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Chamber Executive Article Archive

Old Fashioned Cents

By Chris Mead

Spring 2012

Six Fundraising Lessons from Chambers Past

Raising money is seldom easy, but often interesting, and it's a recurrent theme in the nearly 250-year history of chambers of commerce in North America. As always, the past offers lessons for us today as we navigate an era much different, yet somehow much the same.

Persevere

In the middle of 1790 the Charleston, S.C., chamber faced the nemesis of everyone who's tried to boost membership: apathy. Several members resigned in July. Discouraged, another member made a motion to dissolve the chamber. Others decided to wait before making this final move. In September, the motion was withdrawn and the chamber recruited a number of new members.

This revival was timely. In May of the following year, President George Washington visited Charleston. He needed an organization to host him. The Charleston Chamber of Commerce, still in existence thanks to its patient members, was there to take on the job. The chamber treated the father of our country to a wonderful gala dinner on May 7, an event whose memory is still cherished by the Charleston Metro Chamber of Commerce.

The Charleston chamber faced another challenge after the Civil War. The city was devastated, and many members were dead or being hunted by federal authorities for their blockade-running during the war. The chamber, however, boasted what appeared to be a strong balance sheet. It had kept meticulous records (including a black cross next to each deceased member) and it appeared to have $2,511.51 on hand. Unfortunately, it was all in Confederate money.

Nevertheless, with almost nothing to work with, 22 members got together in 1866 to bring the chamber together again. These brave souls included George Alfred Trenholm, former treasurer of the Confederacy and a past president of the chamber. His wartime exploits would make him the model for Rhett Butler in Gone with the Wind. Like Scarlett O'Hara in the smoking ruins of Tara, Trenholm didn't dwell on the troubles of the past and the lack of resources in the present. He proposed the very first postwar resolution of the Charleston Chamber of Commerce. The short document, which the chamber approved, encouraged the people of Cincinnati to continue their efforts to construct a railroad toward Charleston.1 Trenholm and his confederates still had dreams, and they were ready, with or without money, to make those dreams come true.

Listen to Your Funders

In Russia, a severe famine struck the Volga region in late 1891. The future Nicholas II, son of the reactionary Tsar Alexander III, was in charge of raising money to ameliorate the disaster. He and his father bungled the effort to fight the famine, causing immense suffering and pushing many toward extremist politics.

Americans, including the venerable and dedicated Clara Barton, pulled together for a relief effort. Naturally, the great New York Chamber of Commerce's members took an interest in helping on this disaster, as they had on so many others. They raised funds—but with a wrinkle. At the chamber's monthly meeting on Feb. 4, 1892, after many testimonials in favor of aiding the Russians, the president of Kuhn, Loeb & Co., Jacob Schiff, spoke:

Mr. Chairman, I hesitated and was in doubt whether or not I should come to this meeting, for, as you are aware, I belong to that race which has suffered so terribly at the hands of the Czar's Government.2

Schiff went on to say that although the Jewish people had endured much at the hands of the Tsar, he would be willing to contribute to the fund, provided that the corrupt Russian officials did not get their hands on it. He noted that "the Jews will tightly close their pockets" if the money went directly to their oppressors in the Russian government.

Money was raised and sent to Russia via private channels. Alexander and Nicholas had agents all over the world, and easily could have read the public record of Schiff's 1892 remarks at the New York Chamber. But Nicholas the fundraiser seems either not to have known or not to have cared about Schiff's attitude. The pogroms continued. And Schiff's anger increased.

As the 20th century dawned and Prince Nicholas became Tsar Nicholas II, he continued the anti-Semitic policies of his father. Jacob Schiff, a determined man, as he had shown at the New York Chamber on more than one occasion, was incensed at the Tsar's continuation of the persecution that terrorized Russian Jews. He decided, as he warned in 1892, to "tightly close" his pocket.

When Russia went to war with Japan in 1904, Schiff did his best to ensure that the Tsar could not borrow money for the conflict.3 As he noted at the time, "I pride myself that all the efforts, which at various times during the last four or five years have been made by Russia to gain the favor of American markets for its loans, I have been able to bring to naught."4 He arranged financing for a $200 million bond issue on behalf of the Japanese government. The money boosted Japanese morale and was used to bolster its land forces and acquire and equip the ships that decisively defeated a motley Russian fleet at the battle of Tsushima. For the first time in modern history, an Asian nation had overcome a European power in war.

