Can a charity built for the 20th century adapt to the new realities of modern philanthropy?

Lisa Courtice is in a celebratory mood. It's late January, about nine months into her tenure as the leader of the United Way of Central Ohio, and she just got off the phone with a longtime donor. As Courtice's blinding smile suggests, the conversation went well. The donor pledged $1 million—spread out over the next four years—and Courtice hopes it's the first of several “transformational gifts” in the pipeline for her agency.

Part of an ambitious reimagining of the organization, the strategy marks a bit of a change for the United Way, which has long relied on wide middle-class support rather than monster checks from the super rich. But the economics of philanthropy are changing dramatically, with nonprofits increasingly reliant on individual mega-donations, a reflection of growing income inequality in the U.S. The United Way of Central Ohio needs to adjust to that new reality, along with other powerful forces—digital technology, increasing competition, generational shifts—bearing down on the 95-year-old charity.

Though the organization remains an important Columbus institution—and one of the largest United Ways in the country—it's now facing an uncertain future. Donations have begun to rise again after a major drop during the Great Recession, but giving is still below the 2007 high-water mark of $56 million. Meanwhile, the United Way's basic business model is under fire, as workplace giving loses its luster and individual donors demand more control, earmarking funds for specific causes (instead of letting the United Way choose how best to spend the money) or looking for experiences that the United Way doesn't offer.

Where others see chaos, however, Courtice sees opportunity. After 13 years directing community research and grant management at the Columbus Foundation, she took the job as the CEO of the United Way of Central Ohio in early 2017, drawn by the chance to help reinvent an organization at a crossroads. “We have to not be afraid to fail,” she says. “We have to be able to take risks, be open to new ideas, learning from others.”

And those ideas are beginning to take shape. In conversations with Columbus CEO in recent weeks, Courtice and other United Way leaders began to reveal their plans for creating a leaner, bolder and more accommodating United Way. Changes include more emphasis on technology (smarter data-crunching and a better digital giving platform), stronger relationships with donors and funded partners, and improved outreach to millennials. While some ideas build upon the work of Courtice's predecessor, Janet Jackson, others take the United Way into new areas. United Way officials are even considering the possibility of selling their South Third Street headquarters to capitalize on rising Downtown Columbus property values. Everything, it seems, is on the table.

But such bold risk-taking isn't in the United Way's DNA. It isn't a nimble startup. It's a lumbering, old-school charity built for the 20th century with deeply rooted traditions. Is it even possible for such an organization to adapt to the new realities of modern philanthropy? “I guess that's what we're going to find out,” says United Way of Central Ohio board member Duane Casares.

It sounds like the opening of a stale joke, but one of the great philanthropic ideas of the past 150 years really did begin with a woman, a priest, two ministers and a rabbi. In 1887, the group of Denver community activists created a united fundraising campaign for 10 health and welfare agencies in the Colorado city, raising $21,700. In the following decades, the concept spread throughout the country, birthing what later became known as the United Way.

In 1923, Columbus leaders formed the Columbus Community Fund, which conducted a combined campaign for 28 human services agencies, raising more than $600,000. The effort changed its name to the War Chest during World War II, the United Appeal of Franklin County in 1961, the United Way of Franklin County in 1972 and finally the United Way of Central Ohio in 2000. Spurred by payroll deductions—which started in the 1940s—these “community-chest” campaigns grew dramatically, providing social services agencies a simple and reliable fundraising source. “The community-chest model was fundamentally based on the model of efficiency,” says Allen Proctor, a veteran Columbus nonprofit leader and the CEO of SocialVentures, an advocacy group for social enterprises. “Instead of every organization having its own fundraising staff, we can pull this together and raise money in a very effective manner.”

The formula seemed to work especially well in Columbus, with a tight circle of business executives leading campaigns every year. “It just became part of the culture amongst civic and corporate leaders. … This was something they were going to get behind, and the expectation was conveyed that you would take your turn heading it up and that you would raise more than the person who came before you,” says Laura MacDonald, president of Benefactor Group, a Columbus boutique fundraising consultancy.

Brian Gallagher started as a management trainee with the United Way of America (now United Way Worldwide) in 1981 and then worked for chapters in Winston-Salem, North Carolina; Reading, Pennsylvania; Providence, Rhode Island; and Atlanta. In 1996, he left Atlanta to lead the United Way of Franklin County, as it was then called, drawn by its reputation as one of the top chapters in the country.

During his six years in Columbus, the United Way's annual campaign grew from $37.3 million to $53 million—a 42 percent increase. In 2001, the United Way of Central Ohio was declared the country's top per-capita fundraiser, and a year later, Gallagher was promoted to the top job at United Way Worldwide in Alexandria, Virginia, a role he still has today. “Columbus is a place that works,” Gallagher says. “It's politically diverse. It's got big companies. It's got small companies. It's got major universities and small liberal arts colleges. If you throw United Way seeds in the ground or any kind of philanthropic seeds in the ground in Columbus, things grow because it's part of the culture to be involved.”

