The Lightning Rod M/M Blog

Workplace Donor Names Revisited

Hi Patrick,

We are reanalyzing how we communicate with workplace donors. Can I ask you to address the questions that have been posed to me below? Unless things have changed, my understanding is that if a donor gives only through workplace, then we can only thank her/him, make her/him a member, send her/him our magazine and regular mailings, but not resolicit him. If that donor gives additionally through a non-workplace venue, then we are free to communicate as we wish (taking into consideration that they are giving monthly through payroll deductions and should be treated very well).

1.)    If a donor only ever gifts to us via workplace programs

a.       what are we allowed to send them?

b.      Invitation to membership?

c.       Our quarterly magazine or newsletters?

d.      Cultivation mailings? How are regular mailings that have both a program component and a fundraising component considered?

e.      How frequently may we contact them?

2.)    If a donor gives only via workplace programs and stops giving, may we solicit them? If so, how much time must elapse and how many times can we solicit them?

Hello, XXX -

The short answer is that you may do anything you want with the contact information, regardless of whether the donor gave to you via workplace only or workplace plus other.  There is no prohibition on re-solicitation.  There is no prohibition on re-contacting a lapsed workplace giver.

But what you MAY do and what you SHOULD do are, in our opinion, different.  The "Best Practices" are:

1.  Priority Number 1:  Thank in the spring, when you get the names, as soon as you can.  Do this periodically, every week or two.  Don't wait until all the names are in -- that's a five or even six month process (courtesy of a bunch of United Way PCFOs who are in no hurry to forward your names and regulators who won't make them).

2.  Priority Number 2:  Thank these donors again with a reminder letter in late September, just as the new campaigns are kicking off.  Sample letters are on your online portfolio in the donor names section.

Any contact in addition to priorities one and two is of secondary, lesser importance.

3.  Keep in mind that the reason the great majority of donors do not release their names and contact information is because the don't want to be re-solicited or even contacted.  Those who do release their names do so primarily because they want a confirmation that their gift has made it through the system, not because they want to enter into dialog. 

4.  Therefore, the approach that we recommend is to ASK the donors who release their names if they would like to receive ongoing reports on how their gifts are being used (the quarterly magazine, etc.).  Note in your ask that they may receive communications from you that may also contain requests for additional contributions, but that those requests are not intended for workplace givers like them but rather for those supporters who do not have an opportunity to give at work.  Workplace donors seem to appreciate your recognition that they are different (giving sequentially through payroll allotment).  If given a heads up about additional solicitations, they won't react unfavorably.  In fact, some will give an additional amount outside of work.  But if they don't affirmatively opt in, don't reconnect with them until Fall.  It is far easier to turn off a donor who has released his name than it is to capture him as a recurring giver.

5.  The majority of your names, if you are typical, are now email addresses, so make sure the magazine has an e-version

So, to summarize:

When thanking:  First, do not harm

And:  Thanking is more important than converting (converting from a workplace giver to an outside-the-workplace giver or an in-addition-to-workplace giver).

Finally:  In workplace fundraising, it is far more important to reach new givers than to retain old givers.  That's why advertising is essential.  Ands the best was to retain old givers is by not offending them with unwelcome additional solicitations.

Regards.

Outfoxing United Way's Restrictions On Donor Choice

Bear with me.  This is a little complicated...

When you receive checks directly from a local United Way it's because a contributor has "written in" your agency on his or her United Way pledge card. These contributions, referred to by United Way as "donor option" gifts, are transmitted to you after the United Way has subtracted a handling fee, typically 10-20 percent.

That is, those gifts used to be transmitted. These days it's more likely that instead of a check you'll receive a form or forms from the United Way you are required to complete and return to establish your "eligibility" to receive the gift, regardless of the fact that your contributor specifically named you to receive it.

Over the past several years most local United Ways have made it much more difficult for donors to direct their contributions to specific charities. United Ways have instituted additional fees to discourage donor option gifts or have added "local presence" or "category of service" restrictions or have required special donor option pledge cards that are difficult if not impossible to obtain.  Many have dropped donor option altogether.

