University Times

This year, United Way of Allegheny County is changing its fund-raising strategy “to restore parity in overhead support” which, indirectly, will increase funding for unrestricted gifts, according to United Way spokesperson Bob De Witt.

“United Way will make additional dollars available to address critical needs by ensuring that the cost of operating the organization is proportionately shared by all donors and agencies,” De Witt said in an Aug. 19 prepared statement. ”There will be a charge on all gifts at the rate reflecting the overhead of United Way, currently 15 percent.”

In prior years, the brunt of overhead costs has been borne by the non-profit agency’s general fund of unrestricted gifts (now called the Impact Fund), while a flat fee per designated gift ($6 last year) was charged to cover processing costs on those gifts, according to the United Way.

The new strategy is expected to bolster by $1.5 million the two-year-old Impact Fund, a pool of unrestricted contributions allocated to the 71 partner agencies deemed by United Way to deliver measurable results in improving the quality of life in the county. These partner agencies fall into six areas: children and families; health and mental health; seniors; housing; neighborhoods, and workforce development.

United Way met its overall 2002 campaign goal of raising $39 million, but for the fourth time in five years, allocations to United Way’s partner agencies declined. In 2002, the Impact Fund garnered $19.7 million, a drop of 26 percent over the past three years, for those agencies, according to De Witt.

In 2001, designated gifts, first introduced in 1982, overtook unrestricted donations for the first time. Prior to 1982, United Way (and predecessor organizations) committees allocated funds.

“United Way allocates [Impact] funds based on its assessment of agency management effectiveness, program results and prioritization of critical needs,” De Witt said. Local volunteer experts who serve on six United Way Impact Councils provide guidance for this task.

De Witt added that United Way expects to lower its overhead costs to 10 percent in future years by moving pledge processing from a paper-based to an on-line system; by outsourcing non-core operations such as information technology, and through strategic alliances, such as the United Way’s partnership with Robert Morris University, which is expected to enhance the management effectiveness and oversight of participating agencies.

Pitt’s United Way campaign steering committee supports the new strategy, said campaign co-chair G. Reynolds Clark.

“It’s too early to tell what the effect, if any, will be on giving” with this change in approach, Clark said. “But we believe in the philosophy behind the change. As a cooperative partnership, we all should share in the operating costs. We’re all in this together, so I look at this from a positive standpoint. We’re asking our people here to consider giving to the Impact Fund, which benefits many needy and worthy charities.”

Clark, who has been volunteering for United Way for many years, said that the original thinking behind promoting designated gifts in 1982 was to build the total amount of dollars raised. “And there was a surge of giving in the late ’80s and into the ’90s. It also allowed the agencies themselves to be more proactive in their fund-raising [by touting their individual services]. So it had a positive effect, including in giving from the corporate community,” he said.

“We think the United Way is still the best way to help the whole community. We also need to appreciate the efforts United Way is making to lower its overall operating costs,” Clark added.

But not all area organizations are as supportive of the new United Way strategy. In a memo obtained by the University Times, Children’s Hospital of Pittsburgh President and CEO Ronald L. Violi urged all the hospital’s employees to bypass the United Way and give directly to a new Children’s “Reach Out to Kids” internal campaign.

“We are encouraging employees to make contributions directly to Children’s through the Reach Out to Kids instead of using United Way as a conduit for their donations to the hospital,” Violi wrote in the Sept. 4 memo. “That’s because this year the United Way is assessing a 15 percent fee on contributions such as those designating Children’s as the intended beneficiary. That’s why staging our own fund-raising campaign makes sense and will prevent the loss of potentially thousands of dollars to United Way’s new fee.”

Violi added that the Reach Out to Kids target goal is $110,000, and that “every dollar will go to Children’s Hospital.”

Violi also wrote that United Way pledge cards would be made available to those who wished to give to the United Way.

Children’s spokesperson Marc Lukasiac told the University Times that as of Oct. 1 the internal campaign had raised $97,000. He said final numbers for the campaign, which ended Oct. 3, will not be available for several weeks. “But we feel confident that we’ll reach our $110,000 goal. The response has been good,” Lukasiac said. “And Mr. Violi made it clear in the memo that [the internal campaign] is optional and employees still have the option to give to the United Way if they want.”

—Peter Hart