In Defense of Designations

The issue of designations can be controversial. While some United Ways promote designations as a way to encourage donors to give, others discourage designations by placing restrictions on which organizations can be designated to or by requiring a minimum designation amount. Still, there are other United Ways that do not allow designations in any form.

While some United Ways insist that allowing designations runs in opposition to the spirit of the United Way movement, others insist that promoting designations embodies the historical roots of the United Way movement.

The reality is that every United Way and every community served by a United Way is unique. Therefore, there is no single, definitive answer for how all United Ways should handle designations.

With that in mind, there are three tenets that a United Way must consider when determining how to address donor designations: 

  • Donor designations are not inherently good or bad.

  • The value of designations depends on the individual United Way’s priorities and community.

  • Therefore, United Ways should select their approach to designations based on their unique situation.

These three points may not seem ground-breaking, but they are essential in determining whether or not designations are right for your United Way. Take for instance the question of whether or not your United Way should allow designations to any 501(c)3 in your community.

It’s easy to understand why a United Way might not want to allow designations to any local nonprofit. A United Way that accepts designations of this type has no control over where those donated dollars are invested in the community. Not only that, but it takes a tremendous amount of work to process donations when donors are designating to everything from the regional food bank to local churches.

If designations of this type limit a United Way’s ability to make strategic investments in the community and cuts into already limited staff time, when would a United Way want to consider allowing donors to make designations to any local nonprofit agency?

Allowing such designations makes sense when – above all else – a local United Way sees itself as a fundraiser. If a United Way prioritizes mobilizing as many dollars as possible during campaign, the best way to do that is to allow donors to give to whatever local nonprofits they want.

In the United States, there are examples of United Ways that have double and tripled their campaigns by encouraging donors to do all of their charitable giving – including church tithing – through United Way! For United Ways that define success according to the amount raised during campaign, there is no better way to maximize success than by allowing donations to be directed to any local nonprofit.

Of course, not every United Way defines success according to campaign. For United Ways that determine success according to measurable impact made in the community, the investment of staff time to process designations is likely not the most effective way to support impact work.

Every United Way is unique, so there is no single right answer when it comes to handling designations. Whether your United Way allows designations with no questions asked, places restrictions on designation amounts or recipients, or bans designations completely, your United Way needs to make the choice that best supports your goals.

If your United Way is focused on implementing community impact, you should assess whether or not staff time currently spent processing designations could be better spent working on impact initiatives. If your United Way wants to raise as much money as possible, you will be well-served to consider redirecting staff efforts to encouraging designations.

Whatever your United Way’s priorities, it is worth looking at your relationship with designations and assessing whether or not that relationship supports your United Way’s goals.

How to Survive Philanthropy Cloud

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I’m worried about Philanthropy Cloud.

Not as it exists now – available exclusively to United Ways. I am worried about what will happen to United Ways when Philanthropy Cloud is made available to all nonprofits.

Here’s why: Philanthropy Cloud has the potential to put United Ways at odds with not just their vetted partner agencies and programs but every other charitable cause too. When Philanthropy Cloud is made available to all nonprofits, the easy and exclusive access to workplaces that United Ways once enjoyed will be eradicated, and fundraising will be every organization for itself.

When Philanthropy Cloud is adopted by workplace campaigns and the platform is open to nonprofits other than United Way and its partner agencies, the Philanthropy Cloud platform will have commandeered the traditional benefits of giving through United Way. When Philanthropy Cloud is open to all nonprofits, United Way will no longer be the easiest way for employees to donate to a wide variety of local nonprofit organizations – with just a few clicks of the button, Philanthropy Cloud will allow employees to give to whichever organizations or causes they choose. When workplaces adopt Philanthropy Cloud, United Way will no longer be the only way to ensure donations go to worthy organizations – with its integration with GuideStar, Philanthropy Cloud will put the power to vet nonprofits at donors’ fingertips.

If United Ways are no longer the easiest way to give to many worthy causes or the easiest way to ensure donations go to worthy organizations, how will United Ways be able to sell themselves?

The conversation about the benefits of giving to United Way will have to fully shift away from the process of giving to United Way to the outcomes of giving to United Way. United Ways utilizing Philanthropy Cloud will need to clearly articulate their relevance in terms of the good they do in their communities.

However, this brings us to another challenge.

The current reality is that when many United Ways report results, they’re reporting the outcomes of partner programs – not their own work. Any remotely astute donor recognizes that all the summer meals or after-school programs or mental health interventions their United Way references in an annual report are really the result of another agency’s work. With increasing awareness of overhead, many donors are left wondering why they wouldn’t make their donations directly to the organizations “actually doing the work.”

