In the Nonprofit Quarterly’s Nonprofits in the Age of Obama project, we have committed to following significant trends in and around nonprofits as our economic and political environment re-calibrates. This has led us to follow news reports of the traditional goal setting of the nation’s United Ways. We noticed some interesting trends and wanted to get your input on what you see happening in your locale.

One of the most important barometers of the recession’s impact on nonprofits—and how nonprofits are adjusting to this increasingly terrible economic downturn—maybe found in the 1,400 affiliates and chapters of the United Way. At Nonprofit Quarterly, we increasingly find ourselves noticing changes in the United Way system that raise additional questions about the direction of this network

It’s not simply that most reports on last year’s campaigns, at least those reported in the press, describe fundraising shortfalls of as much as 20 percent, though some sites such as the Twin Cities appear to have made or surpassed goals. There are significant changes in United Way fundraising strategies across the nation.

During the past month, the NPQ Newswire has run several stories about an apparently new practice among United Way campaigns. United Ways in Sudbury, Ontario; Stanly County, North Carolina; Belleville, Ontario; Lee County, Alabama; and Kansas City, Missouri have eschewed the longstanding tradition of establishing fundraising targets for their annual campaign in favor of no-target or no-goal campaigns.

Ditching the longstanding common practice of setting a fundraising target is a major cultural shift in the UW system.  Explanations of the fundraising shift vary from agency to agency. In Sudbury (Sudbury Star, September 10, 2009), the UW is substituting a target of increasing the number of individual donors from 9,000 to 12,000 for a dollar goal. Oddly, this is not because of poor campaign totals in 2008; Sudbury actually did well, surpassing its 2007 total by raising $2.4 million. But entering 2009, the locality faces layoffs in two major employers, thousands of job losses in the mining supple and service sector, and labor turbulence between local employers and locals of the United Steelworkers and others.

The new campaign strategy in KCMO is similar, targeting the recruitment of 25,000 new donors rather than a dollar fundraising target (Kansas City Business Journal, September 10, 2009). Obviously relevant is the increase in unemployment in the Kansas City metro area from 6.0 to 8.9 percent between July 2008 and July 2009. A spokesperson for the United Way of America (headquartered in Alexandria, Virginia) described the Kansas City and Sudbury no-dollar goal strategies as “a growing trend” (Kansas City Star, September 10, 2009).

In Brown County, Wisconsin, home of the Green Bay Packers, the United Way there usually set its campaign goals in the spring or summer, but this year it announced (Green Bay Press-Gazette, May 10, 2009) it would delay setting a goal until the fall, after soliciting feedback from local employers about their economic and employment conditions.

Obviously, in a system of 1,400 affiliates, there is wide diversity of practice. However, in the midst of a recession, how a United Way figures out how to set a campaign target is in itself a solid challenge that may be eliciting a little creative thinking. For example, Baldwin County, Alabama (Mobile Register, September 2, 2009), announced that it reached its target of a little over $1 million last year, but it did so by extending the campaign from its usual fall wrap-up and accounting to January 2009. Whether those donors who were tapped in early 2009 will not be available for contributions to reach this year’s $1.1 million target is anyone’s guess.

The United Way of Central New York (Syracuse Post Standard, September 9, 2009) fell $500,000 short of its target last year, and has set its 2009 campaign target at the amount they last raised—$8,500,000. This seems to be a fairly common strategy but last year, the recession had not hit the depths that it has now reached, particularly in terms of joblessness. In July 2008, during last year’s United Way campaign, the unemployment rate in metro Syracuse was 5.6 percent; as of July 2009, unemployment was up to 8.1 percent. If last year’s campaign fell short in reaching $8.5 million, how will it hit the same number with unemployment having increased by one-third? In Central Alabama, serving the Birmingham area, the goal is also last year’s total of $37.26 million, despite a one-year doubling of the unemployment rate to 9.9 percent. As the UWCNY exec explained, to make up for donors who have lost their jobs it will have to raise more money from new donors.

This raises real questions and perhaps concerns regarding where the new donors will come from. United Way has moved further afield from its base of workplace giving over the years, at times angering affiliates with strategies that directly compete with the fund-raising strategies of community groups.

With the spate of PR-generated announcements of United Way campaign launches and obligatory newspaper editorials imploring readers to give, it is difficult to prune honest insights from promotional pabulum, but some tidbits of candor sometimes sneak in. For example, from the ED of the United Way in Green Bay comes an acknowledgment that “campaign goal-setting is not a scientific process” and admitting that they “have a long ways to go in terms of increasing workplace campaigns.” This would appear to be a major understatement when unemployment is skyrocketing (nationally, it increased from 9.4 to 9.7 percent last month).

In Columbus, Ohio, for example (Columbus Dispatch, May 5, 2009). In December, the Central Ohio United Way said it would be $1.5 million under its campaign target, in March $3.5 million, but the final total was $4.3 million short of the $56.1 million campaign target.

So, what is a United Way to do? Set a stretch goal at or above last year’s number, a lower number based ascribed to the economic downturn, or no goal at all in light of burgeoning underemployment and unemployment?  As a spokesperson for the United Way in Pontiac, Illinois admitted (The Pantagraph, April 11, 2009), “I have spoken with several United Ways across the nation and they have never seen donations down like they are this year.”

This shows up in sharply reduced United Way campaign targets:

  • Greater Lorain County, Ohio, where unemployment is nearing 14 percent, has a $2.6 million goal down from last year’s $3 million goal (on which only $2.83 million was raised);
  • Forsyth County (Winston-Salem), North Carolina, where unemployment has jumped from 6.3 to 10.3 percent, reduced its goal from $18.4 million to $17 million;
  • Calgary, Alberta, dropped its target from last year’s $52 million (on which it collected only $49.5 million) to $47 million; and
  • Knoxville, Tennessee, set a target of  $11.8 million, down $1 million from the previous year since unemployment has increased from 5.6 percent to 9.0 percent.

The impact for many safety net nonprofits is huge. Agencies are getting cut across the board, frequently at percentages much higher than the United Way’s fundraising shortfalls. “People will have to get used to a lot less services,” according to the ED of the United Way of Westchester and Putnam, New York (Journal News, March 21, 2009). Who loses in this calculation? “The poorest of the poor,” as admitted by the President of the United Way of Volusia-Flagler Counties, Florida (News-Journal, June 3, 2009). But the bigger implication may be that the United Way’s payroll deduction charitable donation mechanism may be on life support—and perhaps at risk of not surviving the recession or its jobless recovery.