United Way Drives To Diversify Income

October 15, 2011       Mark Hrywna      

As United Way continues to diversify funding, the piece of the revenue pie made up of workplace giving continues to shrink.

For at least the third year in a row, United Way of King County was the highest-grossing affiliate in the nation, and the only one to top $100 million in public support during 2010. The Seattle-based agency raised almost $117.4 million last year, up almost 18 percent from 2009, according to data released last month by United Way Worldwide (UWW) in Alexandria, Va.

The top five United Way affiliates, by private support in 2010, remained unchanged – in terms of ranking – for the third consecutive year:

• United Way of King County, Seattle, Wash. — $117,390,119, up 17.7 percent from $99,770,036;

• United Way of Metropolitan Atlanta, Atlanta, Ga. — $96,675,444, up 3 percent from $93,876,812;

• Greater Twin Cities United Way, Minneapolis, Minn. — $89,215,904, up 1.1 percent from $88,205,538;

• United Way of Greater Houston, Houston, Texas — $77,079,571, down 2.7 percent from $79,177,806; and,

• United of Greater St. Louis, St. Louis, Mo. — $73,825,094, up 2.8 percent from $71,826,029

John Fine, president and CEO of United Way of King County, credited a giving community, including corporate support, and a strong volunteer base for “strong orientation toward doing things that matter in the county.”

Last year, the agency had a special campaign for a parent-child home program, which sends a visitor into the home twice a week to work with new parents. The program began as a pilot with the chamber of commerce in King County that United Way took over and brought to scale.

“It’s an illustration that when you have strong programs, you can raise money,” Fine said. The agency reached its first-year goal of $10 million, with the anticipation of raising $25 million for the program during three years. “It’s a very generous community,” he said.

Workplace giving, which represents about two-thirds of King County’s giving, grew by 4 percent last year, said Fine. Most of its growth occurred in leadership giving — a boost of 67 percent in major gifts. High unemployment, both nationally and locally, has an impact, but “it can be overcome with strong programs and a strong message like we have,” said Fine, who’s been at King County United Way for 11 years. Next year’s campaign goal is $115 million.

Workplace giving for United Way’s affiliates overall was down about 0.2 percent, with more growth from government support and investments increasing total income by 2.4 percent last year. Public support for the almost 1,250 United Way agencies nationwide totaled $3.858 billion, up from $3.842 billion in 2009, a difference of about 0.44 percent.

Total income grew by $100 million to $4.229 billion last year, from $4.128 billion in 2009. Government support was up 13 percent, from $228 million in 2009 to $257 million last year, while investment income almost doubled, from a reported $58 million in 2009 to $114 million. Endowment and planned giving was up almost 13 percent, which includes a 27-percent bump in bequests, and Tocqueville/major gifts, representing more than a third of total giving to United Way, saw a 1.5-percent increase.

“I’m happy to see they weren’t down more but the more important trend is, where’s the money coming from,” said Patrick Maguire, president and CEO of Maguire/Maguire, a nonprofit association management firm outside San Francisco, Calif. Increasingly the past several years, he said, less money as a percentage of total income is coming from workplace payroll deductions, with greater numbers from grants and high-net-worth individuals — not from the rank-and-file. “We’re seeing a United Way get reinvented here, decreasing their workplace footprint,” he said, adding that they must diversify their revenue; “Either that, or die.”

Overall, 457 United Way affiliates generated at least $1 million in public support. Of the 428 that provided data to headquarters for both 2009 and 2010, 242 increased public support last year compared to 2009 while 186 saw a decrease. In 2009, 406 affiliates reported at least $1 million in public support, 128 of which saw an increase, compared with 270 that decreased. Among 457 affiliates reporting $1 million in private support last year, the median aggregate amount was found in Mentor, Ohio, where United Way of Lake County Ohio raised $2.701 million last year, up 1.2 percent from $2.668 million in 2009.

The median percentage difference among the 427 affiliates reporting data from the past two years was 1.2 percent, by United Way of Mid and South Jefferson County in Port Arthur, Texas, and Greater Longview United Way in Longview, Texas, which raised about $1.25 million and $1.4 million, respectively, last year.

The top affiliates by percentage increase from 2009 to 2010 were:

• United Way of Union County, El Dorado, Ark. — 1,483 percent — $132,347 in 2009 to $2 million in 2010;

• United Way of Clallam County, Port Angeles, Wash. — 119 percent — $975,991 to $2.1 million;

• United Way of Wabash Valley, Terre Haute, Ind. — 111 percent — $2.2 million to $4.7 million;

• Granite United Way, Manchester, N.H. (merger) — 100 percent — $3.5 million to $7 million; and,

• Inland Empire United Way, Rancho Cucamonga, Calif. — 66 percent – $4.5 million to $7.5 million

A snapshot of data from just the previous two years can be deceiving. For United Way Clallam County in Port Angeles, Wash., the big boost that appears in 2010 was an aberration, due to the proceeds of a trust valued at $1 million, as well as some smaller planned gifts, according to Nola Grier, internal operations manager. Planned gifts accounted for about 59 percent of the $2.1 million, or about $1.2 million. The previous year, planned gifts made up less than 11 percent, or about $102,000 of the $975,992 – which is a more typical amount reported by Clallam County.

