United Ways Pare Fund-Raising Expectations for 2002-3 Campaigns

As the nation’s United Ways begin their fall fund-raising campaigns, many are setting conservative

goals. Some expect to raise less money than they did a year ago, and others are hoping to just keep pace with the 2001-2 drives.

The grim outlook follows a year in which United Ways nationwide saw a modest increase in giving.

Over all, the nation’s 1,813 United Ways raised $3.95-billion in their 2001-2 annual campaigns, a gain of 0.9 percent, without adjusting for inflation. When inflation is taken into account, giving declined 1.8 percent.

Economic factors, such as layoffs and company closings, along with the aftermath of the September 11 attacks, caused many to fall short of the amount they had raised in 2000-1. Those United Ways that managed to pull out ahead did so with a fortunate combination of energetic fund raising and a strong local economy relative to other parts of the country.

Even though many small United Ways faced a tough fund-raising situation last year, larger ones fared somewhat better.

At 88 of the nation’s 90 largest United Ways, 57 raised more in the 2001-2 campaign than they did the year before, and three raised the same amount.

United Ways in Salt Lake City, Harrisburg, Pa., Gales Ferry, Conn., and Akron, Ohio, recorded the biggest percentage gains, with each raising 10 to 20 percent more than they did the year before.

The sharpest declines in donations were recorded by Santa Clara, Calif., Las Vegas, Orlando, and Tucson, Ariz., with each dropping 18 to 24 percent from the year before.

Cuts in Aid

Some of the charities that depend on United Way will face stiff cuts in support.

The United Way in Chicago, which took in more than all but three other United Ways, raised $93.1-million, 3.1 percent less than it took in during its 2000-1 drive. But charities will receive 19 percent less than they did a year ago because the organization bases the amount it distributes not only on how much it raised in the past year, but on what it expects in the coming year. The United Way expects that it will raise only $86-million in 2002-3.

The Chicago group says the number of local companies facing layoffs and other woes has caused it to take a conservative view of fund raising in the coming year.

In Houston, the United Way of the Texas Gulf Coast raised $78.5-million, a gain of 4.6 percent over the previous drive. The Houston group says people were willing to contribute in large part because they wanted to help victims of tropical storm Allison, which caused $5-billion worth of damage in the city, displaced many residents, and increased demand for emergency food and housing. The outpouring more than made up for the estimated $4-million that was lost when Enron went bankrupt, causing the United Way to lose both corporate gifts from Enron and a major company where it solicited workers.

But Houston officials don’t think fund raising will be as easy next year. They say they hope to raise the same amount in the 2002-3 campaigns as they did in the past year.

Multiple Difficulties

Some United Ways faced a series of troubles that affected fund raising.

At the United Way of Tucson and Southern Arizona, donations dropped by 24 per cent, to $11.7-million, and the group says some of the nonprofit organizations that it supports will get far less than they did in the past. Some charities could see their United Way aid cut by 46 percent.

The problems started in January 2001, when the United Way cut off money to the local Boy Scouts because of its prohibition against gay leaders, which stirred up anger among many donors.

Six months later, a local newspaper ran a three-part series that questioned whether the group handled donations properly. The United Way said that the allegations were unfounded, but acknowledges that the articles hurt fund raising.

In addition, tourism in the region suffered after the September 11 terrorist attacks, which depressed the local economy and exacerbated the group’s fund-raising problems.

Dan Duncan, a spokesman for the Tucson United Way, says that the group expects fund raising to bounce back, and hopes to increase donations by 12 percent over the previous campaign.

Cautious Outlook

In Las Vegas, the United Way of Southern Nevada recorded a 13-percent drop in donations, from $12.1-million to $10.6-million. Daniel Goulet, the group’s president, attributes the result to the September 11 terrorist attacks and the drop in air travel it caused.

Layoffs last fall at many of the casinos and hotels weakened fund raising and increased the demand for social services. In response, the United Way decided to dedicate all of its discretionary money to basic social services, and encouraged donors to earmark more money to support such efforts.

Mr. Goulet hopes that the September 11 effect will be a one-time blip.

“Prior to the attacks, we had double-digit growth in fund raising for years,” he said. Nonetheless, his group is being conservative for next year, and has set its goal at the same amount it took in in 2001-2.