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Jul 1, 2015

How The United Way’s Community Impact Investment Process Works

Sponsored Content provided by Chris Nelson - President, United Way of the Cape Fear Area

Over the years, local United Ways have been extremely visible in their respective communities during the typical fall campaigns. Many of you know United Way through the annual campaign at your respective workplaces. Others know United Way through various kinds of publicity, perhaps NFL or ACC sponsored commercials during football season. Whether you have participated in the campaign (typically through the ever-popular payroll deduction method) or not, you may not know exactly what happens to your donation once processed through United Way. You may know that your donations stay in your local community, and that United Way’s overhead expenses are relatively low. But do you know how your donation is invested back into the Cape Fear area? Are you aware of what agencies or programs are being supported and who ultimately benefits from your generosity?
 
In recent years, and in most communities, the way in which local United Ways invest your donations has changed. Before I continue, it’s important to note that HOW a local United Way invests in its respective community is a LOCAL decision made by local volunteers serving on the board of directors. Since all United Ways are independent nonprofit corporations, all corporate decision-making is the responsibility of that local board. Local ownership and control has been the cornerstone of the United Way business model for more than 125 years, since the founding of the first United Way – originally called the Community Chest. Unfortunately, this is one of the biggest misconceptions about the organization even today.
 
United Way of the Cape Fear Area (UWCFA) adopted what is called an “Impact” Model eight years ago. At that time, the UWCFA board of directors wanted to transform the agency into an organization that could better target the most critical needs in the Cape Fear area in the key areas of health, financial stability and education. The board also wanted to invest in the most efficient and effective local programs through an extremely competitive investment process. This volunteer-driven process has been implemented by the UWCFA over the past eight years, with an annual evaluation of the process and mechanics that has resulted in continuous improvements.
 
Here’s how it works: Every spring, “volunteer” investment teams review applications from as many as 20 programs in one of the impact areas. Application evaluations used by the volunteers consider specific board-approved criteria such as populations served, program targets, costs, collaboration with other organizations, and most importantly, program outcomes. (In fact, United Way started focusing on program outcomes years before any other funding organization, public or private). Once programs are selected and funding recommendations are determined by the investment teams, those recommendations pass through a review by two additional volunteer groups at United Way. In all, more than 200 volunteer hours spanning two and a half months are accrued in this annual process. Once the board makes its final decisions, programs are notified and funding from UWCFA begins in July.  
 
Another characteristic of the Impact Model adopted here is that UWCFA investments in those programs are committed for three year to give programs a reasonable amount of time to reach their projected outcomes, while providing a funding commitment that can be used to secure additional money. Every quarter of every year, funded programs report their quarterly outcomes to UWCFA. Additionally, UWCFA tracks annual financial data from those programs to assure their continued viability and to monitor their state and federal reporting requirements. After years of development and improvement, the United Way Impact Investment process has become one of the most sophisticated and replicated models in the business.
 
In a future article I will outline the incredible successes realized by this United Way Impact Model. In the meantime, I encourage you to visit www.uwcfa.org to see the results of these community investments for yourself.
 
Christopher L. Nelson is president of the United Way of the Cape Fear Area, a local nonprofit organization. Since 1941, the United Way of the Cape Fear Area has worked alongside local agencies in Brunswick, Columbus, New Hanover and Pender counties to assist them in providing substantial and sustainable change within the Cape Fear area. To learn more about the United Way of the Cape Fear Region, go to https://uwcfa.org/ or call (910) 798-3900.

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