Keeping our promise “to invest resources where they are needed most and where they will have the greatest impact”
Q & A
In the mid-nineties, the United Way movement adopted a new mission to become “impact” United Ways. This meant a shift away from the old federated fundraiser model to a new model focused on having positive, measurable impact in the communities that United Way serves. United Way Ottawa began its own journey to become an impact United Way more than a decade ago.
The changes are reflective of a larger trend in philanthropy, where increasingly donors expect their donations to achieve measurable and meaningful results. That’s why we made a new promise to our donors a decade ago: “To invest resources where they are needed most and where they will have the greatest impact.”
To keep that promise, we want to make sure that donations to United Way support both the good work of agencies and the lasting change our donors want to see in our community. These changes represent years of planning, of best practice research, and of consultation with donors, agencies and other stakeholders throughout the Ottawa community.
Even with the incredible generosity of our donors, we will never be able to raise enough money to address every need. So United Way chose to do the things that evidence tells us we can, that research tells us we must, and that our experience tells us we are best-positioned to succeed at.
United Way has gradually sharpened its focus over the past ten years to the point in 2011 where we were able to define ten clear goals to make real change happen in our city. Many donors still think of United Way as an organization that raises funds for other organizations – and that’s ok. That is something we do. But our core business is really bringing people and resources together, knowing that together we can have a much deeper impact on improving the quality of life in our community for everyone.
Our priority goals are focused on making life better for people who need help. For example, we fund programs that help children and youth to grow up great. We also invest in programs that help seniors, immigrants and new Canadians, people with disabilities and people living in disadvantaged neighbourhoods gain a sense that they are a vital part of our community. And we support programs that help the homeless, people with mental health and addiction problems and those in crisis to get the help they need to turn their lives around.
These goals address pressing needs in our community. They are designed to solve real problems. And over the long term, we know that these solutions will have a lasting effect on our community, making it stronger, healthier and safer for everyone.
This has always been true for United Way and always will be. For example, we have never funded environmental projects, even though environment initiatives are important for our community. However, it is also true that we have never been able to fund everything and we never will be. We can, however, show our donors that their contributions make a difference.
When someone gives to United Way, they expect us to make wise choices about where their money goes. At the same time, donors can designate their donations to the registered charity of their choice through United Way. This way, donors can give to the charities that are important to them.
United Way used to only fund agencies that were members of United Way. But the charitable sector has changed significantly over the past decade. There are many new agencies, different types of agencies, such as social enterprises, and with the ongoing shifts in Ottawa’s demographic make-up, our community’s needs have changed as well.
That’s why we introduced our first open Call for Proposals in the fall of 2010, inviting all agencies in Ottawa to compete for donor dollars and to help us fulfill our promise. The Call for Proposals process enables us to invest in programs that are aligned with community goals, that are capable of demonstrating impact, and that will accelerate our collective ability to make change happen.
We know that United Way’s efforts to sharpen its focus and to open up funding to all agencies have been difficult for some of the agencies that have relied on United Way funding for many years. Over the past several years, we have provided roll-over funding and notified them that our funding approach was changing. We also provided transition support to the agencies we previously funded that did not receive funding under the 2010 and 2011 Calls for Proposals.
By far, the most difficult part of this Call for Proposals process was reducing funding to some programs that we supported in the past. These programs are delivered by good people doing good things. We fully understand the disappointment that some of these agencies feel. With more resources, United Way could support additional programs.
Many agencies have told us that they think the process is clear and fair. In many ways, it is also less onerous that the process required for grants from other sources. Nevertheless, we continue to work hard to make it easier and more transparent every year. For example, we provide precise guidelines on how points are scored. For our second Call for Proposals issued on September 1, 2011, we introduced new tools, including a very easy online submission form. In addition, we offered extensive training through 18 information sessions on our priority goals and five proposal-writing workshops.
United Way’s fundraising fee is 15%, which is significantly lower than the national average fundraising cost of 26% according to Imagine Canada. This fee also compares favourably with other United Ways across Canada, especially considering the fact that Ottawa has a much lower base of available support from corporations than other major metropolitan areas, such as Toronto and Vancouver.
When a gift is made through payroll deduction, pre-authorized chequing or automatic credit card payments, there is a 5% adjustment for pledge loss to those charities which receive donor-directed or designated donations through United Way. However, this 5% charge is not money that United Way keeps. Historically, more than 5% of the pledges made through payroll deductions, pre-authorized chequing, or credit card are lost when people change jobs, banks, etc. One-time payments made by cheque or credit card are not adjusted for pledge loss.
It is worth noting, though, that donors tend to give more when pledging gifts than when making one-time gifts. What this means for agencies is that, in spite of the pledge loss adjustment, they are likely to receive larger and more gifts from donors than they would otherwise.
Our investments in community-wide initiatives and partnerships are focused on transformative change to the systems that support and serve vulnerable people in our community and they complement our investments in front-line community programs. Through these investments, we not only ensure that people’s lives are improved today. We also address the root causes of social problems, ensuring that the conditions that led to these problems are addressed.
Yes, this process is ongoing at United Way. In fact, the Board of United Way established an Impact and Investment Review Committee in August of 2011. Its mandate was to review United Way’s investment approaches to improve procedures and to ensure that United Way continues to invest donor dollars in a way that fulfills its promise “to invest resources where they are needed most, and where they will have the greatest impact.” In April 2012, the Committee presented its Report to the Board, which endorsed all 37 of the Committee’s recommendations. To date, United Way has implemented 12 improvements to its Call For Proposals process and has completed work on 10 of the recommendations. All of the remaining recommendations have been incorporated into our work plans.
United Way Ottawa currently employs 85 people*, which does not include the positions reserved for our employees who are on maternity or special leave. We reduced our staff complement in 2012 by 13 full-time positions. Our staff-per-dollar raised ratio is on par with many other United Ways, and is reflective of the nature of our donor base. More than 93% of the campaign funds we raise comes from individual donors. (For example, United Way Toronto has 200+ staff but raises more than $100 million).
* as at Apr. 2012
Donors can always designate their United Way donations to the charity of their choice and for many agencies, United Way designations are a cost effective way to raise funds for their organizations. Through designated donations, agencies gain access to our campaigns in more than 1000 workplaces with payroll deduction and in some cases, corporate matching of employee donations. On behalf of agencies, United Way takes care of fundraising, marketing, donation collection, processing, receipting, accounting and auditing, donor recognition and protection from pledge loss, which would otherwise represent significant administrative costs for a smaller organization. We are willing to assist any organization in taking advantage of the annual campaign to strengthen their own resources.
Questions or comments?
If you have questions, would like additional information, or have comments on our promise to the community please don't hesitate to contact us.