Source: New York Times
December 23, 2016
By Ron Lieber
Ever since 1991, when The Chronicle of Philanthropy started publishing its annual list of the United States nonprofits that raise the most money from private sources, United Way has topped the list every year except for two.
And 2015 was one of those years, according to the discouraging figures the publication put out this fall. United Way and its United States affiliates collected $3.7 billion in contributions, down 4 percent from a year earlier, even as the 400 top charities collected 7 percent more during that same period.
The charity, which has more than 1,800 local chapters around the world that raise money and redistribute it to local nonprofits, is taking in slightly less than it did in 2004, with a bit of movement up and then down since then.
Giving to United Way is a reflexive action for many Americans whose employers solicit contributions via payroll deduction. But it’s obvious that an increasing number of donors are asking a perfectly reasonable question now: Who needs a charitable middleman when causes and data galore are at our fingertips?
Let’s begin by giving credit where credit is due: To the extent that the United States has a culture of giving, United Way and its workplace campaigns (along with religious organizations and the federal tax code) deserve a fair bit of credit.
According to Heather E. Price, co-author with Patricia Snell Herzog of “American Generosity,” friends and community members are the two factors that appeared most often when the researchers studied what or who most influenced higher giving levels. A workplace campaign can capitalize on both, since many people are friends with their co-workers.
Those campaigns have also proved plenty irritating for employees. So many of them felt pressured to give, or give more, that United Way now posts a number of guidelines on its site to warn companies away from heavy-handedness. Peers, not bosses, should lead fund-raising efforts, and 100 percent participation goals may make employees uncomfortable if they do not want to give at the office.
Campaign tactics aside, what can a middleman offer under the best of circumstances? Jason Saul, founder of Mission Measurement, which helps organizations calculate the impact of charitable dollars and has done work for several United Way chapters, laid out three historical categories of assistance.
First, United Way promised to make sure that money did not go to illegal charities. Then, the local chapters offered expertise about community needs that many citizens would not have recognized. Finally, United Way held out the promise that the causes and organizations it picked would help each donor’s charitable dollars have more impact than if that person, acting alone, picked the recipients.
Today, however, anyone can use sites like Charity Navigator or GuideStar to identify illegitimate charities. Plenty of well-informed people give to the causes that move them most and do not want help finding others. And determining value and efficiency has proved tricky for nonprofits that cannot agree on universal metrics, though organizations like GiveWell have made a game effort toward finding a handful of organizations each year that do the most good for the people who have the least.
Against this backdrop, United Way chapters are left scrambling to prove they are addressing the causes that matter most to people in their communities. The Chicago branch, where giving has increased in recent years, has tried to do this through a focus on individual neighborhoods.
In Brighton Park, on Chicago’s southwest side, one goal is to increase graduation rates at the local high school by devoting resources to preparing children for freshman year. Everything from health to parent mentors in the classroom is part of the mix, and early data suggests that high school readiness is already creeping upward, the chapter says.
“People know that we’ll get to the most underserved neighborhoods and people in need, and I think that is still a big reason why people want to give to United Way,” said Wendy DuBoe, president of United Way of Metropolitan Chicago.
Still, consider the new and very modern competition for donations. At Benevolent, donors can search for individuals who have a specific need beyond basic food, clothing or shelter — say tools for a budding machinist or contact lenses for someone with limited eyesight — and then pay for some or all of it on the spot. The donations are tax-deductible, as they go through a validator at other nonprofit agencies.
“Be part of someone’s story,” Benevolent’s website promises. Even better, it emphasizes that “you can step into the story.”
Is this sort of pitch tailor-made to appeal to narcissists seeking self-satisfaction? Or is it just the new reality, one that United Way does not understand or cannot replicate?
Megan Kashner, Benevolent’s founder, replies by pointing to science and the unfortunately named “identified victim effect,” which posits that many donors prefer to help individuals who are not anonymous. “We’re appealing to people’s visions of themselves,” she said.
But as what, I asked her? Turns out there is no single answer. Some donors view themselves as lucky that they have never been in acute need of charitable assistance. Others have been there and want to throw the rope back for others.
“We’re inviting people to relate to one another’s stories in whatever way suits them and who they are, where they’ve been and who they want to be,” she said.
Ms. Kashner, who is also a clinical assistant professor at the Kellogg School of Management at Northwestern University, is also trying to speak directly to small-dollar donors who wonder whether their modest contributions can make a difference. With Benevolent, it’s obvious that they can, especially when you get a thank-you note from a recipient and can respond from your own email address.
“We used to attribute that kind of true impact only to people making much larger gifts,” she said. “So this is not just about choice but also about inclusion.”
Brian A. Gallagher, who used to raise funds for local United Way chapters and now runs the international organization, has no beef with anyone who wants to give that way (or with finishing second in the rankings to Fidelity’s donor-advised fund, a tax-efficient way for individuals to set up quasi foundations that raised $4.6 billion in 2015). But he believes it has its limits.
“It’s not going to scale in a way that bends the arc on income inequality in the United States or on getting more girls in school around the world or on stopping human trafficking,” he said.
So while technology may allow us to do plenty more good on our own than we ever could before, he says he believes there will always be a place for an organization that can bring many nonprofits together to solve multidimensional problems like the ones in Chicago.
“We stay very focused on those things,” he said. “The reason we’re 130 years old is that we never forgot that we exist to help communities work on their most difficult issues together. And when that happens effectively, that’s what donors care about.”