Strengthening Families and Reducing Poverty: Can We Achieve Both?

1. Strengthening Families and Reducing Poverty: Can We Achieve Both? Alexander SanchezSenior Vice PresidentCommunity Impact Leadership United Way of AmericaSeptember 19, 2007

2. 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

3. U.S. United Way System1,297 Local United Ways

4. Community Impact ModelWhat is it we must do to be successful? Paul C. Light, Rebuilding Confidence in Charitable OrganizationsNYU 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.

5. Community Impact ModelWhat is it we must do to be successful? Paul C. Light, Rebuilding Confidence in Charitable OrganizationsNYU 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.

6. Community Impact ModelWhat is it we must do to be successful? Paul C. Light, Rebuilding Confidence in Charitable OrganizationsNYU Robert F. Wagner Graduate School of Public Service, Public service brief, October, 2005 Charitable organizations must do a better jobof producing measurable results, whether in lives saved and enriched, disease averted, housing rebuilt, pride restored, education enhanced, great art produced, and/or economies strengthened.

7. Mission of the United Way System To improve lives by mobilizing the caring power of communities

8. support services for individuals and families Mobilizing communities that to improve lives   of program clients financial resources of businesses and employees United Way’s Traditional Approach to Improving Lives DIRECT IMPACT

9. people, time, talent, relationships, expertise, technology, money, etc. of community populations create lasting changes in community conditions support services for individuals and families Mobilizing communities  improve lives to that   of program clients financial resources of businesses and employees New Model for Improving Lives Uses Two Approaches COMMUNITY IMPACT  DIRECT IMPACT

10. Community Issue Family characteristics Personal choices Most Direct Service Programs Address Only One or Two Factors

11. Historical trends Economic conditions Public attitudes Media messages Public sector practices Health care system practices Community Issue Private sector practices Educational system practices Neighborhood conditions System relationships Family characteristics Personal choices Addressing Those Pressing Issues Requires New Approaches and Additional Partners

12. 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.

13. Change#4 What Resources Will We Need? • Not onlymoney • People • Relationships • Time • Talent • Wisdom • Expertise • Leadership • Influence • Technology • Financial assets • . . . • . . .

14. 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

15. 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

16. 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

17. 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

18. United Ways Implementing Impact Areasin their Resource Development Plan Percent Source: UWA Research

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

20. Community Impact ModelWhat 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

21. United Way. Advancing the Common Good Creating the opportunities for a good life for all by focusing on: Health Education Income • 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 Inclusion Public Policy Partnerships

22. United Way. Advancing the Common Good Creating the opportunities for a good life for all by focusing on: Health Education Income • 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 Inclusion Public Policy Partnerships

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.

24. 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 Economic Drivers

25. 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.

26. A Stepped Approach to Financial Independence

27. Low to moderate income workersby 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. Who Benefits From the Work?

28. 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

29. National UWA Goals • System Wide InvestmentOver 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 OutreachIncrease 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 UnbankedIn 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 TechnologyThrough 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.

30. 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

31. 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) Strategies to Leverage Income and Build Assets

32. 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 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

33. EITC Return On Investment San Antonio

34. EITC Return On Investment Bank of America, $500,000 investment in FSP Bank of America, > $21,000,000 ROI

35. Community Impact ModelWhat is it we must do to be successful? Paul C. Light, Rebuilding Confidence in Charitable OrganizationsNYU 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

36. 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

38. Thank You