Editor’s note: This story has been revised to clarify that reduced contributions from two local companies to the annual workplace giving campaign accounted for 80% of the $1 million shortfall in 2017.
Dozens of local nonprofit agencies that receive support from the Capital Area United Way will see a reduction in funding from the organization this year by as much as 30%.
The pending cuts, which will be finalized in the next couple of weeks, are the result of a shortfall in the CAUW’s 2017 workplace giving campaign, according to CEO George Bell. The campaign, which ran from mid-2017 through March, raised $7.2 million—or about $1 million less than the budgeted $8.2 million, which is what the campaign raised the previous year.
In 2015, by comparison, the campaign raised more than $10 million.
Bell blames the disappointing workforce campaign in part to the August 2016 flood. Local companies are continuing to feel the effects of the flood, and their employees have fewer discretionary dollars to spend. Also, local companies with operations along the Gulf Coast diverted some of their philanthropic dollars in 2017 to victims of Hurricane Harvey in Texas as a way to reciprocate for help they received following the 2016 flood here.
Another factor, he says, is that two large companies that together accounted for nearly 80% of the shortfall in last year’s local workplace giving campaign underwent major changes. One was sold. Another stopped participating in the campaign altogether after a major restructuring.
Even before the natural disasters of 2016 and 2017, however, giving to the CAUW was trending in the wrong direction, as millennial donors are more selective about where they contribute their philanthropic dollars and negative publicity about the United Way nationwide has continued to mar its image in many communities around the country.
To address those issues, the CAUW underwent a major strategic planning process in 2015 that resulted in a new funding model for 2016. That model, intended to make the organization more strategic and effective, created a three-year funding cycle for agencies that provide services in specific focus areas.
Those partner agencies were supposed to be able to count on receiving a set amount of CAUW funding for each of the three years. But Bell says those amounts were always contingent on CAUW raising enough money and in year three it didn’t happen.
“It actually didn’t happen in year two, either,” he says. “But last year we were able to find some additional money in our budget so we didn’t have to make the cut. We basically haven’t had a normal year in three years.”
Bell says there are several positive changes afoot. He also points to significant reductions in overhead the CAUW has made in the past couple of years. Just 15% of the CAUW’s budget goes to overhead now, compared to more than 22% some five years ago.
Also encouraging, he says, is that the amount of restricted dollars the CAUW receives—those that donors earmark to go to specific charities—is down to 12% from 20%.
“We’ve done a good job of preaching the message that the more you support the work we do the better and more effective we can be in driving the performance of the programs we operate,” Bell says.
For 2018, the CAUW has already kicked off the workforce giving campaign, which typically does not start until the fall. The campaign is currently in its quiet phase, Bell says.
The agency is also looking at revamping the way it funds local nonprofits and is creating new categories of support and new ways for companies to give.
“I call it the new normal,” he says. “But as an organization, I think we are poised to compete and to provide ways to rebuild our campaign.”