Since then, two recessions have affected fundraising in central Ohio, but broader economic, philanthropic and cultural changes perhaps have had a greater impact. MacDonald points to decreased institutional loyalty. While donors might remain committed to a cause, such as children's health, they are now finding different ways to express that loyalty. “That, I think, is one of the headwinds that the United Way is facing,” MacDonald says.

What's more, the United Way is no longer the only game in town. The proliferation of nonprofits—many with their own fundraising teams—has given donors more philanthropic choices in recent years, while digital technology provides a convenient means to learn about other charities and make transactions. Other fundraisers have also moved into Columbus workplaces, such as Pelotonia, a trendy, tech-savvy operation that seems to have created a cultural expectation of participation, mimicking what the United Way pioneered decades earlier. “They've captured what we call social norming,” MacDonald says. “Social norming is really important psychology in charitable giving. All the cool kids now give to Pelotonia, and I think that's no longer the case with United Way.”

But perhaps the most profound change is about control. Increasingly, donors don't want to defer to the United Way and let it decide how to use the money they give. Instead, they designate the recipient of their money, turning the United Way into a conduit or a pass-through rather than an overseer of a large pot of money that it distributes to agencies throughout the city to tackle an ambitious social goal, such as eradicating poverty.

This phenomenon threatens the fundamental fundraising structure of the United Way. As designations have skyrocketed—from 11 percent in 1997 to 37 percent in 2016—some have begun to speculate that the United Way might not be around in a few years unless the trend is reversed or a new model is developed. “The way we are structured, and the way we have been structured, is essentially failing,” said former United Way of Central Ohio CEO Janet Jackson in 2015.

When Jackson announced her retirement two years ago, United Way of Central Ohio leaders launched a nationwide search for a successor. They considered more than 180 candidates but ended up finding their new CEO just a couple of miles away. “We felt fortunate to find a great leader in Lisa Courtice,” says Lisa Ingram, the CEO of White Castle and the chair of the United Way of Central Ohio Board of Trustees. “Her work with the Columbus Foundation really gave her a rich understanding of the diverse and real needs of the citizens of Columbus. And she also had a really keen ear for hearing what's going on in the minds of the donors and the agency partners.”

Indeed, Courtice, the architect of the Foundation's Big Give initiative and a key player in the Weinland Park Collaborative, focused on listening during her first few months on the job at the United Way. A psychologist by training, Courtice met with donors, corporate bigwigs, community leaders, funded partners and more, picking their brains about the United Way, as well as inquiring about their own needs and concerns.

Courtice met multiple times with John Ammendola, the CEO of Grange Insurance, one of the United Way's best corporate partners in Columbus. “What I found most intriguing about Lisa was she listened more than she spoke,” he recalls. Then, when he'd be out and about in Columbus, Ammendola would run into her having lunch with other community leaders. “She was an ear to the ground to really try to understand how the community felt and what worked and what should be preserved and what needed to change.”

“She talked to every stakeholder in the community, I think,” says Casares, the United Way board member and the CEO of Directions for Youth & Families. “She really was very intentional about that. She purposely decided she was going to talk to all the funded partners. She was going to talk to all the key people, the key organizations, the key big businesses that were contributing and really get their feedback. Before she was really going to start to make any significant changes, she wanted to make sure she'd get all the information.”

Eventually, some consistent themes emerged in those conversations. The United Way needs to be a “stronger partner” with both social service agencies and donors. It needs to be more transparent and streamlined. It needs to tell its story better in an increasingly competitive market.

To improve relations with funded partners, the United Way is looking for new homes for five direct-services programs: Fresh Foods Here (healthy food in low-income neighborhoods), Tax Time (free tax preparation), Columbus Kids (preparation for kindergarten), Care Coordination Network (a community hub for services) and E3 (helping low-income women finish their education). Over the past 10 years or so, the United Way incubated these in-house programs that some funded partners saw as competition. “We will continue to invest in that work, but rather than those being United Way employees doing the work, they will be housed at [other nonprofits],” says Michael Wilkos, the United Way of Central Ohio's senior vice president for community impact.

Wilkos expects to find new homes for most of the programs by the end of September. “We've been approached by multiple nonprofits that are interested in each of those, so we know those programs are needed,” Wilkos says. “We know they're valuable to the nonprofit sector, and we want to do what's right by transitioning them in the right way.”

Courtice also rejiggered her data-science team to better serve funded partners, who told her during her listening tour that they're hungry for more data-driven insights. The United Way now puts out a “Results Report” three times a year that already appears to be paying dividends. Nonprofits providing basic needs such as clothing and shelter predicted they would serve about 30,000 people in the first quarter of last year. The data ended up showing that they had served 78,000, more than twice as much as expected. “That is just really important information—and alarming information,” Courtice says.

On the donor side of the equation, Courtice has made a philosophical shift of sorts for the United Way. The agency wants to be more accepting of those who designate their donations. “We embrace all donors,” Courtice says. Courtice encountered a wide variety of opinions on this topic during her listening tour. Some told her the United Way never should have allowed earmarking, that the decision was the one of the organization's biggest downfalls.

