October 09, 2009
Majority of Local United Ways Report Declines in Donations
By Holly Hall
The recession cut a deep swath in contributions to more than 300 of the nation’s largest United Ways last year, according to figures released by United Way Worldwide.
In what officials said was a “stark” trend, the number of local United Ways reporting a decline in contributions shot up to 57 pecent last year, from 34 percent in 2007.
Similarly, the number of United Ways reporting that donations increased in 2008 fell sharply, from 55 down to 32 percent.
The total raised by the country’s biggest United Ways — each of which raises at least $1-million annually — declined by 5 percent, to $4.02-billion, after having risen by 2 percent in 2007.
The local United Way with the largest decline was in Erie, Pa. (-67.5 percent), followed by Hamilton, Ohio (-46.2 percent), Hattiesburg, Miss. (-44.1 percent), Mesa, Ariz. (-38.6 percent), and Fort Smith, Ark. (-37.5 percent).
The Seattle United Way, as it has in previous years, raised the most of any local affiliate in 2008 and was the only United Way to break the $100-million barrier. But that was still a 14.5-percent decline from what it raised in 2007.
Not every United Way did poorly last year: Forty local groups reported double-digit increases. Leading the pack was the United Way in Salem, Ore. (42.2 percent), followed by Greensburg, Pa. (40.8 percent), Casper, Wyo. (28.7 percent), Green Bay, Wisc. (27.2 percent), and Baytown, Tex. (27.1 percent).
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The giving downturn for United Way isn’t just about the economy. United Way of America imposes an agenda on the locals that is way out of touch with local community realities.
Donors are catching on and giving directly to agencies providing relief to the needy.
Many of the large United Ways have ACORN-like advocacy agendas now.
What on Earth happened to this organization ?? It seems to be groping for a mission.
— frank m Oct 1, 08:52 AM #
Well said Frank!
— SD Oct 1, 02:33 PM #
Frank M. has it completely wrong. United Way of America does not “impose an agenda” on their affiliates. His mention of ACORN shows that he is just peddling partisan kool-aid.
— Kalex Oct 1, 02:37 PM #
…“peddling partisan kool-aid” … thank you …thank you very much for my first smile/chuckle of the day!
— Laura Oct 1, 03:56 PM #
United Way has become an opportunistic slug in the philanthropy landscape. They are riddled with corruption and bloat, and simply bully their name on to any successful program their former member agencies conceive. If a program is successful, UW insitists upon “branding” it, and then taking full credit. If the agency resists, United Way takes ownership anyway, using its size and influence to muscle the agency out. Many communities have caught on, which is why United Way is losing market share. Unfortunately, there are still those who are uninformed, and believe United Way is still in the model of an earlier era, when they really did contribute to the well being of their community. Now their main focus is staing in business, and keeping their staffs well paid. they are desperately delivering the Kool Aid, and forcing as many as possible to drink. Time for an informed philanthropic sector to pay attention.
— philanthropist Oct 1, 04:42 PM #
Philanthropist, you hit the proverbial nail on the head. my non-profit was put out of our local after they totally decided to focus on children and youth. the rest of the people in the communty…oh well. they are out of touch with “What [really]Matters”.
— Roberta Oct 1, 05:21 PM #
Wow…what an interesting slant on the truth…UW is a worldwide organization going through a complete top to bottom change to improve service and focus areas. There may be some UW’s out there which aren’t too good in the partnership department and have done some of the things mentioned, but keep in mind, we’re talking about 1,300 independent U.S. nonprofit corporations with local Boards determining local direction, not chapters or branches getting marching orders barked down to them, so of course you’ll have some poor judgement, and maybe an idiot or two giving others a bad name. You also have strong annual accountability requirements and membership standards. Never assume the actions of a few indicate the preferences of all. Most are good organizations doing the best they can to change lives, not the bullying egotistical organizations you’d try to have us believe they are. Check the glass in your own houses before throwing stones anonymously.
