United Ways’ Resource Development Results for 2014-15 United Way Research

Executive Summary

The mandatory Database 2 Survey: Resource Development Overview was launched on March 15th on United Way Online. The deadlines for survey submission were May 15th (UWs on a calendar year) and June 30th (UWs on a fiscal year). Smaller United Ways (raising less than $1 million) were allowed to complete a Database 2 EZ form. A random sample of smaller United Ways were asked to complete the full study. 1,071 United Ways completed the survey on-time, for a 91% response rate. United Ways that could not complete the entire survey were asked to complete the United Way Continuum. The final sample included 99% of card value There was a 100% response rate from all Metro 1 and 2 United Ways. Background

Context Giving to Human Services grew 3.6% in the U.S. in 2014, lagging behind philanthropy overall, which grew 7.1%. Unemployment dropped to 5.6%. At the same time, real hourly wages for the majority of workers continued to decline and remained lower than pre-recession levels. Median disposable income increased by 1.8% between 2013-2014. Net job creation was lower in key industries in which United Way is heavily invested. Corporate CSR interests continued to evolve with companies looking to differentiate themselves with unique programs and also focusing on broader CSR issues than community/workplace giving. The CFC continued to decline, the second year after the government shutdown, with a -7% loss, and participation at an all-time low of 14%. Realistic growth targets for the organization have not been set and must be based on an assessment of position and size within the industry, giving potential, market share, and a comprehensive competitive analysis. There is a minimum 2-3 year time horizon for any enterprise-wide strategy to move from strategy to action to results. Results seen in 2014 reflect activities and action plans created in 2012, at best, and executed on in 2013.

Key Finding 1: Contributions declined -1. 2% in the U. S. and -0 Key Finding 1: Contributions declined -1.2% in the U.S. and -0.5% Worldwide. Int’l Network experienced growth of 1.9%. Current Year Support in the U.S. declined from $3.939B to $3.891B (-1.2%) and the Campaign declined from $3.37B to $3.33B (-1.2%). Campaign and Non- Campaign Revenues declined at the same rate in 2014. One way to understand the loss in CYS is to examine the largest dollar declines in 4 key markets. These 4 markets account for the vast majority of the overall CYS loss of $48.8M: UW $ Loss % of Loss Reason Oklahoma City -$19.7M 40.4% Tornado Relief efforts in 2013-14. Seattle -$11.7M 24.0% One-time gift of $10M in real estate in 2013; plus loss of several key corporate campaigns. Las Vegas -$11.1M 22.7% End of 9.1M grant for childcare; loss of a top campaign and several major donors. Denver -$5.0M 10.2% Flood relief in 2013 of $1.8M; reductions of capital campaign funds, bequests, restricted gifts Total $47.5M 97.3%

Key Finding 1 (Continued): Contributions declined -1. 2% in the U. S Key Finding 1 (Continued): Contributions declined -1.2% in the U.S. and -0.5% Worldwide. Int’l Network experienced growth of 1.9% United Ways experienced an -8.1% decline in the CFC, losing $11M. A larger percentage of the top 50 markets have been experiencing declines in CYS and campaign than in the past. Resources Under Management as a percent of CYS remained relatively stable at 75.1%. International network contributions increased 1.9% in USD. In normalized dollars – mitigating the effects of currency fluctuations – contributions increased 2.6%. The entire worldwide network raised $5.176B, down -0.5% from 2013, or -0.3% in normalized dollars. United Way’s reported figure for the Chronicle of Philanthropy is $3.825B (a decline of -1.17%). The Chronicle 400 listing will be extremely close; preliminary figures for Fidelity Donor Advised Fund ($3.849B) put them slightly ahead of United Way.

Key Finding 2: Contributions outside the campaign declined for the first time since 2008 by -1.3%. Government grants, which increased 149% over the past 5 yrs, declined by -4.6% (-$12.3M) in 2014-15. Many United Ways cited the loss of one-time revenue, time-restricted revenue, or gifts from major donors, bequests, and capital campaigns as reasons for decline. Well-diversified United Ways (10%+ beyond campaign) outperform low-diversified Untied Ways (<10% beyond campaign). Yet, increasingly, the loss in annual campaign revenue is difficult to backfill. Since 2008, the campaign loss has increased from $167M annually to $410M in 2014.

Key Finding 3: The network continues to experience overall donor decline. In 2014, the number of donors declined -4.3% from 8.72M donors to 8.35M donors. The rate of donor decline slowed in 2014 from -6.3% to -4.3% but is still a major concern. Where there is personal, effective individual engagement based on a donor’s philanthropic interests and needs, strong growth in donors is seen. The number of affinity group donors has grown 139% over the past decade. Leading the way are the Women’s Leadership Councils and the Young Leader groups (with donor growth of 165% and 119%, respectively). There is continued growth in the number of Tocqueville and Mega donors overall.

