Greater Twin Cities United Way informed more than 100 nonprofits partners this week that it will narrow the focus of its grantmaking, the philanthropic organization's latest adjustment after three years of declining revenue.
Starting in 2019, United Way will concentrate its grants on programs that address education success, household stability, and employment and income gaps. It will eliminate grantmaking categories for legal services and independent living, which often help seniors and people with disabilities.
United Way Interim CEO Trent Blain said the organization has pivoted from its mantra of "Pathways out of Poverty" to "Pathways to Prosperity" and the funding strategy reflects that. An emphasis on equity will anchor much of the work, said Acooa Ellis, United Way's new senior vice president of community impact.
The leaders framed Wednesday's meeting with nonprofit partners as a gesture of transparency after a funding shortfall in 2016 resulting in painful last-minute cuts that left many charities reeling. Since then, United Way has hosted 100 meetings with nonprofits, donors and experts before setting the funding priorities — and continued to discuss the ideas in small groups at the meeting this week, Ellis said.
"We have heard them and are listening. We value the work they are doing," said Ellis, who joined United Way earlier this year from Catholic Charities. "We are committed to transparency."
Daniel Rodriguez, executive director of Merrick Community Services, said it was clear at Wednesday's meeting United Way is listening and reaching out to its partners.
"I just appreciate the tone that was set," Rodriguez said. "It was one of respect and candor."
The St. Paul nonprofit, which offers career services, children's and seniors programs and runs a food shelf, received about $165,000 from United Way this year, according to tax forms. But Merrick had its funding cut in recent years, including grant money for a Meals on Wheels program for seniors. Rodriguez said he and other nonprofit leaders will need to rethink their funding requests to United Way.
"All of us are going to have to revisit how we can creatively respond," Rodriguez said.
United Way revenue, largely driven by workplace giving campaigns, has dropped from a record $101.9 million in fiscal year 2014 to $77 million last year. The trend seems to reflect a national shift in how people choose to give, with donors seeking more control of their dollars.
The decline initially caught United Way off guard in 2016 and nonprofits were given just a few months' notice that millions in anticipated grants were not coming.
Nearly a dozen staffers were also laid off. Funding dedicated to combat domestic violence and an early reading program were eliminated. CEO Sarah Caruso retired this summer after 15 years at the helm.
In addition to retooling its grant programs, United Way has been trying to re-energize donors and attract new ones.
Next week, United Way will meet with 900 donors and prospective donors at a first-ever Together We Thrive event at U.S. Bank Stadium. The Oct. 25 event is designed to better connect with donors outside of the office — a key part of United Way's new strategic plan.
They'll be able to learn about United Way's focus areas and some of its nonprofit partners, plus there will be a 50-minute presentation and a little reality TV-style drama. Three charities will give brief pitches about new initiatives they are launching and compete against one another for grants totaling $125,000. The audience will vote on the one they believe has the most promise. All three will receive some funding.
Blain said the events with donors and nonprofit leaders are about growing trust and confidence.
Marnie Wells, CEO of Camp Fire Minnesota, said she's not sure if her youth organization will get United Way funding moving forward, but she said the organization set the right tone at Wednesday's meeting.
"Hearing them talk about the value of being in partnership with nonprofit agencies, it's very good news," Wells said.
Nonprofits focused on seniors saw cuts to United Way grants last year, so Wednesday's announcement wasn't a surprise to some.
DARTS, a West St. Paul charity that provides transportation and other services that help seniors stay in their homes, received about $170,000 from United Way funding in 2015. Wednesday, DARTS President Ann Bailey said it did not get money from United Way.
"They are in a tough spot if they have fewer dollars to allocate. They have to do something different," said Bailey, who wasn't at the United Way meeting. "But 20 percent of the population is over 65, and their funding philosophy doesn't have space for them unless they have some other greater need. I am heartbroken."
United Way officials did not say how many nonprofits currently receiving grants will no longer be eligible within the narrower focus.
Nonprofits that received grants in the eliminated legal and independent living categories will have the opportunity to figure out if they can apply in another area, Ellis said, emphasizing that the categories are broad.
Household stability, for instance, bridges a host of issues, including access to healthy foods.
"We are talking about a continuous residence that is safe, affordable and has access to basic needs," Ellis said.
More specific details about the next grantmaking cycle will be released in November with grants awarded next April. Nonprofits that don't fit into new funding category will receive six months of gap funding.