The 2009 fundraising goal was $1.1 million and last year was $1 million. “We like our goals to be a stretch,” said Grier. The annual fundraising campaign raised $861,999 last year and $852,838 the year before that; an increase of 1 percent. She added that the report from UWW does not include endowment earnings that were put into the campaign, which the local affiliate reports to the community.

The million-dollar trust was set-up during the 1990s. “We were aware of the approximate beginning value of the trust but had no idea what would come to us at the conclusion,” Grier said in an email. “As you can imagine, this is a huge gift for us and demonstrates the value of planned giving. This one gift tripled our undesignated endowment reserves and will generate on-going funding for an Early Learning Initiative we have been working toward for several years,” she said.

“The only downside to a donation this large is the affect it has on statistics like this and our income to expense ratio, and our financials. Next year will look like something went really wrong.”

The increase for Granite United Way was the result of a merger of four United Ways, with another expected to come on board in November and another in 2012, according to President and CEO Patrick Tufts. The moves will leave four United Way affiliates in New Hampshire, which had 11 affiliates five years ago, he said.

“The merger created a more efficient United Way that increased revenue by 6 percent and was able to invest dollars back in the local community by 8 percent,” Tufts said.

The aggregate totals for the United Way affiliates without the merger would have been an estimated negative 3 percent from where it finished as a new entity. “We had a number of supporters increase or make additional gifts as a result of our actions,” Tufts said.

Troy Fears, executive director of United Way of Wabash Valley, in Terre Haute, Ind., said his organization received a $6-million grant from the Indiana Association of United Ways to deal with flooding in the region. Most of the funds were received and spent during 2009, though even without the grant, Wabash Valley’s general campaign last year was up slightly, from $1.7 million to 1.8 million, said Fears.

The majority of the increase for Inland Empire last year was from a substantial increase in in-kind donations received, according to Gregory Bradbard, president and CEO.

Specifically, it operates two key programs in the areas of education and health (two of the three major United Way Worldwide initiative areas). Kids Pack is a program that provides backpacks of food to more than 1,000 homeless and very low-income children every weekend, and School Tools is a program that provides quality, donated school supplies to those schools in the most disadvantaged neighborhoods in our region.

“Both of these programs rely on the generosity of individuals and corporations for in-kind product donations, which we were able to significantly increase this past year — including a large donation to our School Tools program,” said Bradbard.

Among those affiliates that saw the biggest percentage decreases were:

• United Way of Galveston, Galveston, Texas — 56.7 percent, from $3.185 million in 2009 to $1.377 million in 2010;

• United Way of Genesee County in Flint, Mich. — 56.4 percent — $7.488 million to $3.261 million;

• United Way of Marion County in Ocala, Fla. — 30.6 percent — $3.286 million to $2.281 million;

• United Way of Passaic County, Paterson, N.J. — 25 percent — $1.392 million to $1.044 million; and,

• United Way of St. Joseph County, South Bend, Ind. — 24.8 percent – $4.171 million to $3.137 million

United Way of Joseph County received more than $850,000 from individual donations and a matching grant from the Indiana Association of United Ways in 2009 to help fund programs designed to address high school graduation rates and reduce the educational achievement gap locally. As a result, it was among the affiliates with the largest increase in fundraising from 2008 to 2009.

“These grants/donations were unique to 2009. They were not included in our annual fundraising campaign totals for that year,” said Kay Ball, president and CEO. Only a slight decrease in dollars raised through the annual fundraising campaign and other contributions account for the remainder of the difference between 2009 and 2010.

A big increase in response to Hurricane Ike in September 2008 accounted for the decline in 2010 for United Way Galveston. The 2009 campaign included grants and gifts from foundations and an increase in individual contributions to help with recovery, according to Executive Director Kenna Bush. The 2010 campaign indicates a large decrease, but the totals “returned to normal,” she said.

UWW agencies that squeaked onto the list of million-dollar affiliates were:

• United Way of Williamson County, Round Rock, Texas — $1,002,593, up 35 percent from $742,622;

• United Way of Whitewater Valley, Richmond, Ind. — $1,006,993, up 33.5 percent from $754,083;

• Greater Douglas United Way, Roseburg, Ore. — $1,007,168, up 11.3 percent from $905,107;

• Victoria County United Way, Victoria, Texas — $1,008,507, up 4.2 percent, from $968,044

• United Way of McHenry County, McHenry, Ill. — $1,008,716, down 11.9 percent from $1,144,691 NPT