A North Texas community institution is facing a $2 million budget shortfall. The United Way of Tarrant County has cut one-third of its staff positions to preserve funding for the programs it supports in and around Fort Worth.
Faced by an increasingly challenging philanthropic environment and with new leadership coming in, the local United Way is changing how it works in a bid for success in the social media age.
A new way of giving
For most of its 95 years, United Way of Tarrant County worked in pretty much the same way.
“They would go into the workspace, and they would make the case for people to contribute, and then those contributions would go to those nonprofits,” said TD Smyers, the chief financial officer for United Way of Tarrant County. Later this month, he’ll take over as CEO.
Smyers said this federated giving model isn’t enough on its own anymore.
“Federated giving has got to find a way to be more relevant in a space where a person can pick up their smartphone and hit a GoFundMe and give money to something that they care about,” Smyers said.
Tarrant County’s isn’t the only United Way organization facing struggles. Greater Twin Cities United Way in the Minneapolis-Saint Paul region announced in April that it would cut funding to organizations as it confronted a $6 million shortfall. This month, Chicago’s United Way organization announced staff layoffs after its fundraising revenues came up a $1 million short of expectations.
When United Way of Tarrant County came in $2 million short of its fundraising goals this year, Smyers attributed it to a number of factors. For one, there’s more competition for donor dollars.
But more fundamentally, the way people go about giving is changing. It’s technological, and also generational: Millennials are replacing baby boomers at work, and Smyers said his organization has been trying to figure out what millennials want.
“We’re looking at the needs of the donor and then matching them with community requirements, community needs. Whereas before we kind of created this laundry list of community needs and tried to sell them to the donor,” Smyers said.
Making difficult but necessary cuts
Some 42 nonprofits rely on United Way of Tarrant County for funding. Girls Inc. CEO Jennifer Limas said news of the shortfall and staff cuts were “alarming.” Funding from United Way counts for about 5 percent of her organization’s budget, but she says Girls Inc. relies on United Way in other ways, like bringing in in-kind donations for an annual fundraiser and helping to market its programs.
“There are a lot of other organizations that it’s going to impact in a tremendous way, a lot of services that can be lost, if we’re not partnering together to figure out how to get those resources funneling back through United Way and into the communities,” Limas said.
In recent years, United Way of Tarrant County has been working to re-jigger its operations to go beyond its role as primarily a pass-through organization for big and small donors. It’s narrowed its funding to groups that focus on their core issues of education, financial stability and health. The organization works with companies to engage people in volunteering and short, targeted drives so that it's building more than a transactional relationship with donors.
Last year, United Way launched an incubator to help new organizations become more sustainable and stopped taking a fee from donations so that 100 percent of donations now go directly to designated programs and organizations.
TD Smyers said cutting staff positions by a third – a combination of layoffs, early retirements and eliminating unfilled positions – is painful but necessary.
“We’re not just relying on hope. But we’re looking at it hopefully,” Smyers said. “We’ve restructured ourselves, we’ve reshaped the organization, we’ve adjusted our business model, we’ve adjusted our impact model, and we believe we’ve done that in a smart way that’ll bring more resources to the social fabric of our community here in Tarrant County.”
Connecting with a younger donor base
Jacque Lambiase said United Way of Tarrant County isn’t alone in struggling to reach millennials. Lambiase teaches strategic communications at Texas Christian University and works a lot with nonprofits. She says when it comes to donations, millennials are different than their parents.
“One thing we know about millennials is that they want a high-touch experience,” Lambiase said. “They don’t just want to give money, or go to the gala and be very disconnected from the organizations they’re helping. They want to roll up their sleeves and help.”
Lambiase said United Way has a lot going for it: For almost a century, it’s been an essential part of the local social safety net, shepherding tons of small donations to organizations that serve people in need. She said it’s a logical proposition that appeals to her. She’s long been a supporter of local United Way organizations, as her father was before her.
“However, that logic doesn’t always transfer to new audiences who also need that emotional appeal,” Lambiase said.
Lambiase said appealing to donors has gotten harder. There’s more competition for donors’ dollars and attention. So, she said nonprofits need to use social media and other forms of communication to not just ask for money but also to show off the work that they’re doing.
“They need logic, emotion and authority. And I think United Way has those in spades. They just have to learn to use all of those appeals across all of those many channels,” she said.
The good news for United Way of Tarrant County is that philanthropic giving is on the rise across the U.S. It’s just a matter of figuring out how to convince those new, younger donors that a 95-year-old nonprofit is the right cause for them.