Resource Development

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.

Are the Times Changing?

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One of the most common refrains I hear from United Ways is that the times are changing. Society is changing, technology is changing, the economy is changing, and even competition for charitable giving is changing.

Just consider this headline from an article in the New York Times: “United Way, Faced With Fewer Donors, Is Giving Away Less.”  You can easily attribute the downward trend in the number of donors to changes in society, technology, the economy, and competition – among other reasons. As you would expect, the article talks about corporate downsizing, increasing competition for charitable dollars, and donors choosing to designate their contribution or just by-pass United Way and give directly.

There are a variety of United Way directors quoted in the article saying things like “There is a disconnect between what United Ways do and what people think they do and the reason for that disconnect is our ineptness at explaining what we do” or “We drive the agencies nuts because they don’t know from year to year what they will get.”

The article also shares some of the strategies being used by United Ways to counteract this trend. For example, United Ways are focusing on growing leadership giving, which according to the article presents a new challenge: “United Way is now competing more with its member agencies to raise money from the wealthiest people.” Another strategy mentioned in the article for stemming the downward trend in the number of donors is allowing donors to give to charities of their choice – designations.

If all this sounds strangely familiar, it should. The New York Times article I am referring to was published on November 9, 1997. No, that is not a typo. The year was 1-9-9-7 or just over 21 years ago. Nearly everything that was mentioned in the article still applies today – over the past 21 years the challenges mentioned in the article have not gone away – they have become the new reality.

Solutions to these external changes are not easy. Instead of being on the receiving end of all these changes, what if United Ways led change? United Ways can change conditions in their community, but that change will not be measured by the number of donors or how much money is given away. United Ways that exist to impact their communities, what we refer to as issue-focused United Ways, are creating change in community conditions by reducing the number of homeless or increasing the number of high school graduates, as examples.

Issue-focused United Ways exist to measurably change a critical issue in their community. Their success comes from measuring lives changed, not from how much money was raised or distributed to partner agencies. An issue focus is one solution to the changes facing United Ways today. Does it make changes in society, technology, the economy, or competition go away? Of course not, but an issue focus allows United Ways to be relevant, sustainable, and impactful in spite of these changes. You can learn more about the Issue Focus Model on our website and learn more about how one issue-focused United Way is relevant, sustainable, and impactful in their community.

It may not be surprising that the New York Times article still applies today, but it is probably disappointing. We all hope that the New York Times will be able to write a different article about United Ways 20 years from now, but that will require United Ways to lead change rather than be crushed by change.

2018 Great Rivers Conference

We invite you to join us at the upcoming 2018 Great Rivers Conference, a regional United Way conference being held from March 5th-8th in Indianapolis, Indiana. Gary and I will be presenting two sessions at this conference:

 

CEO Workshop: Leading Your United Way to a Successful Future   

On March 6th, we will be presenting a special session exclusively for United Way CEOs, Executive Directors, and Presidents. This session will show you how to lead your United Way to a successful future by transforming to an issue focus.

As the issue-focused experts, we will show you the power of an issue focus to simplify your United Way's message, diversify your resources, and maximize your impact. We will take an in-depth look at a variety of progressive issue-focused United Ways of all sizes, as we share stories of their successes and challenges. You will learn about the four essential steps for becoming a successful issue-focused United Way and the importance of including all of your stakeholders in the process. This session will provide you with a deeper understanding of what it means to be issue-focused and the knowledge you need to lead your United Way to a successful future.

Strengthen Your Financial Position by Effectively Diversifying Your Resources               

On March 7th, we will be presenting a session about diversifying your resources. We know workplace campaigns have been the bedrock of United Way fundraising for decades, but future financial stability will depend on effectively diversifying resources beyond workplace campaigns.

In this session, we will explore several proven methods for diversifying resources that will allow your United Way to strengthen your financial position in the future. We will begin by discussing a variety of possibilities for diversifying resources and evaluating the requirements and potential for each possibility. You will learn how to implement these possibilities to diversify your resources, illustrated by examples from progressive United Ways. Strengthen your United Way's financial position by learning how to effectively diversify your resources at this session.

For more information and to register for the 2018 Great Rivers Conference, visit https://unitedwaywi.site-ym.com/page/GRC2018. We hope to see you at one or both of our sessions in March!

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