Greater Twin Cities United Way exceeded its fundraising goal by $2.2 million last year, raising $87.6 million, but still had to lay off nine staff members last month.
The rise in donor-designated contributions for specific organizations created a $6-million shortfall in funding for United Way-directed initiatives, according to President and CEO Sarah Caruso. The shortfall also led to an 11-percent reduction in expenses and a freeze on executive pay.
Caruso declined to say which departments were affected by staff cuts that totaled about 5 percent of the 177 employees at the Minneapolis, Minn.-based affiliate. She said last month they were still analyzing and processing data on the specifics of designated contributions but most were still designated within the Twin Cities region.
Twin Cities is among the largest of about 1,200 United Way chapters in the country, reporting $96.6 million in 2015, down almost 4 percent from $100.3 million in 2014. Caruso said the organization’s centennial celebration in 2015 led to record gifts in 2014 and 2015.
Donations designated to specific charities have increased throughout the country and in the Twin Cities region in recent years, Caruso said. Giving habits are changing as people adapt to digital platforms that bring causes from around the world to their mobile devices and desktops, she added.
As part of a 9-percent reduction in regional program support, United Way’s community-needs experts looked at “programs that are not yet showing the results they expected for the level of funding available, as well as programs where grants were well above the levels at which United Way funds most of its other programs.” All other grants were reduced by 5 percent, according to a press release from the Greater Twin Cities United Way.
The Minneapolis, Minn.-based Pohlad Family Foundation reportedly invited 40 nonprofits with cuts of 40 percent or more in United Way funding, including several domestic violence shelters, to apply for $1 million in emergency grants.
“These decisions were difficult. They were made with careful thought and we know they will have an impact on the programs that are affected and the people they serve,” Caruso said in the release. “We are actively addressing changes in giving patterns as part of our long-range planning,” she said, including the launch next year of a new digital giving platform. The platform is being built among several local United Ways and United Way Worldwide, according to Caruso, who referred questions about it to the national headquarters.