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A Change in Giving

United Way has provided millions in financial support to local nonprofits over several decades, but recent declines in contributions are straining nonprofit budgets

By Molly Priddy
A volunteer organizes donated food at the Flathead Food Bank. Beacon File Photo

Thirteen years ago, the nonprofit Flathead Food Bank brought in thousands of dollars through fundraisers and donations, with businesses contributing more than $23,800 and private donations topping $39,300.

But one of the biggest chunks of the food bank’s income in 2004 was the annual contribution from United Way, which totaled $45,774. That contribution grew to $55,000 by 2007, the highest it would get before the recession started taking hold.

By 2011, the contributions from United Way to the food bank had fallen to $19,229, then further in 2013, 2014 and 2015, coming in at just over $16,000 in each of those years.

Last year, the food bank received $9,450 from United Way.

Lori Botkin, executive director at the Flathead Food Bank, said the shift in revenue from United Way has affected her budgeting process, as well as those of other nonprofits in the valley that are accustomed to receiving funds from the organization, which serves Flathead, Lake, Lincoln, Glacier, and Sanders counties.

Sherry Stevens, executive director of the Northwest Montana United Way, said the downward trend in contributions is an unfortunate reality that her organization has been dealing with since the recession. The last couple of years have been especially tough, Stevens said, due to local business closures as well as a shift in how a major revenue stream for United Way is structured.

“Our campaign from 2015 to 2016, we lost $180,000,” Stevens said.

In 2013, the United Way campaign raised $683,572, Stevens said, and $727,766 in 2014. It then raised $680,550 in 2015 and $500,212 in 2016, she reported.

About 90 percent of United Way’s campaign funds come from workplace contributions, provided by employees at participating businesses who are given the option of pledging money.

When United Way first started, donors didn’t have the option to specify where their money went. Instead, it was all sent to United Way, which then allocated the money to its member agencies.

Now, along with giving to member and affiliate agencies, donors can say if they want their money to go to a specific organization or agency. This shift has affected how much money United Way contributes to its agencies, Stevens said.

“Donor designations are really, really popular in that people want to direct their donations,” Stevens said.

There has also been a change in how global corporate leadership companies, which have national and worldwide presences, are sending money to United Way, Stevens said. Up until about three years ago, a business would run a campaign, send that money to its corporate headquarters, and then the headquarters would send the money to United Way for allocation.

That process has shifted online for the global corporate leadership campaigns, Stevens said, and the pledges are processed via third-party processors instead of going directly to United Way for distribution.

“Now what’s happening is we only get the pledge if the pledge says ‘United Way,’” Stevens said. “In the past, if it said ‘Big Brothers’ or ‘The Nurturing Center,’ because they were (a member agency) under us, it used to all come to us.”

The change has resulted in a loss of more than $33,000 per year, Stevens said.

Stevens said due to the uncertainty with global corporate funds, United Way will not promise those funds to agencies until they receive it.

Another change that can impact the overall bottom line is if a business that usually runs workplace contribution campaigns for United Way closes or moves its base of operations. For example, Weyerhaeuser Co. bought Plum Creek Timber Co. in February of 2016, and by June, Weyerhaeuser announced it would close two mills in Columbia Falls. The workplace contribution campaign stalled, Stevens said, likely because of uncertainty about the future.

Plum Creek employees have contributed hundreds of thousands of dollars to United Way over the years, she said; before Weyerhaeuser bought it, the company’s match along with its employee contributions accounted for about 42 percent of the entire United Way campaign.

“We are so grateful for the years of continued and faithful giving from their employees, and the match we would receive,” Stevens said.

The combination of the new payout structure and the change in local businesses meant United Way didn’t know how much money it would receive, Stevens said, so last year it didn’t hold its annual Citizens Review hearings, during which a group of local volunteers — usually 19 to 23 of them — listen to member agencies’ needs and decide where to send money.

“We did not know how much money we had,” Stevens said. “We had no clue what our bottom line was going to be to allocate.”

But United Way will hold a Citizens Review this year, scheduled on June 27-29, and volunteers interested in participating are encouraged to call United Way at (406) 752-7266.

For some member agencies, however, the confusion about whether funding was coming through or not affected how they could build their budgets.

“The money is important, but the most frustrating part is the lack of communication,” Botkin of the food bank said.

Other than checks from donor designations, the food bank hasn’t received anything from United Way since July 2016, she said.

Geoff Birnbaum, executive director of Youth Homes, whose branch in the valley is Flathead Youth Home, said he’s seen United Way contributions decline over the last 10 years.

“That incremental decrease has been consistent; it was consistent with my experience in other communities (in which) we operate,” Birnbaum said. “Then a couple years ago it just wasn’t very clear about how much they were going to be able to give. We wound up just not knowing. We couldn’t put a number into our budget because we didn’t really have a firm commitment from United Way.”

Stevens said United Way plans to host meetings with nonprofit directors to further discuss recent changes.

Birnbaum also said he’s noticed that younger generations tend to donate directly to nonprofits rather than go through an organization such as United Way that will allocate the money for them. Stevens said some of the most popular nonprofits for younger generations tend to be those involving animals, the environment, veterans, and fighting diseases.

Stevens said she hopes the community continues to support United Way, and also hopes to get back to consistency after the recent setbacks.

“It was a really, really difficult year,” Stevens said of 2016. “I think we did the best we could with that we had.”