Giving to United Ways Drops for a Second Consecutive Year

Weakened by a poor economy, the nation’s United Ways suffered a fund-raising decline for the second consecutive

period during the 2003-4 campaign season, leading to continued cuts at some charities the organizations support.

Donations to the country’s 1,400 local United Ways dropped 2 percent, a decline of $74-million from the $3.7-billion the group raised in 2002-3, according to Brian A. Gallagher, president of United Way of America, in Alexandria, Va.

The 2003-4 setback follows the worst fund-raising decline in three decades at United Way, as donations plummeted 7.5 percent — or $240-million — during 2002-3 campaigns.

The majority of United Ways complete their fund-raising campaigns by the end of March, and many have recently started distributing funds or announcing reductions, Mr. Gallagher said.

Decline Amid Change

The cutbacks come at a time when many charities already receive less support from United Way than in the past, in part because of a change Mr. Gallagher has been advocating since he took over the organization two years ago. He wants local United Ways to transform themselves into organizations that focus on solving specific social problems rather than just raising money for all charities.

Eighty-five percent of local United Ways say they have started to make that transformation, according to Mr. Gallagher — a change that troubles charitable organizations whose work falls outside the area that United Ways decide to support. The Boys & Girls Club in Victoria, Tex., for example, suffered a 46-percent cut in support last year — it now gets $50,000 — after the local United Way decided to redirect its money to programs in other areas.

“You can’t come in and start supporting new charities when you’re cutting people 40 or 50 percent,” says Dwayne Bennett, the group’s executive director. “At the very least, United Way needs to communicate what they’re doing and why they’re doing it better than they have.”

Mr. Gallagher says that in many cities where United Ways have adopted the new fund-raising approach, they have raised up to three times as much money as they did before. As a result, he says, more charities now receive support than they did when United Way raised money for general community needs.

He also said that many charities could receive more money this year than they did last year, as total revenue that United Ways brought in during the 2003 fiscal year from sources other than the traditional on-the-job campaign — including gifts to endowments as well as planned and major gifts — grew between 1 percent and 2 percent over what they raised in the 2002 fiscal year.

Effect of Layoffs

But many local United Ways continue to experience difficulties with their campaigns, in part because many of the nation’s largest companies continue to lay off workers and move jobs overseas. In Cincinnati, where Procter & Gamble has cut 3,000 jobs during the past three years, the company and its workers provided $13.2-million in the 2003-4 campaign, $300,000 less than in 2002-3, said Robert C. Reifsnyder, president of the United Way of Greater Cincinnati.

The Cincinnati United Way raised $60.5-million during its most recent campaign, a 0.5-percent increase over 2002-3, he said. The big reason it held steady during a difficult economy, Mr. Reifsnyder said, is that it received 75 new gifts of more than $10,000.

In Charlotte, the United Way of Central Carolinas also relied on major gifts to stanch a decline in giving it experienced during the 2002-3 campaign. The organization brought in $37.4-million during its 2003-4 campaign, a 1.9-percent increase over the 2002-3 period, with gifts of $10,000 or more jumping 18 percent, said James van der Klok, senior vice president of development.

However, gifts of $1,000 or less fell significantly, Mr. van der Klok said. “We see many employees being asked to pay a greater share of their health-care costs,” he said. “Many of those people just don’t have money to give to charity now.”