But Courtice looks at it differently. “As someone new to this, I come in, and I'm like, ‘Oh my gosh. That's a lot of money that comes through us. That's a big service we offer our community.' ” She also discovered that some of the highest-performing United Ways are more accommodating to designators, resulting in conversions of some into United Way contributors.

Her philosophy seems to be this: meet the donors where they are. And if the United Way can show its impact—the people it's helping, the neighborhoods it's revitalizing, the needs it's addressing—then the money will follow. “I think the really big question is, ‘How is the United Way connecting with those individual donors and how are they creating that feeling that their dollars are making an impact in the community?' ” asks Ingram, the United Way board chair. “If we can do that, then I think the actual model on how we collect the donation is much less relevant than the fact that we actually are inspiring people to give.”

On a shockingly warm late February evening, about 150 people squeeze into the Land-Grant Brewing taproom in Franklinton. The youthful crowd—gray hairs and beer guts are few and far between—sip oatmeal raisin stouts and Baltic porters as they inscribe new or gently used children's books with cute messages, such as “Reading is awesome and so are you.”

“Books and Brews,” as the book drive is known, is one of the signature events of LINC, a United Way initiative that targets young professionals in their 20s and early 30s. One of 16 such groups across the country sponsored by local United Ways, LINC (Lead. Impact. Network. Change.) is growing in Columbus. Since launching in 2014, more than 700 members have completed more than 1,700 volunteer hours and raised more than $1 million for the United Way of Central Ohio's Community Impact Fund, the organization's main vehicle for addressing social concerns in Columbus.

Claire Ferneding, a 30-year-old State Auto Insurance employee, joined LINC at its inception after a senior vice president at State Auto “voluntold” her to sign up. Now a member of the Columbus LINC's steering committee, Ferneding has made close friends through the group and found an outlet for giving back. Like many young people, she's not ready to contribute big dollars to the United Way yet. But she can handle LINC's $250 annual membership contribution (which breaks down to less than $5 a week), and she's happy to provide her sweat equity to projects such as LINC's annual school makeover, where volunteers repaint and freshen up schools, and “Books and Brews,” which collected 3,000 books for kids in need on this night. “And it's fun,” she says. “Having a little cocktail after work is never a bad thing.”

LINC started under her predecessor Jackson, but Courtice also has gotten behind the initiative. She recognizes the need to engage millennials, and LINC serves an introduction to philanthropy for them, as well as an antidote to the United Way's fuddy-duddy reputation. The traditional philanthropic model doesn't seem to work for millennials, and the United Way needs to come up with new ways to reach this critical cohort.

To that end, the United Way of Central Ohio and 21 other large United Ways expect to debut in June a new app that Courtice calls a “game changer.” Philanthropy Cloud—developed with Salesforce.org, the nonprofit arm of Salesforce—creates a slick, smart, personalized digital experience that resembles a philanthropic social media network, connecting donors, volunteers and agencies and using artificial intelligence to match causes with users. Nasi Jazayeri, a Salesforce.org executive vice president, predicts Philanthropy Cloud will drive community engagement.

“You can volunteer or give 24/7, 365 days a year,” says Gallagher, the United Way Worldwide CEO. “You can run a United Way campaign. It can do a cause campaign. It can facilitate your volunteering. It'll track your giving. It will connect you to causes you care about. It'll connect you with each other.”

Though uncertainty hovers over the United Way, possibility and excitement are there, too. In late January, Courtice and two other United Way of Central Ohio executives—Wilkos, the senior VP for community engagement, and Kermit Whitfield, director of communications—talk about the future of the United Way. They're spirited, enthusiastic, hopeful. They seem invigorated by the challenge of transforming the organization, not intimidated by it.

Wilkos is in his second stint with the United Way. Courtice recruited him away when she was at the Columbus Foundation and then persuaded him to return after she took the top job. On this day, Wilkos makes the case for the United Way's continued relevancy. It can be an incubator of big ideas, he says. It has the expertise and communitywide perspective to bring the city together to tackle Columbus' unprecedented poverty rate, which remains troublingly high despite the growth and prosperity that many parts of the region are experiencing. “We need to empower our volunteers, our board members and our staff to be out convening the community, to be talking about these issues and how these things intersect and for people to understand that the solutions will not be quick, and they will not be easy,” he says. “That is why you need this system that is soon going to be turning 100 years old.”

And what will the United Way of Central Ohio look like when that anniversary arrives in 2023? One possibility is it might have a new home. Courtice reveals that United Way leaders have met with developers to discuss what to do with its longtime headquarters at 360 South Third Street in Downtown Columbus. Maybe they'll sell the property and move elsewhere. Maybe they'll redevelop it. Maybe they'll put affordable housing on it. Maybe they'll reconfigure it, adding more space for offices, meeting rooms and idea incubation.

Like the organization itself, the discussion is wide open.

Dave Ghose is the editor.