United Way of McLean County: In a Changing Economy, Philanthropy Needs Innovation to Evolve
Old financial models -- and old narratives about philanthropy -- can’t survive the changing fundraising environment, says David Taylor, President and CEO of United Way of McLean County (UWMC).
Taylor and members of the UWMC Board met with members of the press Wednesday afternoon to discuss the agency’s transition to new methods of supporting human services in the county.
“Things like pledges, campaign allocations, etc. -- that’s terminology that’s really past its prime,” said Taylor. “We’re now talking about money actually collected and received; we’re talking about value created in the community.”
Taylor reported that value -- the agency’s contributions in the community -- has increased by just over $1M from last year.
That doesn’t mean UWMC has collected more money for local nonprofits and causes; in fact, the agency reported direct contributions continue to decline, with unfulfilled pledges still on the rise. Cash in hand is down about $50,000 from this time last year, although the agency’s fundraising year ends in February of 2019, Taylor said.
Rather, the additional $1M refers to new value created through innovative strategies the agency plans to expand on in the coming months.
“Last year, the combined services and grants we gave out was roughly $1.24M, and this year it's over $2.24M,” said Taylor.
In addition to direct service grants, the $2.24M includes the value of nonprofit websites created at the recent 48in48 Hackathon, as well as the Volunteer Income Tax Assistance Program (VITA) and UWMC-funded 2-1-1.
The agency has yet to announce this year’s funding allocations. While money collected from direct contributions is still lagging behind last year, Taylor said UWMC’s 46 programs and 27 participating agencies will receive the same percentage of total available dollars.
“There has been a lot of economic upheaval in this community of late; it would be naive to think that this economy is what it was 3-5 years ago,” said Taylor.
While employees’ movement in and out of Bloomington-Normal as part of State Farm’s recent corporate restructuring efforts likely plays a factor in the rise of unfulfilled pledges, the insurance giant isn’t the only business that’s played a part, he said.
“Any of those economic changes -- the loss of Mitsubishi, et cetera -- that’s affected families, and oftentimes they’re having to make changes to be able to thrive and live.”
State Farm and others have also changed their employee giving programs, eliminating UWMC workplace campaigns that allowed the agency to deliver its message of community needs directly to captive audiences.
The agency itself has also shrunk, dropping from 10 to 3 employees and cutting its budget by $400,000 -- a nearly 50% reduction -- over the last 3 years.
Taylor said that’s about as far as UWMC can downsize without hurting the nonprofits and services it supports.
In response the agency is changing its traditional model of business-to-business fundraising, seeking to connect digitally with donors on an individual basis.
“We’re making a concerted effort right now to get personal contact info that is very unlikely to change like a physical address might or a company affiliation would.”
A targeted marketing campaign to reach State Farm-affiliated donors has already proven successful.
Taylor said since the campaign began in late November, UWMC has seen a 45% increase in State Farm employee matching gifts.
The agency also wants to find more opportunities like 48in48 to turn decreased contributions into increased community impacts.
Although UWMC itself put $25,000 toward the cost of the event, 48 area nonprofits received 48 new websites and digital management services valued at around $1.5M. Rivian agreed to host the event at its production facility, while State Farm paid the other $25,000 to bring the volunteer-powered 48in48 to Bloomington-Normal.
“Those kinds of investments are what we’re going to be looking for moving forward, to not ask in a time of economic uncertainty, ‘You have to give us more money,’ but, ‘Here’s what we’re going to do with what you give us,’” said Taylor. “We’re not just going to get it and pass it through; we’re also going to look for ways to invest it so it means more for the nonprofits we support.”
To help lead the charge, UWMC hired Kathleen Lorenz, Normal Town Council member, and Leadership Illinois executive director, as a project consultant in January.
Lorenz will spend the next several months meeting with individuals including nonprofit and community leaders, large donors, and nonprofit clients, “any key stakeholders that have an investment in United Way in some form or fashion to figure out the best way to capitalize on what we have,” said Taylor.
She’ll also work with UWMC leadership to review the agency’s 3-year grant process Taylor said in some ways limits its ability to react quickly to the community’s changing needs.
Lorenz said any changes to UWMC’s awards model will be developed in concert with participating nonprofits.
”This is not something United Way is going to do to the agencies; we’re going to work with [them].