Placing the blame squarely on the pandemic would be the quick and easy way to explain a decision to merge announced on Monday by leaders of United Ways serving the Battle Creek/Kalamazoo, Jackson, and Lansing regions. But that is not the whole story.
The reality is that these three United Ways, like those throughout the United States, have experienced a 50 percent decrease in annual giving over the last 10 years and have lost half of their donors in the past 20 years, says Chris Sargent, President and CEO of the UWBCKR (United Way Battle Creek and Kalamazoo Region). And these decreasesin donations were only one of many reasons for the merger.
The most dramatic changes began occurring during the start of a recession in 2008 which saw the growth of the gig worker sector and United Ways coming up with different ways to reach these workers who had previously been accessible through brick-and-mortar workplaces.
“There have been a variety of challenges and that’s not unique to United Way,” he says. “It’s been a struggle to connect to the different interests of younger generations. The last couple of years, working in a COVID environment, we’ve not been holding as many in-person events and it’s hard to communicate with donors in digital ways. If you don’t have that ability to get in front of people, that impacts their interest in giving.”
The merger was officially approved on Monday by the boards of directors of the Capital Area United Way
based in Lansing, UWBCKR
, and United Way of Jackson County
based in Jackson. The new organization — United Ways of South Central Michigan (UWSCMI) — will partner locally and regionally on community impact efforts across six counties: Calhoun, Clinton, Eaton, Ingham, Jackson and Kalamazoo.
Sargent says his overarching message is that each of the three United Ways will retain their current offices with existing staff in their communities and continue to operate separate annual giving campaigns with the money raised through each one used in the specific communities they serve.
“Bringing the three organizations into one allows us to be a more effective operation. We’ve become one single nonprofit with one single administration versus three. United Way is unique in that we are not a chapter-based system. Unlike the American Red Cross or the Salvation Army, we are actually local independent organizations that get to make decisions locally.”
He says leaders with their corporate partners, including Consumers Energy, General Motors, and the Kellogg Co., have expressed their support for the merger because of the opportunities it gives their employees to make an impact locally and if they choose, regionally.
The newly-formed organization will operate under a single administration that will offer greater efficiencies and opportunities for existing staff to take on more specialized areas of focus, Sargent says.
“Most of our corporate donors operate in a global economy,” Sargent says. “While they may be locally headquartered and manufacture locally, they’re selling products all over the world. They’re excited that they and their employee donor base now have the opportunity to expand their giving beyond a particular geographic area. Their employees may work at a specific location and live in another one. This is creating a bigger vision to serve a bigger region while staying local and connected.”
He likens to local/regional giving options as a hybrid approach which will continue to give donors the final say in where their money goes.
“For people who live in Battle Creek, they may want to give to local efforts in Battle Creek. For people who think of their community as a larger community, they will have a much bigger geographic area to give to,” Sargent says.
An example of this is funds directed to the Food Bank of Southcentral Michigan, based in Battle Creek, which serves Calhoun, Jackson, and Kalamazoo counties. The amount invested regionally will be proportionate to the total dollars raised by each of the three United Ways.
“We know that hunger doesn’t stop at the county line,” Sargent says.
The majority of donors give their donations as “unrestricted funds” and entrust United Way staff and leadership to direct those dollars where they are most needed, he says, while other donors stipulate that a percentage of their contributions be given to specific nonprofit United Way member agencies.
“Each of our communities is unique, with needs that our individual United Ways tackle every day. At the same time, many of those needs are interconnected. We think we can address these issues better together, both locally and regionally,” says Teresa Kmetz, President and CEO of Capital Area United Way (CAUW), in a press release.
Financial instability is an example of these shared issues, says Ken Toll, President and CEO of United Way of Jackson County (UWJC).
“The ALICE Report shows how the challenges for people in poverty or just above poverty are similar across communities—depressed wages, access to key services like child care, systemic inequities, the economic effects of the pandemic, and lots more,” Toll says in a written statement. “Combining our expertise means we can bring more resources, capacity and ideas that will benefit all of our communities.”
ALICE stands for Asset Limited, Income Constrained, Employed—a term describing 40% of households in Michigan
that struggle financially.
Beginning in 2015 the Michigan Association of United Ways, with support from local United Ways statewide, and Consumers Energy Foundation, began releasing these reports every two years. The reports, which use point-in-time data from the previous two years, provide a comprehensive look from a statewide and individual county perspective at Michigan residents who are struggling financially.
The data collected in those ALICE reports will continue to be a focus for the UWSCMI and its research has broadened to include a specific focus on the BIPOC (Black Indigenous People of Color) community and the financial inequities and racial disparities they are dealing with. At the same time, Sargent says the UWSCM will also maintain its commitment to its four pillars
: education; financial stability; health; and basic needs.
Mergers of United Ways in Michigan are not a unique occurrence. The formation in 2000 of the Ottawa County United Way was the result of four different United Ways merging. In 2012, United Ways in Battle Creek and Kalamazoo merged to become the UWBCKR and in 2017, Eaton County’s United way merged with the Capital Area United Way.
This same activity is occurring nationally according to an article in the Nonprofit Times
which says, “United Way affiliates across New York, Texas, Maine and Indiana have merged or plan to merge in the coming months. In all, 14 affiliates will merge to become six affiliates, with the largest consolidation occurring in the Rochester, N.Y. region.”
Sargent says the UWBCKR and the Jackson and Lansing United Ways had been working together in various areas for several years before the merger and are exploring opportunities to do similar work around financial services operations in an effort to become a more effective and efficient organization. But he stressed that he does not expect this to impact current staffing levels.
“We didn’t do this to cut 20 percent out of our operations,” Sargent says. “We did this to be more efficient in our administration. This is about continuing to reinvest in our teams, our impact in the communities we serve and maintaining a local presence while taking advantage of efficiencies. For us, this is about creating a long-term sustainable future as we continue to drive investments in the impact work we do in our local communities.”
Guiding this work will be a 36-member board of directors. This newly-formed board will take effect on April 1 and will be made up of 12 members from each of the three United Ways current boards. They will decide who will lead the UWSCM.
Discussions about the merger began in earnest almost two years ago when the three United Ways began meeting monthly to discuss what it would look like.
In September, 2020, board members with each United Way met and five months later they were brought together again for a presentation recommending the exploration of a merger from Sargent, Kmetz, and Toll. This was followed in August 2021 by the presentation of the rationale for the merger to board members.
These merger discussions also involved “key donors, agency partners, corporations, organized labor, former board members and others, explaining how a merger would allow us to do more for those we serve,” Kmetz says in a press release. “Everyone who looked closely at this merger, everyone who helped us study it from every angle, gave strong support for the idea.”
Sargent says in recent years the philanthropic and corporate sectors have been looking to the nonprofit sector to partner and collaborate where it makes sense. Their funding has increased to those organizations that seek opportunities to work together
With the merger, Sargent says, “We have some key strategies and we know we’ll be successful moving forward so we can adapt to changing landscapes. As we know, digital communication is how a lot of us absorb information. Having the tools and resources to be able to communicate with donors, potential donors and volunteers more consistently are those types of tools that we need to invest in together to keep us front and center and to connect with people.”