Alexander Keast

4/20/15

Wooddell

PA 360-GVSU

United Way Heart of West Michigan

This is an analysis a of a United Way branch located in Kent County, Grand Rapids Michigan. The United Way Heart of West Michigan, or (UWHWM) was established in 1917 as   a Community Chest.  It’s a branch that’s part of a nonprofit foundation called the United Way. The United Way began in 1913 in Cleveland and has grown from that one branch into an organization of over 1,300 branches in the U.S.; each with local leadership from the community and a local branch manager. The UWHWM’s community branch follows the headquarters’ guidelines and regulations. The mission for the UWHWM, like most United Way chapters, is its emphasis and focus on three major elements to ensure a prosperous community. They consist of education, income and health (UWHWM “History & Misson”. 2015).The UWHWM is classified as a 503(c)(3) (Charity Navigator. 2014).  In the fiscal year of 2013-14 the UWHWM focused 89.5% of expenses on community investment, 22% going to Education, 40% going to Income and 39% going to Health. Focusing on the element of building a community and raising the prosperity of citizens of that community. The United Way chapters, like the UWHWM, focus these three major elements in accordance to specific local need. Through their project oriented local programs and services, they make a win-win situation for the majority of the community. It's not so much centralized on an one-on-one need, as it is an all-for-one community uplift. (UWHWM ,“Community &Volunteer Impact.” 2015).

This community uplift is created over time through the UWHWM networks, affiliate and partner organizations. For a nonprofit to be successful it must concentrate on the concept of transparency. Transparency equates to trust and accountability, developing and building trust for a nonprofit is essential for the success, development and growth of the organization. Charity Navigator is a nonprofit rating website, their database of the Heart of West Michigan gives them an accountability and transparency score of 100/100. All information regarding staff, financial statements, documents, salaries, policies and other required information are all recorded on their 990 form. Alongside having exceptional validity on their 990 form, the UWHWM makes accessing this information easy on their chapter’s website. Information that is included on their website is; donor privacy policy, board members listed and audited financial. Their 990 form and essential key staff is listed as well. Continued trust and transparency is built overtime and continued practices of this can help grow your number of donations, and build relationships with organizations. That is exactly what UWHWM strives to accomplish by staying consistent with their goals and mission and being held for accountable for their actions. Stakeholders analyze how the UWHWM works, what is expected from them, then equate their investments and evaluate how they have made the community grow.  Fundraising affects donors by soliciting people to donate to specific causes.  Potential donors worry about where their dollars are being spent. Donors hope that the money the UWHMW donates goes to the greatest good.  A cause most consider unworthy is fundraising costs.  Donors are very conscious of the fundraising and overhead costs of nonprofits. The UWHMW has an 89.5% community investment with an 11.5% expense in fundraising and administrative costs. When you make a donation, the percentage of that donation is reinvested into the community. This is a very reassuring prospect for potential and current donors of the UWHWM. Due to the very effective solicitation system: the payroll deduction system the UWHWM can generate a substantial amount of contributed revenue for fundraising.

The allocation process of the UWHWM involves local community members that democratically decide where funding is placed. The UWHWM is uniquely structured to involve Grand Rapids or Kent County community members in the allocation process of local community funds.  The allocation process of the UWHWM begins with the formation of panels made up of local community volunteers from all walks of life.  UWHWM staff members organize specific panels of volunteers that reviews the UWHMW’s local programs, they assess the importance of their programs and services and the impact they have on West Michigan’s local communities.  The panels then deliberate and complete an allocation recommendation to UWHWM board member (Brilliant pp.63-80). The members on the board then have the prospect to evaluate each recommendation and amend the recommendations that they see as fit. In order for the UWHWM to allocate funds, it must first raise the funds to allocate.  The major source of funding of the UWHWM is local professional work places. Meijer Inc. in Kent County, is a member organization of the UWHWM. To note Meijer Inc. is a partner and affiliate of the national United Way, not just the UWHWM. When I was first employed at Meijer Inc. I had the option to take a weekly payroll deduction from my hourly wage to donate to the UWHWM. All branches of the United Way have implemented a weekly payroll deduction system to raise the bulk of its funds. (Brilliant pp.63-80) Under this system, the UWHWM asks a company like Meijer Inc. to offer its employees the option to pledge a portion of their wage or salary, which Meijer Inc. automatically deducts from employees’ paychecks and then contributes this amount to the UWHWM branch.  This is a beneficial system not only to the UWHWM but also to Meijer Inc. and its other local or national organization members that use this system. It is beneficial to the employer because there is less interruption in the workplace.  

