United Way of Central Indiana and Charities and Funders and Fundraising and Donations and Philanthropy

Charity alliances in United Way's shadow seek their share

August 27, 2007

Once a year, the CEO implores employees to sign pledge cards to the United Way. Health and human services agencies in the community that benefit wait to redeem your tax-deductible gift.

But others are preaching there's another path to charitable-giving heaven. Lesser-known federations continue to nip at the heels of the United Way establishment in the workplace, reviving the argument over personal giving options and whether competition endangers the venerable United Way's ability to raise money and direct it to causes it deems essential.

For example, Community Health Charities of Indiana, a federation that represents 26 local organizations United Way does not count as member agencies--including the American Lung Association of Indiana and Juvenile Diabetes Research Foundation--is looking covetously at charitable campaigns of private employers in the region.

Nothing against United Way or its mission, stresses Yvonne Matlock, executive director of CHC of Indiana, which is part of a national network. It's just that "there are a lot of great organizations that are not United Way agencies."

The Virginia-based federation raises $58 million annually through employee-giving campaigns at big companies such as Aetna, Hewlett Packard and Toyota. But CHC is relatively unknown in the private sector in Indianapolis. It's more familiar to public-sector employees here, helping them give to charities through the Combined Federal Campaign, Indianapolis Marion County Charitable Campaign and a campaign through Indianapolis Public Schools.

In 2003, CHC got its foot in the door of a local, private employer--Carrier Corp., which conducts a United Way campaign but wanted to expand options for employees. The other private-sector campaign CHC is involved in locally is that of the accounting firm of Robert C. Teipen PC.

"We would love to be in more private-sector campaigns," said Matlock, a former United Way employee.

So would charitable groups such as Hemophilia of Indiana, a CHC member charity.

"These employee workplace campaigns are a good way to get your agency out in front of people," said Michelle Rice, executive director of Hemophilia of Indiana. She's also chairwoman of CHC Indiana and mother of a son with hemophilia.

"We're just really concentrating on trying to get in the workplace more. Everyone knows who United Way is. My kids could tell you what United Way is. But I think there's room."

Diversity movement

A number of employers are contemplating going beyond United Way, said John Clausen, a former United Way employee who last year started Federated Campaign Stewards. His firm outbid United Way on a contract to manage CHC's Greater Indianapolis Combined Federal Campaign.

"I know there are other employers in the community that are having those discussions" about diversifying, Clausen said.

Companies like Indianapolis-based WellPoint Inc. already offer choices in addition to United Way, with its annual "Associate Giving Campaign."

United Way "would love we go through them" entirely, said Robert Alaniz, a spokesman for the Thousand Oaks, Calif.-based WellPoint Foundation. But the health insurer wants to provide a wider choice of charitable options.

But there's no doubt United Way remains top dog in the corporate world of employee giving here. United Way of Central Indiana raised $37 million last year for 100 member agencies, such as American Cancer Society, Damien Center and Salvation Army. About 15 percent of that flowed to non-member health and human services organizations employees designated--something United Way doesn't like to promote. Most all of CHC's local agencies are eligible for such funds.

Over the years, United Way has been advised by a diverse who's who of community and business leaders. With a vision for overall community needs not possessed by rank-and-file donors, this cadre identifies organizations it deems most worthy of funding for the greater good.

Unlike some federations, all member agencies are local. It's a "strategic partnership with the community," said Ellen Annala, president and CEO of United Way of Central Indiana.

But much of United Way's focus is contrary to philanthropic trends emerging since the 1980s.

"People today are just much more aware of what the philanthropy needs are in the community ... . They have a special interest or passion," said Ervin Picha, principal of Indianapolis-based Picha Solutions.

Clausen agreed. He said the desire to better direct and control one's donation is particularly important to Generations X and Y.

"We want to make a difference in our community," said Clausen, 34. "But we want to do it 'this way.'"

Choice boosts giving

That employees want more choice, and respond favorably when given more freedom, appears to be borne out in a number of cases.

