Introduction to Community Impact Strengthening Families and Reducing Poverty: Can We Achieve Both? Alexander Sanchez Senior Vice President Community Impact Leadership United Way of America September 19, 2007

Introduction to Community Impact 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

U.S. United Way System 1,297 Local United Ways Introduction to Community Impact U.S. United Way System 1,297 Local United Ways

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.

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.

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.

Introduction to Community Impact Mission of the United Way System To improve lives by mobilizing the caring power of communities The mission of the United Way System is to improve lives by mobilizing the caring power of communities. Improving lives is always the bottom line of our work.

United Way’s Traditional Approach to Improving Lives Introduction to Community Impact United Way’s Traditional Approach to Improving Lives Mobilizing communities support services for individuals and families to  that  improve lives Note to presenter: If you are using the animated version of this presentation, comments marked with the  symbol correspond with animated text. Traditionally, United Ways have improved lives by mobilizing financial resources of businesses and employees to support programs that provide direct services to individuals and families and thus improve the lives of the clients who receive those services. This approach has a direct impact on the lives of these program clients. This is important work, but we have come to understand that it is not enough. financial resources of businesses and employees of program clients DIRECT IMPACT

New Model for Improving Lives Uses Two Approaches Introduction to Community Impact New Model for Improving Lives Uses Two Approaches COMMUNITY IMPACT people, time, talent, relationships, expertise, technology, money, etc. create lasting changes in community conditions  of community populations Mobilizing communities improve lives  to  that  support services for individuals and families Thus, to the traditional, direct impact approach of mobilizing the financial resources of businesses and employees to support direct services and improve the lives of program clients, the new business model for United Ways adds a second approach -- one focused on: mobilizing the community’s people, time, talent, relationships, expertise, technology, financial assets and other resources to change the conditions in communities that create so many problems for individuals and families and thus improve the lives – not just of program clients, but of community populations. This second approach to improving lives -- by changing community conditions -- is what we call “community impact.” financial resources of businesses and employees of program clients DIRECT IMPACT

Introduction to Community Impact Most Direct Service Programs Address Only One or Two Factors Community Issue Direct-service programs, such as the ones United Ways typically have funded, generally focus on influencing . . . individuals’ knowledge, skills, motivations and behavior, and . . . family dynamics and resources. Even when they do an outstanding job of influencing individual and family attributes, most direct-service programs are not designed, resourced, or able to create changes in the host of other conditions that are causing our communities’ pressing issues. Personal choices Family characteristics

Introduction to Community Impact Addressing Those Pressing Issues Requires New Approaches and Additional Partners Economic conditions Public attitudes Historical trends Media messages Public sector practices Private sector practices Neighborhood conditions System relationships Family characteristics Personal choices Health care system practices Educational system practices Community Issue To address those community issues, we need to deal with the conditions that created the issues in the first place and are causing them to get worse and worse. Changing those community conditions calls for a new approach as well as additional partners.

Introduction to Community Impact Change #2 Who Helps Create Community Change? Whoever can play a role Agencies Individuals Corporations Labor groups Government Foundations Media Academia Institutions Systems Formal organizations Informal associations Neighborhood networks Faith-based groups etc. This new filter lets us see that the answer to the question of “Who will help create community change?” is: Whoever can help, depending on the particular issues and the specific strategies that we pursue to deal with them. Agencies often will have a role to play, but In this new work, our potential partners include every individual and organization in the community. Again depending on the specific issue and strategy, we are likely to be engaged with a variety of individuals and organizations – some familiar to us, some quite new to our experience.

Introduction to Community Impact Change #4 What Resources Will We Need? Not only money People Relationships Time Talent Wisdom Expertise Leadership Influence Technology Financial assets . . . When we say “resources,” the first thought is “money.” Money, of course, will continue to be vital to our work. However, mobilizing resources needed for creating community change is not only about raising money. We will be mobilizing a range of resources: people, relationships, expertise, influence, technology . . . Depending on the issue being addressed, the community change strategy being pursued, and the community that is pursuing it, the kinds of resources we need may vary widely. It will be essential to think of resources broadly to be sure we do not overlook the need and opportunity to mobilize the range of non-financial assets that are available in our communities. The importance of thinking about resources broadly is tied to another change in our thinking – about the United Way’s role in community work.

Introduction to Community Impact Essential Steps in United Way’s New Business Framework Develop impact strategies that improve lives Turn them into investment products Segment investor markets Connect investor aspirations with needs/opportunities/strategies

Introduction to Community Impact 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

United Way’s Strengths Introduction to Community Impact United Way’s Strengths 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 $5 billion+ raised or leveraged Locations everywhere

Introduction to Community Impact 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 The new mission puts United Way on a new road – the road to community impact. This new road brings changes in Strategies, partners, ownership, resources, United Way’s role, investor relationships, and United Way operations We’re going to explore each of these new directions.

