Smaller United Way Affiliates Had A Very Tough Decade

Any organization that has been around long enough is going to see its fair share of changes. Just ask retailer Sears & Roebuck or virtually any newspaper.

United Way and its more than 1,800 affiliates around the United States have not been spared from evolution during the past decade. Workplace giving has been on a downward trend since the Great Recession and online giving entered the mainstream amid a gradual recovery in charitable giving.

Almost three-quarters of United Way affiliates that reported raising at least $1 million in contributions annually, raised less in 2018 compared to 10 years ago, according to an analysis by The Non-Profit Times.

United Way Worldwide (UWW) annually reports a breakdown of campaign support by affiliates that raise at least $1 million. The NonProfit Times reviewed data going back to 2008, up to and including the 2018 campaign. The top 10 to 15 affiliates all have seen decreases in support and the biggest percentage changes typically were found at smaller affiliates.

There are a few caveats to the data. In some cases, a big swing was the result of a change in reporting. A spike in year-over-year support is not uncommon for an affiliate in a region impacted by a natural disaster or mass shooting. And in any given year, it’s typical to find as many as a dozen affiliates merge, which might goose the numbers.

Among 324 affiliates reporting data for both 2008 and 2018, the median change over 10 years was a decline of 17.465 percent (17.49 percent, United Way of Southwest Louisiana in Lake Charles, La., and 17.44 percent, United Way of Genesee County in Flint, Mich.).

That 72 percent of affiliates were down from a decade ago means more than one-quarter of affiliates experienced growth.

United Way of Williamson County (+76 percent) was among the biggest gainers for the past decade, due in part to an expanding economy in the Nashville, Tenn., region. Williamson County is experiencing growth and is a wealthy county, according to Brian Hassett, president and CEO of United Way of Greater Nashville, which recently merged with Williamson County and took over the area previously covered by the dormant United Way of Robertson County.

“We have a growth economy which helps and a strong strategic plan that has been embraced widely,” Hassett said. Investment management firm Alliance Bernstein moved its headquarters from New York City, Amazon is expanding, and Bridgestone is making United Way a priority, according to Hassett. “This helps a lot,” he said. Nashville’s Tocqueville Society (donors giving $10,000 or more) added approximately 55 new members this past year, eclipsing 500.

Growth has not been limited to areas of the country where populations have grown or companies have relocated. For example, United Way of Greater Lehigh Valley is the top affiliate among United Ways of more than $2 million. The Allentown, Pa.-based organization has done it while others in the Keystone state have struggled.

United Way of Kennebec Valley started a Cornerstone Recognition Program for the top 12 businesses to the campaign. Those campaigns are growing 5 percent or more almost every year.“A lot of our success is culture, a growth mindset and a modern United Way,” said President and CEO David Lewis, while some of his colleagues across the state bemoan that “times are tough” for fundraisers.

Lehigh Valley enjoys a robust healthcare industry which benefits the local campaign. “It’s a mentality among the leaders and corporate leaders that’s just really positive,” Lewis said.

The local economy is good but there are other areas around the U.S. that are as good or better, Lewis said, and it comes down to leadership and key volunteers. He pointed to the 2019 campaign chairman, who set a personal stretch goal of $20 million.

“We’re setting stretch goals to achieve and rally behind. Volunteers who have said to us, ‘Dream about what can be.’ Dreams become reality when you put a plan behind it. It’s all connected,” Lewis said. “Talking to colleagues around the country, some wouldn’t even begin to think about it. To start it, you’ve got to think about it,” he said.

Even communities with strong workplace giving are generally flat, according to Lewis. “If you want to have really sustainable growth, it’s got to be in the area of major gifts,” Lewis said. “We leverage dots when meeting with donors. We’ve been able to communicate our impact,” he said. “People are willing to invest in things that work.”

Greater Lehigh Valley also has secured large grants from the federal government and Chan-Zuckerberg Initiative (CZI). “We’ve been working that for a while. You have to build your muscles in all these areas,” Lewis said. The affiliate was getting six-figure grants. Securing its first million-dollar grant, and another for $2.5 million really changed things, he said. “We’re still campaign and major gifts heavy, but diversifying our revenue slowly,” Lewis said.

