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Controlling Choice

The Triangle United Way has opened its campaign to more groups, but some wonder how far the welcome extends.

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For once, Dave Austin feels he has a real choice in this fall's United Way campaign. For years, the types of groups to which the Durham resident wanted to contribute--activist organizations like Student Action with Farmworkers and Southerners for Economic Justice--were left out of the United Way's annual drive. But this year, for the first time, the Triangle United Way has agreed to include members of North Carolina Community Shares--an "alternative" fund-raising federation that Austin helped found--in all of its workplace campaigns. As part of the United Way's expanded "Donor Choice" program, Triangle residents can direct their United Way dollars to social-change nonprofits under Community Shares' umbrella.

Though that's long-awaited good news for Austin, he's got some lingering concerns about how much the campaign ultimately will benefit Community Shares.

"I'm still a little anxious about it," he says. "A lot is going to depend on how this is promoted--what the United Way's PR apparatus will do."

Such worries are shared by others in the federation because of the strings attached to joining the United Way drive, says Brian Lewis, Community Shares' executive director. The agreement with the United Way requires the community federation to pay administrative fees of anywhere from 12 to 21 percent, once uncollected pledges are accounted for. Community Shares must also adhere to strict limitations on campaign advertising, sparking concerns about whether the federation will receive its fair share of the campaign spotlight.

Still, the potential benefits appeared too good to pass up. Last year, when Community Shares was allowed to participate in a few of the United Way's municipal campaigns, pledges to member groups went up by 28 percent.

"The thing that generates growth for us is broadening our pool of donors," Lewis says. "We usually raise about 1 percent of what the United Way brings in. They just broke the $25 million mark [last year]. If we can bring in 1 percent of that, you can imagine the difference it will make for our organizations."

In the 12 years since Community Shares was founded, social change nonprofits have made slow progress in gaining access to workplace fund-raising drives that traditionally have been the exclusive turf of the United Way. Even after the Triangle United Way began to honor donations to nonmember agencies in recent years, "it was still a big hurdle just getting people to know that there were these other openings for giving" to organizations outside the charitable mainstream, Austin says. The doors opened a little wider last year, when the United Way agreed for the first time to list members of the Environmental Federation of North Carolina and Community Health Charities of North Carolina on its official campaign roster. As a result, contributions to the environmental umbrella group rose by 36 percent during the previous year, while gifts to the health group rose by 40 percent, say leaders of those organizations.

Community Shares' supporters hope being part of the United Way campaign will do similar things for their federation's bottom line, but they aren't celebrating quite yet. Already, there are signs that the United Way system might not be such a good fit. One Community Shares member--the Durham-based North Carolina Waste Awareness Reduction Network (N.C. WARN)--won't be listed in the United Way campaign this year because it failed to meet a requirement that agencies participating in the drive spend half of their time doing "human service" work with clients. Lewis says the United Way raised similar questions about two other Community Shares member-groups, but after reviewing information about their programs, decided to include them in the campaign.

N.C. WARN leaders believe they are being shut out because of their organization's longstanding criticisms of Carolina Power & Light--one of the United Way's key corporate supporters. Triangle United Way officials insist that the environmental group simply didn't meet the standards for participating in the campaign--a problem they say has befallen even some United Way-member agencies in previous years.

While Community Shares leaders aren't happy about all aspects of their agreement with the United Way, they're committed to seeing it through for the short-term.

"We know we're going to get some criticism for doing this," says Bethany Chaney, chair of Community Shares' board. "But it's something we have to try, at least once."

Nationally, alternative fund-raising groups that have been included in United Way campaigns have reported mixed results, says Kevin Ronnie, director of field operations for the National Committee for Responsive Philanthropy in Washington, D.C. Though many community fund-raising groups have seen a rise in donations, those increases haven't always been enough to justify the fees and marketing restrictions imposed by the United Way. Marketing is important because unless donors know they can choose to direct United Way dollars to community federations, those groups don't receive any funds.

"Success usually comes about if the United Way allows a choice campaign to proceed in an unimpeded way--when it's not buried or hidden," Ronnie says. Unfortunately, he adds, most of the donor choice programs the United Way has developed don't allow community federations enough control over publicity and outreach. That may be one reason why over time, the financial gains those federations have made as part of the United Way have tended to stagnate.

Why does the United Way want to include community federations in its workplace campaigns? Ronnie points to studies by his group that show that in many communities, alternative fund-raising federations are growing faster than the local United Ways.

"The dilemma for the United Way is how to control choice," he says. "They are laying a bet that they'll have more success at controlling the spread of choice by having these [alternative] guys inside the campaign rather than outside."

United Way leaders counter that their programs are a response to the changing desires of contributors.

"Our donors have interest in a wide and eclectic package of organizations, and we don't want to dissuade their interests," says Tom Dugard, president of the Triangle's United Way. "If we are given the liberty of being inside that workplace, we have to give donors liberty" over where to send their contributions.

Allowing community federations to participate in the campaign certainly hasn't hurt United Way fund raising. The Triangle United Way has set fund-raising records for each of the past three years. This year's goal of $26.7 million is 6 percent higher than the $25 million raised last year.

But at the same time the United Way is giving donors more options, it's also trying to rein in giving to designated charities--including those in the alternative networks. Since the start of its campaign in September, the Triangle United Way has been heavily promoting its Community Investment Fund, a pool of money that the United Way allocates to specific programs. Nonmember groups get none of those dollars.

"The value of the United Way is not just as a fund-raiser. If that's all we were, we'd be out of business by next year," Dugard says in defense of his organization's push for fewer directed gifts. "Our value is in balancing the needs of the community [by allocating funds]. When people designate their gifts, they diminish that capacity."

Ronnie, of the national committee, says directed gifts may be a problem for the United Way, but not for philanthropy in general.

"United Way may be finding they have less money to allocate, but that doesn't mean there is less money being raised," he says.

Jim Warren, head of N.C. WARN, says that by discouraging directed gifts, the United Way ensures that funds won't be shared with agencies it considers too controversial.

"What they're really saying is, 'Let Daddy decide where the money goes,'" he notes.

Even if the United Way drive is a financial success for Community Shares, there are still risks involved.

"I told my members that whatever growth we see this year, the bottom could fall through next year if the United Way says, 'Let's not do this again,'" says Lewis. "What we have to do is create a place where the donors want to give to us and ask to keep giving to us."

Austin says it's now up to the community federation to keep the United Way accountable and make sure that member groups reap the full benefits of the campaign.

"Umbrella groups [like Community Shares] still have to do the work within a campaign, even when it's ostensibly open, to make sure that it really is open and that they're represented faithfully to the community," he says. EndBlock

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