— George. a UW CEO Oct 1, 06:08 PM #
Yes George, we are suggesting your unemployment would improve philanthropy.
— Doug Oct 1, 08:28 PM #
Well, actually George, as a philanthropist, I have been in the company of UW national leadership who make clear the national policy has changed, and that United Ways who do not conform to the new model will lose their right to fly the United Way banner. I have watched as local UW’s have tried to muscle in on the territory of community foundations and effective nonprofits. Sadly, the good community partnerships with UW are now the anomalies.
— philanthropist Oct 1, 10:11 PM #
Perhaps the real issue is gen x and y prefer to give directly to the charities of their choice. Perhaps these two generations grew up in a volunteer driven high school and college environment and are more invloved with specific charities through a hands on experieinces. Perhaps these generations can not understand why they should pay a community entity to administer their gifts. I am the mother of a 24 and 21 year old and have worked extensively with gen x and y donors and they are truly more educated than I was at their age. Perhaps they simply do not want to continue funding programs and agencies that are still doing the same thing and not changing or breaking vicious cycles. just a few thoughts.
— sara Oct 1, 10:18 PM #
Thank you, Sara for steering the conversation back on track with the article. Now that you say that, I think it’s a fair assumption that it’s a generational difference. Younger donors I’ve known tend to be more grass roots focused, and like to be in the trenches. The people I am thinking of now from the previous generation would rather send a check and remain at a distance from the need itself. This could have an impact on donations, on top of the economy and a greater sense of timidity when it comes to donating to a larger agency.
— John Oct 1, 10:35 PM #
Yes, Sara has nailed it. United Way has been a dinosaur stuck in the tar pits since at least the Aramony scandal of the early 1990s. The more they struggle to free themselves the deeper they sink into irrelevance.
New generations of donors – and long disaffected older donors – rightly question the UW business model, lack of efficiencies, and diminished impact as well as their arrogant sense of entitlement to workplace giving sources (including payroll deduction capabilities).
The dynamics of UW’s workplace campaigns are the antithesis of what the giving experience ought to be and feel like for donors in this day and age.
Old timers like me will remember that it’s the United Fund/United Way that brought us the expression “I gave at the office.” That phrase, like the UW itself, is an anachronism that’s gone the way of other obsolete business tools and practices – kind of like the typewriter. You still see one around occasionally, and when you do you chuckle at what once passed for state of the art office technology and realize how lucky you are to have left it behind.
— BrisketBoy Oct 2, 01:51 AM #
I think Sara HAS nailed it: “Perhaps they simply do not want to continue funding programs and agencies that are still doing the same thing and not changing or breaking vicious cycles.” Social problems do have root causes; it only makes sense to pay for short term relief for so long. What United Way is doing now is addressing the root causes of social problems that have plagued us for years. They have wide eyes and big ideas. But they also have big brains and big muscles, too.
When an organization builds itself up over time and does well enough to affect its competition, it earns naysayers. Success brings negative perceptions from outsiders. It seems like some of you have stewed over this to the point where you’ve got an icky taste in your mouth and you say, well, they’ve got what’s coming to them. Considering the audience of this publication, I would venture to guess — you’re disaffected with United Way because you weren’t selected for funding?
The point of United Way isn’t to run small nonprofits into the ground. The point is to work together with lots of people in lots of areas to make the most change — to make the biggest, deepest impact possible, rather than solely being concerned with making agencies happy. To say that a nonprofit is not effective because United Way no longer partners with it is silly. Like all funders, United Way has a point of view, based on real facts, that pushes forward an agenda. It’s where they think they’ll get the most bang for their buck, where they think they can move the needle the farthest to truly turn things around in communities that need help. Their focus on “education, income and basic needs” is a response to root causes, but they’re not ignoring crisis support. United Way funds agencies that achieve real underlying outcomes in the community, and more than just spreading dollars around like butter on toast the way things used to be, they’re making smart investments. The research and the experts and the community said that education, income and basic needs are the issues that affect the quality of life in an area. United Way is putting money into these things now so that in the future we’ll be seriously better off. “Brokering resources” alone won’t move the needle. Making smart investments, collaborating and facilitating, creating strategic partnerships, and making real systems changes — those are the only things that will move the needle.