The humiliation of the defeat destabilized Russia, encouraging unrest that simmered on past the opening of World War I. Under the pressure of German arms, the wobbly Russian regime finally collapsed. The Tsar and his family were shot. Some, or perhaps all, of this might have been avoided if, in 1892, Nicholas the fundraiser had paid attention to one angry chamber member in New York and his concerns about the Tsar's treatment of Jews.

Solve a Big Problem

Why is it that money magically materializes when people face the biggest problems? On April 17, 1861, the New York Chamber of Commerce held its first meeting after the outbreak of the Civil War. During that meeting, after hearing of the need to equip troops for the front, the group raised $21,000 in 10 minutes, the equivalent of about $500,000 today. It also promised to quickly subscribe the remaining $9 million of government borrowing to fund the conflict.5 When confronted by a massive challenge, the New York Chamber found the necessary resources to help its country.

A similar incident occurred a couple of thousand miles away just after the Civil War. The city of Denver was faced with disaster. The nearly completed transcontinental railroad was passing through Cheyenne, not Denver. People and businesses began streaming out of the Colorado city, convinced it had no future. By the fall of 1867, the situation was desperate. As a later chamber chronicler wrote:

Denver had to have a railroad if it was to survive as a city. So on November 13, 1867, John Evans and John Smith and General John Pierce and others marched up the stairs of Cole's Hall on Larimer Street, and before they had marched down again the Denver Board of Trade had been born, with the ambitious job of securing for Denver a railroad.6

The group made a plan for a $500,000 capital project, organized the Denver Pacific Railroad Company on Nov. 19, and collected the first $300,000—hardly a trivial sum in a small city in this period—over the next three days. The first locomotive arrived in town on June 15, 1870, and others followed. The brand-new Denver Board of Trade had ensured that its city would thrive.7

Catch the Fever

Occasionally, whether for good or ill, a community may be seized by a sense of excitement or urgency that fundraisers can exploit. In San Francisco during 1915-16, a longshoremen's strike raised tensions to the fever point. A steady stream of labor-related beatings and harassment was pouring from the docks, despite the chamber's public protests and appeals to Mayor James Rolph Jr.

On July 10, 1916, in a room packed with 2,000 people, the San Francisco Chamber of Commerce set up a group called the Law and Order Committee. The chamber, under its brawny president, J. Frederick Koster, was determined to strike the strikers. Within five minutes after formation, the group had $200,000 in pledges.8

Less than two weeks later, on July 22, San Francisco held a Preparedness Day Parade. (Such parades, which occurred in many cities, made the political statement that if war with the Central Powers should come, Americans would be ready.) Unions had been excluded from the list of participating organizations, and some labor advocates urged a boycott. But a crowd of 50,000 was there to watch. A mile into the march, a bomb exploded, killing 10 and injuring 40.9 Public horror was matched by white-hot fury among chamber leaders and members.

Four days later, the Law and Order Committee held a meeting, this time with 6,000 people. Chamber President Koster proposed, and was urged to set up, a Committee of One Hundred, harking back to the chamber-linked (and violence-tinged) Vigilance Committee of 1856. The new group would be peppered with famous, established businessmen of the port city, as well as some parvenu players, including a chamber board member named A.P. Giannini, whose Bank of Italy catered to local immigrants and working class people, and later would be called the Bank of America.10

The Law and Order Committee fought ferociously on all fronts, seeking the culprits for the bombing with reward money, and fighting unions, strikes, and the closed shop at every turn. So galvanizing was the struggle that the chamber held, from Aug. 29 to Sept. 1, a membership drive using telephone operators. The result was a phenomenal increase in membership, from 2,400 to 6,313.11 This made it, said the organization, the largest chamber in the nation. Indeed, the telephone drive was one of the most successful chamber membership pushes in the history of voluntary chambers of commerce anywhere.

The Law and Order Committee soon overstepped its bounds, running roughshod over the law and winning the enmity not only of the left but of moderates, including Mayor Rolph. The group's extremism brought Presidential candidate Charles Evans Hughes to grief when he let himself be identified with its hardline, closed-shop, anti-union stance. This facilitated Woodrow Wilson's narrow victory over Hughes in California, which provided the electoral votes needed for Wilson to win a second term as President.

