A new reluctance by the public to donate to conservative causes has forced a number of conservative direct-mail firms to fire staff, cut salaries, reorganize, or all three.
Specialists in the field say they believe that conservative donors have been closing their checkbooks for a host of reasons: President Reagan's landslide reelection in 1984 quieted anxieties that in the past prompted contributors to reach for their wallets; conservative mailing lists have been oversold and saturated; the Ethiopian famine, the Mexico City earthquake and other natural disasters tapped out the marketplace of givers; Reagan's campaign theme -- "It's morning again in America" -- undercut direct-mail efforts to capitalize on fear and anger, the two key ingredients in successful solicitations.
In an attempt to counter the drop-off in donations, many conservative clients dependent on direct mail for their funds -- political action committees, lobbies and foundations -- are switching primary targets from small donors to major donors, both corporate and individual, who are often lured into giving by the availability of a tax deduction.
Among those hardest hit by the decline in conservative donations is Richard A. Viguerie, the man who invented many aspects of direct-mail fund-raising, as well as several of his former employes.
Since the 1984 elections, Viguerie has been struggling to stay afloat. Bruce Eberle, a Viguerie competitor, said he operated in the red last year for only the second time in 12 years in the business, forcing him to fire some employes and cut salaries for those who remain. Stephen Winchell, a former Viguerie vice president now running his own firm, had to cut his staff from 25 to 19.
Moral Majority, one of the most visible organizations on the political right, has been prompted by an increasingly negative public image to change its name. It is now called the Liberty Federation. In the process, the group is shifting from an intensely "anti" agenda fighting abortion, pornography and homosexuality -- all currently poor direct-mail draws -- toward more lucrative foreign-affairs themes, including the "Star Wars" space-based defense system and aid to the Nicaraguan contras.
No one in the roller-coaster direct-mail universe has, however, gone through more than Viguerie, the man who produced the money to finance the creation of such new-right institutions as the National Conservative Political Action Committee (NCPAC), the Conservative Caucus, the Fund for the Survival of a Free Congress, and the Congressional Club of Sen. Jesse Helms (R-N.C.).
"It's like somebody told me they started giving themselves a birthday party years ago. They'd like to stop it, but they don't know how," Viguerie said, describing a network of contracts that have now turned sour. "You get a reputation for always having a Christmas party, you don't know how to stop."
Battered by lawsuits approaching $5 million, a series of contracts that forced him to swallow undisclosed costs for mailings that failed to pan out and the loss to competitors of his one-time near monopoly on the right, Viguerie has been backed to the wall.
He sold his magazine, Conservative Digest, which had been a constant money loser, and he has put his executive office building on Leesburg Pike up for sale. His staff, which once exceeded 200, is now down to 70.
He has renegotiated all his "guaranteed no-loss" contracts, pacts in which he guaranteed clients a specific dollar amount every month, a contract unique in the industry reflecting Viguerie's willingness to gamble his own money in high-risk terrain.
Under those contracts, if the direct mail failed to produce a profitable return, Viguerie not only was required to pay the client the guaranteed figures, but also to cover all postage, handling and other costs of the mailing left uncovered by the return on the mailing. "We ain't doing that no more . . . . The monthly guarantees have gone by the wayside," he said.
In his struggle to survive, Viguerie is moving outside the political arena. "We are going to be doing commercial work for the first time," he said. "The Viguerie Co. has never really had to go out and solicit new business . . . Now, we've got a vice president in charge of new business. I'm out there selling some hours every day."
At the same time, however, he is engaged in what sources describe as increasingly tense negotiations with one of his principal clients, NCPAC, which is seeking $2.6 million in credits to make up for a major loss on mailings in 1984. Viguerie, according to sources, is seeking to settle with NCPAC for $750,000 in credits. NCPAC is currently just under $3 million in debt, largely as a result of unproductive mail solicitations.
In addition, Viguerie no longer has an exclusive contract with one of his major clients, the National Tax Limitation Committee, an organization for which he provided essential donor support in the mid-1970s.