United Way contributions are shrinking, true. It’s sad, but charitable donations are down everywhere. http://www.google.com/hostednews/ap/article/ALeqM5hvUtmDJUw9kiAQKf98S2rZHv4l0QD9B14N4G1
Things aren’t what they used to be. United Way partners with only the strongest, most stellar agencies, and that makes sense. Giving the community’s dollars to subpar organizations would be irresponsible. On the other hand, though, plenty of outstanding agencies are no longer United Way partners. This isn’t to say that they don’t deserve funding, but what United Way is going for is real impact on some really specific issues that will make noticeable long-term changes. United Way overhead is shockingly low. On top of that, United Way HAS changed the way they do things, in part as a way to deal with shrinking resources, but also to genuinely affect long term outcomes. No more band aid. Time to heal the wound.
— Kerry Oct 2, 12:32 PM #
United Way no longer has a monopoly on workplace giving. Companies are responding to employee’s desires to give to charities that are most relevant and important to them. Strategic choice campaigns that are designed to align with the company’s philanthropic goals and focus areas and employee’s interests have re-energized workplead giving and resulted in increased participation and overall giving – just not to United Way!
Educated and savvy donors and the availability of technology to administer campaigns independently have contributed to United Way’s loss of market share. Unless they can make themselves relevant to today’s workforce they will continue to see declines.
— Judy Oct 2, 03:41 PM #
But United Way purports in its workplace campaigns to still support the variety of agencies it once did…. most donors don’t realize which agencies have been deemed “unworthy” by the United Way “experts”. I have participated in their “research”. They don’t truly involve the community or even experts… and an uninformed donor gives their dollars believing something altogether different than what really takes place. Yes, it is sad that donations are down due to the economy…. but it is not sad at all that United Way is slowly going the way of all bloated, overfed animals. As the educated donor learns more, the inevitable will happen…. sooner, hopefully, rather than later.
— informed Oct 2, 10:56 PM #
United Way was created and sustained primarly by corporations in each community. Some were incorporated 8 decades ago. It succeeded for years because it consolidated many worthwhile nonprofit appeals into one campaign each year. It was efficient. United Way was great at organizing a comprehensive community appeal.
Now many United Ways are being encouraged to adopt social engineering agendas . Teen fitness, lower dropout rates, income enhancements, etc. Most of these goals are unmeasurable and vague with regard to community impact. And donors are gradually catching on. The marketing message is simply vague.
Givers, local nonprofits and volunteers are becoming confused. And confusion is never good for fund raising results.
— annie Oct 3, 10:46 AM #
The Chronicle should do an in depth assessment. Interview donors, private, family and community foundations, nonprofits who receive dollars and nonprofits who no longer receive funding. Let’s see what the results turn out to be.
— suggestion Oct 3, 11:44 PM #
The “old” United Way favored certain nonprofits- the biggest and least controversial – with membership status and an “inside track” to allocated funding. Even in the 70’s, when I began my nonprofit career as a fundraiser, the United Way was famous for its controlling ways: donors were decidedly NOT connected to the nonprofits they funded; incomplete information – or simply wrong donor information – was given to the nonprofits. So you had two elements that were decidedly not “community focused” – the desire of UW to CONTROL every aspect of the donor communications vs. bringing people together to work together and secondly, attempt to monopolize and control the philanthropic marketplace. Putting blackout dates and restrictions on how nonprofits could fundraise – for decades. Increasing demands for outcome measures that varied widely and often were ludicrously irrelevant to the IMPACT the nonprofit actually had. And all of the criticisms that have already been cited – bloated bureaucracy, ancient technology, taking their cut off the top and reserving the right to dole out dollars based on criterion established by insiders at the corporate and UW administrative level. This was not the work of some few rogue local UWs, but documented policy from the top down. The first crack in the supremacy of UW was dealt by those excluded from the table – hence the development of cause-related groups such as the Black United Fund and Women’s Way. Then environmental organizations – Earth Share. These alternative fundraising groups, as well as many nonprofits who might be in the social services arena but were not “big name” agencies, simply decided that they could do better on their own.
