Page 20 - Harvard Business Review, Sep/Oct 2018

IDEA WATCH HOW I DID IT

s the leader of a nonprofit, I ask people for names, including Crusade of Mercy, United Fund, and
money as a big part of my job—and I love Community Chest. In 1970, to better organize and
doing it. Making the ask isn’t as hard as you brand these efforts, we became known as United Way.
might think. The most effective leaders I’ve
seen in any setting—business, government,
A nonprofit—are driven by purpose, mission, CREATING A DIRECT RELATIONSHIP
and the sense that their work is making the world a I joined United Way in 1981, straight out of college, as
better place. If you approach donors from that stand- a management trainee in the Winston-Salem, North
point, you’re really just having a conversation about Carolina, office. At the time, a company’s donations
mission and purpose and then asking them to join would arrive in a big envelope. It would contain some
you. You simply have to blurt out the number and cash, some personal checks, and a summary sheet
not worry about how many zeros it has at the end. stating that, for example, 1,200 employees had agreed
The most I have ever asked an individual to give is to payroll deductions, which would total however
$250 million. That particular person said no, but I’m many dollars every other week. Companies didn’t tell
pretty sure he has made a generous bequest to us in us who the individual donors were, because they were
his will. What’s striking about these big donation asks concerned about preserving people’s privacy.
is that for most of its history, United Way had no direct Over the past few years we’ve worked to change
relationship with its donors. In fact, in most instances that model—to transform from a primarily business-
we didn’t even know their names. to-business model of fundraising (in which we work
mostly with employers) to a B2B2C model in which
we create a more direct relationship with individual
donors. Payroll deductions still play an important role,
THE 1990S WERE THE HIGH-WATER but we’re moving to a technology-driven engagement
platform. This new model increases our interactions
MARK FOR PAYROLL DEDUCTIONS AS with donors and allows them to become more closely
involved in our mission.
OUR LARGEST SOURCE OF FUNDS; 1990s. United Way suffered a scandal involving the
This shift has been in the making since the early
EVER SINCE THEN INDIVIDUAL longtime CEO, who was convicted in 1995 of fraud and
conspiracy and sentenced to federal prison. Much of
DONORS HAVE BECOME A BIGGER the decade was spent recovering from that by revamp-
ing our governance and operations, writing a new code
PART OF THE MIX. of ethics, and tightening up our brand management.
During that process our donor model was starting to
change. We began seeking out individuals who could
make larger gifts. The 1990s were the high-water mark
for payroll deductions as our largest source of funds;
ever since then individual donors have become a big-
ger part of the mix. Today more than 25,000 people
Our organizational roots go back to the 1880s, in have each given more than $10,000 to United Way;
Colorado. Industrialization was under way, and peo- more than 600 have given $1 million; and 35 have
ple were moving from rural areas into the city. In small given $10 million or more.
towns there’s a sense of community, which creates an Even as direct donations from individuals grew
economic safety net—people know one another, so more important, we tried to increase our engage-
they help those in need. Urban areas have less sense ment with donors from inside our employer-partners.
of community, so as people moved to cities, they lost In the mid-1990s I was the head of fundraising and
the safety net. Local business leaders wanted to do marketing for our Atlanta organization. We decided
something to help, so they created a way to pool em- to send our biggest companies—Coca-Cola, Home
ployee contributions, which were then distributed to Depot, and Georgia-Pacific—surveys to help us bet-
local charities. In the 1950s the United Auto Workers ter understand the wishes and interests of employees
negotiated a plan that allowed employees at the big who were donating via payroll deduction. Among the
carmakers to donate money directly from their pay- many questions we asked was “What do you think the
checks, and over the next few decades most of our most important social issues are in Atlanta?” We re-
donations came from payroll deductions. Back then, ceived 186,000 responses. We ranked the responses
the local fundraising entities were known by various and reported them back to everyone. It was a simple

40 HARVARD BUSINESS REVIEW SEPTEMBER–OCTOBER 2018