Alzheimer’s Association Reorganizing National Operation

Alzheimer’s disease is among the most expensive illnesses in the United States, costing some $226 billion annually – two-thirds of which impacts Medicare and Medicaid. That says nothing of the five million people affected by it and the 15 million caregivers. By 2050, a projected 15 million people will have the disease and the annual cost is expected top $1.2 trillion, according to the Alzheimer’s Association.

So the Chicago, Ill.-based national organization is racing to ramp up operations, including a goal of doubling revenue to $450 million by 2019. As part of its effort to meet ambitious goals of its 10-year strategic plan, the association has embarked upon a strategy to combine all of its affiliates nationwide into a single, unified 501(c)(3) organization.

“The level of concern about Alzheimer’s is higher than it has ever been. People understand the impact on individuals and on the country,” said Stewart Putnam, chairman of the national board of Alzheimer’s Association. “We are the largest nonprofit funder of Alz­heimer’s research and the world’s leading convener of research expertise. We want to be able to increase direct funding of research in our role as a leading convener,” he said.

“The mission and vision stays same. The strategic plan remains. And, the concept of the chapter network remains. That’s key. For donors, for people who have the disease and their caregivers, what we’re trying to do stays the same,” Putnam said.

Dubbed Mission Forward, the effort was initiated by immediate past board chairman Gerry Sampson in March 2014. Mission Forward and its working group, Putnam said, tackle “how we as an entire organization can perform as effectively as possible against those very significant goals.”

The three-year priorities for the 10-year vision are:

  • Make research funding an association-wide priority;
  • Dramatically advance association-wide fundraising for research;
  • Conduct nationwide, dedicated research campaigns;
  • Engage chapters in research fundraising;
  • Complete the push for funding to the field by funding Alzheimer’s Impact Movement (AIM) and increasing awareness and policy efforts; and,
  • Explore and test opportunities for international fundraising.

There also are key priorities when it comes to care and support. They include:

  • Identify, create and provide a set of evidence-based signature care and support programs;
  • Set standards for high-quality care and support across the “continuum of care,” within the association and across the broader field; and,
  • Ensure standards are adopted by the field.

The strategic assessment process resulted in a specific, five-year revenue goal for the entire association, at least doubling revenue to $450 million by 2019 and “developing an association-wide culture that embraces, prioritizes and invests in fundraising as an essential key to the success of the mission:”

  • Continue to grow Walk to End Alzheimer’s and add a second signature event;
  • Grow major and intermediate gifts;
  • Grow planned giving;
  • Begin building necessary capabilities and alignment to grow corporate engagement; and,
  • Develop the case for and pilot reimbursement opportunities.

There are 81 Alzheimer’s Association chapters, including 54 traditional chapters and 27 that are considered part of the national organization. The number of national chapters is up from 11 in 2012. Since 2011, about 20 chapters have dissolved, disaffiliated or been assumed by national.

Similar consolidations have occurred at American Heart Association (AHA) and American Cancer Society (ACS). The transformation at ACS entailed bringing together 13 divisions into one organization but also included significant employee buyouts and other changes, such as suspending its direct mail acquisition program.

“There’s nothing about this that moves away from the robust chapter network we have,” Putnam said, adding that Mission Forward has never been about chapter or office closings and consolidation or layoffs are not part of the plan. Saving money was never a goal of the national board or the work group. “This was all about how we can do more to execute around the strategic plan of our five pillars. A big part of that is increasing revenue,” he said.

By a vote of 25-1, the national board on June 6 moved forward with becoming a single unified organization. Officials declined to disclose the one negative voter. Six members were not present. National has since been working with chapters to provide additional detail through an advisory group of 14 board members from chapters working with the national board. Rather than focus on one individual who voted against the recommendation, Putnam said there was lots of discussion about what the changes mean for local chapters and boards and how the organization can be sure this will advance the cause forward.

