that “good things were happening — not that we were simply keeping the doors open,” Anderson said. “Our donors have responded favorably.”

International Aid’s scope includes the United States. Last year it provided supplies to help those affected by a deadly tornado outbreak in Alabama in April and by a devastating tornado in Joplin, Mo., this past May.

There appears to be no shortage of disasters or needs to be met, which Anderson said presents a major challenge to nonprofit relief organizations. “You have to control your responses,” he said, “and not overspend and put your organization at risk. That’s what caught the organization a few years ago; we had so much going on.” NPT

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