Over thirty years, more and more nonprofits, donors, volunteers and philanthropists – and even corporations who have experienced UW’s inflexibility and desire to control all aspects of work based fundraising have come to share this perspective, and the essential trust in the goodwill of the UW is not there for many. I simply don’t believe that this is a matter of generational preferences – Boomer donors and volunteers also wanted to connect with the MISSION of the agencies they supported, to give more than money, and to get rid of the “middle man”.
Yes, the UW has tried to reinvent itself by adopting more “global” language about its objectives – but what this translates into is the same old stuff in a more abstract package, and not a true and authentic realization of how little they listened or cared about the nonprofits, clients, or donors they claimed to serve.
— 30 year fundraising professional Oct 5, 08:51 AM #
UW of America sneakily franchised independent United Ways about 6 years ago. Pay dues, use the new logo as dictated and fill out reams of paperwork or be cast out of the “ franchise “.
Ever since, local priorities have been dictated by UWA to the local communities. Many were shut down. And the locals have little or no recourse other than disaffiliation. UWA was founded in the 70s to be a trade association responsible for national marketing plans and convening conferences. Now it has moved to a “ Worldwide “ adventure while the American chapters are losing millions due to lack of a cohesive national marketing plan ( LIVE UNITED is an advocacy theme…not a focused mission statement ).
It’s clear to me the National office needs to be completely restructured to serve the interests of individual communities, not the other way around.
— indano Oct 5, 12:42 PM #
Again, I don’t know if anyone from the Chronicle is monitoring this thread, but the need for an intensive, completely independent look into the United Way and its issues seems to be in order.
One of the most glaring issues clearly is the bullying that is consistently reported. Since UW has money and power, many agencies are more than reluctant to publicly criticize for fear of retribution. Board members of United Way are typically not intimately involved, and often unaware of the sometimes unprofessional behavior of the organization.
— suggestion Oct 5, 01:48 PM #
I completely agree with suggestion’s suggestion.
— 30 year fundraising professional Oct 5, 02:20 PM #
WELL said, “30 year fundraising professional.” You obviously know the history.
The saddest part about all of the negative impact United Way has had is that the federated workplace giving fundraising model CAN and DOES work, but it’s gotten such a bad rep at this point due to the scandals and strongarm tactics of United Way that donors and employers have grown to distrust it. It’s a shame that United Way couldn’t simply recognize that there was room for all in the workplace giving arena.
— Nonprof Lifer Oct 5, 07:47 PM #
There are three prevailing factors in the decline of United Way’s revenue, some within United Way’s control (a result of years of heavy handed fundraising and allocation) and two that are societal and economic. The first is a history of top-down corporate campaigns that relied too much on pressure and not enough on building passion. This is leading to the next generations of CEOs and campaign decisions makers opening up corporate campaigns. And when United Way, with a broader, less specific mission and agenda goes up against an organization that can say what they do in 3 words, they lose.
The second factor was alluded to: Younger donors are more likely to give because they have association with a specific mission(buy a cow for a villaige, micro loans to a 3rd world entreprenuer) or a specific person (bono, their pastor, their best friend). United Way isn’t a chic choice.
Third, and probably the most troubling of all, is the fact that the non-profit sector has a glut of non-profits. There’s simply too many organizations competing for a shrinking pool of charitable dollars, and as small nonprofits get better at using the internet or other low cost fundraising methods it eats into the established charities (Red Cross, Salvation Army and others are facing similar declines in revenue).
