United Way effort to bring together nonprofits around child poverty leaves other Northwest Arkansas agencies out

LOWELL -- Change is hard.

Especially for dozens of agencies whose shrinking United Way funding means they must search for new sources of money to continue services such as meal programs for seniors and job programs for the disabled.

The United Way of Northwest Arkansas is in its first year of implementing a grant program for a new, narrower focus on children in poverty. The hope is to have a more noticeable impact even as annual fundraising has declined, said Kim Aaron, United Way president.

"It's a new day at the United Way," Aaron said. "We're doing things differently."

The agency awarded more than $2 million to 56 partners in 2015 but just $871,000 to those same partners this year. Another $770,000 went to 18 organizations receiving the first funding for the children living in poverty program.

"It's heart-wrenching, horrible and hard," said Kathy Deck, United Way board member. "We have tried very hard to communicate those hard choices and the why -- because we want to be impactful."

Aaron said she wants the United Way to continue supporting nonprofit groups that are losing funding through services such as training and consulting. This is part of the agency's move to be more than just a "pass-through funder," taking donations from thousands of employees throughout the region and distributing the money in grants to trusted nonprofit groups vetted during an application process, she said.

The United Way runs a Gift in Kind warehouse that this year received $18 million in donated products from Wal-Mart Stores Inc. to give to more than 150 area charities for a small fee, Aaron said.

Other programs United Way pays for include the Dolly Parton Imagination Library, which provides books each month for young children; the annual Fill the Bus event for collecting school supplies for needy children; and a 2-1-1 referral service for residents who need services.

The additional help is little comfort to the organizations losing funding. This includes some nonprofit groups with a focus on children in poverty, such as the Donald W. Reynolds Boys & Girls Club in Fayetteville. The club has received United Way grants for 50 years, most recently for its after-school programs, said Eric Schuldt, the club's executive director.

United Way grants to the club fell from $80,750 in 2009-10 to $27,000 this year, Schuldt said. About 60 percent of the 200 children who go to the Fayetteville club after school are from low-income families.

The club applied but was not chosen for the new children living in poverty funding this year, Schuldt said. The United Way did award some of the new grants to other area Boys & Girls Clubs.

"We were pretty disappointed," he said. "Honestly, our organization fit really well with their mission of finding a pathway out of poverty for children."

Focused approach

United Way of Northwest Arkansas has awarded grants to agencies involved in causes related to education, health, income and providing a safety net since about 2010, but the agency began studying a shift in strategy in 2013.

The United Way Board of Directors began moving toward an issue-focused platform the following year. A consulting firm assisted the agency in studying community needs.

Surveys found donors were likely to continue or increase their giving to United Way if it focused on a single issue, said Aaron, who became president in November. Top issues were hunger, the homeless and poverty, with poverty being a common thread.

"What resonated, particularly for women surveyed, was children in poverty," Aaron said, noting some research studies show 70 percent of donation decisions are made by women. "We believe this is where the community wants us to go."

The hope was not to raise more money, but to create a greater impact with the money that is raised, she said.

United Way board members did not want agencies to be caught by surprise, so they planned for a phased transition to give partner nonprofit groups time to plan, said Deck, a board member since 2009.

The board extended full grant funding to 56 nonprofit partners for 2015-16. The agencies were to receive half of that amount from July 1 through June 30, 2017, adjusted by the performance of the fundraising campaign. The actual amount going to agencies is about 58 percent less than their 2015-16 funding.

United Way has the ability to act as a hub for coordinating resources around child poverty, not only through grants, but in providing education on the issue and support to organizations, said Deck, who's also the director of the Center for Business and Economic Research at the University of Arkansas.

In her job, Deck gives reports to the community on job growth and prosperity in Northwest Arkansas. Her role with United Way shows her statistics she doesn't like. An estimated 26,000 children, or about one of every four children, in Northwest Arkansas live in poverty, according to information from United Way.

"I hope we'll be able to convene many resources to address this problem," Deck said. "There will be children who are on a path that is not so wonderful. We will help them have more prosperity, more successful lives because of the investments the community makes."

The number of Northwest Arkansas children in poverty would fill 382 school buses, which put bumper to bumper along Interstate 49 would stretch for three miles, Aaron said.

All nonprofit groups, even senior centers, can propose projects for the new focus on poverty, Aaron said. A senior center, for example, could ask for money to start an after-school program for children, she said. A committee of volunteers decides which agencies receive funding.

Organizations receiving grants under the new protocol include Community Clinic at St. Francis House, Girl Scouts Diamonds of Arkansas, Oklahoma and Texas and Samaritan Community Center.

The Early Childhood Center in Springdale received its first United Way grant of $70,000 to begin a Kangaroo Keepers program for 3- and 4-year-olds who are not used to being away from home, Principal Darlene Fleeman said. The center will train volunteers to help children adapt to spending their days in preschool.

Money given in the next United Way fundraising campaign will go toward grants given in 2017-18, Aaron said. A committee is in the process of finalizing what United Way will fund next year. The board expects to vote Aug. 18 on the funding model for the next cycle.

Making up losses

Doing things differently means dozens of agencies across Benton and Washington counties plan to add fundraising events and apply for other grants to compensate for what they will no longer receive from United Way.

Darryl Rhoda, the new executive director of Youth Bridge, met with United Way officials to try to understand their position and said he doesn't agree with the changes.

"We're not the only one who's upset about it," Rhoda said. "A lot of agencies have been left out because of this direction. It's unfortunate."