The Allentown-based affiliate enjoyed a 25-percent bump in support during its centennial year in 2017, and followed it up with a 16-percent increase.

“I don’t care how big your United Way is, there’s always something scalable down to our size,” said Courtney Yeager, executive director of United Way of Kennebec Valley in Augusta, Maine. “I was brought in to make some changes and figure out how to grow. I looked to other United Ways and worked closely with some of them to emulate what they were doing that was working,” said Yeager, who was elevated last year from director of resources development and marketing to executive director.

The four-person affiliate adapted an Emerging Leaders Society from the Boston-based United Way and made it its own, instituting a minimum giving requirement, something not all affiliates have done. “Those people have to have some buy-in,” Yeager said. “Volunteer hours are important but all nonprofits need more than volunteers,” she said.

There’s also a retiree giving program fashioned after the Valley of the Sun United Way in Phoenix, Ariz., given that Maine has among the oldest populations of any state.

While data trends show growth during the past decade for Kennebec Valley, Yeager said there’s still a chance to be vulnerable because of reliance on few donors. Leadership-level gifts ($700 annually) accounted for 62 percent of the 2018 campaign, coming from 350 of its 3,150 donors. “In some ways, it’s exciting that we have such a large leadership group. At the same time, it’s scary … relying on few people for the bulk of the group,” she said.

Kennebec Valley has a large Tocqueville Society for its size. The 20 members account for one-third of the campaign dollars. Yeager credits her predecessor, Rob Gordon, who built those relationships over 33 years at the affiliate.

The board and staff recognized that Kennebec Valley was not keeping up with changes at other United Way affiliates in the country, according to Yeager, and one of the changes to re-energize people was bringing back a Campaign Cabinet after more than a decade’s absence.

“For us, we call it a meeting of United Way’s best friends,” Yeager said. About seven subcommittees work during the summer, tackling specific segments of the campaign. The Campaign Cabinet tends to be large, between 35 and 45 people. “It’s a good opportunity to tap other leaders they know in the community who might be good at leading these subcommittees,” she said.

The idea of the Campaign Cabinet is for volunteers to work for, and with, the affiliate. “You have to be willing to go out and fundraise and make new leaders,” Yeager said.

In 2017, Kennebec Valley instituted its Cornerstone Recognition Program for the top 12 businesses to the campaign. “Most had no idea they were in the top five, 10 or 12,” Yeager said. The businesses are feted in the spring and CEOs are featured in videos. Nearly every year, those campaigns are growing 5 percent or more, and most are on the Campaign Cabinet, according to Yeager.

United Way of the Piedmont had the largest increase in support during the past decade. In 2018, the Spartanburg, S.C.-based affiliate reported campaign support of $37 million, up from $5 million in 2008. Most of that growth came from a Gifts-In-Kind (GIK) center that opened in 2009. The center has grown from approximately $12 million to $29 million in donated product, according to Paige Stephenson, who’s been CEO since 2016.

Gross revenue in the fiscal year ending 2019 was almost $6 million and Piedmont is shooting for $6.5 million next year. “It’s not tremendous growth but when you look across the United Way system, right now, slow and steady growth is a positive,” she said.

“Part of what has given us a little bit of an edge is there’s a lot happening from an economic development standpoint in this community,” Stephenson said. “Along with that, there’s an appetite for private/public partnership and non-traditional approaches as it relates to community development,” she said, crediting strong relationships with chambers of commerce, and city and county governments.

Piedmont sort of lucked into its GIK success after Wal-Mart had relocated one of its five reverse logistics centers to the area. “We did not have a clue as to the scale that they were talking about,” Stephenson quipped. At the time, its GIK program consisted of some extra office supplies. Some nonprofits use the in-kind product as a match for other grants, she said, and over the course of a year, a $1,200 investment could yield $100,000 in product. The 25,000-square-foot facility is a break-even operation because of different fee and membership structures for local charities.