It’s sad to me—I think there’s still a place for a relevant United Way—one truly focused on an inclusive community-wide agenda. They still can generate and leverage money that probably wouldn’t be donated otherwise, they are one of the few organizations that can bring together people from all walks without it turning into a politicized mess and they help keep our corporations invested in our local communities.
So here’s my challenge to “philanthropist”, “indano” and “informed”: Take back your United Way. Insist on volunteering, insist on transparency, get involved in any way you can. United Way has been and should be for the people of each local community. Just like any large organization there will be change and unpopular decisions. Don’t take the easy way out and throw potshots on an internet forum. Take back your United Way and shape it into the organization you want it to be.
— Still a fan Oct 6, 01:42 PM #
I will respond because the fact that this stream of comments has continued days after it first appeared speaks to the passion many of us feel.
You are correct, there are many sides to this issue. But why do you think we should spend the time or the energy to try and “fight” a corrupt Goliath that smears and tramples opponents? UW has deep pockets, and spends time and (other people’s) money to stay in the game. Although there may be a place for them…. why not just applaud the more informed nature of the newer donors and work to keep them educated and involved. Why keep paying a huge percentage to the United Way …. simply so it can work to stay in existance. I’ve heard people say, “The United Way exists because it exists”. In other words…. there IS a better way.
Honestly, I can (and do) have better things to do with my time and my money and my passion than to keep on supporting United Way…..just because. I’m happy to see donors insist upon knowing their organizations, and wanting direct contact. Why not? So United Way can keep good prospects for themselves?
— philanthropist Oct 6, 05:15 PM #
I thought that those reading and participating in this discussion might like to know about the United Workers for the Untied Way (not United – Un Tied)
I posted this comment on my blog at www.cfctreasures.wordpress.com:
There is a heated discussion taking place on the Chronicle of Philanthropy’s website under the article “Majority of Local United Ways Report Declines in Donations.” http://philanthropy.com/news/updates/index.php?id=9689
The gist of many of the comments are opinions expressed that the United Ways have been detrimental to many smaller non-profits by declining to fund agencies that have previously received funds.
The purpose of this post is to point out one non-profit that does make the argument that United Way does discourage freedom of choice in giving is the United Workers for the Untied Way, and their website is at http://www.theuntiedway.org/aboutus.asp
From their home page, their “About Us” statement is:
We are a group of volunteers working nationwide to protect your right to give at work to the charities of your own choice and not those dictated to you by United Way. We are organized as an IRS-recognized 501©(3) nonprofit corporation to which tax-deductible contributions may be made. We have no paid staff. Our office space and administration is provided pro bono. Contributions go 100 percent to our programs.
Take a look at their website and see what you think. I have no connection to this website, but thought that in the interest of this discussion, people should know about it.
Regards,
Bill Huddleston
www.cfcfundraising.com
— Bill Huddleston Oct 6, 05:29 PM #
Workplace Giving is NOT synonymous with United Way
There are really at least three different issues going on in the threads of this discussion, and I do think that it’s worthwhile to separate and identify them, because they are separate and distinct.
The three issues are:
1. Workplace giving as a viable means of non-profit fundraising.
2. The strategic change in direction undertaken by United Way six years ago.
3. How United Ways are perceived by others in the non-profit community.
Viability of Workplace Giving
Some of the discussion threads insinuate that workplace giving is a dinosaur and has no business in the current mix of non-profit fundraising vehicles. I vehemently disagree with that statement, because workplace giving when done well, such as with the Combined Federal Campaign (CFC) has continued to grow, and is and remains, the most donor friendly way for givers to contribute to charities they care about. Most non-profits profess being donor-centric, but what they really are: is non-profit (their own) centric. If you think about it, most of us who give, care about more than one issue, and using the CFC as the model:
CFC – The Most Donor Friendly Means of Donating to your Non-profit
If you stop and truly consider the charitable giving process from the donor’s perspective, not just the non-profit’s perspective, the CFC is the most donor friendly means of donating to any non-profit. The Federal public servant donor, with one pledge card and one transaction: ● Can donate to multiple charities with just one pledge. ● Gives money to the non-profit before it ever hits their checkbook. ● Accrues no interest charges from credit card donations.