Youth Bridge, headquartered in Fayetteville, reaches about 4,100 children in eight counties who are affected by abuse, neglect, addiction, homelessness, mental health issues and behavioral problems.

"I believe everything Youth Bridge does is promoting kids getting out of poverty," he said.

Youth Bridge officials proposed three projects for United Way's new focus, but none was accepted, Rhoda said.

Revenue for Youth Bridge comes from some federal and state money, as well as grants, he said. United Way for years gave $100,000 annually to Youth Bridge, and the funding was useful for applying for other grant programs.

Open Avenues likely will be left out because its 120 clients are teenagers and adults ages 16 and older with disabilities, said Brenda Neal, executive director of the Rogers nonprofit group. Open Avenues receives some state and federal funding for its work in preparing adults with disabilities for jobs, but no funding source exists for more than half of the adults in the program.

"They're very productive people," Neal said. "Many of them I hope to get jobs in a competitive environment."

At one time, the annual United Way grant made up 12 percent of Open Avenues' operating budget, but that has dwindled to about 1 percent, Neal said.

United Way grants to the organization in five years dropped from $75,000 to $59,500, according to United Way's financial records. The organization will receive a little more than $25,000 this year.

The hit comes at the same time a grant from the Arkansas Highway and Transportation Department is expiring, Neal said. The grant provided about $40,000 last year and about $94,000 the previous year in reimbursements for transportation costs.

"That was a pretty big pill to swallow," she said.

Neal plans to apply for more grants. The agency has added a "Pints and Putts" miniature golf fundraising event, set for Sept. 15. Planning already has started for the agency's annual Spring Fling event.

"We're desperately trying to replace those funds," Neal said.

The population of adults who have turned 60 continues to increase in Northwest Arkansas, leading to a growing base of clients for the Office of Human Concern, Executive Director Susan Moore said. The agency's largest program is senior services, which includes providing 200,000 meals a year to seniors in Benton, Carroll and Madison counties.

The nonprofit group's United Way funding dropped from about $60,000 five years ago to $46,750 last year and just under $20,000 this year, according to United Way's financial records.

No changes in service are expected, Moore said. The office will add some spaghetti dinners and will reach out to corporate sponsors to try recoup the loss. The need to raise money will lead many agencies to seek money from some of the same organizations.

"We've always been very frugal with our money and making sure we get the most out of that dollar," Moore said. "It's even more important. When we ask for money, there's a definite need."

Giving trends

United Way Worldwide has ranked as the nation's No. 1 charity for fundraising every year since 1991, except for 2006 when it ranked No. 2, according to data from The Chronicle of Philanthropy. The worldwide organization and its affiliates in 2015 received $3.87 billion.

Despite its standing, United Way affiliates are responding to changes in giving that has left them with less unrestricted money to dole out, said Aggie Sweeney, chairwoman of the Giving USA Foundation.

Donors increasingly want to retain a high level of control over where their money goes, she said. Individual nonprofit groups now have multiple avenues for reaching donors directly, with websites and social media, she said.

Working millennials -- adults younger than 35 who are a growing part of the workforce -- give to social causes but tend to want to know the immediate impact, Sweeney said.

The issue for organizations like United Way affiliates is how to continue to be perceived as important for helping make decisions about where donated money goes, she said. More United Way affiliates are focusing on specific issues, Sweeney said.

"It helps donors understand the impact of their giving," she said.

Declines in annual fundraising for United Way of Northwest Arkansas reflect decreases in workplace giving, including from Wal-Mart Stores Inc., Arvest Bank, Simmons Food and Northwest Medical Center, Aaron said. Last year saw 125 companies participate.

The fundraising campaign hit a peak of $4.6 million in 2008. United Way has since exceeded $4 million in just two annual campaigns, in 2009 and 2013. Campaigns otherwise have been in the $3 million range, with $3.7 million raised in 2015. The 2016 campaign is expected to finish at about $2.9 million, less than the $3.1 million United Way budgeted, Aaron said.

Aaron and her staff continue to evaluate the downward trend in giving.

Workplace campaigns are a primary fundraising source for United Way of Northwest Arkansas, but the worldwide organization is pushing its affiliates to diversify, Aaron said. Many corporations nationally are changing their employee giving programs.

"While these workplace campaigns continue to generate significant contributions into the community, many corporations offer their employees choices beyond the United Way for donations, which can reduce the funds we receive," she said.

United Way is the only charity Arvest Bank offers for employees to give to through a payroll deduction, said Michelle Fittro, spokeswoman for Arvest Bank Benton County. The kickoff for the annual fundraising campaign typically is in the fall, and the company sets a goal of all employees participating.

But Wal-Mart Stores now has an Associate Giving Program where U.S.-based Wal-Mart employees can choose from 11 nonprofit groups to support through payroll deductions, according to the retailer's website. The list includes United Way, as well as the American Cancer Society, the American Heart Association, the Hispanic Scholarship Fund and the United Negro College Fund.

Instead of a month of activities focused on raising money for United Way, some companies have offered for United Way leaders instead to speak at a single "lunch and learn" session, Aaron said.

The worldwide organization now encourages affiliates to pursue individual and major gifts, Aaron said.

For years, baby boomers have been key contributors to United Way through workplace campaigns, but as they retire, they tend to stop giving, Aaron said.

A workplace campaign doesn't have as much appeal to the younger generation who tend to favor giving money to a project that has a more direct and immediate impact, Aaron said.

With the Internet, most people are able to research nonprofit groups and their finances without the help of a separate agency.

"We have to change what we do," she said.

NW News on 08/07/2016