Strengthening Families and Reducing Poverty:
Can We Achieve Both?
Alexander Sanchez
Senior Vice President
Community Impact Leadership
United Way of America
September 19, 2007
United Way System
• United Way has 100 year history of improving lives
• 1,297 local United Ways in the United States
• Thousands of affiliates worldwide
• United Way volunteers and partners work in 46 countries
• United Way in the U.S. raises $3.8 billion from 14 million
donors annually
• Around the world an additional $830 million is raised
annually
2
U.S. United Way System
1,297 Local United Ways
3
Community Impact Model
What is it we must do to be successful?
Paul C. Light, Rebuilding Confidence in Charitable Organizations
NYU Robert F. Wagner Graduate School of Public Service, Public service brief, October, 2005
Only 19% of Americans said charitable organizations do a very good job
running their programs and services, while just 11% said the same about
spending money wisely. In addition, 66% of Americans said charitable
organizations waste a great deal or a fair amount of money, while almost
half said the leaders of charitable organizations are paid too much.
The survey also suggests that rebuilding confidence must involve
sustained investment in strengthening the capacity of charitable
organizations to achieve measurable impact toward their missions.
4
Community Impact Model
What is it we must do to be successful?
Paul C. Light, Rebuilding Confidence in Charitable Organizations
NYU Robert F. Wagner Graduate School of Public Service, Public service brief, October, 2005
Showing the impact involves more than pictures of need. Such pictures
do little to reassure Americans that their contributions are being used
wisely.
Charitable organizations must do a better job of producing measurable
results, whether in lives saved and enriched, disease averted, housing
rebuilt, pride restored, education enhanced, great art produced, and/or
economies strengthened.
5
Community Impact Model
What is it we must do to be successful?
Paul C. Light, Rebuilding Confidence in Charitable Organizations
NYU Robert F. Wagner Graduate School of Public Service, Public service brief, October, 2005
Charitable organizations must do a better job
of producing measurable results, whether in
lives saved and enriched, disease averted,
housing rebuilt, pride restored, education
enhanced, great art produced, and/or
economies strengthened.
6
Mission of the United Way System
To improve lives by mobilizing
the caring power of communities
7
United Way’s Traditional Approach
to Improving Lives
Mobilizing
communities
support services
to
for individuals that
 and families 
financial resources of
businesses and
employees
improve lives
of program clients
DIRECT IMPACT
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New Model for Improving Lives
Uses Two Approaches
COMMUNITY IMPACT
people, time, talent,
relationships, expertise,
technology, money, etc.
Mobilizing
communities
create lasting
changes in
community
conditions
to
financial resources of
businesses and
employees
of community
populations
that
support services
for individuals
and families
improve lives
of program clients
DIRECT IMPACT
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Most Direct Service Programs Address
Only One or Two Factors
Family
Personal
choices characteristics
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Addressing Those Pressing Issues Requires
New Approaches and Additional Partners
Economic
conditions
Public
attitudes
Historical
trends
Media
messages
Public sector
practices
Health care
system practices
Private sector
practices
Neighborhood
conditions
Educational
system practices
System
relationships
Family
Personal
choices characteristics
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Change #2
Who Helps Create Community Change?
Whoever can play a role
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Agencies
Individuals
Corporations
Labor groups
Government
Foundations
Media
Academia
Institutions
Systems
Formal organizations
Informal associations
Neighborhood networks
Faith-based groups
etc.
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Change #4
What Resources Will We Need?
 Not only money
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People
Relationships
Time
Talent
Wisdom
Expertise
Leadership
Influence
Technology
Financial assets
...
...
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Essential Steps in United Way’s
New Business Framework
1. Develop impact strategies that
improve lives
2. Turn them into investment products
3. Segment investor markets
4. Connect investor aspirations with
needs/opportunities/strategies
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What Makes the New Business Model Viable?