Too often, much too often, the donor is never notified if United Way finds his designated charity ineligible. United Way just keeps the money. That's not ethical, but it appears to be legal.

Of course, your prospective workplace giver could simply decide not to participate in the United Way campaign, but the reality is in many companies there is still a strong expectation that loyal employees will support the company's United Way fund drive.

So the question is:  How do you accommodate constituents who wish to give to you through their workplace campaigns but who no longer can because of United Way restrictions?

Answer: Send them to the United Workers For the Untied Way Restricted Gift Receipt Service. (www.theuntiedway.org)

That site has a free service that enables your contributor to make a one-time or periodically recurring credit card "restricted" gift to the United Way. The restriction is that United Way must agree to honor your contributor's designation of your organization as the ultimate beneficiary if United Way wants the privilege (and profit) of processing the gift. If the United Way does not agree to honor the designation the gift funds are forwarded directly to you instead.

The contributor is able to print a receipt evidencing his gift to attach to his United Way pledge card when he turns it in.

It's a win-win-win result. The employee shows support for the company's campaign but keeps his freedom-of-choice in giving. The United Way gets its service fee if it is willing to respect the employee's instructions. And you get a contribution you otherwise would never have seen.

Our advice and counsel used to be that your organization should promote "donor option" as a giving option on your web site, in your newsletter, and in other communications with your constituents.

Now our advice is that you counsel your constituents to make sure their local United Way will honor "donor choice" before they attempt to support you at work, and if there is any problem or question about that to visit www.theuntiedway.org to take advantage of the Restricted Gift Receipt Service.

John Kelker

As reported in a February issue of the Illinois Times, Kelker over the past several years has conducted a campaign to deny other charities their legally-entitled equal access to municipal employee workplace charity fund drives and replace them with what effectively constitutes a United Way-only campaign.  (http://illinoistimes.com/gyrobase/Content?oid=oid%3A9592).

He's done it by bold-faced lying to municipal leaders, promising to manage an "open" campaign in their workplaces and then showing up with United Way biased pledge cards and policies.  Example:  if a donor makes a gift to United Way there is no surcharge deducted and no minimum gift is required.  If the donor attempts to give to a non United Way charity, there is a $25 minimum requirement and a 15 percent "handling" fee.

It's just not credible that the leaders of the affected municipal campaigns would tolerate this prevarication and abuse of trust.  What possible reason would they have to go along with it?  Unless...  Unless.  You know.

The State Attorney General should be taking a really close look at this.

Patrick's To-Do List For President Obama

Everybody else is giving him unsolicited advice. Why not me?

1.  Priority One: Junk all the government PCs and replace them with MACs. I'm totally serious about this.  Federal government IT is straight out of the stone age. The campaign was won with MACs. Want a smarter government? Use a smarter computer.

2.  An unGodly amount of nonprofit capital is tied up in foundation endowments and investments. Foundations seem to be more interested in perpetuating themselves in perpetuity than in making grants. The current "five percent a year" rule just isn't fast enough in confering a public benefit commensurate with the tax deferment benefit.  Solve the "perpetual foundation" problem with legislation that requires a foundation to go out of business within 20 years of its founder's death. Don't let someone purchase immortality with tax-deferred dollars.

3.  The GAO estimates that taxpayers "mis-report" their cash gifts to charity to the tune of $176 billion annually. Mis-report? Right. How many people do you think claim less than they actually gave. Sure, for gifts over $250 the charity is suppossed to issue a receipt, but what about gifts less than that amount?  Knowing that the chance of an IRS audit is slim, some people cheat.  Close this loophole.  Since a tax deduction for a donor results in additional income for the donor, shouldn't it be reported to the IRS by a third party like other income is?  Your employer sends Uncle Sam a W-2.  Your bank sends Uncle Sam your interest income.  Etc. etc.  Likewise, require that cash gifts be reported to the IRS by a third-party transmitter.  How could this be done without revealing to Uncle which charities you support, which would no doubt put a chill on giving?  Easy:  Encourage individual and family donor advised funds -- the "charitable checking accounts" of the philanthropic world. With goverment encouragement, and perhaps a tax-benefit carrot or two, the finance industry would soon make DAFs as common as the common checking account.  By giving through your DAF, the government would have independent documentation of how much you gave but not whom you gave it to. Marketed right, this idea would, I believe, result in an increase in giving overall because DAFs by their very nature periodically remind and encourage one to give.

