Heads You Win

It started with three Irish guys telling jokes over a few drinks. Well, maybe more than a few.

Each summer, for as long as they could remember, the friends from the reinsurance industry got together over the Fourth of July holiday to play a round of golf followed by a backyard barbecue.

But 1999 was different. They talked well into the night. Around 2 a.m. the talk turned serious. All three—John Bender of Allied World Re, Tim Kenny of QBE of the Americas and Enda McDonnell of Access Re—agreed that their careers were going well and that now it was time to seriously help others.

Each of them knew a child with cancer. The kids were undergoing chemotherapy, and it was making their hair fall out. “I said to McDonnell, who had long blond hair, ‘Why don’t you show your solidarity with these kids by shaving your head?’” recalls Bender. “McDonnell shot back: ‘Why don’t you?’”

As it turned out, they all would. Over that barbecue, they cooked up a great idea, a fun way to tackle a serious issue: “Lose your hair, but raise awareness.”

The Saint Comes Marching In

The trio deliberately chose an auspicious occasion, St. Patrick’s Day 2000, to hold their first event at Diamond Jim Brady’s, an Irish bar in lower Manhattan. The goal: Get 17 other people on that March 17 to shave their heads and contribute $1,000 to fight childhood cancer.

But when those 20 people stepped up to shave their heads, the boisterous crowd really roared, and they wound up raising $104,000 instead. That night, the mythical St. Baldrick (a combination of Bald and Patrick) was born. Over the past 11 years, the so-called saint has raised more than $117 million, and around the world almost 190,000 men—and women—have shaved their heads in solidarity with children who have cancer.

It’s no surprise that one of the most successful charities in recent times is an insurance industry idea. Like Bender, brokers and insurers possess an innate talent to pull it off. They are financially savvy, skilled at selling, fiercely competitive and think independently.

And they know about need. As disasters mounted in this year punctuated by drought, tornados, hurricanes and tsunamis, probably no profession, with the exception of medicine and law enforcement, witnessed more human distress.

Fighting the Tide

Insurers are fighting the tide to compensate for the slumping economy and cutbacks in charity. According to a report by the Fundraising Effectiveness Project, net giving levels in 2010 were down. In fact, for every $5.35 that organizations received in donor contributions, $5.54 was lost through attrition. A Dunham+Company survey is even less optimistic, saying two thirds of all donors planned to reduce their charitable giving this year due to financial woes.

But the need for charity doesn’t decrease. “Every year, 160,000 children will be diagnosed with cancer worldwide,” says Bender. “Only 80% will survive the battle.”

Sparkplug for Charity

While the St. Baldrick’s Foundation is one of the more recognizable within the industry, it is one of many charities that insurers, brokers and industry leaders have either started or funded under the umbrella of the Insurance Industry Charitable Foundation.

Earlier this year, in the midst of a slumping economy, the Insurance Industry Charitable Foundation chose to expand rather than contract, launching a Midwest Division (to accompany the California/Western Division and New York/Northeast Division). The Midwest effort is led by 16 companies operating in the Chicago area: ACE Group, Allstate, Chubb, CNA, Dewey & LeBoeuf, Hub Intl., Lloyd’s America, Lockton, Macquarie Capital, McKinsey & Co., Milliman, R-T Specialty, Swiss Re, Wells Fargo Insurance Services, Willis Group, and Zurich North America Commercial.

“This is a new model of philanthropy,” says foundation CEO Bill Ross. “An industry working together.”

The inaugural fundraising event for the Midwest Division, a dinner based on the World’s Columbian Exhibition of 1893, is scheduled for March 1, 2012, at the Field Museum in Chicago. At the dinner, the foundation will present its Trailblazer Award to Bears Care, the charitable beneficiary of the Chicago Bears, for its work in education, medical research and health awareness. Kimberly Saccaro is the executive director of the Midwest Division (312-384-0644 or kbsaccaro@iicf.com).

Another major industry charitable group is the National Insurance Industry Council, which was started by several insurance industry executives in 1978 to fight cancer. It supports the City of Hope, a National Cancer Institute-designated Cancer Center north of Los Angeles. It is one of 40 nationwide. Insurance broker Jerry Sullivan, chairman of Gerald J. Sullivan & Associates and head of The Sullivan Group, is a major mover in the organization.