President and CEO Harry Johns has been working through what the roles of chapter boards will look like and what types of decisions must be made around the strategic plan, according to Putnam. Johns spent 22 years at ACS before being appointed president and CEO of the Alzheimer’s Association in 2005.

The chapter delegate assembly, made up of representatives from the 54 traditional chapters, will vote Oct. 3 on their recommendation to the national board. The 32-member national board then will vote on Oct. 17. The national board does not have to follow the delegate assembly’s recommendation.

Ahead of those votes, during the summer and late fall, Alzheimer’s Association officials have been and will continue having conversations throughout its chapter network, according to Putnam. “There is a range of feelings about that, as you can imagine. As in any organization, in the final analysis, we believe that far and away, most chapters will be deciding to be part of a unified organization,” Putnam said.

“Each of the chapters separately incorporated will have its own choice to make, whether to remain or not. Every chapter will have to make that individual choice. I’m hopeful that all of them will believe that will be the case,” Putnam said.

If a chapter chooses not to become part of national, it can continue to exist as a separate corporation doing whatever work it wants to on behalf of the cause but not as part of the Alzheimer’s Association, he said. Should individual chapters not go along with the plan, Putnam said there would need to be some determination of who owns what assets and such.

After an April 22 conference call regarding Mission Forward, as many as two dozen individual chapters sent letters to the national organization ranging from raising concerns and asking questions about the reorganization to explicitly opposing the move. The board of the Delaware Valley Chapter, covering Delaware, Philadelphia, Pa., and southern New Jersey, went so far as to pass a resolution in response to Mission Forward that it would remain a chapter provided that it continues to operate in a federated or similar model. Representatives of the chapter could not be reached by presstime.

Some chapter representatives would not speak publicly about their concerns for fear of retribution by the national organization. Among the concerns of some chapters was the direct delivery of care and support, the continuation of self-governing chapters, and chapter assets remaining in their control.

Others said the national organization hasn’t made a convincing case to justify a demonstrated need for a change in the organizational structure. As many as a dozen chapters have formed committees to explore their options should the affiliate separate from the national organization.

William Fisher is president and CEO of the Northern California and Northern Nevada chapter. With revenues of about $18 million, it’s the largest traditional chapter. During his 28 years at the organization, Fisher has been through mergers twice before, consolidating seven chapters and boards. The chapter board did not “instinctively dislike the idea,” he said. Letters were sent to national leadership seeking clarity to understand problems the consolidation was aimed at solving. Since May, Fisher said they’ve gotten some of their questions answered but haven’t come to a decision yet. The chapter board plans a full discussion at its meeting in September, he said.

“There are some people who instinctively dislike this idea. Our group was not that way. We had questions about it. We understand it better than we did,” Fisher said. “Any organization has to look at its structure from time to time. Periodically, these are good things to look at. That was our approach from the beginning,” he said, adding that a similar idea “bubbled up” in the Alzheimer’s Association during the late ‘90s.

Some executives he’s spoken to at traditional chapters that have become national chapters in recent years have benefited, going from struggling to more stable.

Growing A Second Signature Event
Part of ramping up fundraising will be growing Alzheimer’s Association’s second signature event. The Longest Day, on June 21, was introduced three years ago, focused on the theme of how long a day can be for caregivers and people suffering from Alzheimer’s. It needs to grow significantly if it’s going to be the equivalent for the organization that other signature events are for other charities, Putnam said.

The association’s primary signature event, Walk to End Alzheimer’s, raised almost $68 million last year, the eighth-largest fundraising event, according to the 2014 Peer-to-Peer Fundraising Top 30 compiled by the Peer-to-Peer Professional Forum. The almost 19 percent increase in gross revenue last year was among the biggest gains of the top 30 events.
The association’s Shared Fundraising Policy (SFP) will remain in place for the “foreseeable future,” according to Putnam. Instituted several years ago, SFP allocates 30 percent of unrestricted dollars to national, 10 percent earmarked for the Mission Fund and voted on annually by chapter leadership, and 60 percent remaining with the local chapter.

