It takes more than dollars to raise a non-profit mission. It takes a village.In parts I and II of this series I highlighted some of the concerns about charitable giving, changes to tax laws that will affect it in the future, and the organizations that rely on donations for survival. In this segment, I talk with Richard Payonk, Executive Director of the United Way of the Wabash Valley, to find out how giving will affect his organization. Richard graduated from Rose-Hulman in 1986. After working as an engineer for his entire professional life, he transitioned into the non-profit world. He served on the board of United Way before taking the Executive Director position two years ago.
I expected the conversation to focus mostly on the ability of United Way to raise money for its campaign. Fundraising was only a topic of conversation for a few minutes. We quickly took a turn, discussing the difficulties of overcoming the stigma of being a traditional fundraising organization, the reluctance of community leaders to get involved and the perception of society as a whole. As if exploring the wonderland of NFPs wasn’t daunting enough, Payonk is trailblazing a different approach. One that requires us to take a look at ourselves, but has the potential to lead his community to a place where we can begin to make sense of it all.
Christian Shuck: What do you think the larger impact will be on your organization?
Richard Payonk: United Way nationally did a lot of advocacy work on the tax reform bill. Because of the impact, and what they were calculating, and they were crunching all the numbers. And so they had sent out a lot of info to us, the exeShuck around the country… I really don’t know how bad that will be.
Shuck: That was one of the things that, the numbers made me want to vomit a little bit.
PAYONK: Oh yeah, that’s worst case scenario. Here’s what I really expect. I expect that most people in 2017 who gave, will continue to give at their normal level, and it won’t be until they do their taxes that they say “wait a minute.” And that’s when, if they were really giving for the deduction, that’s when they’ll realize in March and April they could’ve just claimed the standard deduction. Hopefully, if you believe in the goodness of people, they’ll recognize they didn’t go to the poorhouse and they’ll keep giving. And I know, I tell people this a lot, I’m a Cubs fan, so I’m optimistic, that’s not what most people really think about [when they give].
SHUCK: What do you think the difference will be for smaller groups who rely on smaller annual donations versus larger organizations like universities?
PAYONK: In major gifts, what I think this is gonna cause, is a cycle, where I’m gonna store up every so many years, maybe three years. To a point where I can do it all at once in a year, and then I won’t for a few years and I’ll do it again. People who are giving out of [donor advised funds], I know that’s what I would do. Lump sums into those funds are tax deductible, then I can give out of the fund year in and year out on the smaller scale. People are going to lump their giving into one shot.
SHUCK: I agree and I think there will be a lot of changes in the way people make major gifts. A lot of times those gifts are spread over a few years and take advantage of company matching dollars. And now, I don’t know that will continue, I think those will fall into lump sum cash gifts directly to organizations. And that’s okay, as long as the organizations are prepared for those conversations. I think, on a lower scale, there is going to need to be education on all parts. Both on the staff of the non-profits and for the donors. That is really the hardest part, is trying to captivate that message. What is United Way planning to do on that side of it?
PAYONK: Yeah, ours is a difficult thing that we haven’t done much with. I’m glad to see you taking such an interest in that step. Quite honestly, even on our board, we talked about it briefly on our board. We talked about the tax code going through, but we haven’t done any positive messaging on that. The answer, that’s probably not the right one, is the way I look at almost everything we’re doing right now. Trying to walk away from that long time charitable broker: give to United Way, they give to other charities kind of problem solving. How about we build a product that is so good that you don’t have to work that hard to be selling and convincing people to do it. You make it so convincing that people say I want to be a part of that because it’s doing something. So a lot of our effort in the last year and a half hasn’t been on what we’re doing and how to give, but on the idea of building a better investment, to build the community, and moving people to a better understanding that United Way isn’t just a charity broker. The biggest leak in the boat is that we’ve lost 50% percent of our donors in the last ten years.
SHUCK: Fifty percent?!
PAYONK: Fifty percent.
SHUCK: Do you know why?
PAYONK: If I listen to all those that have done the research, United Way nationally, you know, charitable giving over the last ten years is up. United Way is down…probably nationally, thirty percent or so.
SHUCK: I had no idea.
