United Ways Are Encouraged to Narrow Their Giving to Three Key Causes

Many charities across the country are concerned that they could lose out after United Way of America announced this month that it will distribute money primarily to three causes: health, education, and eliminating poverty.

The national umbrella organization is urging its 1,293 local United Ways and other organizations to collaborate to meet three goals by 2018:

• Cut high-school-dropout rates in half across the United States.
• Reduce by 50 percent the number of families with working parents who don’t earn enough to cover basic expenses.
• Increase by one-third the number of Americans who are healthy and avoid risky behaviors such as smoking or excessive weight gain.

Brian A. Gallagher, United Way of America’s president, said the group chose those goals because “these targets are building blocks for a good life.” He said that, by focusing on just three topics rather than a broader agenda, the organization would have better odds of making a difference.

He said the national umbrella organization consulted with local United Ways as well as its corporate and foundation supporters about how best to prompt social change, and polled members of the public to figure out what social problems they considered most important to solve.

Change for Charities

Mr. Gallagher acknowledged that many charities must change their approach if they want to continue to be supported by United Way.

“I’m not trying to sugarcoat the change this is going to mean for our partners,” he said.

For example, he said, a charity applying for United Way aid cannot simply say, “We served 200,000 seniors last year.” Instead, he said, it must explain what it is doing “to increase the financial stability of seniors.”

The changes also will bring in more money for the organization, Mr. Gallagher said.

“Donors are increasingly giving to issues rather than designating to specific organizations. We believe the goals will help us reach even more people because we are able to better connect them with issues that they care about,” he said.

Giving to all United Ways, which reached $4.1-billion last year, has remained relatively flat over the past decade, according to United Way’s statistics.

The latest makeover follows the national organization’s 2002 decision to encourage local United Ways to try a new approach, which the charity dubbed “community impact.”

It called on them to focus on specific, locally identified problems and to work with nonprofit groups to reach measurable goals. The effort signaled a shift from the more traditional approach in which United Ways acted as fund-raising conduits that passed money to a wide range of nonprofit groups. Donations to local United Ways that have adopted the “community impact” approach are 20 percent higher than at those that have not, the national organization said.

The new 10-year plan is a continuation of that work, and United Way officials said they hoped the goals would spur more United Ways to adopt the community-impact approach. In the years since the change in focus, more than 85 percent of the local groups have said they are making progress toward the new approach, but only 30 percent have fully completed the transition.

Mr. Gallagher said he expects that only about 20 percent of local groups will immediately adopt the new goals and that another 15 to 20 percent may never do so.

Who Gets Left Behind?

Although the goals appear to narrow the types of charities and projects that would qualify for United Way money, Mr. Gallagher said he expects that most recipients of United Way money will be able to qualify for at least some continued aid.

For example, at the United Way of Madison County, in Huntsville, Ala., officials say that most of the charities it supports now are already working on projects to achieve the goals outlined by United Way. “This will change very little for us,” said Cindy Wester, director of marketing and communications.

But in other parts of the country, charities that receive United Way dollars said they feared cuts.

“While these are worthy goals by the United Way, what does this do to people with disabilities, to their families?” said John W. Foley, acting executive director of the Arc of the United States, which works with people with disabilities. “I suspect it’s not going to be pleasant.”

Fighting Poverty

Indeed, in cities where local United Ways have already begun to focus on the three new objectives, charities have lost money they were accustomed to receiving from United Way.

In Austin, Tex., where the United Way Capital Area announced grantees under the new priorities in December, the number of charities eligible for grants shrank from 44 to 36. David Balch, the United Way Capital Area’s president, said the change is based on extensive local research and other evidence that its former approach of distributing money more widely wasn’t working.

“Our old model was a mile wide and an inch deep,” he said, adding that poverty in the Austin area has increased by 40 percent in the last six years, with a growing number of families unable to meet basic needs. “We had to change,” he said.

Among Austin charities that have lost United Way support is the American Red Cross of Central Texas, which lost $230,000 in United Way funds this year. That money had made up a big chunk of the charity’s $960,000 disaster-response budget and accounted for 12 percent of its $1.9-million operating expenses.

Easter Seals Central Texas got half of the $30,000 that it had been expecting from United Way this year and has been told to expect nothing next year. “We surmised there really is not a place for people with disabilities in their new program,” said Kay Klotz, Easter Seals’ director of development.

And Meals on Wheels and More, in Austin, is losing $50,000 of its $140,000 United Way grant this year; officials said they don’t know what to expect next year.

Along with changing how United Way awards money, Mr. Gallagher said, the organization will step up its efforts to influence government to support the priorities it has identified. What’s more, he said the group would do more to attract people to volunteer on projects that will advance United Way’s priorities.

United Way must attract more volunteers and redouble its efforts to advocate for government dollars to support its priorities, he added.

In recent years, “We got out of the public-policy business and the volunteerism business,” Mr. Gallagher said. “This new agenda calls for us to get much more deeply involved again.”

He said that United Way of America would continue to press federal officials to increase money for the State Children’s Health Insurance Program, which state lawmakers have said is inadequately supported, and the amount of the earned income tax credit, which allows people who work in low-wage jobs to get extra tax breaks.

Mr. Gallagher said United Way will provide an update every two years on its progress toward meeting the three new goals.

United Way, which is based in Alexandria, Va., has created a new Web site, http://www.liveunited.org, to help coordinate its work toward the goals.