It may come as no surprise that revenue has dropped once again for the United Way’s Twin Cities chapter. On Tuesday, the organization reported revenue of $68.6 million for 2018, marking a $7 million decline from the prior year.
The nonprofit’s leaders say that figure is “in line with projections.” And going forward, they plan to gauge success based on more 'holistic metrics.'
That means evaluating not just donations, but also how well the organization addresses the community’s need for stable housing, food, education, and economic opportunity.
“Greater Twin Cities United Way has moved well beyond your ‘grandfather’s community chest’ model,” said United Way board chair Tim Welsh in a statement. “We take a long-term, holistic approach to serving the community because it takes more than fundraising to make significant impact.”
The shift in focus could end up being a good thing for United Way, according to Kate Barr, president and CEO of Propel Nonprofits, an organization that provides services for Midwest nonprofits. For nonprofits, success doesn’t always mean getting bigger every year, she says.
In fact, sometimes, it could mean staying the same size, or even shrinking from year to year.
“Getting bigger is not necessarily the way to have most impact and be most valuable in the community,” she says. “I think this is something that’s pretty imperative for every nonprofit—to be able to identify what matters.”
Historically, of course, United Way’s impact has been measured by the amount of dollars it’s redirected to the community. If the nonprofit is changing its desired outcomes, though, it makes sense to retool its barometers of success, Barr says.
United Way’s 2018 community impact report gives a general sense for how well the organization has met its own goals over the past year. For instance, the nonprofit notes that it spent $31.7 million on stable housing initiatives in 2018.
The community impact report also says that United Way spent more than $22 million on education-related initiatives and $11 million in economic opportunity funding.
The organization plans to continue evaluating these metrics “on an ongoing basis,” CEO John Wilgers said in an email. United Way developed the metrics in partnership with its board, leadership team, and nonprofit partners, he noted.
The decline in the United Way’s donations mirrors a national drop in individual giving. The latest Giving USA report notes that giving by individuals fell 1.1 percent in 2018.
However, it’s still too soon to say if the decline is simply a blip or a new trend, Barr says. But one thing is clear: The way people are donating is changing. In the past, so-called “federated giving” was a popular option for many folks. That means sending donations to larger organizations like United Way, which then passes the funds on to other organizations.
“There are lots and lots of options for how people give now, especially with online giving options and online giving portals,” Barr says. “There’s not really any indication yet that says giving is going down. If anything, it’s staying kind of flat, but it’s happening differently.”
United Way has rolled out a few initiatives to capture the shift in donations. For instance, last year, the organization launched the Salesforce Philanthropy Cloud, a digital platform for year-round giving. The nonprofit has tried to garner more donations via social media, too.
The organization is exploring other ways to boost revenue, too. For instance, United Way is piloting a new fee-based consulting model. Services could include helping companies develop corporate social responsibility strategies, according to Wilgers.