One full-time employee oversees the facility with a squad of volunteers that Stephenson estimates to be equivalent to between 3.5 and 5 full-time employees. The average age is probably 75. “This is one of those pieces, as you start a program, these are the outcomes that I expect to see, but one of the interesting pieces has been to watch the cross-section of the community that has come together to volunteer in that space,” Stephenson said. “Individuals who would not have crossed paths, who might not ever become friends, have become friends because they’re working alongside one another,” she said.

Stephenson asserts that there’s great power in the word pilot. Announcing a short-term program for a year or two “sets the expectations in people’s heads that this is a test. If things don’t go as anticipated, you can step back, and say, ‘Well, this is what this was about.’ Now we’ll feed those learnings back into the process to tweak the program or completely revamp it,” she said. “We’re going to do something different, there’s the possibility that we’ll fail but we’re going to learn from that.”

Just like with venturing into a GIK Center, Stephenson said Piedmont launched a Community Resource Coordinator (CRC) program within the past two years. “There’s no one really doing broad, deep case management for families,” she said. When the CRC program launched, Piedmont secured outside grants to help make it happen.

Spartanburg County has an unemployment rate around 3 percent but Stephenson said there are lots of people with entry-level jobs, who have something in particular preventing them from moving to stable housing.

“What we’re finding is that many of the employers have welcomed this [CRC] because with that full employment, employers are wanting to do anything they can to make sure they’re keeping employees,” she said. The CRC can serve a variety of roles for employees who reach out. In some scenarios, it might be assistance with budgeting because they suddenly have to save for something while others might face eviction. “They deal with whatever crisis is happening but quickly realize there are health issues or are experiencing custody issues and help them navigate the legal system,” Stephenson said.

Granite United Way was the result of a merger of six affiliates across New Hampshire and Vermont almost 10 years ago. The merger was a strategic step to building scale and being more representative and focused on impact, rather than the old Community Chest model, President and CEO Patrick Tufts said. It allowed opportunities to do things at scale and statewide.

The Manchester, N.H.-based affiliate was staring down a decrease in campaign-based contributions and employers moving out of state or being acquired by out-of-state entities — a trend that impacts many United Way campaigns. Board Chair Heather Lavoie credits Tufts, now at his fourth United Way, with tying effective interventions and campaigns in a diversified portfolio.

“What are the Key Performance Indicators we should be looking at, activities we should be performing in collaboration with workplaces,” Lavoie asked rhetorically. Also critical to success has been the ability to course-correct and take advantage of opportunities that arise, rather than waiting for any campaign to end to determine its success.

The next decade will see a lot more collaboration of funders, between United Ways, foundations, individuals of wealth, and government, as Granite United Way tackles big problems, like the opioid crisis, homelessness and education. “That puts us in rare company of deep pockets, looking for systemic change, individuals who might write a big check to address one issue that they really care about,” Tufts said.

Lavoie anticipates having a much closer one-on-one relationship with donors in the coming years. For example, text-to-donate has become increasingly more common as younger donors want to do more spot donations that are not aligned with workplace campaigns. “I expect to see an expansion of that as well,” she said.

“The challenge we face is on the corporate side as more and more of our large headquarters are leaving the state or getting acquired — effectively moving out of state,” said Sean Owen, past board chair.

“It’s a balancing act every United Way has to face, the historic relationship with other nonprofits that looks a lot different than 20 years ago when I joined United Way,” Tufts said. United Way used to be the de facto fundraiser for hundreds of nonprofits locally. There are 1,400 nonprofits in New Hampshire, with Granite providing financial support for 800 of them. “There are lots of entities that can say we’re not United Way partners,” he said. “We’re focused on issues in our community, not how many or which agencies we’re funding. What’s important to people on the ground in New Hampshire, what agencies can make a difference,” Tufts said.

“The ability to take chances and be innovative are important characteristics to our success,” said Chief Development Officer Paul DeBassio, who spent time at United Way of Massachusetts Bay and Merrimack Valley as well as United Way Worldwide before going to New Hampshire. When companies and donors turn to United Way to help solve a problem, that’s what success looks like, he added. “That’s where you want to be. It shows the relevance you have, not just one area but multiple areas.”