Three Reasons You Must Change Your Business Model
Pivot, adjust, adapt, recover, rebuild – the pandemic has prompted an unprecedented level of change in our lives, our work, our society and perhaps even your United Way. But in reality, United Ways have needed to change their business model for years. In addition to the pandemic, here are three reasons you must change your business model:
Reason #1: No money = No United Way
The decline of workplace campaigns has been clearly documented for years and there is no turnaround in sight. In all of our research for local United Ways, we have not seen any indication that workplace campaigns will rebound or return to previous levels. Most of the reasons workplace campaigns are declining are completely outside of the control of United Way such as lack of local leadership, closures, corporate restructuring, open campaigns, third-party processors, online giving, Giving Tuesday, virtual workplaces, etc. United Ways cannot fix these problems.
If your primary source of revenue is dying then continuing to raise money the way you always have is not going to be successful long-term. The ability to effectively raise money and diversify your revenue beyond workplace campaigns is going to require you to change your business model.
Reason #2: United Ways Are Not Selling What Donors Want to Support
People no longer want, or need, an organization to vet local charities and allocate money to deserving charities – they can easily do that themselves, if they want to. With the internet and websites like Charity Navigator and Guidestar, it is easy for anyone to examine local charities and determine if they are worth supporting.
Donors are not motivated to give by the campaign goal. The amount United Way wants to raise is irrelevant to most donors. On average, less than 20 percent of donors want to know about the campaign goal. Donors need to see the results of how their contribution changes lives in their community. Our research with local United Ways has found that between one-third and one-half of all United Way donors report that they do not know what their contribution accomplishes. The cause-oriented younger generation has no interest in giving to an organization that just passes through their contribution to local charities.
If donors no longer want to buy what you are selling then continuing to sell what you have always sold is not going to be successful long-term. Attracting and retaining donors is going to require you to change your business model.
Reason #3: United Ways Cannot Explain What They Do
If trying to explain everything your United Way does is nearly impossible for your staff and board, then don’t expect your donors to “get it.” Our donor research has found that approximately one-third of donors cannot explain what United Way does even though they give money to United Way. The most common reason this happens is that United Ways try to be everything to everyone and therefore feel compelled to talk about everything they do and try to explain all the processes they use to do everything they do.
Often the stories that United Ways tell are about their partner agencies. This is like a large blinking arrow sign pointing donors to give directly to partner agencies and does nothing to increase understanding of United Ways.
If your community and donors do not understand what you do then continuing to say the same thing over and over again is not going to be successful long-term. The ability to clearly and concisely explain what your United Way does is going to require you to change your business model.
The Issue Focus Business Model Address All Three of These Reasons
Issue Focused United Ways choose an issue, like poverty, homelessness, graduation rate, or kindergarten readiness, and they lead and convene the community to make a measurable change on that issue. Instead of a campaign goal, their success is measured by the number of families no longer living in poverty, people who now have a home, students who graduated from high school, or children that are ready for kindergarten. Rather than spreading their money a mile wide and an inch deep, they invest deeply in programs and services that address their issue. And they ask donors and funders to give to reduce poverty, end homelessness, increase the graduation rate, or have every child enter kindergarten ready to learn and not for a campaign goal.
When a United Way is issue focused, people know exactly what their contribution will accomplish because an issue focused United Way only addresses one issue with an inspiring goal for success. Issue Focused United Ways raise more money because they are able to attract additional resources like grants, sponsorships, and planned giving to address their issue. When a United Way is issue focused, they are able to unify their community, volunteers, donors, partner agencies, board, and staff around a shared vision to address a single issue. Issue focused United Ways can easily explain what they do in just one sentence, and even in as few as two words such as “Crush Poverty” or “Halt Hunger.”
Take a couple of minutes and learn more about how an issue focus will transform your United Way by watching our free United Way Survival Guide video.