Christel DeHaan

Introduction

Although she grew up struggling in post World War II Germany, in 1996 Christel DeHaan (born October 20, 1942 in Nördlingen, Germany) became one of the wealthiest women in the United States when, at the age of fifty-four, she sold her company, Resort Condominiums International (RCI), for $825 million (approximately 1.2 billion in 2010 USD).[1] Begun in 1974 in Ms. DeHaan’s and her then husband’s home, RCI grew from a fledgling company in which its first year’s total revenue was only $16,000 ($70,700 in 2010 USD) into a mega-giant in the industry that had annual revenue of $345 million ($479 million in 2010 USD) when DeHaan sold it twenty-two years later.[2] In the mid-1970s, the sales of resort condominiums had stagnated. However, sales opportunities expanded again when developers began to sell fractional units in individual condominiums. Ms. DeHaan and her then husband had the added insight of recognizing that fractional unit owners wanted to be able to exchange their time-shares with other owners in order to enjoy vacations at different locations. It was this vision and the ability to execute it through the use of groundbreaking technology that led to the tremendous growth of RCI.[3] With her riches, DeHaan has now become one of the most generous philanthropists in America by establishing a number of schools around the world and by creating her own foundation in her adopted city of Indianapolis, Indiana.

Family and Ethnic Background

Christel DeHaan was born on October 20, 1942, to Adolf and Anna M.B. (Engel) Stark, in Nördlingen, Germany, a picturesque Bavarian city of approximately 9,000 inhabitants at the time. She has an older sister, Evelin, who now resides in a suburb of Indianapolis, Indiana. Her natural father was killed during an American bombing raid several weeks before the end of World War II while still a German soldier. Her mother remarried, but her second husband, Wilhelm Riedel, passed away when Christel was only sixteen years old.[4]

Prior to the war years her family experienced middle class German comforts where they resided in a 400-year-old stone house. The Starks enjoyed china, silver, crystal, accordion and recorder lessons for both Evelin and Christel, and listened to opera on the family’s portable record player. But with the death of the girls’ father and the devastation that beset Germany at the end of the war, times became meager. Food shortages meant that their mother had to forage in fields for leftover potatoes and make other provisions just to keep her daughters from hunger. Christel had to carry water from a local creek for cooking and drinking; she worked in a community garden; she loaded the basement with coal for winter heat; and she picked and packed apples in the attic for the family’s winter consumption. Her mother also began a service of pressing linens to increase the household’s modest income.[5]

But life for the Bavarian family wasn’t all hardship. Christel recalled that she still participated in childhood activities that almost all children enjoy: swimming in local rivers, riding her bicycle in the country, reading, and dancing. She even got to the point that she didn’t mind eating horsemeat, which was all that was available from the local butcher shop. Although times were difficult for her family, her mother would still give small amounts of money to war orphans and invited hungry neighbors to their home for meals.[6]

In 1958 at the age of sixteen, DeHaan graduated from high school at a Franciscan convent. Following her desire to live abroad, she became a nanny in England. As a result, her fluency in English increased substantially. When she returned to Germany in 1959, DeHaan took a position as translator and administrative assistant at a U.S. army base in West Germany known as Grafenwöhr.[7] There she met her first husband, Ralph Cobb. He was a medic at the military base and they wed in Switzerland. They had their first child, Keith, while still living in Germany.

When Ralph’s military tour ended in 1962, the couple and their young son moved to Indianapolis, Ralph’s hometown. Christel and Keith arrived in the U.S. on immigrant visas. In 1965 Christel gave birth to a second son, Tim. Today Tim works in real estate and Keith owns and operates a taxidermy business.[8]

In moving to Indiana, Christel followed in the footsteps of many previous generations of Germans who had migrated to the Hoosier state. Indiana has a long history and identity tied to Germany. Even today nearly 40 percent, or 2.7 million, of Indiana’s residents have a German ancestor. [9] This is one of the highest percentages of any state in the U.S. German was the unofficial second language of Indiana until World War I when the teaching of German in public schools was temporarily banned by the state’s legislature.[10] Today, Germany remains Indiana’s number one trading partner in terms of foreign countries. The state has a strong interest in reclaiming its German heritage as is evidenced by the founding of the Indiana German Heritage Society in 1984.[11]

Christel’s first entrepreneurial venture in her new home was to start an ironing and typing business, which she operated out of her house while she cared for her young family. In 1971, the couple “grew apart,” as DeHaan recalled, and the marriage ended in divorce. At about this time, she enrolled at Indiana Central University (known today as the University of Indianapolis) to pursue a bachelor’s degree.[12] DeHaan was elected to the university’s board of trustees in 1996 and later served as the board’s chairwoman for more than a decade.[13]