“How that evolves over time needs be part of a discussion,” working closely together with chapters and national, he said.

What Happens To Board Members
The size of local boards depends on the size of the chapter. For traditional chapters, the association has set a minimum of 11 but ideally they have 15 to 21 members with some variation based on local needs.

“How we’re organized, what’s the best way for resource utilization, to carry out all aspects of our mission, that’s something the management team and chapter executives work on together,” Putnam said.

An Operational Care and Support Task Force, led by a chapter staff member appointed by Johns, will address how the association “can best ensure care and support to those who need it.” An advisory group to the Mission Forward Work Group was created and comprised of 14 chapter board members.

“Working with chapter volunteers, we’re going to have a role for chapter boards that will be significant, robust and help accomplish our goals,” he said. Part of the advisory group of board members is working on exactly what those roles will look like, according to Putnam. “What this will look like in terms of exact structure, how we arrange things, how specific expenses and revenue will be is part of the work that is ongoing,” he said.

At national chapters, Putnam said board members no longer have direct legal and fiduciary responsibility but have significant roles in building relationships and bringing more people to the cause and more support for overall efforts. Board members would still have key roles such as, establishing relationships, bringing more support to the cause, understanding needs of local communities, “being the eyes and ears” of the national board and how the association-wide plan is being executed.

The national organization has done a good job of creating venues to express concerns and reactions to the national plan, according to Lee White, chairman of the Georgia chapter, a traditional chapter. “By the time this process is done, hopefully we’ll have an excellent opportunity to have questions heard and answered and make an informed decision,” said White. He was among a number of chapter representatives who the national organization put The NonProfit Times in touch with to speak about the consolidation plan.

The Georgia chapter went through a similar reorganization several years ago, combining seven regional boards into one statewide board, according to White. It created a more functional alignment and was geared around elements of the organization’s strategic plan, he said.

For a regional advisory board focused on governance, all that effort is pretty much wasted, White said. It’s much more relevant for members to be focused on the mission at hand, he added, and most volunteers gain their satisfaction from that. Some functions are better managed and distributed nationally but some, like care and support, have to be done locally, White said.
Margaret Barron, executive director of the San Antonio & South Texas Chapter, a National chapter, hopes to see even more collaboration and consistency among chapters in the Lone Star State, especially when it comes to public policy. “I’m hoping it can make public policy a little easier. It might be a way of hiring a statewide person,” she said.

“I don’t expect a lot of things to change, maybe a tweak here and there. What we do here and how we do it can have impact on other markets…because it’s not about what the Oklahoma chapter does but what Alzheimer’s Association does,” said Mark Fried, president and CEO of the Oklahoma chapter.

“With any sort of change, it’s going to be a little unsettling, a lot of that is just fear of the unknown,” he said. If the Oklahoma chapter were to disaffiliate, Fried said they would not have the ability to influence elected officials on topics that are important to the organization or impact research to the level needed. The chapter recently received gifts for research totaling $7 million from two donors. “No way they would have made those gifts at that level to research if we weren’t part of Alzheimer’s Association,” he said.

Dave Hunter is board chairman of the Greater Pennsylvania Chapter, which covers all of the Keystone State except the Philadelphia area. He’s based in Erie, Pa., but the chapter has four offices, including Scranton, Harrisburg and Pittsburgh. “Even though we [Alzheimer’s Association] are a leader, a lot of people out there, particularly in rural Pennsylvania, don’t have that kind of reach; we need to get to them,” Hunter said.

The only question and concern about the consolidation process is to make sure staff are comfortable, Hunter said. “Change management is important. Our board’s all in,” he said, as the national organization has addressed at lot of concerns about staff positions and use of assets continuing to be used where they are raised. NPT