Battle for clout – Market share falls

The United Way is fighting for its existence, Fortune magazine reported in its Nov. 27 issue.

The struggle stems from a battle for control of pledge forms that has pitted the United Way of America against local affiliates and torpedoed the organization’s dramatic comeback from a scandal in the early 1990s, Fortune said.

Betty Beene has quit as president under pressure from an influential handful of the 1,400 fiercely independent local offices upset with what they saw as a power-grab disguised as efficiency.

The turmoil comes in the face of gloomy fundraising results: Adjusted for inflation, contributions still lag behind its 1988 totals for the United Way, which has lost market share in the face of rising competition for charitable dollars.

In 1988, with more than 450,000 nonprofits in the U.S., the United Way pocketed 3.16 percent of all charitable contributions in the U.S.

In 1999, with 715,000 nonprofits, the United Way’s share of donations fell to 1.98 percent.

And relative to personal and corporate income in the U.S., United Way contributions have plunged 29 percent in the past 12 years, compared to a surge of 8.2 percent in the share of overall giving as a percentage of income.

Beene’s effort to wrest control of the processing of pledges from local affiliates aimed to use technology to make it easier for donors to make contributions – and paralleled efforts in the financial services industry to make it easier for investors to do business.

Because it can eliminate gatekeepers, in fact, digital technology has prompted questions about the very existence of the United Way, which long has played a gatekeeping role between donors and charities, Fortune said.

To keep pace with changing demands for services, roughly 40 percent of United Way offices have moved away from serving simply as conduits for existing programs. That movement — led by such affiliates as Minneapolis, Atlanta and Columbus and backed by the national office – is being resisted by other affiliates.

For full story, go to Fortune.

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