United Way thought strategically, but not maturely

Early in my career, in the early 1970s, under gentle pressure from my employer, I signed a form allowing $2 to be deducted from my paychecks and given to United Way. I didn't really know anything about UW, but giving was expected, and even with the financial strain of a young family man, I figured I could handle the 50 bucks a year. Besides, it was tax-deductible.

A few years later, I began learning a lot more about UW, because I went to work for American Red Cross, which at the time was the largest recipient of United Way funding. I stayed with Red Cross for 28 years, eventually becoming the CEO of my field unit, and later served for four years as executive director of another UW-funded agency, Crisis Connection.

Over those years, my personal contribution each year grew to almost 50 times the two bucks per check I put in initially. My knowledge of the organization, and my regard for its work, became much greater as well. So, like many others, I regret seeing Greater Twin Cities United Way's decline in fundraising results and in community influence ("Charities scramble as United Way wanes," April 1).

There are several reasons why UW giving is decreasing, locally and nationally. In the 1970s, a much greater proportion of workers were in easily reached downtown locations, amenable to workplace campaigns. We baby boomers were tolerant, as today's millennials are not, of gentle and even sometimes not-so-gentle pressure from the boss. And today's available technology enables us to avoid intermediaries for all kinds of goods and services that we consume, charitable giving being no exception.

I believe, however, UW hastened its decline with one decision that was superficially strategic, but not mature. It embraced donor designation.

Confronted by a consumerism movement that pervaded most sectors of the economy, United Way, initially with a reluctance that evolved into full-throated enthusiasm, decided to become a pass-through organization. Donors could designate any nonprofit organization to receive their gift, and UW would pass that gift along, no further strings attached. It worked the other way, too: Donors could say they did not want their gift to go to particular organizations.

This decision could be readily justified by marketplace logic. Consumers were demanding more choice and more personal control, and UW was prepared to give its consumers — its contributors — just that. It was being responsive to the marketplace.

The deeper flaw in its strategy, however, was that UW gave away a large part of its value proposition. No longer could UW claim the valuable turf it once owned exclusively: as the entity that could fairly and competently evaluate funded agencies. Previously, it could vet the agencies it funded, looking at their management quality, the robustness of their programs and, most important, the results they achieved. It could provide its contributors with resounding assurance that their funds would be deployed effectively. All too blithely, UW backed away delivering this value, instead becoming a fiscal intermediary in a society that has less and less need for intermediaries.

United Way (including its predecessors — United Fund, Community Chest, Red Feather) was probably one of the great ideas of the 20th century. It enabled community-minded people to give efficiently, once, yet have their gift allocated to dozens and even hundreds of nonprofits doing good and important work. All products and services, and all ideas, have a finite life cycle. They all come to an end, and the UW idea will sooner or later (and it's looking like sooner) come to an end.

Our Greater Twin Cities United Way has had a terrific run. It is the largest local United Way in the country, even though there are 13 metropolitan areas that are larger than ours. Through its funded agencies, it has done a lot of good over the decades. Although it's declining, it will be around for a while.

I just wish the strategic sensibilities of United Way — nationally, not just here — had been more acute. That it had not conceded perhaps its greatest asset. Staying in the vetting business might have extended UW's useful life by an additional 20 years or more.

David J. Therkelsen, of Minneapolis, is a former nonprofit executive and educator; he was CEO of American Red Cross in the east metro area and later was executive director of Crisis Connection.