4.  Prohibit public corporations from making charitable contributions.  This is shareholder theft of the basest sort.  Why should the company take your money and give it to somebody else?  That's the government's job.  If the CEO wants to write a fat check to the United Way, let him use his own money.  While you are at it -- and more to the point -- we need to overturn the legal theory that corporations are "people" and have citizen rights.  This monstrous travesty of legal logic is why corporations have more clout than the general public.

5. Appoint a Charity Czar to do czar-like things. I volunteer.

The United Way Scandal That Just Won't Die

Today the United Way of Central Carolina (Charlotte) released a report on its internal investigation into how its former CEO, Gloria Pace King, managed to engineer a pension package so outrageously generous that she was fired when the details of the pension became public.  Yes, even though the UW Board's executive committee had signed off on the plan, when it became public they threw Ms. King under the bus.

Now, with this new report, they've thrown her under the bus again.  According to the report, published today in the Charlotte Observer, Ms. King manipulated details of her proposed pension payout to triple its value.  Basically, what the UW Board is saying is "she fooled us."

Right.  Under the bus again, Ms. King.

Meanwhile, the United Way of America is conducting a survey of all local United Ways to make sure the King pension story in an anomaly.  The UWA will no doubt conclude that the remuneration and retirement plans at other United Ways are reasonable and customary.  Guess how many nonprofit professionals outside of the United Way would agree with that assessment.

Charlotte NC United Way - What A Mess!

Kudos to Reporter Kerry Hall and her colleagues at the Charlotte Observer for their expose on one of the most mismanaged United Ways in the country.  That they had the journalistic courage to do so is good news.  The bad news is that the Charlotte United Way was just doing what United Way of America told it to do.  That doesn't bode well for the rest of the UW system, but don't say we didn't warn them.

Details of the newspaper's reports are available at www.charlotteobserver.com, but here's the gist of it.  Charlotte has a number of large corporations that haven't gotten the word that coerced giving to United Way is not OK.  United Way is (was) a sacred cow in this town.  Then, a few months back, somebody leaked the details of the incredibly generous pension plan given to the UW CEO, along with her equally magnanimous salary, and the pledge cards hit the fan.

Next, the United Way board of directors, the same board that had authorized the pension payments, fired the CEO for accepting them.  (The excuse they gave was that with all the uproar over her salary and benefits she could no longer be effective.)

So the Charlotte Observer started taking a closer look at United Way's numbers, and that's how they discovered a total lack of accountability and transparency within the United Way itself.  It turned out that the fastest growing "program" funding was spending on four mysterious UW inhouse programs.  This is money that would otherwise have been allocated to community charities.  United Way allocated the funds to itself instead.  Only problem was, nobody at UW, execs or board, could explain what these programs do or what the UW employees that were hired to work on them do.  On the face of it, they appear to be a complete waste of money.  Or, as some have suggested, perhaps they were shells used to disguise overhead administrative costs as program costs.

As the newspaper pointed out, United Way is a stickler for vetting other charities' programs before it gives them your money but when it comes to their own programs it's a whole different story.  Who knew?

The tie-in with United Way of America?  The Charlotte UW was simply adopting the new operating paradigm UWA is pushing so hard -- increase UW infrastructure at the expense of outside charities and use the added capacity to "convene," "track trends in government funding," "study," and "advocate."  In other words, to turn United Way into a lobbying organization to push for more tax dollars for the social programs its "experts" favor.  Of course, the United Way system has no such policy expertise, but this approach will enable it to buy it.  The reason this is a good thing, UWA contends, is that it keeps the United Way "relevant" and "focused on the community" rather than being "a mere pass-through organization."

As I've said before, United Way's arrogant hubris is unbelieveable.

What is "Fat By Five"?

You've heard of the United Way program "Success By Six," but you probably haven't heard of the other program, "Fat By Five"?  Is it...

