United Way Donations Up 5.1%

But on-the-job drives continue to draw a shrinking share of donors

United Ways nationwide raised $3.58-billion in their 1998-99 fund-raising campaigns,

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a 5.1-per-cent increase over the previous campaign season, according to figures to be released this week by United Way of America.

It was the third consecutive campaign period in which the amount raised by United Ways outpaced the rate of inflation, which has hovered around 2 per cent in the previous 12 months. Double-digit percentage increases were reported by 18 of the 83 largest United Ways, which raise at least $9-million annually. The Austin, Tex., United Way reported the largest increase: 28.9 per cent.

For many of the 1,900 local United Ways, the results are solid proof that the United Way system has reclaimed the ground it lost in the early 1990s as a result of an economic recession and a scandal that forced the resignation of United Way of America’s president, William Aramony. In 1992, the year of the scandal, donations to United Way campaigns dropped by 4.1 per cent; it was not until 1996 that the campaigns raised the same dollar amount as they did before the scandal.

Since then, United Ways have benefited from the strengthened economy, as well as successful efforts to encourage people to give $1,000 or more annually. Such gifts now account for nearly a quarter of United Way campaign revenues and have grown by more than 100 per cent in the last five years.

But even so, United Ways — which support more than 45,000 charities nationwide — face challenges that could cause big fund-raising problems in the long run.

Chief among the warning signs is a decline in the percentage of employee donors at companies that hold United Way campaigns. Some 35 per cent of employees at such companies give to the United Way drive, compared with 47 per cent a decade ago.

Another big change has come in how employees give. In many cities, the number of donors who earmark their gifts for specific charities has grown substantially. That’s why some United Ways have less money than they once did to allot at their own discretion.

Earmarked gifts were a big factor in an embarrassing financial crisis for United Way of Santa Clara County, in San Jose, Cal., which announced in May that it did not have the $11-million it had promised to 104 charities (The Chronicle, May 20). Donors had been designating more and more of their United Way gifts to charities of their own choosing over the past several years. But the Santa Clara United Way kept giving the same amount it always had to local social-service groups and depleted its reserves.

After an emergency campaign, the United Way announced last month that it would be able to provide all but 11 per cent of the funds it had promised to local charities.

In addition to the problems caused by earmarked gifts, many United Ways continue to grapple with corporate restructuring. Some United Ways have lost gifts from hundreds or even thousands of workers who have been laid off by local companies. In an attempt to offset such losses, some United Ways are taking steps to start campaigns at medium- and small-sized companies, but the results have been mixed.

In Ohio, the United Way of Greater Dayton suffered a 4.7-per-cent decrease in donations after a dozen of Dayton’s largest employers either moved out of the area or laid people off.

Losses might have been greater if the United Way had not tried to get donations from smaller companies, as well as big gifts from individuals. Those two new sources of revenue, however, did not make up for all the losses caused by the changes at the large companies.

“It’s like taking one step forward and another step back,” says Jayne Murphy, the Dayton United Way’s director of marketing.

In New York State, where the United Way of Greater Rochester raised $39.5-million last year, layoffs at corporations like the Eastman Kodak Company are making it more expensive to raise the same amount year after year, says president Joseph Calabrese. Since he joined the Rochester United Way in 1987, Kodak has decreased the number of employees in the region from 70,000 to 25,000.

“If we have to replace a Kodak employee who gives $200 per year, we have to solicit eight new people,” says Mr. Calabrese. “Most new donors give about $50 per year, so we need four new donors to equal the Kodak person. But we have to ask at least eight people before we find four who say Yes.”

Such difficulties are one reason that United Ways are making a special effort to keep giving strong among big national corporations.

The 10 national companies that give the most to United Ways through both employee gifts and corporate contributions donated more than $257-million in 1998-99, about 1 out of every 13 dollars raised by United Ways.

United Way of America is now working with 150 national corporations, each of which has at least 25 sites and employs more than 10,000 people, to help the companies identify the most effective ways to solicit donations.

In the last few years, the umbrella organization says it has figured out 10 specific techniques that make a difference, such as appointing a senior executive who oversees the campaign at all locations and holding separate briefings for top executives.

Employees at United Way of America are now trying to get the large companies to adopt as many of those 10 techniques as possible, after studies by the organization last year found that the more techniques a company uses, the more its employees give.

Leaders of local United Ways, like Mr. Calabrese in Rochester, say United Way of America’s work with the national companies is a big help. Efforts to start a campaign at Wal-Mart Stores in Rochester went smoothly because United Way of America had already recruited the company’s national headquarters, says Mr. Calabrese.

“We’d like to see United Way of America double the number of companies they’re working with,” he says. “There are a lot of companies like Home Depot and others where we cannot get in at the local level because store managers don’t have the authority to make the decision” to run a United Way drive.

While United Way of America has been able to open doors at big corporations, it has not had as much luck getting those companies to release the names of employees who give to United Ways, due to confidentiality concerns. That makes it difficult, if not impossible, for local United Ways to thank people who give on the job, says Betty Stanley Beene, president of United Way of America.

