Diversity aids workplace giving

The Trenton Times

Monday, December 20, 2004

By ERIN MURPHY SANDERS

Tom Van Essen of Hopewell Borough is a longtime supporter of Planned Parenthood
of Mercer County.

Alicia Byzek of Fairless Hills, Pa., gives to the Kisses for Kyle Foundation.

Linda Tyler of Ringoes prefers to diversify her giving and includes an international,
national and local organization.

While the trio of Educational Testing Service employees may disagree on where their
workplace donations should go, they all agree that having a choice increases their enthusiasm
for giving - as well as their donation.

"I think that deciding where to give is a very personal thing and to have choices is a very
good thing," said Tyler .

These days, more employees - and their bosses - are echoing those sentiments.

For decades, workplace giving was synonymous with the annual United Way campaign, which
raises funds for community care organizations. Today, many employers have expanded the
choice on payroll deduction pledge cards to include organizations focusing on the environment,
social justice, medical research and the arts.

Americans expect choice - and lots of it - in the marketplace, so it's not surprising that the
American employee expects choice in the workplace: multiple health and retirement plans,
flexible work and leave schedules and alternative workplace giving options.

When employees give at the office, they want to choose where their money goes, said
Nancy J. Tringali , executive director of Community Health Charities of New Jersey in
Monroe, a federation of health organizations.

"I think companies see alternative giving options as a benefit to their employees and employees
see them as a benefit because it's a painless way to give."-- -- -- Many new nonprofits were
formed during the 1960s and 1970s as a result of increased ethnic, civil rights and environmental
consciousness but were unable to gain access to workplace giving campaigns until pressure
from employees, the federal government and the nonprofits began opening doors.

In the 1980s, the Combined Federal Campaign (CFC), the largest workplace charitable giving
campaign in the world, opened up to thousands of small national and local nonprofits. Access
to the CFC campaign, which reaches more than 4.5 million federal employees and raised
more than $250 million in 2003, gave them a stable source of funding and a foothold in the system.

State, county and municipal employee campaigns soon followed suit. Prior to the mid-1980s,
the New Jersey state employee campaign included the United Way and a handful of other
health and human service agencies. Today it represents more than 1,400 human service,
environmental, advocacy and health agencies.

To gain access to workplace giving campaigns, which are the highest-yielding, lowest-cost
method of fund raising, small nonprofits often band together under umbrella organizations
or federations. Such partnerships give employers a single point of contact, allow agencies
to focus on their mission and put more donor dollars directly to work.

"We are the workplace giving department of our member organizations," said Paula-Jeanne
Aldarelli, executive director of Earth Share of New Jersey in Trenton , a federation of 18 New
Jersey environmental organizations, including Isles Inc., the Stony Brook-Millstone Watershed
Association, the Pinelands Preservation Alliance and the New Jersey Audubon Society.

Aldarelli said the workplace-giving environment is changing dramatically as more and more
corporations expand their choice.-- -- -- In a 2002 survey of 100 companies representing more
than 5 million employees conducted by The Consulting Network, 40 percent said they had
broadened their campaigns beyond United Way-affiliated charities.

But it can still be hard for alternative federations to get in the door.

"Old habits die hard," said Aldarelli. "I think that some people find it hard to believe that more
choice in a campaign would be better for the campaign overall."

The enduring tradition of the United Way campaign can be a formidable obstacle for managers,
even if they want to open a campaign, said Matthew Howe, executive director of the National
Alliance for Choice in Giving.

With its strong social network at the community level, the United Way maintains a dominant
position in the marketplace. Of the estimated $4 billion raised through workplace giving in 2001,
about $222 million was pledged to alternative federations, according to a study by the National
Committee for Responsive Philanthropy.

Open campaigns create a challenge for the United Way . |

Jesse M. Starks, vice president of resource development at the United Way of Greater Mercer
County said they are rethinking their marketing strategy and how to differentiate themselves
from other charitable organizations.

Unlike other federations, Starks said the United Way allocates undesignated donor dollars
based on a citizen review process that identifies and prioritizes human service needs in the
community, assuring more accountability for those dollars.

At the same time, the United Way has been offering employees more choice. Donors may
choose a particular community group or charity as a recipient of their donation.

In addition, United Way often continues to manage a campaign after it opens to alternative
federations because of its long history with the employer.

In the case of the State of New Jersey's Employee Charitable Campaign (ECC), United Way
staffers have felt uncomfortable promoting their own organization within the open environment,
concerned about a perceived conflict of interest.

Starks is helping them rethink their role so they can manage the campaign fairly and effectively
for state employees while continuing to raise funds for their organization.

But does choice generate more charitable dollars or further divide the pot?

Howe believes workplace giving behaves like any other marketplace when it moves from a monopoly
to a competitive arena - overall consumption rises with more choice.

That seems to be the case at Educational Testing Service in Lawrence .

Three years ago, ETS added Community Health Charities, the American Red Cross and the
United Negro College Fund to its traditional United Way campaign. Participation has risen from
6 percent to 65 percent and total contributions have increased from $35,000 to more than $300,000.

"I knew that ETS'ers were generous," said Eleanor Horne, vice president and corporate secretary.
"They simply were not responding to United Way."

In talking with employees, Horne learned they wanted to control where their dollars went, so the
campaign emphasizes choice both through United Way donor designation, alternative funds and
a write-in option.

Horne said the role of leadership in a campaign is to make it clear the company values employee
contributions and the company will do the same. Senior staff members are asked to be leaders in
the campaign and to contribute at least $1,000.

"When you put your money where your mouth is, it's a lot easier to turn around to your
employees and ask them to do the same," said Horne.  Simply opening a campaign
does not guarantee increased participation.

"The only way you get campaign effectiveness is to organize," said Eleanor L. Brilliant,
professor at the school of social work at Rutgers University and author of "The United Way,"
a study of the organization. "If a group puts in a lot of energy for enthusiasm, they will get
enthusiasm. It does not happen because you have 10 more organizations in the campaign."

According to Brilliant, some in the industry believe the era of the great workplace campaign
is over because of the loss of factory workers, the proliferation of smaller companies and
the impersonal nature of electronic fund raising.

Nationwide, only 25 percent of employees have access to workplace giving campaigns and
participation has dropped to 35 percent compared with 47 percent over a decade ago. Yet
fewer are giving more.

The New Jersey ECC raised a record $2.108 million last year with about 10 percent employee
participation.

Others see a new era dawning for workplace giving. Howe believes that companies are
increasingly interested in open campaigns because technology makes it easier, that changing
corporate cultures and demographics are making diversity in giving a priority and that scandals
on the national level have caused a gradual erosion in support for the United Way .

Prudential Financial Inc.'s workplace giving program may be the wave of the future. Prudential,
headquartered in Newark , has experimented with open campaigns since the 1980s.

No longer called a campaign, the program has evolved into a year-round, online matching
gifts program.

The Prudential Foundation matches employee charitable donations (direct or payroll
deduction) dollar for dollar to a maximum of $5,000 a year. The company continues to
support organizations that were part of its traditional campaign on a project basis versus
an annual pledge.

Before those changes, Dale Harris, director of local initiatives, said the company noticed a
gradual decline in per-capita giving.

Employees were bypassing the system and giving directly to their favorite charities, which
weren't part of the program.

Now that all charitable organizations are eligible, the program receives high marks from
employees and the size of the average gift per employee is steadily increasing.