In 1973, through an introduction by a classmate, she met Jon DeHaan, who then worked at an Indianapolis architectural and engineering firm. He had considerable business experience and entrepreneurial drive. At the time, in addition to pursuing her studies, Christel was working at RCA’s Indianapolis plant, making $13,000 ($63,800 in 2010 USD) a year as an administrative assistant to the company’s head of quality control.[14]

Christel and Jon married in 1973 and Jon later adopted Christel’s two sons from her first marriage. Together they also had a daughter, Kirsten, who is now a singer/songwriter/guitarist living in New York.[15] Almost immediately they began work on what would become Resort Condominiums International (RCI). Their initial investment of $42,000 ($206,000 in 2010 USD) came primarily from an inheritance Jon had received. They grew the company substantially over the next 15 years, but the couple separated in 1989 and the breakup ended in divorce in 1991.

Business Development

When the DeHaans married, Jon already had substantial experience in several recreational type ventures involving exchanges, primarily in the area of the recreational vehicle/campground industry. Campground developers needed a way for private owners of lots and RV vehicles to exchange the right to stay at other campgrounds in order to facilitate campers’ interest to travel to different geographical locations. This problem arose because private lot owners and RV owners tired of returning to the same location each year, so an exchange enabled campers to travel and use other campground plots for a modest exchange fee. Jon had developed this expertise while working for the American Land Development Association (ALDA). He had formed an exchange program for owners of recreational vehicle/campground plots called “Camp Coast to Coast” in which camp members paid a $1 per night reservation fee.

The success of Camp Coast to Coast, however, was greatly hampered when the Arab oil embargo crisis hit in 1973 and soaring gas prices substantially curtailed recreational vehicle travel. After six months of trying to make Camp Coast to Coast a success in Texas, Jon moved to Indianapolis to work with friends he had made while attending Indiana University as a graduate student. That is when he met Christel and they soon married and formed RCI.[16]

Although Camp Coast to Coast was not successful for Jon DeHaan (it was later sold to an ALDA member), he and Christel were able to parlay what he had learned in creating an exchange program for the campground industry to another stagnant real estate business—condominium sales. Jon, Christel, and a group of friends associated with ALDA came up with the idea of a condominium exchange program. RCI was created as a tool by ALDA to sell condominium units.[17]

The condominium exchange industry offered a number of benefits to the developer and the fractional share interest holder. First, under the rental model, the renter merely has the use of a condominium for a specific time period (e.g. weekly), but he or she does not enjoy the benefits of ownership. For instance, under a time-share arrangement, fractional share owners can sell their interest or transfer it during their lifetime/at death. Second, a fractional interest owner always knows that he or she will be able to return to a specific location and not be prevented from doing so due to lack of availability. Renters do not have that same guarantee.

For developers, the condominium exchange business gave them opportunities and assurances that they did not have with merely selling to single owners or relying upon renters. For example, prior to the exchange model, a developer might be able to “pre-sell” only a small number of condominiums before he or she went to the expense of purchasing ground and constructing actual units. However, with the ability to expand ownership to a much larger pool through fractional share ownership, developers could contract with a larger number of clients before the development even broke ground. And with the existence of an exchange model, this increased the likelihood that customers would want to own a time-share. These factors enabled developers to obtain financing more easily and usually on much more favorable lending terms.

Prior to the exchange model, developers and resort owners did not have a means to address the negative aspects of time-share ownership. At that time, one of the greatest deterrents of owning a fractional interest in a specific condominium was that it “locked” the owner into having to return to the same location, often at the same time of the year. These limitations discouraged time-share ownership, because vacationers often wanted to vacation at different locations or, for instance, upgrade to a larger unit to accommodate additional family members or guests. However, with the development of the exchange industry, time-share owners who used the exchange had much greater flexibility to travel to different resorts at different times of year. At the same time, they had some guarantee that the quality of the condominium met a certain level of expectation.

In 1974 several ALDA members contributed a small amount of cash, about $7,500 ($33,200 in 2010 USD), to help launch RCI. More importantly, they enrolled their resorts in the new company. RCI was now in the condominium exchange business. As previously stated, up until this time the overwhelming majority of condominium owners either owned 100 percent of an individual unit or they owned a time-share (e.g., 1/52^nd share), but they had to return to the same condominium year in and year out. There was no efficient or reputable mechanism to exchange units for a similar type of unit at an equally desirable destination.