Key Finding 4: Significant challenges remain in the workplace with participation at an all-time low. United Ways experienced major losses in 2014-15 from corporate accounts – whether due to layoffs, attrition, or loss of corporate campaigns entirely. Current performance indicators show that participation rates in corporate workplace campaigns remain at their lowest level, 18%. A significant portion of United Ways mentioned corporate workplaces as a major challenge in 2014. This includes declining CEO engagement/support, workplace access, and participation. Many United Ways reported losing corporate accounts. Performance in GCL companies is stronger than corporate workplaces overall ($516 vs. $360 avg gift; $179 vs $69 per capita; 40% vs. 18% participation.) Increasing participation in corporate workplaces to the mid-point between the current rate and GCL rates would generate an additional $1B in revenue and 2.6M donors for UW.

Key Resource Development Trends

Trend in Giving to All Philanthropy, 2004-2014 In Billions of $ 7.1% 1.6% -3.7% 10.3% -8.3% 3.6% 4.9% 5.5% 11 Source: Giving USA 2015

United Way Current Year Support Trend, 2004-2014 In Billions of $ -5.2% 1.6% 0.4% -3.0% 1.1% -0.8% -1.2% -2.8% 12 Source: United Way Research

United Way Campaign Trend, 2004-2014 In Billions of $ -4.5% -4.3% 0.3% 0.3% -1.8% -1.2% -0.2% -2.8% 13 Source: United Way Research

Resources Under Management as a % of CYS RUM % of CYS Source: United Way Research CYS = Current Year Support RUM = Resources Under Management

2014 Growth in Charitable Contributions – All Philanthropy vs 2014 Growth in Charitable Contributions – All Philanthropy vs. United Way Source All Philanthropy United Way Bequests 15.5% ($28.13 B) 0.8% ($23.5M) Corporate Giving 13.7% ($17.77 B) 1.2% ($999.3M) Foundations 8.2% ($53.97 B) -2.0% ($77.3M) Individual Giving 5.7% ($258.51 B) -2.1% ($2.71B) Source: Giving USA 2015 and United Way Research

Philanthropy (US) United Ways (US) Giving from Corporations is a Larger Share of Giving to United Way than Philanthropy Overall Philanthropy (US) United Ways (US) Source: Giving USA 2015 ;United Way Research

United Way Worldwide Network Raises $5.176 Billion in Contributions Canada $520M 1.5% Canada $508.3M -0.3% Europe $17.9M 5.5% Europe $24.4M 10.4% United States $3.97B 1.1% United States $3.89B -1.2% Caribbean $1.9M -19.3% Africa $6.5M 5.5% Caribbean $1.93M 1.0% Africa $470K 84.8% Asia $739M 19.7% Asia $726.8M 2.7% Latin America $17.5M -6.4% Latin America $23.8M 19.7% U.S.: $3.891B, -1.2% International: $1.286B, +1.9% +2.6% normalized for currency fluctuations

Individual Engagement

Engagement Works: Affinity Groups membership growing Cumulative % Growth in Donors Women All Affinity Groups Young Leaders All Donors Source: United Way Research

Engagement Works: Growth in Affinity Group Giving Still Dramatically Outpaces Overall Giving Cumulative % Growth since 2004 Women All Affinity Groups Young Leaders Source: United Way Research

Changes to Two Large WLC Programs Led to Small Decline in Affinity Groups* 2014 2013 Pct Chg ($) Women 160 $175,004,907 $178,084,396 -1.7% Young Leader 147 $52,048,119 $51,821,192 0.4% Students 18 $193,667 $245,791 -21.2% African American 17 $8,688,156 $7,132,663 21.8% Hispanic 5 $1,718,755 $1,697,645 1.2% LGBT 4 $647,188 $483,990 33.7% Asian $0 $29,312 Other 15 $11,014,085 $11,110,962 -0.9% $249,314,877 $250,605,951 -0.5% Source: United Way Research. * Los Angeles raised the minimum WLC entrance amount from $1K to $2.5K. As a result, Membership declined. Albuquerque changed their WLC policy to an “opt in” program. Absent these changes, WLC would have Increased by 5.9% and overall Affinity Group Giving by 4.8%

Tocqueville/Mega Giving Continues to Grow; Leadership Giving Receded in 2014 $567.1 Total $ 27,472 # Gifts $20,643 Avg Gift $712.2M Total $ 518,723 # Gifts $1,373 Avg Gift Source: United Way Research

Rate of Donor Loss Slowed in 2014-15 Millions of Individuals -4.4% -10.1% -5.5% -2.1% -2.5% -1.4% -6.3% -4.3% Source: United Way Research

Half the Donor Loss Came From Employees in Corporate Workplace Campaigns Total Donor Loss Corporate Employees 47% 173K Donors Outside Campaign 16% 58K Donors (includes nearly 20K donors to Tornado Relief in 2013) Hospitals 15% 54K Donors Other Individuals 1.8%, 7K Donors Schools/Universities 18% 66K Donors State/Local Govt. 3.5% 13K Donors Source: United Way Research