The most bitter dispute involves two related suits, one filed in Fairfax County and the other in federal court in Chicago. In these complex legal battles, Ruff-PAC and Free the Eagle, both of which are run by Howard J. Ruff and Neal B. Blair, are pressing claims against The Viguerie Co. for a total of $3.69 million.
At conservative and Republican gatherings, speculation over Viguerie's ability to avoid going belly-up rivals discussion of the 1988 presidential contest.
"If a cat has nine lives, Richard is a tiger," a former employe said. "He's looked down the black hole before." Another former employe countered, "This time, I just don't know."
Viguerie contended, however, that he has pulled out of his nose dive and avoided bankruptcy. "There's an old saying: 'Whatever doesn't kill you, makes you stronger.' We will survive. Everybody has to tighten their belt and work harder, but we are going to come through it . . . . "
Many of Viguerie's problems have roots in his own success. Just as he effectively created his own clients, he has trained what has now become a small cadre of direct-mail specialists, many of whom are now his competitors.
Among the former Viguerie vice presidents who are now prominent fund-raising specialists for the Republican Party and conservative causes, or involved in related activities, are:
Ann Stone, of Ann Stone Associates, whose clients include NCPAC, High Frontier and the GOP campaign committees; Winchell, of Stephen Winchell and Associates, whose clients include the Republican senatorial and congressional campaign committees, the PAC of former Delaware governor Pierre S. du Pont IV, and the Heritage Foundation; Wyatt A. Stewart III, director of finance and administration for the National Republican Congressional Committee; James G. Aldige III of Dominion Direct Mail and Publishing; and Michael Gretschel, head of the National Outdoor Advertising Agency, whose clients include the National Rifle Association.
Many of Viguerie's business offspring are facing a slack period, although none are believed to be as close to insolvency as Viguerie.
"There really aren't any devils for the Republican Party to write about," Winchell said, describing the difficulty in raising cash through the mails. "There is no Democratic threat."
At the same time, Winchell argued that within the Republican-conservative fund-raising business, "you have a classic example of a mature marketplace." Ten years ago, that market was "underexploited." Now the contest is to persuade existing donors to raise their contribution levels, and to find ways to reduce the costs of the increasingly expensive process of adding new names, or prospecting, he said.
The falloff is not universal among organizations on the right, according to both Winchell and Stone. High Frontier, which supports spending for the Star Wars program, "went through the roof in January, and stayed there," according to Stone. The Heritage Foundation, in turn, has had strong success using mailings that criticize the United Nations, Winchell said. In addition, a number of direct mail specialists on the right said the decline was sharpest at the start of 1985, and since then there has been a modest rebound, although it remains below past levels.
The shift of emphasis from small to large donors has occurred in almost all the groups on the right and affiliated with the Republican Party. All apparently hope that major donations, often from corporations, can offset declining direct-mail revenue.
At the Republican National Committee, Chairman Frank J. Fahrenkopf Jr. said a new category of donor -- "Junior Eagle" -- has been created. RNC "Eagles" are men and women who give $10,000 annually; the "Junior Eagle" is for those under the age of 35 willing to donate $5,000, making it effectively a program for very upscale Yuppies.
At NCPAC, emphasis has been shifted to a sister organization, the National Conservative Foundation. Unlike NCPAC, which must publicly report all contributions to the Federal Election Commission and which can accept no more than $5,000 annually from any individual, the foundation has no such restrictions. Its solicitation material pointedly notes that contributions are unlimited, "totally tax-deductible," can be made by corporations and "will remain private and unpublished."
Viguerie, who continues to conduct mailings for NCPAC and a number of other groups, said: "Our clients' house files [lists of people who have already given money] are generally performing at about same level as in past, maybe a little bit off, but not much. But it's the prospecting [mailings attempting to add new donors to the house lists] that seems to be not performing. What that means is that you are not having new names. There is always attrition from a client's house file, so you are not replacing those who are dropping by the wayside."
Aldige, who now serves as a consultant to direct mailing firms, said a major problem is that former senator "George McGovern (D-S.D.) is gone, (former senator) Birch Bayh (D-Ind.) is gone. (House Speaker Thomas P.) Tip O'Neill is going. You have to have opposition to inspire people. You raise money against things."