A 2002 survey of 100 companies representing 5 million employees, "Practices in Corporate Employee Involvement Programs," by Virginia-based The Consulting Network, found employee participation in campaigns increases along with the number of giving options. Participation was flat for companies with "United Way only" campaigns, but grew 6 percent when those companies expanded the list of potential recipients.

Contributions climbed when Indiana's State Employees Community Campaign opened up the list of potential recipients. The SECC is to Indiana state office workers what United Way is to private-sector employers.

Until 2001, the state limited its list of eligible organizations to those that could prove compliance with a list of state standards.

"We used to administer some, frankly, arduous standards," said Keith Beesley, counsel for the state personnel department. Beesley knows because he was taking home reams of paperwork on weekends to vet different charities. "We were almost making charities run through a gauntlet."

Starting in the 2001 giving year, the SECC threw open the eligibility essentially to any charity with a 501(c)3 ruling from the IRS.

"It occurred to us maybe the IRS knew what it was doing," Beesley said.

And state officials concluded that some degree of responsibility for giving decisions should lie with donors.

"These are adults. It's their money," he said.

In 2001, the first year state employees could pick any 501(c)3, giving soared 24 percent over 2000. Beesley said as far as he knows, the state had not granted substantial pay raises that might otherwise explain the sharp growth.

Last year, 7,720 state employees gave $1.15 million to 1,430 organizations ranging from AIDS to Alzheimer's groups. Scouting organizations, churches and various county United Way campaigns were also among the recipients.

Some of those donations left the state. For example, one donor gave $78 to "Ferret Haven by the Sea," a ferret animal shelter in the Washington, D.C., area. Another $988 went to the Watchtower Bible & Tract Society of Pennsylvania.

The relatively new Rupert's Kids, an Indianapolis-based youth charity that was formed by the very hairy veteran of television show "Survivor," received 15 gifts from state workers totaling $949.

Rupert's mom and an officer of Rupert's Kids, Georgette Boneham, said she was tickled, given that the not-for-profit is not a United Way agency.

An even more unlikely recipient, perhaps, is listener-supported Christian radio station WGNR-FM 97.9, in Anderson, which received 10 donations totaling $867. The station owned by Chicago-based Moody Bible Institute has an annual fund drive, which last year exceeded its $850,000 goal.

Station Manager Ray Hashley said he didn't realize the state campaign generated contributions, "but I'm pleased to hear that." He applauded the state employee program's breadth of choices, saying people tend to give to something "when it's near and dear to their hearts."

Global vs. local

The federal employee program, the Combined Federal Campaign, claims a broad geographic reach--funneling donations to 2,200 charities around the world. It generated $271 million last year, in what CFC says is the world's largest workplace campaign.

Don't look for the local United Way chapter to get that diversified. The focus is still on this community, said Annala, although UWCI is providing more options. For example, donors who may work in another United Way region can designate a gift to their home county's organization. UWCI also has provided new giving options in areas such as education. It's also worked to cut overhead to 5 percent and aims to cut that even further.

"Competition in virtually every aspect of life can be a very good thing," Annala added.

Carole Higgins, of SIDS Center of Indiana, thinks so, too--at least as far as her organization's access to employee giving campaigns is concerned. Community Health Charities was quick about directing $3,500 toward her charities' modest $42,000 budget and has managed to grow that amount, she said.

The group's other source of funding is through volunteer fund-raisers and grants from foundations. SIDS Center provides bereavement support for families dealing with the death of an infant, and provides cribs through its "Beds for Babies" program.

"Frankly, I think we would be very much ignored by United Way. We're too small," Higgins said.

Federations like CHC face resistance, however, in their quest to tap private-sector employee giving campaigns locally. Matlock recalled a conversation with a major hospital in Indianapolis. The big concern expressed by hospital officials "was that United Way contributions would go down."

Earl Goode, chief of staff to Gov. Mitch Daniels and chairman of the 2007 State Employees Community Campaign, is the first to praise the diversity of the state employee giving program and its potential to make giving more attractive.

But in United Way's defense, he said, "if everyone had the choices we did, that would probably mean much less giving to the United Way agencies."

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