United Ways: Moving Away From the Future of Giving

To the Editor:

How depressing to read your article about the United Ways’ reverting to past practices of limiting donor giving to their so-called community funds (“Moving Away From Donor Designation,” October 7). After all these years, you would think that the United Ways would finally have figured it out.

The donor-choice movement of the United Way emerged as a response to donor displeasure with the limited number of member or partner agencies of the United Way and a belief that the distribution system was controlled by a paternalistic old-boy network that favored safe social-service organizations. The partner agencies which benefited from the bounty of workplace campaigns represented (and still represent) minuscule segments of the community — in most cases fewer than 3 per cent of the total number of non-profit groups in the United Way service area.

Organizations completely locked out of United Ways included advocacy groups, the arts, women’s groups, environmental organizations, and international charities, to name but a few. Not only did the United Ways refuse to admit those agencies into their own campaigns — they also did everything they could to prevent those groups from participating in workplace-giving campaigns.

Unfortunately for the United Ways, and fortunately for everyone else, the courts saw differently when it came to public-employee campaigns. As the doors of the Combined Federal Campaign opened — soon to be followed by state and municipal campaigns — alternative federations proliferated at both the national and local level. These federations embraced virtually every cause the United Way wouldn’t. Alternative federations, starting with public campaigns and eventually making inroads at private workplaces, began to capture the hearts and dollars of donors who had no use for the limited vision of the United Way.

In order to protect their now-vulnerable workplace monopoly, the United Ways decided to form alliances with some of the alternative funds and invented donor choice. Rather than acknowledging the right of alternative funds to the workplace and working with them to increase total giving by building an inclusive, truly community-based campaign, the United Ways developed strategies designed to preserve their monopolies.

Just as the Chronicle article pointed out, the donor-choice strategy worked, but too well. Donors began giving to the issues and organizations to which they wanted to give — and not to the community funds of the United Way.

Unfortunately, donor choice had two major failings. First, the traditional community-fund agencies of the United Ways lost dollars as donors selected the charities of their choice. Second, most non-affiliated agencies realized few contributions from donor choice as the majority of gifts migrated to charities with well-known names or popular causes. In essence, donor choice unraveled the benefits of communal giving and reinforced the principle of “them who has, gets.”

Thus, it’s not surprising that the traditional community-fund agencies are pressuring their United Way hosts to shut the doors again. The irony they seem to have missed is that they lost their workplace monopoly as a result of their own single-minded drive to protect it.

The original vision of the United Way is still powerful — to create truly communal giving through a painless donation technology which addresses the full range of present and emerging community need. Instead of reverting to failed past practices, however, the United Ways need to combine the truth of that original vision with the practical experience of donor choice. Donors want to respond to a wide range of community need, and they don’t trust traditional sources of power to decide how to spend their money.

Instead of limiting their beneficiaries, the United Ways need to find new ways to extend the concept of communal giving to a broad range of traditional and non-traditional community problem solving. Instead of fighting the alternative funds, the United Ways need to embrace them in authentic partnerships to develop innovative strategies for the coming millennium.

With these concepts — communal giving, equal access, and wide open minds — truly community-based solutions can be created. Maybe somewhere across the country a United Way is listening.

Gayle L. Gifford
Principal
Cause & Effect
Providence, R.I.

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To the Editor:

Henry Ford is often quoted as saying something along the lines of, “People can have any color automobile they want, as long as it’s black.” This statement came quickly to mind as we read Debra Blum’s article about the United Way.

We truly believe that the United Way system is one of the most significant and meaningful institutions not only in this country, but also in the world. The good that has been done as a result of its work is immeasurable.

However, we were astonished that an organization of this magnitude seems not to understand a very basic business and marketing concept. As we read your article, we understood United Way as defining its current challenge as wanting “to curb gifts to specific charities.” To us this seems akin to Henry Ford trying to curb consumers’ desire for colored automobiles.

Basic marketing tells us that rather than trying to control or channel consumer desires, you should try to position yourself to satisfy those desires. Several prominent American businesses learned this lesson in the 1970s, most notably IBM and the major U.S. automakers.

It seems obvious that our entire culture is moving rapidly in the direction of greater consumer choice, whether it’s in hundreds of cable (or satellite) television choices or in shopping on the Internet. The public is better educated, more mobile, and has greater access to information than ever before. Long gone are the days when donors did not have the ability or resources to learn about and evaluate charities on their own.

In the past, United Way did play an important role in helping to determine the most important and efficient uses of employee contributions. However, employees today not only have the ability to make those determinations themselves, but they are demanding the right to do so. The trends that United Way is seeing are proof of this fact.

The United Way has long positioned itself as the convener of caring in the community, when, in reality, it has never supported all of the needed and worthwhile charities in any community. We believe that, in the long run, United Way can only continue to be a prominent player in this role through collaboration with other charitable federations such as Earth Share, America’s Charities, and Community Health Charities.

However, to do so, United Way will have to find a new way to view its role as decision maker about the charities and causes most deserving of support. For United Way not to recognize and, in fact, support the movement toward donor choice would be disastrous for the organization over time. Donors are clearly sophisticated enough to find ways to support the charities of their choice within or outside of the United Way system.

Doug Lund
Chair of the Board

Daniel W. Snare
President
Community Health Charities
Washington

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To the Editor:

Your article on United Way and donor choice exposes an agency-focused viewpoint on fund raising: Something must be wrong with the process if my individual charity is getting less money than before.

That viewpoint has permeated, and stultified, workplace philanthropy. What’s exciting is the new world described in your article in which the focus now is on a more appropriate viewpoint: What is it that charitable donors want, and how can charities give it to them?

Each and every one of those donors who designated their payroll-deduction gift to the agency of their choice, whether or not it happened to be one of the members of the federation which their employer chose to handle that year’s workplace campaign, no doubt welcomed the opportunity to exercise personal choice, and felt good about their gift. If those donors found out that some United Ways think they gave to the wrong place, they’d be insulted by the paternalism of this thinking.

If the United Way or Community Chest-type of federation is a good thing, and its member agencies are worthy charities, then they can point this out and the donor world will respond positively. United Way and its members simply have to adapt to the inevitable modernization of the philanthropic world, and the increasing sophistication of charitable donors, many of whom no longer need to be told to whom their money should be given. There will obviously always be many donors who continue to appreciate what the United Way-type of federation provides, and who will be willing to pay the cost. But United Way cannot any longer use its dominant position in workplace fund raising to capture those who don’t.

The United Ways that are complaining about this trend are not only demonstrating their failure to recognize and adjust to evolution, but are also demonstrating their commitment to remaining on the following edge of philanthropy.

The challenge in the new world of empowered donors will be to insure that they receive as much information as possible so that they can make a fully informed, quality choice of where to direct their donations. That’s where productive attention should be focused, not in mourning the past.

Edward L. Knapp
Camino, Cal.