United Way of Central Maryland has ended its long-standing policy of allowing donors to earmark contributions for private schools and art institutions, a move that it expects to cause at least a temporary dip in the next fund-raising campaign.
Starting with the local charity's 2004 campaign - scheduled to begin this summer - the group will accept only gifts that are designated for nonprofit organizations that have health or human services as their core mission, said Larry E. Walton, president and chief professional officer.
About $1 million of the $42 million raised in the United Way's 2002 campaign would not have been accepted under the new policy, he said.
In recent weeks, officials of the local charity have visited major donors - people whose $10,000 to $100,000 gifts have been earmarked at least in part for institutions such as the Gilman School or the Baltimore Symphony Orchestra - to tell them of the change.
United Way board Chairman Donald Manekin said the policy was changed after the organization drew up a strategic plan last year and heard that some people in the community did not give because they knew the United Way accepted money for schools and arts organizations.
"People have been generally unhappy about the United Way's position on this," Manekin said. "The board was very unanimous about this issue - not only about doing it, but doing it now."
The hope, he said, is to attract big contributions from people who applaud the change in policy.
United Way money not routed to a particular charity goes to the "community safety net," a group of more than 100 agencies that represent the organization's central purpose of sheltering the homeless, counseling abused women and helping people find jobs. Many don't have the money or staff to solicit donations.
For years, the local United Way, like many others around the country, has allowed donors to designate gifts to any nonprofit organization, even if that group was not one of the United Way's member agencies.
The original goal was to bring in more givers by offering choices. But as the percentage of designated gifts began to cut into the amount available for distribution, the charity has tried to discourage the practice during the past several years.
United Way moved the designation option to the back of its pledge form and charges a 17.5 percent administrative fee for any gift outside its network.
For many donors, designating through United Way offered credit in the workplace, where many employers still promote United Way, along with the gratitude of a favorite museum or alma mater.
If a donor gave more than $1,000 to a university through the United Way, for example, the donor earned membership in the United Way Leadership Society, along with recognition from the university for the same donation. A $10,000 gift bought membership in the Alexis de Tocqueville Society.
At Notre Dame Preparatory School in Towson, money from United Way - which amounted to $45,450 in 1999 - has always been used for financial aid, said spokeswoman Cami Colarossi.
"We're certainly disappointed to hear this news, but as a charitable organization, it is their prerogative to direct their funding where they wish," Colarossi said yesterday.
Sally Ruppert, director of individual giving at the Baltimore Museum of Art, said she is not worried that gifts will drop off because of the change. In 2001, the United Way reported handling three gifts to the museum that totaled $56,000. But the amount varies from year to year, and Ruppert characterized it as a small part of the museum's fund raising.
There will be some judgment calls involved in the policy. Jemicy School, a private school for dyslexic children, will continue to receive designated money, Walton said. If the United Way board is not sure a group qualifies, it will ask that group for its mission statement to determine whether health or human services are included, he said.
The local United Way's fund raising has suffered for the past few years because of the poor economy, corporate cutbacks and news of a scandal at the United Way chapter in Washington, D.C.
The 2003 campaign, which will formally conclude in about a month, is about $1 million short of its private-sector goal of $32.6 million. In 2002, the campaign fell $5 million short of its goal, and the organization cut funding for 63 nonprofits by 40 percent over six months.
Walton said that in the short term, the new policy is likely to shave some money from United Way's fund-raising total. Donors have said they understand the reasoning but some have said they will have to take part of the donation they ordinarily funnel through United Way and give it directly to the recipients.
Lindy Small, who handles corporate giving at Constellation Energy, said employees there who designate gifts and have heard about the change aren't sure how they'll respond.
"It's all such a new thing and hasn't been formally announced," she said. But the amount of designations that would be turned away makes up a small portion of what is typically raised, she said.