Many brokers and insurers believe that, when choosing your charities, charity begins at home and that the best cause could be right under your nose.

Fireman’s Fund donates money to fire departments through its Fireman’s Fund Heritage Program, while Marsh & McLennan’s RJF Agencies unit, based in Minneapolis, raised almost $150,000 for Children’s Hospitals and Clinics of Minnesota, as well as Admission Possible, which helps young people prepare for college.

The Hartford made a $7 million, five-year investment last year in the Asylum Hill neighborhood of Hartford, Conn., its headquarters for more than 200 years. Thousands of The Hartford’s employees volunteer for its Team Hart community service program.

Philadelphia Insurance Companies founder James Maguire Sr. started the insurer nearly 50 years ago to provide affordable insurance coverage to the deaf community. Since then the insurer and its employees have donated more than $8 million to charitable causes. In 2011, PHLY continued to support The Cancer Center at The Children’s Hospital of Philadelphia by donating more than $65,000 for the third consecutive year.

Harnessing the Spirit of Competition

Brokers and insurers are intensely competitive with one another, and nothing inspires their charitable giving more than the chance to beat their peers—no matter what the sport.

Chubb harnesses this motivation through its Chubb Charity Challenge of 45 regional golf tournaments played each year around the U.S. and Canada. A team of four agents and brokers donates $2,500 to play for the charity of their choice. Each first-place team then plays in the national tournament, held this year at the Ritz-Carlton in Naples, Fla., to vie for the big prize. This year’s winning team received a check for $50,000 for its charity, but every team that competed took home at least $5,500. Over the last decade Chubb’s Challenge has raised nearly $11 million.

In 2010, Willis Group decided to organize the charitable work done by its employees throughout North America. “We had a lot of great activity, but it wasn’t all connected,” says Todd Jones, president of Willis North America, who leads the effort.

The Willis Foundation started off with a bang—from a starter pistol—last October when 11 teams of Willis employees and corporate sponsors from around the country lined up for its CharityChase in Chicago’s Grant Park. The goal of the 15-mile footrace: raise $1 million for the foundation, which they did.

“My team won,” says Jones, who didn’t run himself, but picked and coached the winners. The real winners, like a local soup kitchen, were profoundly grateful, even for small donations.

“You may think $2,500 is not big,” Jones says, “but to some, it’s huge.”

Competitive events that pit insurers against each other can raise vast amounts of money. Aon Benfield and the Insurance Industry Charitable Foundation’s annual softball tournament, held on July 28 in New York City’s Central Park, earned more than $50,000 for the Family Reach Foundation, which helps the families of children with cancer. Partner Re won the tournament by beating 13 teams from the reinsurance industry.

State Farm sponsored the 63-day Sea to Shining Sea cross-country bike trek for wounded veterans of Iraq and Afghanistan. State Farm’s distinctive red vans rode alongside, while employees provided lunch and dinner throughout the 4,000-mile trip. It was “proof that disabled Americans can accomplish feats most people only dream about,” says Mike Davidson, the insurer’s chief agency and marketing officer.

Gone Fishin’

AmWINS came up with its own creative way to inspire giving last summer when the wholesaler took casual Fridays one step further. Employees could dress casually for work any day of the week to raise money for the St. Baldrick’s Casual to Conquer campaign. Two dollars allowed employees to wear jeans and flip-flops; $1 bought one or the other. Some AmWINS employees paid a week at a time, while others paid in advance for the whole summer.

Munich Re got creative with different venues such as Penny Wars, raffles and a race/walk in Princeton, N.J., to benefit Eden Autism Services, which battles autism in both children and adults.

Bankers Life and Casualty employees took to the streets for its annual Forget Me Not Days in more than 150 cities. The street-corner solicitations brought in more than $286,000 for Alzheimer’s research. And in May, Erie Insurance, which sponsors Adopt-A-School, took 21 seventh- and eighth-graders fishing along with 12 of its employees to teach them how to bait and cast their lines and, of course, how to reel in a fish.

A Tradition Passed Down

Just as brokerage businesses often pass from father to son, so does the tradition of service. The next generation may choose a different charity, but both believe in what they do.

