D.C.-Area United Way “Only Going to Support the Big Guys?”

Print Share on LinkedIn More

Big Fish

July 27, 2012; Source: Washington Post

Size begets size in nonprofit fundraising, and the United Way of the National Capital Area is making that policy. In a letter sent out to nonprofits last week, the Washington, D.C.-area United Way announced plans to curtail funding for nonprofits that raised less than $50,000 in annual fundraising. According to the Washington Post, that could cut off almost 200 small charities.

For the area’s United Way, the move to focus funding on bigger charities comes in response to donors who want to see clearer impacts from their contributions, countering what a United Way spokesperson said is the problem of money being “spread so thin that it’s often hard to see the impact.” The president of the Nonprofit Roundtable of Greater Washington, Chuck Bean, called the new policy “a good move” and said that it will “enable [the United Way] to focus on high-performing organizations.” Implicitly and not altogether illogically, Bean and the United Way are equating fundraising prowess with organizational performance.

Small nonprofits that typically rely on volunteers say that this new policy will be devastating. “They’re only going to support the big guys while the small guys have to tough it out at a time when spending money has been the worst it’s ever been,” said Burton Goldstein, treasurer of National Capital Therapy Dogs, which provides animal-assisted therapy services. Denise Erskine-Meusa, president and chief executive of the Black Aesthetics Institute, said that the United Way has “been a godsend, and for them to tell us ‘You’re not getting any money’ is distressing” for her organization, which uses artwork and films to promote self-expression among youth. Goldstein thinks that the United Way policy will force some small-budget nonprofits out of business.

NPQ readers, please weigh in here. Is this new United Way policy a solid plan for focusing scarce charitable dollars on high-performing groups with potentially strong impacts, or is it short-sighted in its equation of fundraising with performance and/or its focus on helping larger organizations?—Rick Cohen

  • LCG

    I am not surprised by this move. The United Way model is struggling to stay relevant and this will be a new hook that they use to keep donors interested and to try to reposition themselves with next generation donors. Frankly, I believe that the motivation is self-interest. If we depend on the United Way to be the thought leaders on measurable impact, we are all in big trouble. There is self-reflection involved here – meaning, when they look in the mirror the equation of bigger fundraising = greater impact/performance seems to ring true. This feels more and more like the Goliath complex that seems to be taking shape within the sector.

  • Rich Foss

    My heart and work is with smaller community nonprofits. I can understand the shock as they lose a steady, major source of annual income. Unfortunately big means powerful and, in my experience, Untied Way exercises a lot of power, especially with smaller nonprofits. I also think this can be a long term gift to those smaller nonprofits who see it as an opportunity to develop their own identity and grow their donor base. With the cutting of United Way funds they have a opportunity to quickly take their fundraising to a new level because donors will be aware of their need.

  • Linda Tieman

    While this might seem harsh at the first reading, I think it bears consideration. It puts a challenge in front of organizations that are not able to raise much and asks the question really about whether they should exist. We all know of nonprofits that have fabulous hearts and ideas but cannot execute, and often are redundant. I assume that this U. Way will evaluate the impact of its decision and be wise enough to amend it if the results indicate that they should.

  • Terry Fernsler

    Ditto all that.

  • jme

    i have mixed feelings as well. i agree it could eliminate some redundancy, but i also believe that the “little guys’ deserve a chance to help get a leg up tool. there aren’t a lot of options for the start ups, but it is a bigger risk for United Way also to give to groups without a history- which is also why many grants are not available for them from other sources either. ultimately i guess i don’t know that it will dramatically change anything, other than hopefully allow more funds to be available for those with a track record. small groups that want to stay small, will be unaffected. small groups that can’t seem to grow will either figure out another way, or fade…which is better than mismanaging/ wasting funds that could go elsewhere. if i had to pick a side, i think i would say i can understand the dilemma and reason behind it and support the idea- in favor of ambition and ingenuity for the smaller groups to prevail.

  • Scott Heiser

    When I first read the article, I felt a bit frustrated over the impact this would have on the small non-profit that is only trying to do what they feel in their hearts is right and necessary in their community. But, as I gave it more consideration and with a little research, I have come to the conclusion that this may be the wake-up call for communities to once again start looking inward instead of outward.

    United Way is simply another casualty of the growing trend toward “bigger is better.” We have seen the devastation to small businesses in communities where Big-Box stores have taken root in small communities. We have seen the eradication of small, intimate church congregations in communities where Mega-churches have taken root.