The UWHWM is a member organization of the United Way.  As a member organization it must sign a contract with the United Way, this allows the United Way to fundraise for their organizations.  The UWHWM sole purpose is to fundraise; organizations like UWHWM, whose purpose is to fundraise are called “federated funds”.  As a branch of the United Way, the UWHWM service is to raise funds at a lower cost. As a foundation they can raise these funds at a lower cost than most non-profits can on their own.  The United Way, due to economies of scale, can raise funds at a small cost. Only 11 cents on the dollar, this amount is in reference to the UWHWM annual report. This in turn concludes that 89 cents of every dollar the UWHWM donates is invested back into the community to help those who need it most. These funds that the UWHWM has collected is then distributed among its local member organizations. (Brilliant, 1990)  The member organizations that are networked with the UWHWM have a contract with the United Way. Being a branch of the United Way it is affiliated not only with local member organization but also with the hundreds of partners that the national United Way is associated with. Fifty-seven percent of the United Way’s funds are distributed among thirteen member organizations or agencies.  The most popular agencies include the Family Service, Boy Scouts, Girl Scouts, Boys Clubs, YMCAs, YWCAs, the Salvation Army and the Red Cross. (UWHWM, “History & Misson”. 2015)

The United Way Heart of West Michigan’s Board of directors are unique in the fact that some of the individual’s members on the board correlate to one of the 3 specific elements of the UWHWM mission: Education, Income and Health. There are a total of 19 board of directors in the UWHWM; some members are individuals who are apart of philanthropic organizations or companies who give donations to the UWHWM, while other are agency partners with the UWHMW. The list includes GRCC, Arbor Circle, Spectrum Health, PNC Bank, Steelcase Inc., Meijer Inc., UFCW Local 951, Management Business Solutions, 42 North Partners, SpartanNash CWA Local 4034, Thomas M. Cooley Law School, Deloitte, Davenport University, Amway Corporation, Fifth Third Bank and PNC Bank. Meijer Inc.’s founder Fred Meijer was a major philanthropist and practiced altruism. He donated and invested in projects and programs to help develop and bring prosperity to Grand Rapids. SpartanNash is a food distribution company that donates some of their products to local food pantries, even Steelcase Inc. is a local philanthropist we can thank for Grand Valley State Universities beautiful library located at their PEW campus. The UWHMW staff consists of Maureen Noe, who is the President and CEO of the UWHMW. The rest of the staff team employed by the UWHMU consists of positions associated with the following: Accounting, Finances, Marketing & Product Development, Essential Needs Force, Community Impact, Data Analysis, Graphic Design/eMarketing coordinator, Volunteer Center Coordinator, Payroll & Human Resources, Schools of Hope coordinator, program manager- Coalition to end Homeless, Major gifts director, Outcome & Performance Evaluator, VP Workforce Development & Operations and Events & Workplace Campaigns coordinator. The staff seems to envelop the UWHWM’s labor, resources, finances, capital investments, mission, partners, marketing, fundraising and community and volunteer needs. The volunteers from the team are divided into groups, each team is led by a United Way staff member. The teams visit their assigned agencies and evaluates the financial recordings, program effectiveness, need from the community and surrounding parishes. (UWHWM “Staff & Board”. 2015)

The team prepares reports on each agency and submits their recommendations to the United Way Board of Directors. This information is used to make funding decisions based on community need, community impact and available funds.

