United Way Sees End to Dry Spell

Giving rises 4% to 5% nationwide as new strategies begin to pay off

United Ways around the country are celebrating a campaign season that they say marks a clear end to a long stretch of weak returns.

Based on preliminary results released by United Way of America, gifts to the roughly 1,400 local, independent United Ways are expected to rise by 4 to 5 per cent on average. That projection is based on returns from 478 United Ways, most of which started their campaigns last summer or fall.

A check by The Chronicle of 58 of the largest United Ways that have completed their campaigns shows even stronger growth — 5.8 per cent.

“We’re back,” says Betty Beene, president of the United Way of America. “Without question it’s going to be the greatest campaign we’ve seen in years.”

If the early results hold, the 1997-98 campaigns would beat the previous year’s 3.2-per-cent increase and soar past the current 1.6-per-cent inflation rate. United Way of America expects to release final figures in August.

Numerous United Ways — including eight of the largest — are reporting double-digit increases in giving to their 1997-98 campaigns. These include Charlotte, N.C. (21.5 per cent), Miami (20.5), Wilmington, Del. (18.0), and Seattle (17.5).

Booming local economies played a major role in the increases. Another big factor: growing emphasis on attracting big donations from individuals, the fastest area of growth for most campaigns.

Of the biggest United Ways, the only one to report a decrease so far has been Honolulu, which is down 6.3 per cent. Says Valerie Moore, vice-president of marketing and communications, “Right now we’re suffering the economic problems the mainland suffered several years ago. A lot of companies that had their headquarters here are gone.”

Much of the 1990s were indeed rough for many United Ways and the charities that relied on them for support. In many cities, campaigns have long been flat or have fallen short of totals raised in the 1980s.

The low point for most United Ways followed the 1992 disclosure that William Aramony, then president of United Way of America, mismanaged the organization and spent charity dollars on lavish travel and entertainment arrangements.

But changes in corporate America have also been problematic for United Ways, which traditionally have relied on on-the-job campaigns.

Many large-scale layoffs in the 1990s have meant that fewer employees are participating in fund-raising drives. Corporate mergers have meant that many cities have lost major headquarters — and, thus, major donors. And many companies, in their drives to spur employee productivity, have decided that they can no longer spare time for workers to watch campaign videos and hear fund-raising pitches from volunteers.

What’s more, many Americans now work at home or at very small offices instead of at companies large enough to conduct a United Way drive. United Way of America estimates that the percentage of people who hear United Way appeals at their jobs has shrunk from 31 per cent in 1993 to 26 per cent last year, even though the num ber of companies participating in drives has risen.

Those challenges have forced United Ways around the country to re-evaluate how they raise money and how they distribute it to charities.

Under continued pressure to cut administrative costs and to make it easier for regional and national companies to participate in campaigns, United Ways are working together more than ever before.

In some cases, that has meant consolidated fund-raising campaigns; in others, United Ways have merged or are sharing employees. United Ways in southern California, for example, are currently considering a merger.

And the United Way of America is developing a national system for processing pledges at companies that have offices throughout the country. The idea, which is designed to reduce the number of different United Ways with which a big company has to work, will be tested in several cities during the 1998-99 campaigns.

As their traditional employee-giving drives have failed to produce big gains in recent years, most United Ways have moved into other areas of fund raising, such as seeking major donations and planned gifts.

Such approaches are starting to pay off. At the Charlotte United Way, for example, the number of people who contributed $10,000 or more almost doubled from the previous year, to 207. And the number of people who gave $1,000 to $9,999 more than quadrupled, from 780 to 3,636. All told, gifts of $1,000 or more accounted for almost a third of the organization’s $26.5-million campaign total.

For the United Way of Santa Clara County, Cal., success has come from looking beyond cash to gifts of stock. The charity had been pushing the idea of stock gifts for several years on the assumption that many employees of Silicon Valley companies receive stock options and bonuses of stock that they might be willing to donate in order to receive a tax deduction and to avoid having to pay capital-gains taxes. The value of such gifts doubled from 1995 to 1997.