 Occupies on an open niche (mobilizing
community partnerships to achieve community
change on pressing issues)
 Aligns with customer interests
 Relates to United Way’s traditional mission
 Builds on United Way strengths
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United Way’s Strengths


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Relationships with diverse stakeholders
(business, government, individuals, nonprofits)
Reputation as a neutral player
Ability to mobilize communities

Knowledge of community assets and needs


Focus on outcomes/results
17 million donors

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$5 billion+ raised or leveraged
Locations everywhere
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Implications of the New Business Model
The new model requires new ways of thinking about:
 Strategies
 Partners
 Ownership
 Resources
 United Way’s role
 Resource development
 United Way operations
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United Ways Implementing Impact Areas
in their Resource Development Plan
United Way System
United Ways with Impact Areas
Percent
20
18
16
14
12
9.9
10
8
6
5.0
4
2
0
UW1b
Source: UWA Research
18
United Ways Actively Positioning
Impact Areas in their Resource Dev. Plan
Actively Promoting
Not Actively Promoting
Percent
20
18
16.3
16
14
12
10
8
6
4
2
-0.1
0
UW1b
Source: UWA Research
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Community Impact Model
What is it we must do to be successful?
“Gallagher has worked to move the
mission away from ‘How much did we
raise?’ to ‘How much impact can we
have in our communities?’
The new model is to focus on
outcomes, not dollars”
-- Knight Ridder News, 10/19/05
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United Way.
Advancing the Common Good
Creating the opportunities for a good life for all by focusing on:
Strategies
Draft
Measurement
Areas
Education
• Quality child care
• Maximized income
• School readiness
• Increased savings
• Academic completion
• Financial assets for
long-term stability
Community & Volunteer
Engagement
Public Policy
Health
Income
2-1-1
Community
Investment
Partnerships
• Preventive / Everyday
Healthcare
• Healthier Teens: Drug-free,
within weight and reduced
pregnancy rates
Donor Relationships
Inclusion
Resource
Generation
22
United Way.
Advancing the Common Good
Creating the opportunities for a good life for all by focusing on:
Strategies
Draft
Measurement
Areas
Education
• Quality child care
• Maximized income
• School readiness
• Increased savings
• Academic completion
• Financial assets for
long-term stability
Community & Volunteer
Engagement
Public Policy
Health
Income
2-1-1
Community
Investment
Partnerships
• Preventive / Everyday
Healthcare
• Healthier Teens: Drug-free,
within weight and reduced
pregnancy rates
Donor Relationships
Inclusion
Resource
Generation
23
Economic Challenges
• Over 38 million Americans have incomes below the federal poverty level.
More than fifty percent are employed.
• Income Disparities – Top 20% control 85% of wealth;
Bottom 60% control 4%
• One out of three households reported using credit cards to cover basic
living expenses.
• The personal savings rate in 2006 (as a percentage of disposable
income), was a negative 1 percent.
• 2 million people filed for bankruptcy in 2005. Approximately 50% of
bankruptcies are caused by medical debt.
• Average credit card debt among American households is about $9,300.
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Economic Drivers
Key economic factors affecting
the ability of average persons to
achieve long-term financial
stability, include:
Lack of Economic Mobility
Soaring Personal Debt
Wealth Inequality
As evidenced in recent articles in:
The New York Times
The Washington Post
Wall Street Journal
Miami Herald
The Chronicle of Philanthropy
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United Way’s Financial Stability
Partnership™
A National Initiative Focused on Financial Stability
An initiative focused on financial stability leading to
independence designed in steps to can help individuals and
families to get off the financial tightrope, overcome basic
subsistence needs, and allow them to plan for the future.
27
A Stepped Approach to Financial Independence
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Who Benefits From the Work?
Low to moderate income workers by
helping them develop and implement
strategies that:
– Increase Income
– Build Savings
– Gain and Sustain Assets
Employers by creating a stronger, more
crisis-resistant workforce
Communities by increasing home and
business ownership, and the financial
stability of its residents
This Work Matters
Five years ago, Brownsville,
Texas had the highest poverty
rate in the nation. In just a
year’s time, United Way
worked with 1,000 Brownsville
families to apply for the
Earned Income Tax Credit,
resulting in nearly one million
additional dollars in that
community.
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Expanding Partnerships
Partnered with United Way and
provided an innovative process and
support in researching and
analyzing Benefits Calculators
which can scale and revolutionize
access to public benefits system
wide
Exploring partnership to support a
national agreement for benefits
calculator and other technology to
advance financial stability work
Partnered with United Way to
expand Earned Income Tax
Credit (EITC) outreach to 33
markets across the country
Host partner for the EITC and
Beyond: 2007 Leadership
Summit designed to bring UW
leaders and elected officials
together to focus on EITC and
other asset building strategies to
strengthen communities
30
National UWA Goals
 System Wide Investment
Over the next five years, the United Way will increase its investment by
50 percent to $1.5 billion by adding targeted, focused and proven strategies
that impact financial stability.
