Twin Cities United Way's declining revenue slowed in 2020 as nonprofit faced needs in pandemic

The COVID-19 pandemic shuttered workplaces and led some employers to furlough or lay off workers, prompting many companies to scale back or cancel the kind of workplace giving campaign that Greater Twin Cities United Way has long relied on.

The nonprofit, one of the largest of 1,200 United Way chapters in the United States, saw its revenue drop in 2020. But the percent of decline was lower than in previous years, thanks to offsetting revenue from new sources.

According to financial information United Way reported this week, the organization drew $57.7 million in revenue in 2020, about $3 million less than in 2019. But it was less of a decline than the nonprofit had seen in previous years.

"Workplace campaigns aren't generating as much revenue anymore," CEO John Wilgers said. "And therefore, we're relying on other sources of revenue to help make up that difference and bring stability back to our revenue stream."

Twin Cities United Way, among the largest social services nonprofits in Minnesota, is in the fourth year of a long-term plan to rely less on workplace giving campaigns, as donors shift from payroll deductions to giving directly to charities of their choice.

To respond, United Way raised money around specific issues in 2020, such as $5 million for COVID-19 aid to nonprofits. The organization won more government contracts for services and added 20 companies to its online workplace giving tool, Salesforce Philanthropy Cloud. That's up from four companies in 2019 that paid for the service, which helps employees research charities, target donations and sign up to volunteer.

Before the pandemic, workplace giving campaigns were already a "challenging revenue stream" for United Way, Wilgers said. When companies moved to remote work, it became even harder for them to mobilize for donations, and some opted out altogether knowing their employees were facing economic stress, he said. To curb the spread of the virus, fundraisers and volunteering events moved online.

The Twin Cities United Way's yearly revenue peaked in 2014 at $102 million. By 2017, revenue fell to about $76 million, prompting United Way to cut grants and lay off nine employees.

In 2020, United Way cut expenses by $8.9 million by delaying filling jobs and by trimming administrative, travel and entertainment costs. But no one was laid off, and United Way didn't reduce grants to nonprofits, Wilgers said.

Instead, United Way cre­ated several funds, such as the COVID-19 relief fund, and then doled out $3 million to small, minority-owned businesses — with the help of other foundations — to rebuild after the civil unrest in Minneapolis and St. Paul after the murder of George Floyd.

United Way has faced questions from current and past employees about internal racism and turnover of employees of color. In June, board members and employees began a nine-month "equity journey" focused on racial reconciliation.

The organization also teamed up with the Minneapolis Foundation and the St. Paul & Minnesota Foundation to make changes to the criminal justice system through meetings, educational efforts and examination of policies or testifying at the Legislature.

United Way works with about 500,000 Twin Cities residents each year. It also operates a 211 helpline, which assists residents with finding services, such as shelter and housing. Calls to the helpline jumped 300% at the start of the pandemic before stabilizing to normal levels.

"Our response to the pandemic, I think, was strong and quick and decisive," Wilgers said. "But the pandemic had the greatest impact on the people in our community that we already every day worked to serve and support, and that's people living in poverty and people of color."

Kelly Smith • 612-673-4141