        The United Way Heart of West Michigan makes getting involved with the local community of Kent County easy. Working with the UWHWM is a great opportunity to help shape your own community. The UWHWM is “expanding rapidly to include an increasing number of schools, government entities, and community members… United Way’s partnerships allow you to volunteer for the causes you are passionate about, serve on a cabinet or council, and connect with other community members from all industries” (UWHWM ,“Community & Volunteer Impact.” 2015). To look into what the UWHWM offers in terms of volunteering, you   can find helpful information on the UWHMW’s website. Interested volunteers can look through its work options to find a position that suits your needs and schedule. The UWHWM Web site lists 26 different ways to live "United." These volunteering instructions are broken into the three core categories of education, health, and income. Volunteering can easily be done without formally joining the group. If an individual knows they want to help, but isn’t sure how or what exactly volunteering entails, the UWHWM  also provides helpful links to the following information about volunteering: Volunteer Tools, Benefits of Volunteering, Tips for Volunteering, Volunteering as a Family, Youth and Volunteerism and a zip code search for programs in your local area. There are however some requirements for prior qualifications or experience for some of the volunteer positions available at the UWHWM. Education is one of the UWHWM major mission elements, to advance individuals in need of educational progression or tutoring it would be assumed that an individual applying for a tutor position would have prior experience instructing children. The same applies to volunteers seeking to help in health, it would be necessary to have a medical license to give a local citizen a free clinic evaluation, or any sort of dental care. However, not every position needs prior experience and qualifications. With the UWHMW’s easy volunteer instruction and guidance finding the perfect position for individual seeking to help their community is really a simple task. (UWHWM “Volunteer Center”. 2015)

How do the services that the UWHWM provides get delivered throughout the community? The UWHWM communicates is services through helping as many people in Kent County as it possibly can. It helps people from all walks of life; assisting families, babies, kids, teenagers, parents and elderly citizens. People with health problems like diabetes, asthma and obesity, people with coping with depression, abuse or mental illness. How does the UWHWM address the vast majority of these specific needs? The UWHWM partners with more than 60 local agencies to help 1 in 4 citizens in Kent County instead of focusing on meeting one-on-one needs,it focuses on an all-in-one community upbringing. By doing this as a whole, one donation not only goes to the need everyone is aware of, but also to those that are less obvious, but no less important. Help is always available whether it’s needed to teach a child to read, provide food and shelter the homeless, or to keeping families in their homes longer (UWHWM ,“Community & Volunteer Impact.” 2015). The services that the UWHWM provides is wide range,but each is extremely important to the individuals who need them. Due to this focus on raising up the whole community, when people generously donate to the UWHWM they can be reinsured that the money they give will be reinvested back into the community (UWHWM ,“Community &Volunteer Impact.” 2015). The UWHWM Volunteer Center allows Kent County citizens to get involved one at a time, once a week, through company holiday volunteering, Spring Break disaster relief trips, you name it. UWHWM also provides a 211 direct dial number to help resource its information to help people find the help they need. (UWHWM ,“Community &Volunteer Impact.” 2015).

        The stake holders in the network of the UWHWM are very diverse but can be organized three into three different categories. Secondary stakeholders are those whom are indirectly affected by the actions of the UWHWM. This group includes the community at whole; that is to say, any of the decisions that the UWHWM indirectly affects the community members in either a negative or in a positive way. The mission of the UWHWM is to improve the quality and standard of living for individuals who are in need. Primary stakeholders are those initially and directly affected, either positively or negatively by an organization's actions. The United Way as a whole concentrates its efforts on combating the problems of education, income and health. An example of the UWHWM emphasis on providing services for those in need of adequate health care is the case story of a girl named Hailey who was diagnosed with cerebral palsy, and whose parents found help through one of the UWHWM affiliates and partners. Natalie, Hailey’s mother, had this to say: “We heard through other families that Conductive Learning was truly beneficial to their children’s development. Without it, Hailey may never have gotten the opportunity to realize her full potential” (Heart of West Michigan, Weitier.2015). It is necessary for the UWHWM to reach as many Primary stakeholders as possible, or else its mission statement would only be an idea and not a reality. Last, key stakeholders have the strongest influence on the direction in which the UWHWM operates and the strategies it will take to affect its affiliates and those who benefit from its finances and services. These individuals include the president/CEO, the board, the staff, volunteers and the donors; it should be noted that these key stakeholders can be a part of the primary and secondary stakeholder groups as well. How the UWHWM shapes and effects the communities surrounding it is purely decided based on the choices that the president and the board makes in correlation to the direction they want to take the nonprofit organization. The staff and the volunteers are agents of principal and labor; they are in turn the individuals who make sure the plans and programs the UWHWM creates are implemented, organized and communicated effectively and are enacted in a fashion that represents the nonprofit accordingly (Ott, Dicke, pp.182-96.) The donors have a strong say in what goes on in the UWHWM because they directly control their funding. Individuals who make donations have a choice on where they want their money to be used in the UWHWM.

