Sue Dragisic has long been the magician of Milwaukee’s philanthropic scene. Wherever she goes – presto! – donations seem to sky-rocket.
Under her leadership, the United Performing Arts Fund saw its fundraising rise fourfold – from $2.3 million in 1984 to $9.5 mil-lion in 1999. Then Dragisic was recruited to lead United Way of Greater Milwaukee, which hoped she could duplicate that success.
Sure enough, Dragisic waved her magic wand and United Way’s campaign total jumped from $28 million in 1999 to $39 million in 2005. Picked as one of the city’s most powerful women by this magazine in 2002, Dragisic had once again proved her clout.
Or had she? Despite United Way’s magical success, dollars going to many of its member groups have actually declined. A long-time anchor group like the American Red Cross, for instance, has seen its allocation drop from $2.25 million to $1.6 million.
Other questions arise. If United Way is doing so well, why did it have to cash in some $4 million in reserves in recent years? -Dragisic says her board of directors felt it was inappropriate for United Way to maintain a surplus. But Bud McKonly, chief executive officer of the Red Cross, says United Way had to cash in reserves to meet its funding commitments to member groups.
There is another reason to doubt United Way’s success. Independent research by the Public Policy Forum in the “Annual Report on Giving” shows that overall donations to human services in Milwaukee were flat and actually declined in real dollars from 2000 to 2004, during a period when United Way, the main driver of human service donations, saw its annual campaign increase by $7 million. How is this possible?
United Way originally targeted workplace giving – many donations from many employees. But for the last 15 years, small donors have been turning away, often to give to other causes. And so local United Ways have put increasing emphasis on well-to-do donors; Milwaukee pushes for individual “leadership” gifts of at least $10,000.
As Dragisic concedes, some of these givers have already chosen to donate to member groups like the Boys and Girls Club or Sal-vation Army and have been convinced to funnel the donation through United Way’s campaign. Those pass-through gifts have been worth as much as $1 million apiece, according to one campaign veteran.
On paper, such a contribution looks like an increase for United Way, but for the community, it means no net increase in philan-thropy. That might help explain how United Way’s campaign keeps rising while giving to human services remains flat.
Another sleight of hand by United Way involves donor choice. For years, its literature has told donors they can designate their gift to a member group like the Boys and Girls Clubs. In reality, that “choice” was meaningless. Of the $34 million donated in 2002, for instance, some $4 million was designated by donors to specific member agencies. What was the result? Not one of the 80 member agencies of United Way saw any adjustment in funding.
According to United Way of -America, only a minority of local chapters operate in this misleading fashion. Most make sure every dollar designated by a donor to a particular group is added to its allocation. -Dragisic has announced a change in this policy for this year’s drive, which is long overdue but a positive development.
Hunger Task Force, a popular group with donors, had continual squabbles with United Way about its allocation and has now joined 16 agencies that help feed the hungry to create their own workplace campaign. In Milwaukee and elsewhere, the United Way model is falling apart because so many donors prefer to choose where their donations go.
In response, United Way has attempted to prove its relevancy by taking on specific community problems. Dragisic’s group has tar-geted and funded education and job training projects. But as United Way becomes more of a problem-solving, grants-making agency, the old member groups it once served as chief fundraiser get short shrift. In the last 20 years, the percent of the Red Cross’ budget coming from United Way plummeted from about 90 percent to 27 percent. For the Boys and Girls Clubs, it dropped from 38 percent to 9 percent. These groups increasingly fund-raise on their own, further eroding the “united” concept.
Such trends are happening nationwide. Dragisic and United Way do not face an easy challenge. But whatever these difficulties, the community deserves the straight story. United Way’s longtime policy on donor designations was misleading, and its ever-rising annual campaign figures seem to fall in the same category. A nonprofit needs to be transparent, McKonly notes, adding, “It’s hard to get a good understanding of exactly how dollars are taken in and expended through the United Way report.”
There’s always a bit of showmanship and razzmatazz when it comes to fundraising. But ultimately, if the process isn’t an honest one, you may turn off potential givers. And no community can afford to see the good will of donors disappear.