The DeHaans came up with a system, modeled after Camp Coast to Coast, to grade condominiums by season (high season for high season, swing season for swing season, low season for low season) and by quality. The grading for size and quality of the condominium was essential. For each exchange, RCI charged a small, relatively inexpensive fee. In the mid-1980s, for instance, the fee was between $24 and $64 per exchange, depending on the type of exchange requested. Where RCI made its largest earnings, however, was in charging an annual membership fee, which was about $58 per year and member by the late 1980s (a little over $100 in 2010 USD). Thus, whether a member actually used the exchange or not, he or she still paid the annual fee. This provided RCI with a steady and reliable source of operating capital.[18]

The DeHaans started their business by first focusing on resorts, in highly desirable locations, where single owners of condominiums were the norm. However, as their business progressed they approached and attracted resort clients where fractional ownership of condominiums was common. It was at that time that the company grew quickly.

RCI formally opened its first office of only two hundred square feet in Indianapolis in April 1974. Because the office was so small, early RCI mailings to potential customers were done from the DeHaan’s home. They hired neighborhood children at $1 per hour to stuff and stamp envelopes. The first exchanges were maintained on cards in a Pendaflex box in RCI’s modest office.[19]

With RCI’s successful venture, along with other early competitors, the entire resort condominium industry was transformed. No longer did individual owners have to be wealthy. The focus of the industry changed from “whole ownership” to time-shares. This increased the potential customer base dramatically. A whole-ownership condominium offered RCI only one exchange member, whereas to divide the condominium into time-shares meant that the same unit could provide RCI with as many as fifty-two different exchange owners. As a result, the demand for condominium ownership increased dramatically because a shared arrangement was affordable to almost anyone. For example, in the early days, an individual one-week time-share in a condominium could be purchased for as little as $3,000.[20]

The genius in RCI’s remarkable success was the recognition and ability to obtain the cooperation of resort owners. Without an inventory of condominiums to market, RCI didn’t have a business. But just as critical—and resort condominium owners eventually realized this—was the fact that without a means of marketing their unused inventory (it was estimated that condo owners were leaving their units empty about two-thirds of the time), the industry had a bleak future. Thus, a marriage between the two (RCI and resort developers) made for a perfect match. Resort owners would provide the inventory and RCI would facilitate the exchange of unused inventory.[21]

The DeHaans were able to capture such a large share of the exchange market because they were early into the industry, they were aggressive marketers (holding conferences for developers in exotic locations), and, to a much lesser extent, because Jon DeHaan had previous experience and connections through marketing Camp Coast to Coast. In terms of marketing, RCI’s holding company, Endless Vacation Systems, Inc., developed a vacation magazine that went to all RCI members, videos that affiliated resorts could use to market the advantages of time-share ownership, and a travel agency that helped arrange members with flights and travel-related excursions. As early as the mid-1980s, member services even included an RCI Gold Credit Card with a $7,500 credit line.[22] Through the use of automation, RCI’s exchange offered a remarkable success rate of matching availability of location with where the individual member wanted to vacation. By 1987, RCI reported that 98.6 percent of the time, exchangers got to go where they wanted.[23]

A factor that contributed to the growth of time-share ownership and should not be overlooked is the lowering of transportation costs, especially in the airline industry. If the cost of a time-share now made it possible for the average person to be able to afford partial ownership in a resort condominium, the deregulation of the airline industry in the late 1970s made it affordable to travel to distant destinations. Largely as a result of the 1978 Airline Deregulation Act, the cost of travel decreased, on average, more than 20 percent and the volume of air traffic soared with ridership up 55 percent a decade after the 1978 legislation. Within twenty years of the act, the number of U.S. passengers had increased annually from 275 million to 600 million. And deregulation of the airline industry was not just happening in the U.S., but in many other developed and developing countries worldwide. Just as ownership of a resort condominium had been previously seen as a privilege of the “well-to-do,” so had airline travel. But with deregulation and the subsequent appearance of discount airlines, travel by air to the Caribbean, Hawaii, Europe, Central and South America, and Southeast Asia became affordable even to the average wage-earning household.

The DeHaans worked tirelessly in the mid and late 1970s to enroll approximately seventy condominium developers into ALDA’s Resort Timesharing Council where they became affiliated with RCI. By late 1985, RCI had grown its membership to 1,100 resort affiliates in fifty countries, had enrolled its 500,000^th member family, and had facilitated its 500,000^th vacation exchange. By 1988 RCI completed nearly 500,000 exchanges in one year alone. The DeHaans had established regional U.S. offices in Atlanta, Boston, Denver, Fort Lauderdale, Florida, and southern California and foreign offices in Buenos Aires, London, Tokyo, Paris, Mexico City, Verona, Italy, Düsseldorf in DeHaan’s native Germany, and licensee operations in Australia and Japan.[24] It held annual conferences where resort developers were invited to learn more about the entire process. For instance, in September 1985 the DeHaans hosted three hundred delegates from eighteen countries at RCI’s sixth annual convention in Orlando, Florida. Former President Gerald R. Ford was the keynote speaker.[25]

