Local United Ways Experiment With New Approaches to Distributing Money

For the past several years, United Ways around the country have been undergoing mission makeovers, looking for ways that they can play a more active role in solving local problems instead of just raising money for health and social-service groups.

And, as the 1997-98 fund-raising campaign totals roll in, United Ways report that donors like what they have been seeing.

United Way of America says donations to local campaigns are likely to rise by 4 to 5 per cent on average, based on preliminary estimates. Several United Ways are reporting double-digit gains.

The United Way of Central Carolinas, in Charlotte, N.C., translated a change in the way it does business into a 21.5-per-cent increase. Pledges to its most recent campaign were $26.5-million.

Instead of promoting its efforts to help all kinds of social-service groups, the Charlotte United Way decided to emphasize three priorities that would receive the bulk of the money raised: improving early-childhood development, helping the elderly, and encouraging economic self-sufficiency among the poor.

In Baltimore, United Way executives are in the process of working with a wide range of people to identify the city’s four most urgent social-service needs. It plans to distribute money in ways that will meet those needs.

Says Larry Walton, the United Way’s president: “We basically are saying to our constituency, We can’t be all things to all charities anymore. That day is really gone.”

The effort already figured into the Baltimore United Way’s most recent campaign, which closed in November with a 4-per-cent increase over the previous year. The campaign materials emphasized how United Way would measure the effectiveness of its spending and adjust the distribution of its money accordingly.

“It’s one thing to say 10,000 Boy Scouts came to meetings in a particular month,” says Mr. Walton. “But the other thing you need to say now is, ‘Fine. What impact on their lives did you have in those meetings?’ We’re moving in that direction.”

He adds: “We’re getting a lot of good feedback, particularly from our corporate community. They view us as having to make the same kinds of tough decisions they’re having to make in their businesses every day.”

The United Way in Seattle has dropped the idea of a United Way “agency” entirely. Traditionally, United Ways work with a group of charities, such as the local American Red Cross and Y.M.C.A., and provide them with a percentage of the campaign donations every year.

“We’re moving out of the membership business,” says Rick Rafael, media-relations manager of the United Way of King County. “We’re establishing ourselves as a community foundation that will finance health and human- service needs throughout the community through any agency, not necessarily member agencies. After 2000, we will no longer have member agencies.”

That may mean less money in the future for some charities that have come to rely on United Way money, even though the campaign has been producing big increases. During the most recent drive, Seattle’s United Way raised $60-million, or 17.5 per cent more than the previous year.

Under its new approach, charities will request money for their programs based on their ability to show that they have made a difference in the community. The program is already being phased in and is meeting with mixed reactions from charities.

“I probably speak for most executive directors when I say we felt threatened by it,” says Bill Sanders, who heads the Birth to Three Developmental Center, a Seattle charity that helps young children with physical or mental disabilities. “The concept sounded right, but we were concerned. I wasn’t sure where infants and toddlers with disabilities fit into their priorities.”

But Mr. Sanders plans to wait and see what happens before making a final judgment on the change. During each of the next two years, his group will get about 90 per cent of what it received in 1997.

He says he and his employees have struggled with how to describe their results. For example, Mr. Sanders says he worries that if his organization uses measurements that compare children in his program with kids without disabilities, they may give a mistaken impression regarding a child’s long-term progress. The reason, he says, is that babies with disabilities measure up fairly well against their healthy counterparts. But as disabled kids get older, they fall further behind average children, not because they have regressed but because the tests and measurements have become more sophisticated, Mr. Sanders says.

Betty Beene, head of United Way of America, says local United Ways have to be willing to tackle hard issues such as the ones being discussed in Seattle if they want to continue to thrive. She believes that United Ways must justify their existence to donors as community problem solvers, not just fund raisers. That idea was the main recommendation of a 1995 United Way of America report.

“The 1995 report said that United Way will add value beyond the independent efforts of the agencies that it funds and it will conduct cost-effective, high-impact fund raising,” says Ms. Beene. “Our belief is that those two are related, that our ability to raise money is absolutely related to our ability to effect change in our communities.”

The success of the 1997-98 campaigns serve as validation of that view, she says.

“We’re beginning to articulate the value-add the United Way brings to the donor,” says Ms. Beene. “We are finally getting our voice.”