Develop Your Investment Mindset
Does your United Way have an investment mindset? If not, you need one.
YOU CANNOT CUT YOUR WAY TO SUCCESS
Board members frequently think of their United Way like a business and when workplace campaigns decrease the expectation is that United Way will cut costs. But rather than cutting costs across the board, board members feel that partner agency funding is somehow “exempt” and that cutting costs needs to come from their United Way’s operations.
United Ways cut costs in many ways including; layoffs, reducing staff from full-time to part-time, not providing cost of living adjustments or raises, cutting benefits, eliminating marketing activities, cancelling special events, reducing office hours, moving to a smaller office, no longer thanking donors individually, and even merging with other United Ways.
United Ways that are continually cutting costs because of declining workplace campaigns have a “cost” mindset. United Ways with a cost mindset think of what they do like a manufacturer or commodity business. They are trying to raise money and pass it through for the lowest cost possible. They want donors to give to them because they are a low-cost operation, which they often demonstrate by bragging about their low administrative costs.
But cutting costs is unsustainable over the long run, because at some point there will be no costs left to cut.
INVESTMENT MINDSET
An investment mindset means your United Way invests in people and activities that create greater impact, resources, capacity, and capability. Investing in people is not considered a “cost” for these United Ways, it is considered an investment that results in greater value.
Examples of an investment mindset include:
A United Way that hired a part-time person to develop their planned giving program and has secured several million dollars in planned giving commitments in just a couple of years.
A United Way that hired a person to develop a corporate sponsorship program that raises nearly a million dollars a year for their work.
A United Way that hired a grant writer who secured several hundred thousand dollars’ worth of grants in their first year.
A United Way that outsourced their annual special event fundraiser to an event planner and raises 10x the cost of the event planner’s fee.
DEVELOPING YOUR INVESTMENT MINDSET
Here are five steps for developing an investment mindset at your United Way:
Your board must commit to the long-term success of your United Way by not cutting costs. Take the amount of money that is raised and cover all of the costs of operating your United Way FIRST.
Allocate the remaining money to partner agencies. Do not make commitments for partner agency funding until you have the funds in-hand and have covered your United Way’s operating costs. This may require a one-year period where you do not make any allocations to partner agencies so you will know how much money you will have to allocate instead of hoping you will be able to make your campaign goal.
Invest in keeping great people. If you have great people on staff, don’t lose them due to cutting costs. Nearly every week, United Way CEOs and Executive Directors tell me how they have lost a valued team member who left to take a better paying position elsewhere. Be sure to invest in paying great people at rates similar to other positions in your market and provide them with appropriate cost of living adjustments. This is especially true for one-person United Ways. The cost of losing a great executive director and having to find a new one will be higher in the long run than paying the executive director what they are worth to keep them. The big unseen cost of staff turnover is the time and effort required for the new person to start all over again creating relationships.
Invest in diversifying your resources. Based on our research, workplace campaigns are not going to return to previous levels – they will continue to decline. This means your United Way should invest in people who can help you develop a planned giving program, a corporate sponsorship program, secure grants, and hold special events. These investments, done correctly, will always pay for themselves.
Change the focus of your United Way from how many dollars are raised to how many lives are changed. Instead of a fundraising focus adopt an issue focus. <<<insert link: https://www.focusedperspectives.com/issue-focus-transformation >>> The best way to grow revenue is by focusing everything you do on addressing an issue such as poverty, homelessness, or the graduation rate. You can do this by making it clear to donors what issue you are addressing, telling stories of how people are affected by the issue, and sharing stories of people who are no longer impacted by the issue. This approach to charitable giving empowers donors to change lives in their community as they will be able to see that their contributions result in fewer people living in poverty, more people who have a home, or more students graduating. An issue focus allows you to raise more money from grants, institutional sponsorships and support, planned giving, and special events in ways that are not possible when United Way acts as a middleman or pass-through organization. The vast majority of your donors will support your United Way to do this work and United Ways that have adopted this approach grow their revenue.
CLOSING THOUGHT
Failing to invest in your United Way is one of the top reasons why United Ways are failing.