Furthermore, the couple advanced consumer legislation that protected time-share owners and helped repair the industry’s early reputation of semi-sleazy marketing tactics that had, up to that time, badly tainted an otherwise good concept. They also went from their antiquated means of recording exchange properties on index cards to accepting exchanges over the telephone by having members use a “call-in” center. By 1977 RCI’s exchange network was automated through the use of a Wang computer system. Four years later the DeHaans purchased an IBM computer system that allowed even greater ease of automated exchanges.[26]

Automation was critical to the company’s success because members could deposit their weeks into an “RCI SpaceBank;” they did not have to find another owner to swap units in the locale they chose as a vacation destination.[27] In some regards, an innovative mechanism to automate exchanges was forced on RCI because it could not keep up with the burgeoning demand otherwise. For instance, in 1987, even with the automated exchange system in place, RCI was receiving approximately 35,000 telephone calls a day but only had the capacity to field 27,000 calls. The huge increase in demand resulted in rapid expansion for RCI. For example, its employment increased from a few dozen employees in the mid-1970s to more than four thousand employees when DeHaan sold the company in 1996.[28]

Thus, the explosion in the time-share industry as a whole catapulted RCI, the leading time-share operator, from a small, one office operation into a mega hit. From 1979 to 1989, sales increased 10,000 percent, from $1 million to $100 million. From its original capitalization of $42,000, by 1989 its worth had increased to $135 million ($206,000 and $237 million, respectively, in 2010 USD). The industry generally was experiencing nearly as rapid a growth. For example, the annual sales volume of time-share resorts in the United States grew from $300 million in 1978 to $3 billion in 1998. During the same time, the number of households owning time-shares grew from less than 100,000 to 1.9 million.[29]

Unfortunately, while the DeHaans were enjoying phenomenal success in the business world, their personal lives were far from ideal. In late 1986, Jon, as the majority owner, pushed Christel out of the business and the couple sought a divorce the following year. This happened at a critical time in the business’s operations, exacerbated by the fact that Jon had several brushes with death due to serious heart problems. He had suffered a heart attack in 1979 and had heart bypass surgery in 1984, followed by angioplasty procedures in 1985, 1986, and 1987.[30]

When the divorce proceedings were finally held in 1991, Christel testified that Jon had been hospitalized thirty-four times over the previous four years and that his health problems had consumed him. However, this fact didn’t equate well with managing a company that was growing at a phenomenal pace and required constant oversight. At the same time, the livelihoods of more than 1,500 employees were at stake. Jon had offered Christel $11 million to settle the dispute, but she refused and the case went to litigation.[31]

After a lengthy trial lasting approximately one year, the judge ruled with what was considered at the time as a surprising outcome. First, he held that the 20 percent interest in the company that Christel formally held greatly undervalued her contribution to the company’s success.[32] He wrote: “If you really look at all the literature the company put out during the time that both parties were associated with RCI, they kept talking about it in terms of [a] partnership, in terms of the founders, Christel and Jon DeHaan. It wasn’t just Jon DeHaan, ever. It seemed to me that both parties were equally necessary in what they did to get the company where it is.”[33]

Second, the judge valued the company at $135 million, the value at which Christel’s appraisers had placed it. This figure was substantially higher than the one Jon’s appraisers had submitted. During negotiations and at trial, Christel had sought to be a buyer or seller at 50 percent of the value rendered by her appraisers.

Third, the judge awarded control of the company to Christel. He sighted in particular her success in developing RCI’s business in Mexico, South Africa, and South America, and the turn-around she had orchestrated with RCI’s business in Europe. Prior to her assuming control of RCI’s European operations, that division of the company had been losing about $1 million per year.[34]

He ordered her to pay Jon half of the accepted appraised value, or $67.5 million.[35] He based this last decision primarily on the management abilities of each and on Jon’s declining health. Christel paid the huge award by obtaining a personal loan and using RCI’s holding company’s stock as collateral.[36] Jon appealed the ruling. The Indiana Court of Appeals upheld the trial court’s decision regarding control, but ordered Christel to pay her former husband an additional $20 million. It justified the additional compensation based on the finding that this would be the approximate amount of capital gains tax that Jon would have to pay on the trial court’s award.[37]

DeHaan returned to running RCI with a vengeance, having been pushed out of the company’s day-to-day management during the two-year divorce proceedings.[38] She immediately dismissed some members of upper management, expanded the company’s international reach into foreign resort markets, and added additional member services. She soon purchased a travel agency to compliment RCI’s offerings to members, purchased a new computer software system, rewarded top talent with compensation, and offered child care to the company’s employees.[39]

She went head-to-head for market share in competing with the number two time-share company, Interval International, based in Miami, Florida. She held conferences in Asia and Spain in an attempt to lure developers in those regions, and the company responded by growing at a phenomenal pace during the next five years.[40] In DeHaan’s first year alone as president, the number of time-share exchanges RCI handled increased by 34 percent.[41] She traveled more than 50 percent of her time, eventually visiting all thirty-two countries where RCI had an office by the mid-1990s.

