United Ways around the country and, indeed, the world have been in various states of transition for more than a decade. Sheboygan County’s is no different. In the grand scheme of things there are two distinct models of operation: Traditional Agency Funding and Impact Investment Funding and a full spectrum of variations in-between.

The traditional United Way campaign model executes an annual fundraising effort throughout the community and attempts to raise as much money as possible in a short period of time. Upon completion of the annual campaign, funds are distributed to a small group of traditional agencies, each doing good things in the community. For United Way of Sheboygan County, this is 22 agencies.

Historically, funds are raised via payroll deduction from employees which are often generously matched by participating companies. For nearly 40 years, from the 1960s through the 90s, this method was effective in raising more money each year. During this time, the economy grew at a steady pace. Year after year, campaigns increased, if only slightly. When they did, traditionally-funded agencies saw their own funding increase. If the campaign went up 5%, agencies received 5% more. During the lean years, agencies shared equally in the decline.

This one call for all approach generally comes with a fundraising black-out period and does not allow affilliate agencies (those we fund) to run their own community-wide fundraising campaigns during the prime months of United Way’s campaign in Sept and Oct. This way, most participating employees and companies could be assured they would not be solicited by traditional agencies, if at least during our prime campaign season. This year we did away with the black-out period, essentially allowing the agencies we fund to continue fundraising during the same time we are in full campaign mode to raise money for their programs.

On the other hand, the impact investment model means United Way raises a specific amount of money to achieve a defined set of objectives with the intention of creating sustainable change.  Prior to initiating the campaign, United Way engages the community in a methodical effort to assess its most critical needs. It does this by participating in conversations with many, often disparate stakeholders including major donors, funding corporations, public institutions, private businesses, schools, healthcare, and nonprofits.

Beginning in the late 80s, continuing into the 90s, and to this day, donors have increasingly demanded to see specific, evidence-based results from money contributed. The once-standard United Way message of “trust us with your money, we will make the right decision for you,” slowly lost its appeal, especially among young donors.

In response to donor demand, forward-thinking United Ways began to reallocate funding from agencies to more specific, targeted programs and investments whose outcomes could be precisely measured. By doing this, United Way’s message gradually changed from “trust us, we are doing good things throughout the community through a variety of good agencies” to “we are making targeted investments to produce specific outcomes and we are measuring results to report back to you.”

During this long transitional period, United Ways gradually shifted funding into programs and investments where work centers on prevention and intervention rather than on the perpetual management of crises.  Following the old adage, ‘an ounce of prevention is worth a pound of cure’, modern donors are demanding a higher social return on their philanthropic investment. And why shouldn’t they? They have been investing their hard earned money but not seeing sustainable change. We can no longer say “thank you for your gift, but please give us more this year because the problems are even worse now.”  

United Way is being judged like any other business and we are expected to evolve as necessary.  We are expected to tell our stakeholders how their investment is eliminating or preventing a certain problem. Our donors expect us to tell them the problem, the solution, the cost, the outcomes and the timeline. This is what we are prepared to do here in Sheboygan County, just as the majority of our United Way partners have done throughout the state.

Next week I’ll discuss the various options available to successfully move from the Traditional Campaign Model to the Impact Investment Model.