United Ways are trying a wide variety of other tactics as well to help pull up their campaign totals.

The Phoenix United Way, for example, was able to take advantage of a state tax incentive to help encourage gifts to its campaign, which raised 15.4 per cent more than the previous year’s drive.

Last year, the State of Arizona decided to offer a tax break to people who give to charities that help the poor as part of its efforts to move people off the welfare rolls and into jobs.

But the law was complicated, says Frank Rogan, vice-president of fund raising at the Phoenix United Way. He says the average person would have had a hard time knowing which charities qualified.

So the United Way worked with the state to create a pool of qualifying charities — those that spend at least 50 per cent of their budgets to help the poor. The effort was named the Working Poor program.

To qualify for the tax break, Arizona residents first have to have claimed a charitable deduction on their tax returns in 1996 or later. That figure is used to establish a donor’s base-line giving. Then, in a subsequent year, donors who make a gift to the Working Poor program that is greater than their base-line gift could claim a tax credit equal to the increase in giving. Donors are limited to writing off an increase of up to $200.

Since the law was enacted last year, the Working Poor program has received gifts of $500,000.

United Ways that lack such incentives to offer donors have become increasingly creative in their use of advertising materials to tug at donors’ social consciences.

In Los Angeles, the United Way is using a series of catchy one-liners to overcome the city’s reputation for stinginess. The campaign came after the United Way wanted to find a way to respond to a Chronicle survey several years ago that ranked Los Angeles 48th among the 50 largest cities in generosity.

During the campaign, which runs through June 10, city residents will hear radio spots and see billboards carrying statements such as “What this town needs are compassion implants” and “One non-fat double latte could buy a toddler milk for a month.”

Joe Haggerty, president of the United Way of Greater Los Angeles, says the ads have led to stories on National Public Radio and local television stations. “The campaign’s been a good catalyst to talk about charitable giving,” he says. “And that’s good for a growing, developing community like L.A.”

Mr. Haggerty also believes that the ads will ultimately help put the campaign ahead of previous years. “Right now the campaign is running a double-digit increase ahead of where it was at this point last year.”

Seattle United Way officials decided to pay for a year-round advertising and public-relations campaign. “We’re going after this very much like Procter & Gamble would build product identity,” says Jeffrey H. Brotman, the 1997 general campaign manager, who is also chairman of Costco Wholesale. “You can’t do that by running an ad campaign in September and October.”

The ads, which describe social problems like child abuse and homelessness, are intended to grab people’s attention with headlines such as “Introducing a tax shelter that actually provides shelter” placed next to a photograph of a woman and child trying to get into a homeless shelter.

“Then we hit them with direct mail, which they can read at their leisure,” says Mr. Brotman. “We did some door-to-door work as well.”

The organization also instituted a series of lunch meetings throughout the year with community and business leaders in hopes of getting large donations and recruiting new businesses to hold on-the-job campaigns. Several volunteers hold these lunches about once a week and invite 10 or 15 people.

Seattle’s approach of working on fund raising year round is becoming increasingly common.

The United Way in Santa Clara County has gone so far as to do away with the concept of a campaign season altogether. For the past couple of years, the organization has been holding fund-raising drives year round.

“We have found that there’s been a real shift in the time frame that companies would like to conduct campaigns,” says Elena Romero, senior vice-president of resource development. “Some of them are saying, ‘Fall is not a good time for us. If we ran in the spring, we could provide better resources and we believe we could raise additional dollars.’ ”

Santa Clara now reports its campaign total at the end of its fiscal year, instead of at the conclusion of a drive that lasts for just a few months, as it did in the past. “It’s like any other business,” says Ms. Romero. “If you’re in a for-profit corporation, you have four quarters of sales that you’re reporting. We’re doing the same thing, only we have four quarters of pledge revenues that we’re reporting.”

While most United Ways still maintain a formal campaign for several months, more and more are gearing up for their next campaigns almost as soon as the previous ones end. Several United Ways attributed big gains in their campaigns to their ability to put volunteers to work early.