By this time, the U.S. and the international time-share industry had blossomed. For example, in 1996 in the U.S. alone, the time-share industry included 1,204 resorts and an estimated 64,300 time-share units. That same year, the number of weeks sold totaled 218,000, with the average weekly price being approximately $10,000. The industry was experiencing an increase in sales volume of nearly 14 percent per year and total dollar sales were $2.18 billion. It was estimated that the time-share industry contributed about $18 billion to the U.S. economy through employment, personal and business expenditures, and taxes. The industry employed more than fifty thousand people directly and several multiples of this number indirectly.[42]

But as successful as the industry had become by the mid-1990s, projections were even rosier for the foreseeable future. As the baby boom generation neared its apex in terms of earning power and demand for high quality leisure, the time-share industry, as well as other sectors that benefited from this population’s maturing—such as luxury automobile manufacturers and cruise line companies—had the potential for unprecedented growth.

For instance, it has been calculated that the more than sixty million baby-boomers in the U.S. (those born between 1946 and 1964) control more than 80 percent of personal financial assets and 50 percent of discretionary spending.[43] And the time-share industry wouldn’t benefit from only “graying Americans;” this was a worldwide phenomenon. As populations throughout the world became older and gained wealth, they would in turn look at new and better ways to enjoy recreation, travel, and leisure time. And the time-share industry offered all of this. DeHaan and RCI were in the enviable position of being able to tap into this aging, wealthier, leisure-seeking population.

In 1996, DeHaan sold RCI to New Jersey based HFS Incorporated (Hospitality Franchise Systems), which also owned companies in the hotel and rental car businesses such as Howard Johnson, Ramada, and Avis.[44] She had turned down many previous suitors, but she accepted HFS’s offer when she realized the hospitality company provided RCI with its best opportunity for continued growth.[45] Henry Silverman, HFS’s CEO, told Business Week magazine in a profile story about him that DeHaan’s business savvy and the company she had grown since taking control five years earlier had made an incredible impression on him. Before their business luncheon—in which Silverman made a pitch for RCI—was over, the HFS executive had “convinced myself, and had her half-convinced, that [HFS] should buy the company. This is not a good negotiating tactic—drooling and groveling—but I do both of those.”[46] Obviously HFS’s investors thought that the deal Silverman had struck was a good one. Within one day of the announcement of HFS’s purchase of RCI, HFS’s stock price increased more than five dollars per share, from $74.62 to $79.87.[47]

At the time DeHaan sold RCI, the company employed 4,200 employees located at sixty-eight offices in thirty-three countries. In its last year before the sale, RCI arranged more than 1.5 million vacation exchanges to resort designations in eighty-one countries.[48] As the sole shareholder, Christel received $550 million in cash, $75 million in stock, plus the potential to earn another $200 million if RCI hit benchmarks negotiated between herself and Silverman. RCI did, in fact, meet those benchmarks and she received the full payout, an amount totaling $825 million.[49]

What DeHaan proceeded to do is almost unprecedented. She gave generous bonuses totaling millions of dollars to employees, primarily based upon seniority with the company. For example, a Vietnamese-born mailroom clerk who had worked at RCI since 1980 received a check for $40,000. Other employees received enough to pay off their mortgages and send their children to college.[50] DeHaan explained her philosophy in making the generous payouts. “This was done in recognition of their devotion, and in recognition of my philosophy that when you have, you also share.”[51]

From her wealth, she also gave back to the industry in 1998 by establishing the “Christel DeHaan Tourism and Travel Research Institute” at the University of Nottingham in England. The DeHaan Institute conducted and disseminated research about the time-share industry worldwide, including reporting on instances of fraud, customer satisfaction studies, and emerging time-share markets. When the institute was formally dedicated, Great Britain’s Queen Elizabeth and the Duke of Edinburgh attended the affair and dined with DeHaan. The institute merged with other research entities at the University of Nottingham Business School in 2011.

Today, more than fifteen years after DeHaan sold RCI, the company still exists and is the largest time-share exchange company in the world. Known as “Group RCI,” it has approximately 3.8 million members with access to more than four thousand affiliated resorts in more than one hundred countries.[52]

To this day DeHaan is regarded as one of the principle originators and developers of time-sharing. The concept established such a successful model in the 1970s and 1980s that many major hotel brands such as Hilton, Disney, Marriott, Westin, Hyatt, Embassy, Radisson, and Ramada now use time-sharing as a way to market new resort developments. The entry of such brand name hospitality companies has had the added effect of giving credibility and consumer confidence back to an industry that had been tainted by the practices of several unscrupulous developers and salesmen. This trend all began with the DeHaans and a handful of ALDA members in the mid-1970s.

