Many United Way Campaigns in Peril

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United Way

February 22, 2014; Lewiston Sentinel

As of this past weekend, the United Way campaign in Lewiston, Pennsylvania was supposed to be close to wrapping up. But at over a hundred thousand dollars short of the campaign’s $600,000 goal, officials of the United Way of Mifflin-Juniata are making a big push, looking for new donors and asking past donors to increase their giving.

A decline in charitable giving through the United Way in Juniata and Mifflin counties is not inconsequential. Both counties are well above the state average in the percentages of children living in poverty, children living in economically at-risk families (below 300 percent of the federal poverty level), and births to mothers with less than a high school education.

In Pekin, Illinois, the press termed the United Way campaign results “dismal.” With a campaign goal of $615,000, the United Way of Pekin raised only $473,116 in pledges. That was $141,884 short—and down from the $533,000 raised last year, which was also short of that year’s campaign goal. The 29 agencies typically funded by the Heart of Missouri United Way, based in Columbia, Missouri, face a 10 percent across-the-board cut in their allocations from the United Way because its campaign was $1 million short of its $4 million target and $400,000 below the pledge totals of the previous year.

Do these results mean that all United Way campaigns are tanking? Hardly. The United Way serving Charlotte, North Carolina somehow overcame a $2.2 million fundraising gap in the last week of its campaign to beat its $21.5 million campaign goal.

But for other United Ways, the results haven’t been good, despite a supposed recovery in the economy. Declaring a campaign successful, as was done by the Sedalia-Pettis County United Way in Missouri, may make participants feel better, but it doesn’t undo the campaign’s fundraising total of $488,000, almost 10 percent below the $540,000 goal. “We didn’t meet our goal but we’re not dwelling on that. We’re focusing on the agencies and what they do, not the amount of money we raised,” Sedalia-Pettis campaign chair Paul Dick said. “We do have a large amount of money to help our agencies, and there will be money coming from outside the campaign throughout the year that should make up for what we didn’t raise.”

It’s good to have confidence that money will come after the campaign’s wrap-up to make up for shortfalls, but it doesn’t appear that other United Ways are quite as confident as Sedalia’s. As of last week, the United Way of Morgan County, Colorado, had raised only $212,600 toward its $275,000 campaign goal compared to the $288,000 it actually raised the previous year. Executives fear that fundraising to address the recent devastating floods in Colorado undermined the campaign total. Those flood-related needs continue, on top of the basic human services needs addressed by United Way agencies, making sources of supplemental funding difficult to imagine.

In Watertown, New York, Bob Gorman, the president of the United Way of Northern New York, says that his organization has been facing years of declining revenues and has turned to “raiding the endowment” to make up for shortfalls for its member agencies.

What explains the success of a campaign in Charlotte and the problems of its counterparts in Watertown, Sedalia, Lewiston, and Pekin? Some night say that the problem is one of fundraising intermediaries such as the United Way itself, a more expensive and more cumbersome approach to charitable giving than simply donors’ giving directly to the charities of their choice without the intercession of the United Way’s corporate-dominated giving committees or the coercion from employers to make sure that large proportions of their employees participate. But the Charlotte region has a different advantage, as it is home to the headquarters of eight Fortune 500 corporations, including Bank of America and Duke Energy, both huge participants in the United Way campaign. The intermediary function of the United Way in Charlotte didn’t seem to get in the way of its very large campaign fundraising totals. 

While both corporations and donors may no longer see a great need to have an intermediary fundraising entity such as the United Way run their charitable workplace giving campaigns, there may be other reasons in play for the shortfalls in Lewiston and Watertown:

  1. The lagging campaigns are often in small cities and small towns where there are few, if any, corporate headquarters.
  2. Employment numbers haven’t caught up with share prices on the burgeoning New York Stock Exchange, leaving many people out of work despite the purported economic recovery.
  3. Many employees are facing lower hours and less take-home pay in the current job market.
  4. In the private sector, higher wage manufacturing jobs are being replaced by much lower wage service jobs
  5. Although unemployment is starting downward, it is still much higher than desirable, not including the large numbers of people who are working part-time because they cannot find full-time employment and others who have simply left the labor force entirely.

