More Significant Impact

Recently, I saw this on a website, “Our ability to have an impact was often spread too thin. We can have a more significant impact if we invest in specific areas and focus our giving to programs with greater impact.” I can’t begin to tell you how many times I have heard United Ways talk about how their allocations are a “mile wide and an inch deep.” As workplace campaigns continue to shrink leaving less available for allocations, nearly every United Way continues to fund all of their partner agencies at reduced levels – they very, very rarely reduce the number of partner agencies funded. As a result, allocations continue to be a mile wide and a half inch deep.

You probably thought it was a United Way that was saying these things, however, it was actually Amazon. On January 18, 2023, Amazon announced that they were closing their AmazonSmile program effective February 20, 2023. The statements I shared earlier in this blog post were made by Amazon as an explanation for why they are closing their AmazonSmile program.

Lessons to Learn

There are two lessons every United Way can take from the closing of AmazonSmile.

First, Amazon has decided to fund fewer charities and programs. For nearly a decade, Amazon invested the time and resources necessary to allocate the proceeds of AmazonSmile to over 1 million organizations. As one of the largest companies in the world, Amazon had the resources to keep AmazonSmile going but decided there was a better way to support charities and programs. Moving forward, Amazon lists affordable housing, education, food banks, disaster relief as issues they will be supporting.

Should United Ways do the same? We have long believed that United Ways will be most impactful, sustainable, and relevant when they adopt an issue focus. Rather than a mile wide and an inch deep, issue focused United Ways make targeted and intentional investments in programs that address their issue and measurably change lives.

I am sure some of you are concerned about the impact of funding fewer partner agencies. Several years ago, I was on the board of a United Way funded nonprofit that saw their allocation decrease significantly because United Way was raising less money. The director of the organization came to the board and recommended the organization no longer seek United Way funding because the amount received was no longer worth the staff time and effort required to obtain the funding. If United Ways keep raising less money, and reduce allocations accordingly, at some point partner agencies will no longer see the benefit of United Way funding.

Second, some things take more time and effort than they are worth. Amazon is making the case that they can have far more impact by making targeted charitable contributions rather than covering the staff time and cost of passing through money to over a million organizations.

United Ways should look carefully at the cost and effort to process designations. Yes, United Ways can capture a percentage of the contribution to cover the cost of processing designations, but more and more lately I am hearing United Ways say that percentage is no longer worth the cost and effort necessary to process designations. Processing designations do not increase the awareness and understanding of what United Ways do – if anything, processing designations helps increase the awareness and understanding of what other charities do.

The Six Million Dollar Question

Several years ago, we were working with a United Way to develop their new, three-year strategic plan. This United Way raises a total of approximately $6 million every year from their workplace campaign, corporate contributions, foundations, and grants. Thirty of their board members and staff had gathered for this strategic planning session and I asked them this question:

“Every year, you raise $6 million from the community. If I gave you $6 million right now and said I want you to spend it addressing critical social issues and changing the social condition of your community, would you do exactly what your United Way is doing now and spend it exactly how your United Way spends it now? Raise your hand if you would.”

Not a single hand went up in the room.

Unquestionably, their United Way is making a difference in the community – I could cite a variety of examples. The reason no hands went up is not because they aren’t doing good in the community.

So, why did no hands go up?

Because their board members and staff knew that their investment process could be better, with a greater focus and more powerful impact if it was done differently.

Because their board members and staff knew that their resource development efforts could raise significantly more resources, with more diversified sources of funding and less reliance on workplace campaigns if it was done differently.

Because their board members and staff knew their marketing and engagement efforts could involve many more people, to volunteer and advocate for change if it was done differently.

And perhaps most importantly, their board members and staff knew that the same processes they had been using for years, worked really well years ago, but were not as efficient and effective anymore.

Amazon answered this question and changed how they allocate their charitable contributions.

Now it is your turn. Would you raise your hand if I asked you this question?

Perhaps an issue focus is the future of your United Way.