DeHaan has long been a champion of women succeeding in business. She said in a 2007 interview: “For centuries, men have been engaged in the art of networking and business dealings. Many deals have been struck on the golf course . . . many by leveraging existing relationships. Women are relatively new at these customs . . . but they will get there. It is important for women to recognize that this is a journey and one that does not need an apology.”[53]

Social Status and Personality

Since the sale of RCI, DeHaan has delved into a handful of business ventures, including CD Enterprises, which she formed in 1997 as an investment and management firm. However, she has devoted most of her time to charitable work. She has also been highly sought after for board memberships and has joined several boards of for-profit and not-for-profit organizations.

Corporate boards on which she has served include HFS Incorporated (which became Cendant Corporation), Raintree Resorts International, Inc., and American United Life Insurance, on whose board of directors she remains today. Non-profits boards that she has helped guide include the National Adoption Center, The University of Indianapolis (where, as mentioned, she served as chairwoman of the board of trustees for more than a decade), Dance Kaleidoscope, Indiana’s premiere professional dance company, and the Indianapolis Symphony Orchestra Society. She demonstrated her interest in Indianapolis becoming a more cosmopolitan city by serving as volunteer president of the International Center of Indianapolis during the years 1989-1990 when she assumed sole leadership of RCI.[54]

She remains a member of the American Association of Pianists, where she is vice chair today. Every four years, the American Pianists Association sponsors the Christel DeHaan Classical Fellowship Award, in which the competition’s winner receives a $50,000 cash award and a two-year fellowship to include in-kind career assistance, publicity, professional fees, and other opportunities worldwide, all valued at over $100,000.[55] This fellowship is funded by DeHaan herself. In 1995, she formed the Christel DeHaan Family Foundation, which presently has assets in excess of $60 million. The foundation has contributed tens of millions of dollars to charities, primarily in central Indiana and primarily to causes that focus on the arts or social services.

DeHaan was last listed by Forbes magazine as one of the four hundred richest Americans in 2002 when she was ranked as the 313^th richest.[56] She is no longer on the list because she has given away a large portion of her wealth and because the list is now comprised of only billionaires.

Examples of her generosity are noteworthy. Immediately after the sale of RCI, she and her family foundation gave $3.5 million to local arts organizations, $1.5 million toward construction of the White River Gardens at the Indianapolis Zoo, $1 million to the Eiteljorg Museum of American Indians and Western Art, and $3.5 million to the Christel DeHaan Fine Arts Center at the University of Indianapolis.[57] Although she didn’t come to Indiana until the age of twenty, she now considers it her home. “I think Indianapolis is a good place to raise a family, to work, and to start a business. I have grown to love Indiana.”[58] In one interview she stated that she found Hoosiers to have the same work ethic as her fellow native Germans. She offered that as one reason for her decision to keep RCI based in Indianapolis even though she could have easily moved its headquarters to a more cosmopolitan city or closer to her resort clientele.[59]

In 1995, U.S. President Bill Clinton appointed DeHaan to the White House Conference Task Force on Travel and Tourism, and in 1997 she was named to the British Tourism Hall of Fame. She is a founding Director of the International Timeshare Foundation and was elected twice to the American Resort Development Association Board of Directors.

DeHaan is known for her grace and sophistication, but she has no desire to be a public figure. In a rare interview to a reporter of The Indianapolis Star in 2010, she explained: “I am basically a very private person. Very private. There is a piece of me that is very public by the work that I do and with what I am involved. But my house needs to be my home. It is my sanctuary. I share it on certain occasions but not to make it so public.”[60]

As a patron of the arts and a person interested in culture, DeHaan has a low-key but respectful impact on community life in Indiana. She has served on Indiana Governor Mitch Daniel’s education round table, and in 2000 she founded “Project E,” a nonpartisan, non-profit organization dedicated to improving K-12 education in Indiana. Project E has been proactive in advocating establishment of the state’s charter school initiative. In its first year of existence, DeHaan’s family foundation contributed $3.5 million to Project E.[61]

DeHaan has met with President Barrack Obama, and held fundraising events at her home for local arts organizations. One such recent event included a concert by the 2010 Instrumentalist of the Year, Hoosier native, and violin virtuoso Joshua Bell to benefit the Indianapolis Symphony Orchestra. In recent years, she has endowed a professorship at the University of Indianapolis in gerontology.[62]