    We have also seen small NPOs go by the wayside because they cannot afford the professional non-profit managers and fundraisers to deal with the rules, paperwork and requirements of many funding organizations such as United Way and federal, state and local government agencies.

    Change is necessary for NPOs to remain healthy. Maybe it’s time for a dose of reality that “bigger is not better.”

  • Frances Post

    I remain puzzled and concerned about the overall logic about foundational-type giving. Supposedly as a result of these particularly challenging times we are confronting virtually all the region’s funders significantly changing their giving strategies. Given that I have rarely seen any funders who effectively measure their own outcomes these changes seem no more based on logic than the current approaches. So, we’ve now thrown another curve-ball at a highly stressed community without any credible information supporting the benefits. I would like all foundations, including United Ways, to invest in improving their own performance; seeking ways to create their own meaningful collaborations (to remove duplication of efforts) and generally ‘upping their own game’. This would not only free up additional resources (as their operational costs decrease) it would also provide useful case-studies and role modelling for the concepts they wish non-profits to follow.
    Thanks, as always, to NPQ for being willing to spark dialogue in potentially sensitive areas.

  • Dan

    Terrible idea. Not all high performing nonprofits are even seeking to raise $50K annually- think true grassroots after school programs, community led garden projects, etc. I am very much in favor of supporting effective organizations, but how does this policy make sense when the United Way itself cannot explain how it measures impact? It would seem that learning how to measure impact would be the first task to undertake. A major selling point of the United Way is that it will actually conduct the due diligence and make sure the impact is there. If they can’t measure impact (and haven’t done so in the past), why would anyone give money through the United Way? No wonder they are having such difficulties.

  • Dianne

    The policy makes sense. $50,000 is a reasonable threshold for an organization to attain in order to show that it has public support for its mission and programs. Surely a key tenet of the United Way approach and system is about “most good, for least cost” and using a cooperative approach to strengthening communities. Very small, niche groups seldom serve broad segments of any community.

  • Harriet Meyers, National Capital Therapy Dogs

    How do you define “high performance?” During the second quarter of 2012, 86 volunteers of National Capital Therapy Dog, Inc. (NCTD) and their registered therapy dogs spent 900 hours with clients providing animal-assisted physical therapy, distraction from pain, relief from emotional distress, reading motivation and development, and outlets for joy and affection — isn’t that high performance? When the National Institutes of Health, Johns Hopkins Hospital, and all of the other hospitals, nursing homes, shelters, hospice facilities, schools and libraries we serve give our volunteers outstanding ratings on their annual reviews — isn’t that high performance? And when, against all the odds, our totally volunteer organization has managed to grow and achieve our mission for 21 years — isn’t that high performance?

    If United Way donors want their contributions to benefit high performance organizations, NCTD should be one of them. However, we will no longer be eligible because our volunteers do not generate $50,000 in annual revenue.

  • meg Meyers

    To give money only to organizations which have already raised $50,000 (by paid administrative and marketing staff) and then take away money from smaller organizations who rely totally on volunteers to do their work, seems to me to be incompatible with the term “non-profit”. Since when does fundraising equate with high performance? The high performance of our small no profit organization is due to the high quality and impact of the good that we do. To lose small groups like ours would be a loss to the community as a whole.

  • Lynn Desautels

    I think the United Way’s action is shortsighted and will hurt alot of excellent organizations that do tremendous good with very small amounts of money. I volunteer with two excellent organizations that rely heavily on United Way donations but will now be left out of the campaign; this change will be devastating for both. I hope the United Way changes their policy. Just because an organization is small does not mean it is ineffective.

  • D. Thorndon

    I find it alarming that one local nonprofit leader quoted in this article believes (erroneously) that nonprofits which garner more fundraising dollars equate to “high-performing organizations.” This is simply not true. It is a poor measure of an organization’s performance within its community on behalf of its constituents. If his supposition was true, United Way would be one of the highest-performing organizations, but it appears mostly to excel at raking in the bucks and throwing its weight around. The more I recall and read about UW, the less I like it.

  • Greta Patten

    Aren’t donor dollars better spent on smaller charities with less overhead, and hence less bureaucracy, than the big ones?

  • Jeanette

    The new United Way policy absolutely stinks. The larger charities do not need as much financial help as the smaller ones and donors can and should be made to understand that.

    “I’m not donating money unless I see the impact it’s making”. REALLY? That’s why the United Way Is cutting off funds to the smaller nonprofits? Ask the donors to now watch the impact that will make!