Jamie Crystal handles client and strategic relations for Frank Crystal & Co. and sits on the board of The Educational Alliance, a nonprofit founded in 1889. Jamie, who likes to visit schools and see where safety can be improved, was honored for his support of its early childhood education and other programs.

In contrast, his father, Jim, the chairman and CEO of Frank Crystal, is vice chairman of The Mount Sinai Hospital and handles its audit committee. One of New York City’s two largest hospitals, Mount Sinai manages the healthcare and treatment of most 9/11 responders. Jim’s wife, Jean, a hospital board member, developed a program for Mount Sinai’s Adolescent Health Center, which treats 9,000 teenagers.

“When it comes to charities, everyone has a different flavor,” says the senior Crystal. “You get a better response when people are giving to something they are emotionally connected with. I don’t think it’s appropriate to dictate charitable giving.”

Making a Difference

Brokers and insurers are independent by nature and like to give to the charity of their choice. They often have children, which figures prominently in their charitable decisions. Peter Eastwood, CEO of both Chartis U.S. and Boston-based Lexington Insurance—and the father of three—co-chaired a fundraiser to kick off a $17 million campaign to rebuild one of Boston’s YMCAs.

Powell Brown, CEO of Brown & Brown in Daytona Beach, Fla., is a director of Camp Boggy Creek in Central Florida, which was founded by Paul Newman’s Hole in the Wall Gang for children with cancer, diabetes and chronic illness. Powell is also the father of four children.

As an adopted child, FM Global human resources manager Melinda Smith of Plano, Texas, knows firsthand about the foster care system. That’s why she volunteers as a court-appointed special advocate to help children through what could be the most frightening time in their lives.

Then there’s Chuck Chamness. He’s the CEO of the National Association of Mutual Insurance Companies as well as the proud father of Joey, a survivor of bone cancer. Chamness is also a board member of St. Baldrick’s and a “shavee” who helped raise $154,000 this year.

The insurance industry has an advantage over other do-gooders in its ability to handle money responsibly. The recession has been a litmus test for insurers, and, while they’ve made mistakes, they’ve come through far better than banks and Wall Street. For charities like St. Baldrick’s, this means counting the pennies, making the balance sheet transparent and avoiding the scandals that have plagued other charities.

“Our grant process is one of the most rigorous in research,” Bender says. “Three scientists review every proposal.”

The insurance industry knows charity is also good business. It’s a great way to meet and involve potential or future clients and to form relationships. Charitable giving is tax deductible, so many events are galas where glittering gowns mingle with tuxedos at country clubs and hotel ballrooms, far away from where those in need of the charity live.

Meeting the Challenge

Bridging the gap between the needy and the affluent is a challenge for any charity, particularly for insurers, who live in a high-stakes money world. So the simple answer is: don’t just give money. “Non-profits need endless commitment,” says Jim Crystal. “And time is equally as important as the money you give.”

Harold Morrison Jr., Chubb’s chief global field officer and chief administrative officer, oversees the insurer’s Charity Challenge. He is keenly aware of the difference between the event at the Ritz-Carlton, where teams of golfers compete to help charities, and the mean streets where children play in broken glass. “But as a result of this, we now have people working and volunteering with these charities,” Morrison says.

The 2010 tournament’s winning charity was Misty Meadows Mitey Riders, founded by Harry Swimmer, a retired Chubb agent from Charlotte, N.C. Swimmer’s 80-acre family farm offers disabled children with cerebral palsy, muscular dystrophy and spina bifida, who are normally confined to a wheelchair, the opportunity to experience the world in a very different way—on horseback.

The Insurance Industry’s Charitable Foundation’s annually sponsored Volunteer Week produced more than 140,000 hours of volunteer service nationwide. And for some in the insurance industry, volunteer work really hits home. Ariana Lowe of Nationwide Insurance called the day she came home to find her house on fire the “worst day of my entire life.” Now she donates her time and skill to help build a four-family home in Stanhope, N.J., for Habitat for Humanity. She’s also a Disaster Action Team Leader for the American Red Cross.

And what about the three Irish guys who started it all by tossing back a few at a backyard barbecue? They still have their heads in the game. Bender is chairman of St. Baldrick’s, McDonnell serves on the board and Kenny is chairman emeritus. All of which is reward enough.