DeHaan has received numerous awards, including Girls Inc. of Indianapolis’ “Touchstone Award” in 1996, [63] the American Resort Development Association’s prestigious “ACE Lifetime Achievement Award” in 2001, and the Indiana Historical Society’s “Living Legend” award in 2005. In 2000, she also received Indiana University’s inaugural “Herman B. Wells Visionary Award,” named after the former president of Indiana University, during an awards ceremony in which Colin Powell, former U.S. Army General and Chairman of the Joint Chiefs of Staff, assisted in honoring her.[64] In 2001, the Indianapolis Business Journal awarded DeHaan with the “Michael A. Carroll” award for her determination, devotion, humility, and commitment to community.[65]

DeHaan speaks with a refined German-Bavarian accent and is the picture of sophistication. Several years ago, she established an annual tradition of inviting forty to fifty guests to her home for an evening of dinner and discussion. Modeled after the European style of salons, these informal gatherings allow guests to listen to expert panelists from across the United States and the world, including academics, and leaders in government and from think tanks. The guests then break out into groups and discuss serious topics such as health care reform, alleviating poverty, and the U.S.’s standing in the world.[66]

She has defined for herself a successful life. In an interview in 2007, she said: “Success begins with living a meaningful, honorable and purposeful life. Inherent in that definition is the aspect of contribution – the contribution one makes to the family, the workplace, the community, the country and the world at large. In the end, success simply can be defined as a measure of making a difference.”[67]

Christel House

An opportunity to make a significant difference came in 1998. After DeHaan had sold RCI in 1996, she had anticipated a quieter life, one in which she could once again engage in the arts, culture, community life and reestablish a closer relationship with her children, who had competed for her time while she ran RCI. She had planned on overseeing her family foundation and indulging in these pursuits she had long enjoyed but had previously had little time for. Thus, she had a personal plan, but that personal plan still didn’t fulfill her yearning to accomplish something greater. After all, she was only in her mid-fifties at this time. And then came “the call” one day in January 1998 that changed her life and the lives of thousands of others. She found her purpose.[68]

The call, from a man who had operated her Latin American division of RCI, was about a Franciscan nun by the name of Mother Inez. Mother Inez was struggling to care for a large number of orphans in Mexico City and she needed help. DeHaan was interested, but wanted to make sure her contribution would be well used if she was going to assist financially and decided to go to the orphanage herself.

In the children’s home in a crowded barrio of Mexico City she found approximately 130 children who came from households of extreme poverty. The facilities were woefully inadequate to feed, clothe, and care for the children. Babies slept in hammocks while toddlers slept two to a bed, head to toe. The playground was a 20 sq. ft. courtyard.

Mother Inez, DeHaan, and a small entourage next traveled to another location outside of Mexico City which housed dozens of abandoned adolescent boys. The facility had no running water, no electricity, and only meager offerings of food and clothing. The orphanage’s one bus was broken down, so the boys had to walk six miles one way to reach school.[69]

An attorney for DeHaan’s Indianapolis foundation, who traveled with DeHaan, recalled, “We all cried. They were society’s throwaway kids, and it’s like she didn’t want to see them thrown away [anymore].”[70]

DeHaan had earlier become sensitized to the crisis of poverty through first hand contact with it while running RCI. She had traveled around much of the globe to help others find their destination dream vacation. This frequently took her to some of the world’s finest resorts—beaches and mountains in scenic locations. But often times, near these locations of paradise, she found hovels, shanties, squalor, beggars, hungry children, and desperate parents.[71]

From that encounter in Mexico, DeHaan knew she had the wealth to affect the lives of these children and more, but she knew that any means of assistance had to include a plan that went beyond feeding and clothing them for the time being. She later recalled: ”I stood there, [outside Mexico City], and I looked at these young boys and saw this picture 10 years forward. And I said, ‘I know what I am going to be doing.”[72]

On her return trip from Mexico, DeHaan created a plan where she would establish boarding schools for the poorest of the poor in countries around the world. The schools, however, would also offer health care, counseling about parenting skills, and financial and job training. She wanted to equip the students to deal with a modern society and receive an education that would enable them to become a “change agent” not only for themselves but for their communities. She named the schools “Christel Houses” because she wanted the children to see them as a safe haven, a home, from the abject poverty and desperate conditions they came from.[73] In looking at possible locations for her schools, she considers where the need is the greatest and where the laws are conducive to her establishing the schools.[74]

The charity that she subsequently established is called “Christel House,” a registered 501(c)(3) not-for-profit foundation. It is infused with a holistic approach towards the problems of poverty. Each Christel House strives to promote the core values of respect, responsibility, independence, and integrity. DeHaan’s own personal motto has become synonymous with the organization: “to care, to share, to make a difference.” The charity’s philosophy is one of making each child gain the skills to become confident and self-reliant, basing its teaching on the well known philosophical statement by Maimonides: “If you give a man a fish, you feed him for a day; if you teach a man to fish, you feed him for a lifetime.”[75]

