NAACP to offer members long-distance phone card

June 27, 1994|By James Bock | James Bock,Sun Staff Writer

Under the slogan "Help Freedom Ring," the NAACP is joining the competition for the long-distance telephone dollar.

The financially troubled Baltimore-based civil rights group is to unveil today the NAACP Freedom Calling Card, a program that offers members discounts on long-distance service while paying the NAACP a commission on calls.

The Rev. Benjamin F. Chavis Jr., executive director of the National Association for the Advancement of Colored People, said the card puts the organization in "the posture of providing economic benefits directly to our members. It is a major step forward to economically empowering our members as well as the organization."

The NAACP clearly needs money. Dr. Chavis, who became the group's leader in April 1993, disclosed last week that the group was $900,000 in the red for 1993 and confirmed that its cumulative deficit totaled $2.7 million by the end of March. He laid off 10 staff members this month and expects to dismiss 10 more this summer.

The long-distance deal, which has been under discussion for more than a year, is an attempt by the NAACP to diversify its revenue stream and to strengthen its membership. With membership dues as low $3 a year for youth and $10 for adults, the group depends heavily on corporate and foundation donations to underwrite its $18 million annual budget.

Dr. Chavis, 46, has risked alienating traditional donors by including black separatist leader Louis Farrakhan in an NAACP-sponsored summit and by courting black radicals, gang members, "gangsta" rappers and others beyond the NAACP's largely middle-class constituency.

The NAACP leader views the long-distance plan as one way black consumers can direct their spending to benefit African-American institutions. If 10 percent of NAACP members use the long-distance card, Dr. Chavis said, it "has the potential to generate over $1 million annually" for the group.

Neither the NAACP or Trans National Communications Inc., the Boston company that is its partner in the deal, would say how much of a commission the NAACP would receive on calls.

Trans National Communications, established in 1991, is a "switchless reseller" that buys long-distance time wholesale from carriers such as AT&T and passes it on at a discount to 250,000 customers. The reseller can offer discounted service because it neither owns switching equipment and transmission lines nor main tains a big advertising budget.

The Boston company is a pioneer in "affinity marketing" of long-distance service for residential customers. In return for the endorsement and membership list of a group such as the NAACP, Trans National pays a quarterly royalty based on the group's monthly telephone sales, the company says. Trans National handles billing and customer service.

l,.5l In effect, the 85-year-old NAACP is lending 3-year-old Trans National Communications the prestige of the nation's largest civil rights group for its marketing. The NAACP, which claims 650,000 members, plans to push the long-distance service at its annual convention next month. Nonmembers also are eligible to join the program.

"Your long-distance calls are a powerful force for change," says a brochure promoting the NAACP Freedom Calling Card. "Every call helps freedom ring."

The nation's 300 switchless resellers accounted for about 2 percent, or $1.5 billion, of the long-distance industry in 1993, according to the Telecommunications Resellers Association, which was formed in 1992 to cleanse the fledgling business of shady operators. The resellers are both major customers -- and competitors -- of carriers such as AT&T and MCI.

Trans National Communications is part of Trans National Group, the brainchild of Boston entrepreneur Steven Belkin. Beginning in 1974, the Belkin company has developed travel, credit card, telecommunications and mutual funds businesses, all using affinity marketing.

Trans National has affinity deals with groups such as the International Wildlife Coalition, the American Museum of Natural History and the American Society of Notaries, said Deborah Belt, a spokeswoman.

"With so much advertising and so many products in the market, the consumer is confused, and the endorsement and approval of our product from an affinity group gives confidence that there is good value and a good product," Mr. Belkin told the Boston Business Journal. "That's why our many businesses are successful."

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