Introduction to Community Impact United Ways Implementing Impact Areas in their Resource Development Plan Percent Source: UWA Research

Introduction to Community Impact United Ways Actively Positioning Impact Areas in their Resource Dev. Plan Percent Source: UWA Research

Community Impact Mission - Taking Hold Introduction to Community Impact Community Impact Mission - Taking Hold United Ways that report they are actively communicating the Community Impact Mission are much more likely to believe it’s making a difference. They believe: - the Community Impact Message is having a positive effect (72% vs. 48% system) - the Community Impact Mission is resonating with their donors (73% vs. 47% system) - it is having a positive affect on their ability to raise funds (40% vs. 24% system) This is not just attitudinal; performance is better. Those United Ways that believe the community impact message is having a positive effect have stronger than average resource development performance. We asked a few questions on the survey specifically about the CI mission. As we saw from the beginning of the presentation, a majority of UWs indicated the CI mission was a positive effect on the campaign. Larger UWs were more likely to say it was a positive effect, but at lower rates than last year. We specifically asked if the CI message resonated w/the donors, and a majority of UWs agreed. When we looked at only those UWs who were actively communicating the CI mission, the results changed dramatically. Those UWs overwhelming believed that the CI messaging had a positive effect (72%) as well as believing that the mission resonated with donors (73%) Source: UWA Research

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

United Way. Advancing the Common Good Introduction to Community Impact United Way. Advancing the Common Good Creating the opportunities for a good life for all by focusing on: Education Income Health Maximized income Increased savings Financial assets for long-term stability Preventive / Everyday Healthcare Healthier Teens: Drug-free, within weight and reduced pregnancy rates Quality child care School readiness Academic completion Draft Measurement Areas Community & Volunteer Engagement Community Investment Donor Relationships 2-1-1 Strategies Resource Generation Public Policy Partnerships Inclusion

United Way. Advancing the Common Good Introduction to Community Impact United Way. Advancing the Common Good Creating the opportunities for a good life for all by focusing on: Education Income Health Maximized income Increased savings Financial assets for long-term stability Preventive / Everyday Healthcare Healthier Teens: Drug-free, within weight and reduced pregnancy rates Quality child care School readiness Academic completion Draft Measurement Areas Community & Volunteer Engagement Community Investment Donor Relationships 2-1-1 Strategies Resource Generation Public Policy Partnerships Inclusion

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.

Building the Case Strategic Planning/Initiative Framework Development INTERVIEWS THOUGHT LEADERSHIP RESEARCH TASKFORCE Partners, Funders, LUWs, key UW staff, and others UWA and 25 Local United Way Leaders New and Existing Research UW Network and External National Thought Leaders

Introduction to Community Impact 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

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.

A Stepped Approach to Financial Independence Introduction to Community Impact A Stepped Approach to Financial Independence

Who Benefits From the Work? Introduction to Community Impact 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.

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

Introduction to Community Impact 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.

National Launch Events Introduction to Community Impact 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

Strategies to Leverage Income and Build Assets Introduction to Community Impact 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) City of San Antonio, Department of Community Initiatives (Funding & Site Operations) Annie E. Casey, Making Connections (Funding & Site Operations) IRS (Software & Technical Assistance) Catholic Charities (Volunteer Recruitment and Placement) United of San Antonio & Bexar County (Funding & Outreach/Marketing)

Introduction to Community Impact Breaking the cycle of poverty….. by helping individuals access information, save, and acquire assets with long-term value Access to Information & Education Financial Literacy Introduction to Services Community-based Case Management Working Families Change in Behavior Acquire Assets I use this to illustrate the continuum of services, education, and (high touch) care that low income families need to eventually meet their asset goals – You have to realize that no one comes as an empty vessel – you have years of assumed spending/saving behaviors and patterns that people either have to learn an/or unlearn. This is about providing individuals and families with access to information and resources that allows them to make the most informed decision possible – Let me ask you who doesn’t want Choice and Control over their hard earned dollar. Let me caution you – there is an extreme difference between being in a Traditional versus non-traditional market – you have to create education and program opportunities that allow people to move between a traditional and non-traditional market and be sensitive to where people enter into the continuum More informed consumer market – increased access to information and resources Two way street (developing a untapped market) convenience/ facilitator of relationships between low-income families and traditional financial market Financial Education and asset building programs are needed and effective complements to traditional welfare, adult education, workforce development, and work support programs, providing participants with tools needed to make sound financial decisions, participate in financial mainstream financial system, move up the economic ladder and achieve the American dream. Essential elements to point our this is about creating programs and creating partnerships that leverage supplemental resources and assist individuals and families to use their IDA so that they can leverage other asset building opportunities. Half of all wealth comes from generational transfers Homeownership Asset Development Strategies EITC / CTC / Edu. Credits IDAs Credit Rebuild Asset Building and Preservation Education Campaigns Multi Benefit Enrollment Marketing & Development of Financial Products & Services Financial Literacy + High-touch Case Management Micro-Business Higher-Education

EITC Return On Investment Introduction to Community Impact 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 61% were female and 39% were males. Eight in ten (81%) EITC filers identified as Hispanics, 10% as African Americans and 8% as White, not Hispanic. Slightly over one-third (35%) of the EITC filers were homeowners, while nearly half (49%) indicated that they rent their residence. 55% of the VITA filers filled as “single” 44% w/ health insurance – 34% w/out health insurance 7% indicated that they receive Food Stamps 63% of the filers had checking accounts. 51% had savings accounts.

EITC Return On Investment Bank of America, $500,000 investment in FSP 30 Communities Tax Year 2005 Tax Year 2006 Total # of Volunteers 4,698 8,931 Total # of Volunteer Hours 100,386 276,329 Total # of Filed Tax Returns 161,635 225,824 Total Amount of EITC Returned to Clients $61,905,252 $83,262,273 Total Amount of Tax Refunds to Clients $199,306,955 $269,336,295 Bank of America, > $21,000,000 ROI

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: Whether they have confidence in the United Way 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

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

Introduction to Community Impact These and other resources are tools for helping our United Way focus on what matters.

Introduction to Community Impact Thank You