New charity funds, alternatives to United Way, gain strength

NONPROFITS INC.

March 14, 1994|By LESTER A. PICKER

One of the emerging trends in workplace charitable campaigns is clearly giving employees greater choice.

Formerly the exclusive province of United Way, work-site charitable giving now faces stiff competition from newly formed alternative campaigns that allow employees to support environmental causes, women's issues, non-United Way social service agencies and international relief agencies.

All in all, there are some 170 other federated campaigns in the United States. By making one payroll deduction, an employee distributes support over many agencies.

One of the strategic errors United Way has made over the years -- and one that I have railed against -- is not putting more effort into marketing directly to employee donors, the very audience that puts bread on the plates of the agencies that United Way represents.

Until recently, United Way has focused its marketing efforts on ,, corporate leaders and its member agencies. A 20-year trend toward increased consumer choice and consumer empowerment which United Way officials resisted, coupled with internal problems at the national office, has now boomeranged. United Way affiliates throughout the country suffered declines in employee contributions of 4 percent in 1993.

In contrast, alternative funds grew by nearly 5 1/2 percent last year, according to the National Committee for Responsive Philanthropy.

Interestingly, in 93 percent of campaigns where United Way stood side by side with other federated campaigns, total employee giving increased. In fact, in 75 percent of those campaigns giving to United Way increased, and in 55 percent of those campaigns giving to United Way increased by 10 percent or more, according to the NCRP.

This shows that giving begets giving. We are far from a zero-sum game for individual philanthropy at this point in society's evolution. Most Americans give about 2 percent of their pretax income to charity. But many give at 5 percent or 10 percent and get great joy from their acts of kindness. What we should all be doing, most especially United Way, is encouraging everyone to give more to charities.

Over the past few years, United Ways throughout the country have been forced to allow donor choice and donor designations, options that enable employees to earmark their contributions to specific charities. Some United Ways are taking this trend further, acting as brokers, in essence, in raising funds for many causes.

The board and staff of the United Way of Southeastern New England have redefined United Way entirely. They now view their mission as raising money for all community needs, from social services to arts and environment, according to Kalman Stein, executive director of Earth Share, a campaign that represents 40 national environmental organizations. United Way will be the logical collector of funds, because of its firm hold on work-site fund-raising.

Given United Way's traditional resistance to competition from alternative appeals, what strategies did the alternatives use to get a foothold in the workplace? I recently met with Stein; Don Sodo of the National/United Service Agencies; Deb Furry of the National Alliance for Choice in Giving; Rene Acosta of the International Service Agencies; and John Coy, a consultant to non-United Way federated campaigns, and others on the board of the Council of Federations.

The council brings together more than 500 charities in separate organizations. It provides a forum for these agencies to work together toward a common goal -- to increase workplace giving through cooperative efforts.

As Don Sodo says, "Our mission makes sense. Corporations say they are being bombarded and confused by competing campaigns. We work together to raise giving for all."

Is there room for employee contributions to rise? According to the council, the answer is yes.

The council hopes that United Way and the growing number of other federated campaigns will learn to work together effectively to increase the charitable-giving ethic of most Americans.

(Les Picker is a philanthropy consultant. Write to him at The Brokerage, 34 Market Place, Suite 331, Baltimore, Md. 21202, [410] 783-5100.)

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