The very system that the UWHWM has established and implemented to grow its community impact here in Kent County is also hindering the social welfare of Kent County as well. First is that the UWHWM, due to its size and position, has lower fundraising costs as well as lower transaction costs.  The lower costs make the UWHWM a lucrative option for those donors that are price sensitive.  The lower transaction costs permits the United Way to make the price of donating much cheaper by making it more convenient to donate by using its effective solicitation system: the payroll deduction system. Therefore, the UWHWM, like other United Way chapters, deter entry into the market through exclusive pricing (Bonniwell, pp.4-14). The reduction of competition in the market reduces social welfare by reducing the amount of donations to other nonprofits, who would have otherwise provided a more diverse variety of services to the Kent County Community. By lowering these transaction costs it does insure the growth, development and success of the UWHWM chapter, however selfish it may be, it’s better to be a winner than a loser. Besides having great success despite the possibility that this success may be hindering social welfare, the UWHWM seems to have achieved organization, social and financial stability. According to Charity Navigator, from 2010 through 2013, the UWHWM primary revenue, minus its program expenses, is very stable. Between those 4 fiscal years, the ratio is almost “for every dollar spent there is a dollar earned” In 2012, it generated $16,883,843 dollars in revenue and spent $14,238,185 in program expenses. However in 2013, it generated a deficit of $647,107 dollars. Concluding this breakdown of the UWHWM income statement, it can be evaluated that the UWHWM is in its mature state of the nonprofit organizational lifecycle due to its relative stability of its income (Ott & Dicke, pp 234-67).

Pertaining to the rating that Charity Navigator gave UWHWM and the evaluative, procedural, organizational infrastructure, community & volunteer impact, fundraising, the growth and stability of its finances and networks as concluded in the research compiled above. It can be said with confidence that the stability of the UWHWM is reassuring for the future growth and development of the nonprofit organization as a whole. Like any nonprofit it is important to stay accountable and transparent, to continue advocacy and to develop and maintain its goals and missions. UWHWM seeks to meet in its quest to bring prosperity to the whole community of Kent County. The process of which it generates its donations through payroll deduction can make difficult barriers of entry for other nonprofits who want to develop and offer its own programs and services to Kent County. This hindrance of social capital can hurt Kent County potentially, however this would suggest that the UWHWM would have to restructure its key donations system, this in turn could case catastrophic implications to the financial well-being of the UWHWM which has already reached the stage of maturity in the nonprofit life cycle. Restarting now would inevitably make the UWHWM cease to function effectively.  The UWHWM is a stable and successful nonprofit foundation 170(b)(1)(A)(vi) the longevity and impact that the UWHWM will have on Kent County will continue for years to come as long as operations, finances and mission goals stay consistent.

Work Cited

Bonniwell, Matt. "The United Way's Effects on Donor Behavior." University of Puget Sound. N.p., 4 Mar. 2007. 4-14. Print.

Brilliant Eleanor, “The United Way: Dilemmas of Organized Charity” (Columbia: Columbia University Press 1990) 63-80 Web. 23 Apr. 2015

"Community Development : Fundraising Heart of West Michigan United Way." Charity Navigator. Ed. Nancy Sedek. N.p., May 2013. Web. 23 Apr. 2015. <http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=3806#.VTl5TOOAqVi>.

Duby, Aron. United Way Heart of West Michigan. Ed. George Wietor. United Way, 14 Feb. 2015. Web. 20 Apr. 2015. <http://www.hwmuw.org/>.

"History & Mission." United Way Heart of West Michigan. United Way, May 2015. United Way Heart of West Michigan. Web. 23 Apr. 2015. <http://www.hwmuw.org/mission>.

Ott, J S., and Lisa A. Dicke. “The Nature of the Nonprofit Sector”. 2nd ed. Boulder, CO: Westview Press, 2012. 182-96, 231-67. Print.

"Staff & Board Members." United Way Heart of West Michigan. United Way, May 2015. United Way Heart of West Michigan. Web. 23 Apr. 2015. <http://www.hwmuw.org/board>.

"Volunteer Center." United Way Heart of West Michigan. United Way, May 2015. United Way Heart of West Michigan. Web. 23 Apr. 2015. <http://connect.hwmuw.org/>.

"Volunteer & Community Impact Report." United Way Heart of West Michigan. United Way, May 2014. United Way Heart of West Michigan. Web. 23 Apr. 2015. <http://www.hwmuw.org/>.