DeHaan established the first Christel House in Mexico City in September 1998. The school now has more than 350 students. It ranks in the top 10 percent in Mexico’s national examinations and its excellent girls’ choir has serenaded both unknowns and the likes of First Lady Michelle Obama.[76] DeHaan next opened a school in Bangalore, India, in July 2001. In 2008/09, it had a graduation rate of 97 percent, and in 2010 the number of students increased to 933 studying at the seven-acre campus.[77] The third Christel House was opened in Caracas, Venezuela, in October 2001, and it now has three hundred students. Recent test results demonstrated that 97 percent met or exceeded national standards in math and 99 percent in language arts. The fourth Christel House was established in Cape Town, South Africa, in January 2002, with 648 students. Ninety-seven percent of its students passed South Africa’s national examinations with the national average for all schools being only 60 percent.

The Christel House Academy opened in Indianapolis, Indiana, in September 2002, with 464 students. At the beginning of the first year of operations, only 18.3 percent of the Academy’s students passed the Indiana Statewide Testing for Educational Progress (ISTEP).[78] Just eight years later, in 2010, 70.4 percent of students passed the statewide examination in mathematics and English.[79] Also, in 2010, DeHaan contributed an additional $2 million and helped raise another $2 million to build a high school onto the K through 8^th grade Academy, becoming the 12^th charter high school in Indianapolis.[80]

In 2003, DeHaan established “Christel House Serbia”, located in Kragujevac, Serbia, and returned to India in 2010 to open another school in Lavasa, a city located southeast of Mumbai. As of this writing, she is making plans to open a third Christel House in India. In total, more than 3,000 students and more than 250 teachers, administrators, and staff are part of Christel House school-based programs on five continents.[81]

DeHaan’s groundbreaking efforts to alleviate poverty and lack of opportunity through education have not gone unnoticed. For example, media celebrity Oprah Winfrey, prior to opening her own Leadership Academy for Girls south of Johannesburg, South Africa, consulted with DeHaan.[82]

To date, DeHaan has spent more than $100 million of her own fortune (out of the $130 million needed to establish the schools), contributing an additional $3.5 million each year to underwrite overhead expenses. But she is much more than a figure head. She helps hire principles and spends eight-hour days in her office four days a week overseeing administrative matters. She visits each school at least once a year and holds weekly Skype conference calls with each facility’s upper management. “I was hands-on in RCI. I am hands-on in Christel House,” she said.[83]

Each year, DeHaan holds an annual charity fundraising event in Indianapolis where friends, former business colleagues, and admirers come to support the Christel House operations.

In 2003, DeHaan launched the “Christel House Open,” an annual fundraising golf tournament where the proceeds benefit Christel House. The golf tournament, which is supported heavily by members of the American Resort Development Association (ARDA), is international in scope. In recent years, more than 1,800 golfers have teed off from approximately twenty different courses spanning five continents to raise funds for Christel House.[84]

In 2009, “Christel House coffee” was introduced, being primarily served at ARDA member locations. Royalties from coffee sales support the charity. Also in 2009 her foundation established the annual Christel House’s “Braking the Cycle Bike Ride.” Bicycling enthusiasts ride more than one hundred miles in southern Indiana in support of raising funds for Christel House’s mission.[85]

Conclusion

As a former corporate executive turned philanthropist, Christel DeHaan has applied the same business acumen she acquired in founding and managing RCI to her charitable work. Her advice to others who want to make a difference is to treat their philanthropic interests with the same rigor and metrics as they do their business operations. She once said, “Find something that is extraordinarily important to you. Make sure the world becomes a better place because of your involvement.”[86]

DeHaan’s contributions have been significant. First, she and her former husband identified a niche market that helped foster a boom in vacation property ownership. As a result, it gave the average person the opportunity to travel and experience different cultures and settings through a medium of exchange that was both relatively easy and inexpensive for the consumer. Second, through the use of technology, she advanced RCI’s ability to become a leader in the industry and to capitalize on the growing demand for affordable vacation experiences much as the cruise line industry has done in the past thirty years.

Finally, with her immense wealth Christel DeHaan is giving thousands of school children in developing countries and her own adopted state the opportunity to climb out of poverty and illiteracy. As she puts it: “I am by nature an entrepreneur. I need to build and create, and I need to have more than the family foundation. I always wanted to do something that would make a huge difference in somebody’s life, but I could never figure out what that was. But when I went to Mexico, I got the epiphany.”[87]

It is unknown whether she could have accomplished as much had she remained in her native homeland. Yet, it is certain that Christel DeHaan’s legacy will last for several generations. Her success also reveals that her adolescent upbringing in post World War II Germany had a critical influence in enabling her to capitalize on her entrepreneurial instincts in her adopted country.

Notes