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 Other Half

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For nearly 30 years, we have been conducting donor and community research for local United Ways throughout the United States. Over time, the questions we ask have changed – for example, we now ask about social media usage, but we no longer ask if people use email.

One of the questions we have consistently asked is: “If you did not give to United Way this past year, have you ever given to United Way?” We have found that the percentage of people who did not give to United Way this year but have given to United Way previously has increased over time. In every survey we have conducted since 2014, at least 50% of all people who did not give to United Way in the past year had given to United Way previously.

Here is a sobering thought: Half of all people who did not give to your United Way this year have given to United Way previously. When you walk down the sidewalk or through a store, take a moment and think that one out of every two people you see has probably given to United Way at some point in their lives but did not give to your United Way this year. It makes you want to grab them by the collar and ask them “Why aren’t you supporting United Way?” doesn’t it?

But, it is not their fault – you can’t blame them. The reality of the situation is that most of those people don’t give because they are no longer asked to give by their United Way. Perhaps they retired and are no longer exposed to a workplace campaign, or maybe they changed employment and now work at a company that does not have a workplace campaign.

The vast majority of people who did not give to United Way this year but have given previously did not give for any reason other than they were not asked to give. How do we know? Because when we asked them, most community members who have previously supported United Way indicated they would support United Way again if asked. This is especially true with retirees.

I can already hear some of you thinking “Hey! We give people an opportunity to give online on our website.” While this may be true, the challenge with providing an online giving opportunity is that your potential donors need to “find” the giving opportunity. Workplace campaigns reach out to potential donors by bringing the giving opportunity to the donor. Most charitable giving occurs because the charity brings the giving opportunity to the potential donor through direct mail, social media, a golf tournament, or even cookie sales. Online giving portals fail to do this.

For all of the United Ways that are wrapping up their workplace campaigns, it is now time to start working on reaching the other half of your donors. What giving opportunities can your United Way provide to engage your former donors such as special events, affinity groups, or alternative giving opportunities? There are United Ways that we have worked with that raise up to one-third of their total resources from these types of activities.

We are not suggesting that United Ways eliminate their workplace campaigns. Instead, we are suggesting that they actively seek to attract donors outside of the workplace campaign. Based on our research and the increasing percentage of people who have given to United Way previously, reaching donors outside of the workplace campaign will be essential to long-term success.

If attracting former donors is a priority for your United Way, let us know and we can help you explore potential opportunities for reaching donors and develop a plan based on the most effective and efficient methods for your United Way.

The other half of your donors are waiting. Now is the time to begin the other half of your fundraising.

P.S. Be sure to join us at 2:00 p.m. EST next Monday, February 4th for our webinar “Get Your Board Onboard: Secrets of the Engaged Board.” You can learn more about “Get Your Board Onboard: Secrets of the Engaged Board” and all our webinars here.