United Way
United Way is an international network of over 1,800 local nonprofit fundraising affiliates. Prior to 2015, United Way was the largest nonprofit organization in the United States by donations from the public. Individual United Ways mobilize a single fundraising campaign to raise money for various nonprofits, with most donations coming through payroll deductions.
United Way Worldwide
United Way organizations raise funds primarily via workplace campaigns, where employers may solicit contributions on United Way's behalf payable through automatic payroll deductions. After an administrative fee is deducted, funds raised locally by United Way are then distributed to various nonprofit agencies within those communities. Major recipients have included the American Cancer Society, Big Brothers/Big Sisters, Catholic Charities, Girl Scouts, Boy Scouts, and The Salvation Army.Membership in United Way and use of the United Way brand is overseen by the United Way Worldwide umbrella organization. United Way Worldwide is not a top-down organization that has ownership of local United Ways. Instead, each local United Way is run as independently and incorporated separately as a 501 organization. Each affiliate is led by local staff and volunteers and have their own board of directors, independent of United Way Worldwide or a parent organization. Some United Way affiliates, like the Central Community Chest of Japan, choose not to use the United Way name and branding.
Local United Ways pay membership dues to United Way Worldwide for licensing rights to the United Way brand and must meet criteria to maintain their membership status. The membership dues to United Way Worldwide are a portion of the total funds raised by each local United Way. U.S. affiliates pay a membership fee of 1% of their total funds raised to United Way Worldwide. The structure has been described as similar to a "global franchise operation" by Forbes magazine.
Internally, United Ways are classified by how much funds they raise on a scale of 10 levels. Metro 1 is the highest-ranking which requires raising at least $9 million annually.
Functions
United Ways are federated fundraising bodies that mobilize a single fundraising campaign to raise money for a diverse range of nonprofits. United Ways raise funds and determine how to best distribute them.Fundraising
United Ways raise funds primarily via company-sanctioned workplace campaigns, where the employer solicits contributions from their employees that can be paid through automatic payroll deductions. 57% of United Way's donations come through payroll deductions while an additional 20% from corporate donations.United Way also administers many of the annual workplace campaigns for federal employees in the US called the Combined Federal Campaign.
Nonprofit agencies that partner with United Way usually agree not to fundraise while the United Way campaigns are underway.
Distributing funds
Money raised by local United Ways is distributed to local nonprofit agencies after an administrative cost is deducted. In 2002, the average administrative fee was 12.7%. Where United Way distributes the funds depends on if the donor designated or restricted their donation to a specific organization or cause.Designated donations (donor-choice)
Almost all United Ways allow donors to specify which nonprofits should receive their funds. Some United Ways let donors choose which focus area or social problems they wish to support, which allocates their gift to a relevant subset of their charities in its network. Some United Ways allow donors to direct their gifts to any nonprofit while some only let donors give to any charity in their region or anywhere in the country.About a quarter of United Way donations in the US are currently designated.
Undesignated donations
If the donor does not earmark a specific cause or organization for their donation, the money goes into a general fund and are allocated to areas of greatest need by the local United Way's volunteer committee.Traditionally, United Ways would grant funds that can be used for any purpose by the recipient nonprofit. However, many United Ways have started giving funds to nonprofits only to be used for specific programs run by the nonprofit. These funds are provided in the form of contracts in which the nonprofit must deliver programs and are subject to review and audit by the United Way's volunteer committee.
History
Origins in the Community Chest movement
The organization has roots in Denver, Colorado, where in 1887 Frances Wisebart Jacobs, along with the Rev. Myron W. Reed, Msgr. William J. O'Ryan, Dean H. Martyn Hart and Rabbi William S. Friedman began the Charity Organization Society, which coordinated services between Jewish and Christian charities and fundraising for 22 agencies. Many Community Chest organizations, which were founded in the first half of the twentieth century to jointly collect and allocate money, joined the American Association for Community Organizations in 1918.The first Community Chest was founded in 1913 in Cleveland, Ohio, after the example of the Jewish Federation in Cleveland—which served as an exemplary model for "federated giving".
