UNITED WAY IS INDISPUTABLY THE NATION’S premier workplace-based fundraiser, but shifting workplace arrangements and internal frictions make it fair to ask whether the United Way is the philanthropic “Way” of the future, or soon to be a relic of the past.
Operating for decades under the name “Community Chest” (yes, just like Monopoly) in most localities, the traditional United Way fundraising model relied heavily on the typical mid-20th century workplace: sizeable businesses with a fairly large number of employees, linking corporate and community spirit to spur contributions to a general fund in support of health and social service-oriented charities.
In more recent years the United Way movement has had to adjust its way of doing business, partly due to changes in the structure of the workplace, partly due to the proliferation of new charitable organizations that don’t always fit the standard service model, and partly due to internal financial scandals at United Way of America, the umbrella “service center” for the United Way system.
But in a modest rebound from those scandals, United Way raised an impressive $3.25 billion in its 1996 campaign. As UWA President Betty Beene points out, this represents revenue growth “by more than $100 million for a 3.2 percent increase” over the previous year. Early figures suggest that 1997 giving is up between 4 and 5 percent, which would be the second time since 1989 that United Way giving has outpaced inflation, and the largest increase in giving to United Way in a decade.
So is United Way on the upswing again? In some ways it is, but the picture isn’t that simple.
For one thing, giving to United Way is up only slightly over the 1991 level (and that doesn’t even take account of inflation). For another, as shown in figure 1, giving to United Way as measured in nominal dollars started a slow decline even before the internal scandals hit in 1992. And even with the latest uptick in giving, patterns vary widely around the country. In Los Angeles, United Way donations are still down sharply, while the Austin, Texas area posted a 25 percent increase in dollars pledged.
In addition, the number of donors United Way reaches in its traditional workplace campaigns is down significantly since 1991. Last November The New York Times reported that the number of donors to United Way had dropped by 20 percent since 1991. That is roughly correct if you look only at United Way’s broadest traditional donor base (defined by United Way as “employees of corporations and small businesses”). But if this is so, why is giving up in the latest reporting year, even in nominal terms?
The principal reason is that for several years United Way has been retooling its campaigns to give more emphasis to large donors (“Major” gifts of $10,000 or more grew over 15 percent in 1996, while “Leadership” gifts of between $1,000 and $10,000 grew by more than 6 percent). These larger donors generated 17 percent of United Way giving as of 1996, but only 7 percent back in 1991. Clearly this is where United Way’s dollar growth is coming from. United Way is bringing in those donors with fairly traditional fundraising tactics: strengthening personal ties with local and national business leaders, emphasizing the public relations value of associating with United Way, and focusing its campaigns (and its local funds distribution) on specific functional themes such as welfare-to-work, health care, homelessness, and child care.
But while those larger donations were increasing, the traditional workplace donors declined over the same five-year period not just in number of dollars generated, but in number of contributors and number of employees solicited (over 35 million workers were solicited for donations to United Way in 1991, but only 33.8 million in 1996).
Deconstruction — Or Postmodern Revival
A decline in United Way’s “traditional workplace” donor base should surprise no one, in part because the centralized, hierarchical workplace has been giving way for several decades to more diverse models such as telecommuting, job sharing, and working for smaller, more entrepreneurial start-up companies. It’s just not as easy as it used to be for United Way (or anybody else) to reach a huge number of workers via a core group of large employers.
But slippage in the old donor base need not be fatal, or even seriously damaging to United Way in the long term, since the United Way movement, under the leadership of UWA, already has implemented a number of strategies to reach beyond its traditional base and diversify its funding sources. If the old United Way model relied on iron linkages to the centralized workplace, the model of the future may be a postmodern one: doing whatever it takes to reach donors as both the business world and the philanthropic world continue to evolve.
The strong new emphasis on large gifts and building a reliable core of strong, consistent donors is just one example of how United Way is changing. United Way also is giving renewed emphasis to some of its older alliances—with the National Football League, organized labor, and large corporations like IBM. As an example, IBM’s intense effort to raise employee consciousness of the United Way mission produced a 15 percent increase in giving in 1996 from IBM employees in North Carolina’s Research Triangle area. Simply using basic “new” technologies like email appears to have helped boost the IBM United Way drive.
United Way organizations around the country also have made a concerted effort to respond to popular demand for more “say” in how their charitable dollars are spent, establishing a “donor choice” option to allow donors to earmark their contributions for particular causes. While this innovation probably has helped stabilize the donor base, it has put serious pressure on smaller charities that have always relied on the undesignated pool of United Way funds to keep operating from year to year.
This changing face of United Way has not come without a price, or without generating internal friction. A quick review shows an unusual number of situations around the country where major charities are at odds with their local United Way. In one case, a group of United Way agencies is threatening to raise funds on its own, potentially a major problem given that the United Way concept relies on organizations’ jointly pledging to limit independent fundraising, which would otherwise cannibalize United Way donations.
In San Diego, nine of the biggest local charities (including the Salvation Army, Red Cross, and the Boy and Girl Scouts) are considering joint action independent of United Way to raise their own profiles in the community, collaborate on common projects without United Way supervision, and establish their own identity as the “Community Services Coalition of San Diego.” Their specific gripes with United Way include the decline in allocations from the general United Way fund, which is a direct consequence of “donor choice.” In addition, the group (like many United Way dissidents) thinks United Way spends too much on administration before divvying up its receipts.
The exact opposite is happening with the Richmond, Virginia, United Way, which has cut off the Petersburg chapter of Red Cross due to its alleged “confrontational, adversarial, and abusive . . . dealings with United Way volunteers and staff,” as reported in the Richmond Times-Dispatch (the Red Cross appears perfectly happy to go its own way). A more collegial separation already has occurred in Nebraska, where the Heartland United Way split off from the Combined Health Agencies Drive (embracing the Arthritis Foundation, United Cerebral Palsy, and related groups). So far both groups have come out winners, exceeding their fundraising goals for the year.
Additionally, many United Way chapters (including that in Washington, D.C., the National Capital United Way) have drifted from their traditional focus on health and human services charities and allowed arts and cultural organizations to participate in their fund drives. “Donor choice” logically requires broadening of the funds-distribution pool, and unless the pool grows quickly, funds for new program areas will come at the expense of more traditional service charities.
Can United Way reinvent itself fast enough to secure its “market share” in the philanthropic world? Many within the United Way system think so. According to Beth Curran, Western Region Director in the San Francisco Bay area, “companies have really embraced [donor] choice.” Curran adds that United Way has taken significant strides in providing technical training to local charitable organizations, using a competitive process to award grants based on a demonstration of local impact and likelihood of success, and focusing on solving particular problems facing the local community. Curran may be proved right, but it’s worth pointing out that the Western United Way Region has reported the slowest growth in funds raised (in recent years) of all the United Way regions.
Like most traditional, large, bureaucratic organizations with a long and rich history, United Way is going through adjustment pains in this postmodern era of decentralization, free-flowing information, and emphasis on individual autonomy in all kinds of decision-making. The United Way movement clearly is doing some of the things it needs to do to adapt. Whether it can move fast enough remains to be seen—and there are plenty of other actors ready to pick up a piece of the action if United Way falters.
George Pieler is a freelance writer based in Washington, D.C.