Of course, no United Way is going to stop providing funds to partner programs and start only providing direct services. So, the question becomes: How can United Ways that lack their own unique programming restructure their relationships with their partner programs and agencies in order to have their own results?

For many United Ways, the solution will be fully and truly implementing community impact.

Since 2003, United Ways throughout the system have been adopting and experimenting with community impact. The central tenants of community impact are clear and familiar, and adopting community impact allows the focus on United Ways’ work to shift from the funding United Ways provide local programs to the work United Ways do to develop and implement impact strategies in partnership with others. Convening and guiding collaboration and partnerships to identify new solutions is a result that resonates with donors. Donors like knowing that their donations fund innovative partnerships that produce impactful results.

While implementing community impact can be a significant departure from what some United Ways are currently doing and therefore require a significant investment of effort by staff and board members to reset the priorities of their United Way, I can see no other downsides.

Transitioning to community impact allows United Ways to secure more grants, more deeply impact their community, and – most importantly in the world of Philanthropy Cloud – help United Ways ensure their long-term relevance by giving them their own results to sell.

To survive when Philanthropy Cloud is available to all nonprofits, United Ways will need to strengthen the products they have to sell. Although this will certainly be challenging for many United Ways, stronger products will mean making investments more strategically and will therefore mean greater local impact.  

For all my worries about Philanthropy Cloud, I think the looming challenges of an open Philanthropy Cloud platform will ultimately lead to the start of a more impactful and relevant chapter for United Ways.

The Urgent Need for Strategic Planning

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Back in the day, life was pretty good for United Ways. United Ways were able to raise increasing amounts of money year-after-year, and many donors would support United Way until retirement without giving it a second thought.

But the times have changed. Over the past three decades, an endless stream of new challenges has made the work of United Ways more difficult than ever. These challenges include economic recessions, growth in the number of nonprofit organizations, open campaigns, third-party processors, the ability to find and support any charity and cause on the internet, downsizing companies, organizations not disclosing donor information, companies that no longer have local leadership, scandals, Facebook and social media, online giving, Giving Tuesday, Red Nose Day, GoFundMe, partner agency competition for funds, difficulty getting outcomes for funded programs, increasing designations . . .

You get the idea. The challenges are there – you know them all too well.

These challenges make it clear that doing what United Ways have always done is not going to work moving forward. For United Ways to be sustainable, relevant, and impactful in the future they will need to determine what they are trying to accomplish, select the best strategies to achieve their goals, and decide how they are going to implement those strategies.

In short, United Ways need to be doing strategic planning. Even if your United Way’s mission is still absolutely right for your community and its needs, the strategies your United Way will be using and how your United Way implements the strategies will need to change. Strategic planning, done well, does precisely this – articulate a clear purpose, select appropriate strategies, and plan to implement and execute the strategies successfully.

If you think your United Way’s mission is on-track, I would encourage you to take a couple minutes and read my blog post “The $6 Million Question.” Think about the reason why your United Way exists and perhaps try the $6 million question with your board at your next board meeting.

Some United Ways find themselves heading in several directions at once. After you read my blog post “You Only Need One Compass” you may find that your United Way has a lot of compasses. For United Ways to be successful, it is absolutely essential to clarify your mission and purpose, one of the first steps in our strategic planning process.

Many United Ways tell me they already have a strategic plan. Great, but does it help your United Way jump higher or farther? Take a moment to read my blog post “Jump Higher or Leap Farther?” for some perspective on strategic plans that will move your United Way forward. With all the challenges facing United Ways, it is imperative to be leaping farther, which is something we address with our playbook of transformational strategies that we use with United Ways during our strategic planning process.

Strategic planning is urgently needed at most United Ways. Most United Ways are still doing what they have always done and have not yet fully evolved to address the challenges they are facing. If United Ways expect to remain relevant, sustainable, and impactful, they cannot wait any longer to address their challenges.

We know that United Ways are unlike any other nonprofit organization. Because we only work with United Ways, our strategic planning process is unique. Our strategic planning process recognizes the unique aspects of United Ways, including workplace campaigns, designations, allocation processes, partner agencies, community impact, and affinity groups. If the time has come for a new strategic plan or an update to your current strategic plan at your United Way, check out our strategic planning information and let’s start a conversation about how we can ensure that your United Way will be relevant, sustainable, and impactful for years to come.