United Way fundraising strategy in turmoil

Rick Cohen and Ruth McCambridge

One of the most important barometers of the recession’s impact on nonprofits may be found in the 1,400 affiliates and chapters of United Way.

Reports on last year’s campaigns, at least those reported in the news media, describe fundraising shortfalls of as much as 20 percent in some areas.

This has resulted in campaign goals this year that either are reduced to calibrate to the local economy or are missing altogether.

United Way of Central New York reportedly fell $500,000 short of its target last year, and has set its 2009 campaign target at the amount it last raised — $8.5 million.

This seems to be a fairly common strategy, but last year the recession had not hit the depths that it now has reached, particularly in terms of joblessness.

In July 2008, during last year’s United Way campaign, the unemployment rate in metro Syracuse, for example, was 5.6 percent.

As of July 2009, unemployment in the region was up to 8.1 percent.

If last year’s campaign fell short in reaching $8.5 million, how will it hit the same number with unemployment having increased by one-third?

In Central Alabama, serving the Birmingham area, the goal is also last year’s total of $37.26 million, despite a one-year doubling of the unemployment rate to 9.9 percent.

As an executive at United Way of Central New York explained, to make up for donors who have lost their jobs, the agency will have to raise more money from new donors.

In an apparently new practice, some United Ways have dropped the longstanding tradition of establishing fundraising targets for their annual campaign in favor of no-target or no-goal campaigns, or by replacing a dollar goal with the goal of increasing the number of individual donors.

Ditching the longstanding common practice of setting a fundraising target is a major cultural shift in the United Way system and explanations for the move vary.

In Sudbury, Ontario, United Way is substituting a target of increasing the number of individual donors from 9,000 to 12,000 for a dollar goal.

This is not due to past performance but to future realities: Sudbury surpassed its 2007 total by raising $2.4 million in 2008.

But entering 2009, the region faces layoffs at two major employers, thousands of job losses in the mining sector, and labor turbulence between local employers.

The new campaign strategy in Kansas City, Mo., is similar, reportedly targeting the recruitment of 25,000 new donors rather than a dollar fundraising target.

Obviously relevant is the increase in unemployment in the Kansas City metro area from six percent to 8.9 percent between July 2008 and July 2009.

A spokesperson for the United Way of America in Alexandria, Va., told the Kansas City Star the no-dollar goal strategies in Kansas City and Sudbury were “a growing trend.” 

It will, of course, be critically important to watch the results of these 2009 workplace campaigns and the effects on local United Ways and community organizations during what is now projected to be an extended “jobless recovery”.

Rick Cohen is national correspondent and Ruth McCambridge is editor of The Nonprofit Quarterly, which published a longer version of this article.

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