The success of the Cleveland Community Chest led to a modest spread of the concept to other cities. World War I helped disseminate the concept of the Community Chest as the model for federating giving was used to support wartime fundraising efforts. Of the 300–400 War Chests that existed during the war, most converted over to becoming Community Chests after the war ended.
The number of Community Chest organizations quickly increased from 245 in 1925 to almost 800 by 1945. An observer on WWI's effects on the movement said, "there is no doubt that the federation movement gained a momentum in one year that would have required ten years of peacetime activity." Mirroring the changing terminology, the American Association for Community Organization changed its name to the Community Chests and Councils, Inc in 1927.
Further consolidation into United Funds
also impacted the Community Chest movement. National health research charities, like the American Red Cross and the American Cancer Society, gained government support during the war. These health agencies used their centralized headquarters and nationwide fundraising reach to run separate and competing local fundraising campaigns alongside the Community Chests.The competing appeals between the health organizations and Community Chests resulted in exhausting and disorganized situations. Business leaders were concerned that the barrage of donation drives in the workplace would reduce productivity. The Ford Company issued a well-publicized press release stating that the automaker lost $40,000 in executive time and employee productivity with each plant solicitation. A committee at Ford led by Henry Ford II told charities to "federate or perish. We'll contribute to charity once a year or not at all."
This outgrowth of objections from business and labor leaders led to the formation of the first United Fund in 1949 in Detroit, Michigan. Under the motto of "Give Once for All", the United Foundation hosted a single campaign that included Community Chests, local charities, and some of the national charities. This first campaign in Detroit was a success and had raised more in the single campaign than the disparate efforts has yielded the year prior. The single workplace campaign model quick spread elsewhere and, by 1953, there were over 1,200 United Funds.
These campaigns, which united Community Chests with other organizations, commonly used the "United" prefix in their names. In 1956, Community Chests and Councils, Inc. changed its name again to United Community Funds and Councils of America to reflect the shifting naming used by its affiliates.
The "big three" national health drives objected to handing over control of their fundraising efforts and refused to participate in a single workplace drive. The focus of local community fundraising also conflicted with the mission of the national health organizations. Many United Funds supported health causes locally, with funds going to charities in their local communities. By the late 1960s, the conflicts between United Funds and national health charities resolved itself with many of the charities folding into the United Fund or retreating from competing.
Formation of the United Way
After WWII, the United Fund took a similar role to the modern United Way. They focused almost exclusively on workplace fundraising. The end of the excess profit taxes weakened the incentives for corporate gifts after World War II. Campaign leaders looked to employees in workplace as an opportunity to make up for the expected loss. In 1956, workplace giving from employees accounted for 39.6% of the revenue of United Funds and Community Chests. This was the first time that workplace giving exceeded corporate gifts. With federal government's move to allow compulsory Social Security and income tax withholdings in 1942, the technology of payroll deductions became a vehicle to allow employees to give incremental gifts. The strong economy in post-war economic boom helped these campaigns to grow at a rate of 5–10% annually.United Community Funds and Council of America, the national association of United Funds, expanded its role in the 1970s. Historically, it served a similar role as a trade association to the United Funds and lacked authority in shaping their affiliates. Its thousands of affiliates went by no fewer than 137 different names and pursued thousands of different charitable objectives.
To give the organization a national identity, the United Community Funds and Council of America adopted a new name and logo. The organization announced on July 13, 1970, that it would change its name from "United Funds and Council of America" to United Way of America. Bayard Ewing, the president of the fund said: "We wanted a simple name that would give people a clearer and more descriptive idea of what our organization is trying to do. I hope that the name will be adopted by all of our 2,260 fund‐raising units throughout the country." The new logo was designed by graphic designer Saul Bass in 1972. Aramony traveled to major cities to persuade the affiliates to adopt the logo and brand name.
It moved from New York City to Alexandria, Virginia, in 1971.
In 1973, United Way of America formed a partnership with the National Football League.
By 1974, there were enough United Way organizations internationally to demand the kind of support provided by the national organization, United Way of America, and United Way International was born. Its staff spoke eight languages, with a Board of Directors from more than seven countries working with member organizations. Christopher Amundsen served as interim president during a yearlong search.