Although the Law and Order Committee made more than its share of mistakes, it proved a point. When a chamber taps into emotional currency, it can also tap into currency—lots of it—and plenty of new members to boot.

Tap into the Power Source

Fred S. Ball became the new executive vice president of the Salt Lake Chamber of Commerce on Jan. 1, 1971. He was shocked to find there was not enough money to make his very first payroll. What was he going to do?

Ball called someone who had encouraged him to take the job: N. Eldon Tanner, second counselor in the First Presidency of The Church of Jesus Christ of Latter-day Saints. Tanner invited Ball to his office the next day, where the church leader said, "I feel inspired to have you go see the presidents of KSL Radio and TV, Deseret Book, ZCMI, Beneficial Life, Murdock Travel, the Deseret News, Zions Securities, and Bonneville International. But give me two hours before you go to them."

Ball did as Tanner suggested. Each business was connected with the Mormon Church, and at each one, he found a $5,000 check waiting for him. He had enough money to make payroll, and never ran into such a serious financial problem again in his 25 years at the chamber.12

Bang the Drum

Florida was the economic development wunderkind of the mid-1920s, the place where all the stars wanted to live and where everybody seemed to want to move. Business people in Atlanta took note of Florida's success and envied it. Atlantans also were concerned by the collapse in cotton prices and the rise of the boll weevil. And there was a deeper rooted, continuing envy of the cities of the North, with their higher living standards and technological and commercial sophistication. How could this out-of-the-ashes Civil War city fight its way out of these constraints?

The answer emerged in August of 1925, when Atlanta Chamber President W.R.C. Smith, a publisher, announced an advertising campaign called Forward Atlanta. This effort would show the world, and especially the North, the advantages of this southern metropolis. The aim was to attract companies to Atlanta.13

The goal was $250,000. Fundraising began on Oct. 6, resulting in pledges of $85,000 that day. By Oct. 10, chamber volunteers had scooped up an extraordinary $668,000 in commitments. With this impressive war chest, the chamber began placing ads. The first appeared in the Saturday Evening Post on Feb. 20, 1926. Soon the promotional pieces were appearing in Forbes, Fortune, trade magazines, and other publications. The ad choices were made by a senior team of Atlanta executives who knew the kinds of things their counterparts in other cities were looking for.14

The campaign was a smash hit. In 1926 alone, Atlanta added 169 new firms with nearly 5,000 jobs, prompting the chamber to extend the campaign for an extra three years. By the campaign's end, 762 firms totaling 20,000 jobs had come to town, although it is unclear how many actually came as a direct result of Forward Atlanta.15

The newcomers included Chevrolet and Nabisco. In the excitement, local businesses expanded, too, and the Atlanta chamber and the allied Junior Chamber of Commerce worked with Mayor Hartsfield on his harebrained scheme to turn Candler Field into a leading airport. Forward Atlanta didn't do all these things, but it did a great deal and focused local business people and the community on the idea of growth and the "Atlanta spirit."

Just as chamber leader Asa Candler had successfully bottled refreshment with his appealing Coca-Cola drink, so Forward Atlanta bottled the Atlanta spirit and exported it to the world. A Junior Chamber of Commerce volunteer at the time, Duncan Peek, reminisced later about Forward Atlanta: "That was the beginning, in my estimation, of Atlanta becoming a great city."16

Even before Forward Atlanta, the Georgia city was famous for its publicity machine. It was in 1924 when Gerald W. Johnson, while criticizing the Babbittry of his native Greensboro and other southern cities, issued his often-quoted dictum: "There is no God but Advertising, and Atlanta is his prophet."17 It's a measure of the Atlanta chamber's chutzpah (or limited reading of contemporary magazines) that instead of turning off the advertising faucet because of Johnson's invective, it decided with Forward Atlanta to shoot its message through a veritable fire hose.