These factors add up to significant challenges for United Way campaigns in communities and regions that don’t have the vibrant, corporate headquarter economies of places like Charlotte. 

When people talk about income and economic disparities in the U.S., they might consider the disparities that occur among localities and regions. They are increasingly reflected in United Way campaign results and United Way distributions to vital safety net nonprofits.—Rick Cohen

  • Brenda G

    Why have admin fees taken out of your donation through United Way, when you can make the donation outright? I’ve never understood donating through this vehicle.

  • michael

    While both corporations and donors may no longer see a great need to have an intermediary fundraising entity such as the United Way run their charitable workplace giving campaigns…

    Your answer is right there. Be it tax preparation or airline travel, the internet has ruthlessly eliminated intermediaries. As someone else noted, the overhead expense of channeling your donation thru the United Way no longer makes sense. Just give direct.

  • Terry Fernsler

    The first two commenters are trying to place a simple answer on a complex issue, based on. perhaps, their own behavior. There are probably many reasons for some communities’ inability to raise the donations needed, but applying a single universal cause does not explain why other communities are able to raise more than expected. Let’s not react thoughtlessly with simple answers and expect to solve the matter once and for all.

    What should be alarming to readers is the widening gap between the “have” communities and the “have-not” communities. Many of the most needy communities have few financial resources needed to take care of their neighbors. This points to systemic problems–both within the communities and with our socio-economc system. The affected communities can have little immediate impact on the socio-economc problem, but can immediately influence on changing the old habit of raising resources from the community it does not have.

  • Linda

    It alienates donors, too, when a federation kicks the donors’ favorite causes in the teeth. The troubled local UW here mismanaged application procedures, never even offered an apology, and haughtily kicked some small local causes OUT of its catalog. I’ve never again recommended giving through the federation, and I have spoken with others who feel the same. Federations need to provide some kind of service, themselves, if they are to succeed. I’m in the DC metro area, where we also don’t have a lot of corporate HQs (that is offset a bit, maybe, by the huge government presence. But that giving is definitely not the same as corporate giving).

    Small donors, small programs, have to matter, and I think that when a federation turns away from them, it has begun its decline. Especially in rural or otherwise disadvantaged communities, you cannot sit and hope for a big corporation to relocate in order to fund safety net programs!

  • Rick Cohen

    Dear Linda: you’re raising a hugely important point about what is happening in rural communities where there isn’t a big corporation likely to plunk itself down and open up a huge plant, much less a regional or national headquarters office. We would like to hear more about the United Way experiences of nonprofits in rural areas and small cities as well, what’s happening to the United Way campaigns and to the nonprofits that count on them. Thanks for your comment.

  • Doug

    Why are donations down?

    DUH !!!!!

    Personally, I have not seen a pay increase since 2009. Yet costs for college tuition, taxes, groceries, gasoline, and utilities have all increased. So, we have cut back or eliminated the discretionary stuff: no landline telephone service, less outside entertainment, no cable TV and no charitable donations.

    And I consider myself lucky, at least I still have a decent paying job.

  • Loyal

    Giving directly does not eliminate an overhead fee. Every organization has to take a cut for administration and fundraising fees. United Way is good at fundraising and has years of experience of keeping these percentages low, where smaller non profits may not have the resources to do the fundraising necessary to keep the lights on. In the end, giving directly could potentially decrease the donation the charity receives because historically, their overhead is higher than that of an organization who has institutionalized fundraising for charities.

    In addition, United Way vets organizations before funding them. They grant non profits money only after they’ve been through a vigorous application process. So when you don’t have time to really dig deep and find out where you dollars are going, United Way requires agencies who apply for funding to give budget plans and to report back on outcomes that United Way requires them to meet.