Last week, our column talked about transition: the transition from the traditional United Way model (raising as much money as possible and distributing it to affiliate agency programs doing good things in the community) to the Impact Investment Model, focusing on a small number of specific issues and fixing them.

There are three basic ways to manage the transition from traditional campaign to impact investment model:

One is to simply continue funding traditional agencies from an unrestricted ‘community chest’ model while simultaneously approaching major funders and asking for additional gifts to finance special impact investments. Even in the most prosperous communities, this approach can be limiting. Unless donors are specifically attached to a favorite cause, the most common response is typically ‘why can’t you fund this through your regular allocations of the money you have already raised?’  

Another, more drastic, approach is to stop funding to all traditional agencies and request they apply for funding based on their ability to deliver services aligned with the particular impact investment. This approach was recently applied in Manitowoc. The local United Way defunded all of its traditional agencies and asked them to submit ‘requests for proposal’ (RFPs) indicating how they could fit into projects outlined by United Way. This ‘rip off the bandage’ strategy enables United Ways to move quickly to an impact mode. It also has the potential to alienate many traditional donors and agencies, many of whom might already provide vital services within the impact areas or adapt their internal resources to align with the investments.

A final form of evolution is to gradually shift campaign funding from traditional agencies to impact investment over a period of time. This approach entails a reallocation of funding from current programs to targeted investments. It encourages traditional agencies to realign programs to impact and enables United Way to put ‘first money on the table’. This can inspire major donors to match United Way’s investment and, in effect, jumpstart efforts.  

In the spirit of remaining a vital, relevant organization, United Way of Sheboygan County is currently undergoing an intense strategic planning process to determine which of the three strategies above it will follow on its path to impact investment. 

One thing is certain, Sheboygan’s United Way will, like those across the state and nation will, indeed, evolve to the impact model within the next few years.