United Ways Suffer 5% Drop in Giving for Second Year in a Row

Nationwide, local United Ways collected $3.84-billion last year, a decline of nearly 5 percent from the more than $4-billion the charity received in 2008. It was the second year in a row that United Ways reported a 5-percent loss.

The 10-percent drop over the past two years is the largest decline United Ways have witnessed since 1945, according to the charity’s national headquarters. The drop is causing trouble for many local charities that were counting on United Way for aid. Some United Ways rode the economic downturn with modest increases in giving, but at many, including some of the largest United Way affiliates, donations dropped or were flat.

The Seattle United Way, which raised the most, for example, again took in more than $100-million, but that was a nearly 2-percent decline from 2008. Atlanta, in the No. 2 spot, reported a 5.3-percent drop, while the Twin Cities and Houston United Ways both reported declines exceeding 8 percent.

In other cities, United Ways faced steeper losses, with declines of more than 20 percent in Salt Lake City and New Orleans and more than 15 percent in Austin, Texas; Knoxville, Tenn.; and Miami.

Against the Odds

Some local United Ways were able to buck the downward trend. Despite the tough economic climate, the United Way in Irvine, Calif., managed an unprecedented 44-percent increase in donations, to $25.7-million in 2009, up from $17.9-million the year before.

In addition, it was able to increase the number of employees that give through payroll deductions by 10 percent, to 41,302 employee donors, even as Orange County, the region served by United Way, lost almost 30,000 employees from its local businesses.

Maria Chavez Wilcox, the Orange County United Way president, says that in the past year, her affiliate reached out to 20 percent more businesses that had not done on-the-job campaigns before than it did in 2008.

“It does prove that in this community and in this country, people are generous,” Ms. Wilcox says. “If the cause and the calling are there, and they’re communicated clearly, people will give even in the worst of times.”

Other largess came from two anonymous donors, one contributing $2-million and the other $5-million, Ms. Wilcox says. “They realized that this was the time when their generosity was going to really be more significant than ever before.”

In Spartanburg, S.C., contributions to workplace-giving drives totaling $4.7-million didn’t budge this year, but the United Way of the Piedmont raised $13.8-million anyway, a 173.4-percent jump over 2008 and the biggest increase of all United Way affiliates. That’s because the Spartanburg United Way persuaded Wal-Mart to give $9-million worth of goods to distribute to other charities in need of supplies.

The lingering recession, though, unhinged a number of local United Ways last year.

The Des Moines United Way has been reeling over the effects of the crisis in the financial-services industry. Several companies could not match gifts from their employees as they had in the past. As a result, last year’s donations were down to $24.4-million from $25-million in 2008, even though the United Way extended its campaign by a month to take advantage of year-end giving. As a result, the organization cut its grants to local charities by 6.9 percent and laid off five staff members.

Now, the United Way has more troubles in the offing. Wells Fargo Financial, a major employer in the area, announced in July that it will lay off 1,000 employees over the next year. About 4,600 Wells Fargo employees gave to the United Way campaign last year.

In Kansas City, Mo., United Way donations fell from 2008 by about $700,000, to a final tally of $38.4-million. The charity sought 25,000 new donors and managed to attract 21,000, says Barbara Wurtzler, senior vice president of resource development. “New donors don’t give as much as established donors,” she says. “Still, it’s good to get people involved. Once a donor gives, they’re more likely to give again.”

Affinity Groups

One promising area of growth, though, for the nearly 1,300 local United Ways has been “affinity groups” of donors—including women, blacks, and Hispanic donors who form giving clubs. Such donors contributed nearly 3 percent more last year, but the five-year growth rate of their donations was a more-impressive 70 percent.

“Everybody likes to get involved in their community in a different way, and the affinity groups help us get closer to matching how they want to get involved with what’s really making a difference in their community,” says Linda Paulson, United Way’s director of strategic markets. Last year, she says, some 120 women’s groups nationwide collectively raised $120-million for United Ways.

Locally driven, the groups honor donors publicly for their philanthropy and help raise money for specific projects. For example, the United Way of Central Iowa’s Women’s Leadership Connection raised more than $1.2-million last year for school-readiness programs. The women and other groups of donors accounted for about two out of five dollars—about $9.24-million—raised by the Des Moines United Way last year.

After the United Way of Greater Kansas City started a women’s group last year, more than 200 women joined, many increasing the amount they typically give, to at least $2,400 apiece, to join the group. Together the women gave about $1.7-million, including $200,000 in new or increased donations.

But giving last year was flat among other groups of donors, especially those who give the most to United Way. Donors who gave $10,000 or more increased their gifts by just 0.4 percent.

United Way has also worked in recent years to raise money by expanding its network of affiliates around the world. But donations to United Ways overseas also declined last year. Giving to United Ways outside the United States dropped by 3.7 percent in 2009, to $1.2-billion.

Soliciting Mom-and-Pops

Many United Way officials who believed that the economy would rebound after the first year of the recession in 2008 have been forced to readjust or lower their campaign goals for the coming year.

Many local United Ways are trying to offset lowered expectations by focusing on companies that they haven’t approached before and small or medium-size businesses. Results have been mixed.

More than 20 companies with 199 or fewer employees have given $506,780 this year toward the $5-million campaign goal of the United Way in Fargo, N.D.

The United Way in Research Triangle Park, N.C., is trying to persuade 100 small- to medium-size companies to hold on-the-job campaigns but last year was able to recruit only about 10 of them. “We tried to concentrate on new businesses, but we were not totally successful,” says Craig Chancellor, the United Way’s president.

The Austin United Way has also set its sights on small companies. While Austin has about 100 businesses with 500 or more employees, it has more than 30,000 companies with fewer than 20 workers, according to the local chamber of commerce. Since July, the Austin United Way has been reaching out to such mom-and-pop companies with a goal of raising $300,000 to $350,000, and it has persuaded 10 companies to hold United Way drives so far. “We’re building a culture of philanthropy,” says Debbie Bresette, the group’s president. “Even though the economy is sluggish, people do feel a sense of hope.”