● Makes a secure donation —their personal information is never on the Web, and government payroll systems are secure.
● Donors may remain anonymous if they wish — CFC anonymous donors are some of a nonprofits best supporters, and a majority of the CFC donors choose this option.
One of the unique features of workplace giving is the fact that it occurs in the workplace. This sounds rather obvious but what much of the non-profit sector has forgotten, (or never learned) is that this means that workplace giving is the only type of non-profit fundraising that is subsidized, high leverage, low risk fundraising. As an added bonus, the monies generated are unrestricted, reliable and predictable.
Given the intense interest in the non-profit sector about leadership development, there are other hidden benefits to workplace giving, namely that it provides the perfect training ground for actually developing leadership skills.
I will address the other two issues in subsequent posts.
Regards,
Bill Huddleston
www.cfctreasures.wordpress.com
— Bill Huddleston Oct 6, 08:44 PM #
But many donors are fine with the nonprofits knowing them… yet United Way does all it can to keep the info as far away as possible. They should be encouraging the strengthening of the relationship between donors and the causes they care about. Instead, they work to keep the donors “to themselves”….. so as not to lose their cut of the take. Slimey… yuck.
— paying attention Oct 6, 11:18 PM #
I think donation down is not good for the site, so need more donation for improving of the site quality.
____________________
Band Merchandise
— salman Oct 9, 03:15 PM #
What is missing here is the impact of the internet and email and the ability for non-profits to get their message and mission out to their community. Also, non-profit organizations are much more public and accessible. United Way/UF served a great purpose “organizing” fundraising for non-profits when communication and access lacked. But today, why give to UW when you can give directly to your charity of choice- most online and they take your credit card. UW takes a admin fee; with the large UW’s its millions of dollars. Also, who says that the UW leadership knows whats best for its community? The biggest non-profits in the community lose sight of the accountability also. UW’s support is dropping; and they should be reducing staff etc. in order to maximize pass through to the non-profits, but instead many just cut funding to the local orgs.
— its 2009 Oct 20, 03:45 PM #
On a more practical note, local United Way agencies continue to falter as it relates to how large companies run their annual UW campaigns.
Specifically, so many are run by those in lower paid positions often related to the Human Resources Department. What I have learned and what is presented in my book: “Cookbook for Running a Successful Company United Way Campaign” is that the in house leader needs be an executive or future executive who has an understanding and a willingness to interface with all levels of a company in order to achieve an effective understanding of what United Way funds accomplish and why the Company should support those efforts.
I have found over many years in corporate America that if an assignment like the annual United Way campaign is handed to someone who doesn’t really want it or who does not have the talent, then the results are less than spectacular.
During one of my leadership experiences, I was able to take the company’s United Way giving from $13,000 the prior year to $140,000 the next year. From that new beginning the Company giving rose to over $200,000. The fact is that nothing changed from my first year to the second year except the leadership and of course, the process.
And while I am at it, I need to share that in my opinion, local United Ways all of whom are independently operated can be of enormous benefit to communities if they are being managed correctly so let’s not throw the baby out with the bath water.
— Paul Baskin - Grants To You Oct 20, 04:32 PM #
It is wonderful that you worked so hard on behalf of your community, Mr. Baskin. We are all grateful to have the commitment of individuals who have your kind of understanding and passion.
Unfortunately, if you read the thread carefully, this is not the issue being discussed here. It is about whether this model is still the best and most effective way to serve our communities well.
— csk Oct 22, 09:21 AM #
It would have been great if a link to the United Way press release had been included in this article! Next time?
— Jan Masaoka Oct 30, 01:00 PM #