 Increase Income Through Expanded EITC Outreach
Increase the number of eligible families currently not claiming EITC by
25 percent in 200 targeted communities over the next year.
Increase the number of eligible families currently not claiming EITC by
50 percent in 400 targeted communities over the next five years.
 Bank the Unbanked
In 50 targeted communities, reduce by 10 percent the number of unbanked
and under banked households over the next year.
Across the United Way system, reduce by 25 percent the number of
unbanked and under-banked households over the next five years.
 Expansive Integration of Technology
Through technology, increase enrollment by 25 percent of eligible families
in earned public benefits in 20 targeted states over the first year.
Through technology, enable all United Ways to enroll eligible families in
earned public benefits in 50 states over the next two years.
31
National Launch Events
Brand Forum (Communications)
Los Angeles, January 24-26, 2007
National Public Launch
Washington, DC – Press Club, May 7, 2007
Staff Leaders Conference
Pittsburgh, May 16-18, 2007
EITC and Beyond: 2007 Leadership Summit
host partner National League of Cities
San Francisco, July 11-13, 2007
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Strategies to Leverage Income
and Build Assets
Earned Income Tax Credit (EITC)
Outreach
Volunteer Income Tax Assistance
(VITA)
Individual Development Accounts
(IDAs)
Financial Literacy Education
•
Freddie Mac Credit Smart Initiative
•
Freddie Mac Loan Prospector Outreach
•
Lending Consumer Rescue Fund
•
Don’t Borrow Trouble Campaign
•
FDIC Money Smart Train the Trainer
Partnerships w/ Financial
Institutions
•
Marketing of Existing Financial Products
& Services
•
Development of Alternative Products &
Services
Multi-benefit Enrollment
•
Use of Benefit Calculators (N2L)
33
Breaking the cycle of poverty….. by helping
individuals access information, save, and acquire
assets with long-term value
Access to Information & Education
Introduction to Services
Financial Literacy
Working Families
Change in Behavior
Community-based
Case Management
Acquire Assets
Homeownership
Asset Development Strategies
$
$
$
$
Micro-Business
$
$
Higher-Education
Financial Literacy + High-touch
EITC / CTC / Edu. Credits
IDAs
Case Management
Credit Rebuild
Asset Building and Preservation
Education Campaigns
Multi Benefit Enrollment
Marketing & Development of Financial
Products & Services
34
EITC Return On Investment
San Antonio
2002
2003
2004
2005
2006
Number
of Sites
41
32
27
26
28
Returns
Completed
10,400
15,244
20,850
25,962
30,000
E-Filed
3%
73%
93%
98%
100%
Returned to
Community
$12
Million
$21.8
Million
$30
Million
$40
Million
$45
Million
35
EITC Return On Investment
Bank of America, $500,000 investment in FSP
30 Communities
Tax Year 2005
Total # of Volunteers
Tax Year 2006
4,698
8,931
Total # of Volunteer Hours
100,386
276,329
Total # of Filed Tax Returns
161,635
225,824
$61,905,252
$83,262,273
$199,306,955
$269,336,295
Total Amount of EITC Returned to Clients
Total Amount of Tax Refunds to Clients
Bank of America, > $21,000,000 ROI
36
Community Impact Model
What is it we must do to be successful?
Paul C. Light, Rebuilding Confidence in Charitable Organizations
NYU Robert F. Wagner Graduate School of Public Service, Public service brief, October, 2005
Significant positive predictors of confidence in the sector:
1. Whether they have confidence in the United Way
2.
3.
4.
5.
6.
7.
8.
9.
10.
Whether they believe charities do a god job helping people
Whether they believe charities do a good job spending money wisely
Whether they have higher levels of education
Whether they believe charities do a good job running programs and services
Whether they have confidence in the Red Cross
Whether they have higher income
Whether they are older
Whether they see less charitable waste
Whether they are female
37
Community Impact
When all of the pieces come together, not only does your
work move toward greatness, but so does your life.
For in the end, it is impossible to have a great life unless it is
a meaningful life. Perhaps, then, you might gain that rare
tranquility knowing that you’ve had a hand in creating
something of intrinsic excellence that makes a contribution.
Indeed, you might even gain the deepest of
satisfactions: knowing that your short time here on
this earth has been well spent, and that it mattered.
--Jim Collins, Good to Great
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Thank You