Mega Giving

Major Trends Half of all individual giving to philanthropy comes from High Net Worth Individuals. Growth in Mega Giving (multi-million dollar gifts) is fueling the growth in individual giving and philanthropy overall. Growth rates not experienced in any other segment of philanthropy. Philanthropy 50 list: Top 50 donors increased giving 33% over 2013 to a total of $10.2B Increased ethos of giving. Giving Pledge – inviting the wealthiest to commit to giving more than half their wealth to philanthropy during their lifetime or through their will. Six new signatories in 2014. Roughly one-tenth have pledged. Commercial Donor Advised Funds fueling growth in Public Society Benefit. Have been growing significantly over the past decade. (Fidelity, 330%; Schwab 580%; Vanguard 120%) Growth stalled in 2014. (Fidelity, 4%; Schwab, -2%; Vanguard, -1%;)

Enormous Giving Potential Among High Net Worth Individuals; Top 5 Multi-Million Dollar Gifts to Philanthropy Exceed U.S. United Way Total Top 5 Mega Gifts of 2014 $1.9B to the Bill & Melinda Gates Foundation from Melinda F. and William H. (Bill) Gates III $556M to the Silicon Valley Community Foundation (donor-advised fund) from Jan Koum $550M to the Sean N. Parker Foundation and Sean Parker Foundation donor-advised fund at Fidelity Charitable Gift Fund $500M to the Silicon Valley Community Foundation from Jill and Nicholas Woodman $452M from Michael R. Bloomberg to an unidentified entity Top 5 Mega Gifts in 2014 to Philanthropy greater than the current size of the U.S. United Way Network. Total: $3.96B Source: Giving USA 2015

Giving From High Net Worth Individuals Fuels Growth in Philanthropy; 1 Year Growth in Multi-Million Dollar Gifts Outpaces All Other Sources All Mega Gifts Top 5 Mega Gifts Billions $ 39% 83% 2013 2014 2013 2014 Source: United Way Research and Giving USA. *”Mega Giving” to Philanthropy is Defined as Multi-Million Dollar Gifts

United Way Tocqueville and Mega Giving Still Growing Faster, in the Long-Term, Than Other Areas of Individual Giving to United Way 10 yr growth 1 yr growth $161.7M 20.4% -1.0% $134.4M $405.4M 26.5% 3.2% $320.4M $714.2M $712.2M -0.3% -4.6% Source: United Way Research and Giving USA 2015.

Leadership, Tocqueville, and Mega Giving Have Slowed Dramatically Leadership Giving Tocqueville/Mega Giving Source: United Way Research

Need to Encourage Growth Among Tocqueville/Mega Donors; Giving Levels Generally Remaining Stagnant Source: United Way Research

Wealth Transfer

Major Trends Greatest transfer of wealth in U.S. history will be occurring over the next 45 years. An estimated $59 Trillion will be transferred between 2007 – 2061. (3x the size of the U.S. economy, $17.9T) Of that, 83% ($49 Trillion) will be transferred through final estates. The other 17% ($10 Trillion) will be transferred through “accelerated transfer” – allocations made during the lifetime as a part of estate planning (trusts, foundations, family limited partnerships.) Accelerated transfer during the lifetime is increasing, particularly among wealthier individuals. Wealthier individuals tend to leave a larger fraction of their wealth to charity. An estimated $6.3 Trillion will be given to charity. (Sum of all giving to Philanthropy in the U.S. for 33 years from 1981-2014, or $110B/year.) This is in addition to $20.6T in giving during the lifetime. Lifetime giving, accelerated giving, and charitable bequests are interconnected forms of giving, can provide a positive feedback loop.

Major Trends (cont.) Growth in Endowment/Planned Giving (EPG) for United Way over the past 10 years has been 49% ($61.6M to $91.8M). Growth in Bequests for Philanthropy over the past 10 years: 52% from $18.5B to $28.1B. While our EPG growth rate is strong, our market share is extremely low. United Way’s market share of total corporate giving to philanthropy is 5.6%, United Way’s market share of planned giving is 0.08%. Percentage of United Ways that have full-time or part-time Endowment/Planned Giving (EPG) staff  4%.

Tocqueville Legacy Circle

Percent of United Ways (Metro 1-4) with Tocqueville Legacy Circle Percent of M1-4 UWs Source: United Way Research

Tocqueville Legacy Circle Members Up 12.6% Source: United Way Research

Expectancies from Tocqueville Legacy Circle Members $291,704 $191.2M Up 8% Source: United Way Research

Tocqueville Legacy Circle Members That Were New New Members 9.9% (70 Members) Up 27% Source: United Way Research

New TLC Members, Not Tocqueville Donors Percent of New Tocqueville Legacy Circle Members That Were Not Tocqueville Donors in 2014 New TLC Members, Not Tocqueville Donors 56% (39 Members) Source: United Way Research

Million Dollar Legacy Circle Source: United Way Research

Endowment Planned Giving Results Source: United Way Research

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