Long-term planning

With reduced giving to United Way, it needs a checkup. 

By Peter Leousis

[3-29-04] Barbara Goodmon’s recent editorial about United Way’s fundraising shortfall [Learning to fish, Philanthropy Journal, 03.18.04] raised an important issue for our community.

In fact, she raised a host of important issues about how we support nonprofit service providers and what happens when there are gaps in human services that those providers try to fill but can’t.

For years, we’ve relied on United Way’s community fund to support critical services in our community – services that governments can’t or won’t pay for themselves.

The last couple of years, United Way’s contributions have mirrored declining contributions to United Way itself.

My guess is that contributions to United Way rise and fall with the business cycle, and there’s a lag before they rebound.

When times are good, contributions grow. When times are hard, people give less and contributions fall – at the same time that demands for services are growing.

Nationally, contributions to charities have been flat the last couple of years. But because changes in federal or state tax law can also affect contributions to charity, it’s important to know why contributions to United Way are down.

Is it simply reflecting a dip in the business cycle? Were there changes in tax laws that discouraged people from making charitable contributions, or eliminated incentives for making them? Or has United Way has lost its appeal for donors? Does it need new leadership that can help it re-energize its original mission?

The second issue Barbara Goodmon raised is that we have serious gaps in human services that nonprofits try to fill. What are those gaps and why do they exist?

Before we turn to government for solutions, we need to examine how we fund nonprofits and what we expect in return for that funding.

One of the reasons we look to United Way to raise funds is that nonprofits quite often are very good at service delivery, but not very good at promotion or fundraising.

But involving a surrogate fundraiser removes nonprofits from an important step in the “accountability chain.”

Most of the time, nonprofits get United Way funding for their good works, but some do a better job than others in putting those dollars to work. What accountability mechanisms are in place to make sure donors are getting the best bang for their buck?

Finally, there has to be a way to plan and prepare for inevitable downturns in United Way donations – whatever their cause.

Should United Way establish a “rainy day” fund that could be triggered when economic indicators nose dive?

That way, deserving nonprofits wouldn’t have to suffer through the greater demands that hard times impose on them without the resources to do what they do best: help people in need.

Peter Leousis is assistant director of the Odum Institute for Research in Social Science at the University of North Carolina at Chapel Hill.

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