The campaign ran through 1929, and with the advent of the Great Depression it was not renewed in 1930. But there was something singular about this project, something worth repeating. The fizzy Atlanta spirit needed a bottle, a structure to capture and export the value of the overachieving southern metropolis. And so the multiyear community promotion/advertising campaign would return to Atlanta in the early 1960s, as ambitious as before, and copied by communities not only in the South but across much of the rest of the nation. Indeed, chamber "capital campaigns" or "superfund campaigns" would become identified with Atlanta, even though similar funding campaigns had happened long before 1925, and far away from the southern city where war was hell and drinks steamed with carbon dioxide.

What may we conclude from these six tales of money, the lack thereof, and occasional mayhem? There are certainly the fundraising lessons attached to each incident. Surely one additional lesson is that creativity is not confined to any city or any era. And finally, perhaps, if we look at these incidents closely, we can see that money, like humans, is a pack animal: it prefers not to travel alone, but with a dream.

Chris Mead is ACCE's senior vice president of member and sponsor relations. Although it's not in his job description, he's researching and writing a history of U.S. chambers, a labor of love that began three years ago. Publication is expected in 2013.

Bibliography:

1 Minutes, Charleston Chamber of Commerce: 1866-1878, handwritten manuscript, Charleston Historical Society library. Entry for February 13, 1866.

2 Thirty-Fourth Annual Report of the Corporation of the Chamber of Commerce of the State of New-York, for the Year 1891-92 (New York: Press of the Chamber of Commerce, 1892), 99.

3 Jean Strouse, Morgan: American Financier (New York: HarperCollins, 2000), 547.

4 Letter to Lord Rothschild, April 4-5, 1904. From Cyrus Adler and Mortimer Schiff, Jacob H. Schiff: His Life and Letters, Part 2 (Garden City, New York, 1929), 122.

5 Frank Moore, editor, The Rebellion Record: A Diary of American Events, Volume I, (New York: G.P. Putnam, 1861), 96.

6 Anonymous, Summary of the Minutes of the Denver Board of Trade and the Denver Chamber of Commerce, 1867 to 1949, chapter entitled "1867 – 1884," page a.

7 Anonymous, Summary of the Minutes of the Denver Board of Trade and the Denver Chamber of Commerce, 1867 to 1949, chapter entitled "1867 – 1884," page b.

8 Steven C. Levi, Committee of Vigilance: The San Francisco Chamber of Commerce Law and Order Committee, 1916-1919 (Jefferson, N.C.: McFarland & Company, 1983), 29-30.

9 Steven C. Levi, Committee of Vigilance: The San Francisco Chamber of Commerce Law and Order Committee, 1916-1919 (Jefferson, N.C.: McFarland & Company, 1983), 41-44.

10 Steven C. Levi, Committee of Vigilance: The San Francisco Chamber of Commerce Law and Order Committee, 1916-1919 (Jefferson, N.C.: McFarland & Company, 1983), 131.

11 Law and Order in San Francisco: A Beginning (San Francisco: San Francisco Chamber of Commerce, 1916), 37.

12 This entire incident is reported in this excellent source on the Salt Lake Chamber: Don Woodward and Joel Campbell, Common Ground: 100 Years of the Salt Lake Chamber (Montgomery, Alabama: Community Communications Inc., 2003), 134.

13 Clifford M. Kuhn, Harlon E. Joye, and E. Bernard West, Living Atlanta: An Oral History of the City, 1914-1948 (Athens,Ga.: University of Georgia Press, 1990, 2005), 89-90.

14 Clifford M. Kuhn, Harlon E. Joye, and E. Bernard West, Living Atlanta: An Oral History of the City, 1914-1948 (Athens,Ga.: University of Georgia Press, 1990, 2005), 90.

15 Clifford M. Kuhn, Harlon E. Joye, and E. Bernard West, Living Atlanta: An Oral History of the City, 1914-1948 (Athens,Ga.: University of Georgia Press, 1990, 2005), 92.

16 Clifford M. Kuhn, Harlon E. Joye, and E. Bernard West, Living Atlanta: An Oral History of the City, 1914-1948 (Athens,Ga.: University of Georgia Press, 1990, 2005), 93.

17 Gerald W. Johnson, "Greensboro, Or What You Will," from South-Watching: Selected Essays by Gerald W. Johnson (Chapel Hill, N.C.: The University of North Carolina Press, 1983), 45. This essay first appeared in the Reviewer in April 1924.

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