“So many times I have run into people who’ve given to United Way and they expect to receive a thank-you,” says Ms. Beene. “They may get one from their company, but they expect to get one from us, too.”

To better communicate with donors, many locals have taken steps in recent years to show the value of giving to United Way. They are aggressively telling potential donors about the services they provide to charities in their region, as well as their oversight of charities, which often are required to meet certain standards to be eligible for United Way dollars. The idea is to demonstrate that United Ways do a lot more than just pass donations along to other charities.

The Seattle United Way has gone so far as to drop the United Way logo, an open hand under a rainbow, in favor of a new logo depicting the United Way as a “safety net” for needy people.

That image, officials say, is a more accurate representation of what the Seattle United Way does. “People really understand the safety net,” says Rodney Wheeler, vice-president for community campaigns. Along with the strong local economy, the change helped the charity raise $68.6-million last year, an increase of 14.3 per cent.

To demonstrate their effectiveness to donors and to keep costs low, other United Ways have merged operations. In Minnesota, the Minneapolis and St. Paul United Ways combined their personnel, accounting, and information-services departments, placing them under the supervision of a single executive last year. The change has saved $100,000 so far.

Other United Ways, in efforts to expand beyond workplace-giving campaigns, are benefiting from new fund-raising methods. Among them:

Special drives for women. The Greensboro, N.C., United Way raised $13.8-million, or 10 per cent more, in 1998-99, partly because of a new effort to get women to make donations of $10,000 or more.

Like many locals, the Greensboro United Way has a giving club called the de Tocqueville Society for people who give $10,000 or more. But volunteer Bonnie McElveen-Hunter, a local publisher who agreed to lead the effort to increase those gifts, suggested that United Way focus on women last year.

Ms. McElveen-Hunter and the United Way decided to approach three different groups: businesswomen, women who were active community leaders or volunteers, and housewives with financially successful husbands. With the latter set of donors, husbands were asked to make a gift of $10,000 in honor of their wives.

Ms. McElveen-Hunter made 43 in-person visits and obtained 40 new donations from or in honor of women — in addition to her own gift in honor of her mother.

To recognize the women and to spread the idea to other United Ways, a full-page advertisement featuring photographs of the women was designed by Ms. McElveen-Hunter’s company. She persuaded the securities company Merrill Lynch to pay about $50,000 to run it in The Wall Street Journal.

Ms. McElveen-Hunter says she hopes that in coming years Merrill Lynch will run similar advertisements, highlighting United Ways in other cities that raise the most de Tocqueville gifts from women.

Gifts of stock. Several United Ways saw a substantial rise in stock gifts in their recent campaign. The United Way in Austin, Tex., raised $12.9-million last year, an increase of 28.9 per cent, in part because many of the employees of high-technology companies in the area found it easier to give stock than cash.

Asking donors to give stock “is a core strategy now,” says president Gary Godsey, noting that the Austin United Way began promoting such gifts in 1996 when it got a dozen stock donations worth $50,259. Two years later, in its most recent campaign, the charity got 111 such gifts worth $646,695.

The average stock gift, Mr. Godsey says, is worth $5,826, compared with the average gift of $178 from all other individual donors.

Events for professionals. In Boston, the United Way of Massachusetts Bay saw a 10.7-per-cent increase, raising more than $48-million in its most recent campaign. Officials attribute some of the gain to a series of fund-raising events for groups of professionals who are not solicited through on-the-job drives.

Six breakfasts were held for leading professionals in fields such as investment management, real estate, and insurance. The United Way recruits a well-known speaker who is likely to be a big draw for each group and then invites several hundred professionals to attend. Each person who comes to the event is asked to make a substantial pledge to United Way.

Last year, the events netted $2.6-million, $1.2-million of which was from professionals who had never before given to United Way.

“We used to have a two-pitch approach, with the workplace campaign and the one-on-one solicitations,” says Kevin Stone, senior vice-president for fund raising. “But then we started looking at the fact that we were missing a lot of professionals.”

Other fund-raising events. In its 1998-99 campaign, United Way of Miami-Dade, in Florida, raised more than $40-million, a 22.7-per-cent increase. It is among the most successful in obtaining gifts of $1,000 or more, which accounted for 41 per cent of contributions last year. But it also raised a large amount, $1.5-million, through a variety of events.

Last year, for example, it netted $400,000 from its second “Mayor’s Ball,” $500,000 from a wine auction, and an additional $26,000 from a promotional offer with Badia Spices. The company introduced a new spice blend last year and gave the United Way a portion of the proceeds from its sale in area grocery stores.

In addition, the Miami United Way made a change in a popular overnight cruise it had offered previously. Instead of selling tickets to individuals, the charity promoted the December cruise as a way for companies to host their annual holiday party and persuaded a handful of companies to buy tickets for all of their employees.

Says Tamara Klingler, the Miami United Way’s senior vice-president for communications: “The companies were happy with this idea; none of their employees had to drive home after drinking.”