The Cincinnati United Way, for example, increased its pledges by 5.8 per cent during its most recent campaign, to $52.9-million, by recruiting about a dozen volunteers last spring to get in touch with companies. As a result, some 300 companies in and around Cincinnati held on-the-job drives for the first time.

Recruiting more volunteers than ever before also helped United Ways. Columbus, for example, doubled the number of recruits who donated their services to help raise money — to 400 — by asking the local Chamber of Commerce to help find volunteers. The organization says the additional manpower was a key reason the United Way brought in $40-million in pledges, 7.2 per cent more than it did the previous year.

The United Way in Dallas had an 8.1-per-cent increase, bringing its total to $46.7-million, thanks in large part to its ability to double the number of people who help raise money through its “loaned executives” program.

The Dallas United Way asks companies to lend an employee or pay a stipend to cover one person’s time during half of the campaign or for the entire 20-week period. The United Way then brings those people into its offices, puts them through a four-day training course, and sets them up with desks and telephones.

By going to companies early and emphasizing the program, the United Way was able to get 50 people to participate during its most recent campaign. Jill Pharr, a spokeswoman for the Dallas United Way, says the program helped reach companies that had never before participated in a United Way campaign and generated 18,000 new donations.

Some United Ways are taking a high-tech approach to coping with changes in the work force.

While technology is by no means a large part of most campaigns yet, many United Ways are experimenting with World-Wide Web pages, electronic mail, and computer networks to reach people who miss hearing a face-to-face appeal or to supplement such solicitations.

The Mile High United Way in Denver, for example, this year offered companies an interactive computer program available on a CD-ROM that companies could make available to their employees through their computer networks. The program allowed users to learn about the United Way and the campaign using the computers at their desks. Twenty-five companies requested the program, which United Way officials say is not bad for a first venture.

The Denver organization also has a Web site and uses electronic-mail “postcards” to distribute appeals to some employees or to thank them for their gifts. “The postcards are a paperless and painless way for employees to get information,” says Laura Rogers, vice-president of marketing and communications at the Denver United Way. “We really find that companies are asking for less paper, so we’ve had to figure out how to reach people who so often are tied to their desks.”

United Way officials also hope that Web sites and other technology in the future will help them reach the growing number of people who work primarily from their homes or at small businesses.

Currently about 200 local United Ways have Web sites, all of which are reachable through the United Way of America’s Web site (http://www.unitedway.org).

A big concern of many United Ways as they look to the future is figuring out how to reach the next generation of donors, those who now are in their 20s and 30s. Many are experimenting with new ways to involve them.

The Atlanta United Way arranges volunteer opportunities for many young employees so they can see first hand how United Way dollars are being spent. “Younger employees did not respond well to the traditional United Way approach,” says Bill Garrett, the organization’s campaign director. “They wanted more involvement.”

The United Way/Crusade of Mercy in Chicago organized a free jazz concert, paid for by local banks, to help announce its campaign’s start last year. Officials there say two of the banks, which have a lot of young employees, saw big increases in donations, at least in part as a result.

The Tulsa United Way has held volleyball tournaments and five-kilometer runs during its campaign for the past several years.

The object of those events was not to raise money but to call attention to the United Way, says Kathleen Coan, president of the Tulsa Area United Way.

And the strategy seems to be working. Although Ms. Coan has no figures on whether younger donors are giving more, she says more young adults are volunteering to serve on committees that allot United Way campaign proceeds to particular charities. When asked during orientation sessions what motivated them to volunteer, the members often cited the sports events.

The Rochester United Way concentrated some of its fund-raising efforts on fast-food restaurants and grocery stores with the hopes of reaching young donors.

The big financial payoff may come later. Joseph G. Calabrese, Rochester’s president, says he hopes that as young workers move on to other, higher-paying jobs, they will continue to give because they will already be familiar with the United Way and its work.

Other United Ways share Mr. Calabrese’s hope. Says Edward S. Egnatios, vice-president of volunteer services and public affairs at the United Way in Detroit, “The reality is that we have to come up with new ways of reaching new givers.”