1.  United Way of America's new childhood nutrition initiative.

2.  United Way's 5-Year plan to increase United Way staff infrastructure five-fold.

3.  Code talk for the United Way system's incredibly overly-generous pensions for their top executives.

If you think you know the answer, reply to this post.

How Is The United Way Like Paulson's Bailout Plan?

Glad you asked.

1.  Give us billions of dollars.  Only we will decide how to spend it.  We can't tell you in advance how we'll spend it.  No second-guessing our decisions after we spend it.

2.  Do it now.  Don't wait. This is an emergency.  Our community is in crisis.

PS:  Don't ask us about the salaries of our top executives or about the generous golden parachute packages we've bought for them, courtesy of your previous gifts.

Glad you asked.

1.  Give us billions of dollars.  Only we will decide how to spend it.  We can't tell you in advance how we'll spend it.  No second-guessing our decisions after we spend it.

2.  Do it now.  Don't wait. This is an emergency.  Our community is in crisis.

PS:  Don't ask us about the salaries of our top executives or about the generous golden parachute packages we've bought for them, courtesy of your previous gifts.

Why Not Full Disclosure About the United Way List To Public Sector Employees?

These days it's not uncommon for United Way campaign solicitation materials distributed to donors to not include any list of "United Way Member Charities."  Many United Ways no longer have "member" charities.  In any case, the "new United Way" paradigm is to encourage gifts to the United Way community fund and discourage gifts to individual charities.  Including a list of charities with the solicitation materials would only remind donors they have a choice.

But when it comes to at-work fund drives for public sector employees at the federal, state, and municipal level, the participating federated groups, including the United Way, are required to list their respective member charities in the campaign materials.  In the cases where the United Way has no members it nevertheless "certifies" charities that it has persuaded to apply for inclusion in the fund drives under United Way's name.

Everyone turns a blind eye to the fact that these charities are not "members" in any commonly understand definition of the term.   When donors see the United Way list they presume those charities are somehow supported by or affiliated with the United Way.  They also presume that if they make a gift to United Way that money will be shared among the "members."  After all, that's the traditional federation model.

But nothing could be further from the truth.  United Way will not share any funds designated to it with these charities.  The only support United Way will give these charities is to pass along any gifts that have been designated by donors to these individual charities, and it will charge a 10, 15, or 20 percent service fee off the top for the privilege.

Isn't it time for this practice to be disclosed?  If a federation is not going to share gifts with the charities it lists under its name, shouldn't donors have right to know that?

Heart (less) West Michigan United Way

Heart of West Michigan United Way runs the funds distribution program for the Raymond James Investments company's United Way campaigns conducted around the country.  The company is a big United Way supporter, especially of the United Way of Tampa Bay, where the company has its headquarters.  Employees are strongly encouraged to support the United Way, but "write-in" gifts to individual charities are permitted so long as the gifts are to "organizations  whose primary mission focuses upon health and human service issues."

Guess who determines whether the intended recipient charity is a "health and human service" organization?  And guess who keeps the money if the charity is determined not to be a health and human service organization?

Last fall a Raymond James employee in Tampa Bay made a designated write-in gift to a charity the donor had supported for years.  In due course the Heart of West Michigan United Way contacted the charity and asked it to provide evidence that it met the health and human service criteria.  The charity did so.  A few weeks later the United Way wrote back, saying:  "After careful review, it has been decided that the PRIMARY mission of (charity) is not health and human services."

And what does this charity do that makes its PRIMARY mission NOT health and human service.  Wait for it...

It provides material support to orphanages and helps couples adopt orphans.

To add insult to injury, the United Way's letter pointed out that the charity's application had been reviewed by the Vice President of Resource Development -- in other words, by the executive responsible for bringing in money to the United Way.  Conflict of interest anyone?

There was no mention of an appeals process in the letter, but the charity appealed anyway and eventually prevailed.  The charity eventually got the gift, about six months after the donor had given it, with 10 percent taken off the top as United Way's "service" fee.

We asked the United Way in writing  whether the donor would have been notified had the charity not eventually prevailed and, if so, would the donor have had the option to have the gift refunded?  No response.  A month later we asked again.  What we got back was a fax of our request letter on which was a handwritten note that said:  "I've been busy."  We've heard nothing since.