Growth at United Ways Lags Behind Many of Its Competitors, Report Says

Charitable pledges from individuals to United Way campaigns are growing at a slower rate than those to non-United Way

drives, says a new report.

From 1996 to 2001, pledges to so-called alternative funds — federations of charities that operate campaigns separate from the United Way — grew almost 36 percent, compared with 24 percent for United Ways. In 2001, alternative funds raised almost $222.3-million, a $94.3-million increase from 1991, before adjusting for inflation.

While the amount received by alternative funds is still dwarfed by donations to United Ways — United Ways received more than $2.5-billion in 2001 — the increase in on-the-job giving to these groups is a “testament to the growing appeal of this movement,” says the report from the National Committee for Responsive Philanthropy, in Washington, and the National Alliance for Choice in Giving, in Portland, Me.

The National Committee for Responsive Philanthropy supports a larger role for alternative funds in on-the-job fund-raising drives because the funds typically provide donors a greater choice of charities that advocate progressive political causes than do United Ways.

The report summarizes the results of a survey of 191 alternative funds nationwide and compares the findings with donation data provided by the United Way of America, an umbrella group in Alexandria, Va., for the 1,853 local United Ways.

While not questioning the accuracy of the data, Richard S. Belous, vice president of research for the United Way of America, criticized the report’s conclusions, saying United Ways cannot be compared with alternative funds because of their difference in size.

Non-United Way groups have made the most gains among donors who annually give $1,000 or less to employee drives.

In 1991, alternative funds received 6 percent of on-the-job donations made by those donors. In 2001, they received 11 percent of donations. The increase shows that the funds are “meeting a need that had gone unmet and have developed a base on which to grow,” the report says.

Conversely, United Ways have experienced a decline in giving by people donating $1,000 or less, says the report. In 1991, those donors provided 61 percent of gifts to United Ways, but by 2001, they accounted for only 45 percent.

Of the alternative funds, ones that support social-justice causes experienced the largest growth in on-the-job pledges. From 1996 to 2001, those groups’ pledges rose more than 40 percent, topping $19.7-million two years ago.

Despite the growing popularity of alternative funds, their total number declined from 208 in 1997 to 201 in 2001. While a few groups closed because of lack of support by donors, the report attributes the decrease to the 1998 merger of the National Voluntary Health Agencies and the Combined Health Appeal. The consolidation led to the closure of 15 local funds.

The report, “Giving at Work 2003,” is available free at http://www.ncrp.org. Printed copies are available for $12.50 for members and $25 for nonmembers by contacting the National Committee for Responsive Philanthropy, 2001 S Street, N.W., Suite 620, Washington, D.C. 20009; (202) 387-9177; fax: (202) 332-5084.