PAYONK: What you will hear and what I’ve talked about locally, is that I think as the Baby Boomer generation is getting older, or whatever the case may be, and more, younger donors are coming in, younger donors aren’t very generous. I was at a meeting the other day, and without me saying anything [someone] said, today’s donors want to follow their money. When I was younger, we would give and not worry about whether or not that organization was going to do great things with it. Today’s donor wants to feel good that they changed something. United Way was sort of nebulous. You know, what do they do? Oh, they help people. I don’t think donors of the last ten or twelve years get what they do. You know what Habitat for Humanity does. They’re going to build a house, so I’m gonna feel good about that. I know what Red Cross does, they’re gonna do disaster relief and I feel good about that so I’m giving to that. So United Way went through this gold standard in the 80s and 90s, where payroll deduction was an easy way to give. Now, you can give to whomever you want on your phone every month. You don’t need a United Way to [give]. What has started bringing it back is this impact approach. The best of the [local] United Way organizations have gone out and listened to the communities and acted as a convener. Why can’t we be bringing together all the non-profits and civic organizations and saying okay, who’s got problems and who has the best solutions? To me, it’s a long answer to your question, it’s building a better product, for charitable giving, that’s more focused on each individual community.
SHUCK: What are some of the other local United Way groups doing?
PAYONK: In Milwaukee, what they heard when they did their conversations was teen pregnancy. That was a huge issue for them. They stopped just funding agencies, and started convening, and said everyone, we’re going to work on teen pregnancy together. And each brought their own niche to the table, be it the city, the businesses, the non-profits, and sure enough over five to six years they saw a forty percent drop in teen pregnancy rates. That’s what United Way is starting to do across the country. We’re probably on the front third of the curve here, to start saying what’s the issue?
SHUCK: And that’s where you got into the ALICE issue?
PAYONK: It didn’t matter what the surface issue was, it was all related to poverty. So we said let’s make that the issue that we want to wrap all the other non-profits, businesses, city, county, police, and say let’s use this measurement.
SHUCK: I had never heard that until the [United Way] annual meeting last year. And as soon as you started dropping some of that data, I thought, oh my god, of course this is the issue.
PAYONK: Yeah, United Way nationally, started with New Jersey. They commissioned Rutgers University to say, let’s forget about the national poverty level. Let’s really study, in each community, what it costs to live at a bare minimum. …There’s no entertainment budget, it’s gonna be, what does it cost to feed a family of four for thirty days. After looking at all that publicly available data, they saw what everyone already knew, the poverty rate is kind of ridiculous for getting by. So you turn out this ALICE report that says here’s what it costs to live in Vigo County, for a family of four, and then it also studied the job market to see how many jobs are available that pay $15, $20, $25 an hour and it just puts the two together. The other thing it does for me, when you start talking to people and say we’re going to go work on poverty, you get the pushback from those who say those are the lazy people. They mooch off the government, they don’t really want to be out of poverty.
SHUCK: I don’t think that argument has changed much since Johnson was President.
PAYONK: No, and me as an engineer, root cause problem solving, how are you gonna solve a problem half the people don’t even think is real? Go look at the polls. Salvation Army did a huge poll about six or seven years ago. You find out half the people not in poverty think it’s caused by laziness and lack of motivation. And here, this ALICE report is showing all these people who have jobs, who are working, and still barely getting by. You just realize you have to bring that to light. There’s actually more people living in Vigo County with jobs who are struggling to get by, than there are people without jobs who are struggling.
“How are you going to solve a problem half the people don’t even think is real? Go look at the polls. Salvation Army did a huge poll about six or seven years ago. You find out half the people not in poverty think it’s caused by laziness and lack of motivation. And here, this ALICE report is showing all these people who have jobs, who are working, and still barely getting by.”
SHUCK: So, our group of friends, we discuss this often. And we look around Terre Haute, and we say, what’s missing? Well, the city doesn’t have any money. There’s no tax base. Where’d the tax revenue go? Well, it’s moved outside the city limits. Well how do we get those people to move back into the city? We have to build these things that make it more appealing. Well the city doesn’t have any money. It’s this cyclical thing, I don’t know how you get an affluent segment of the population to want to invest and move back in, trusting that a government, really, will do with your money what it should. It’s not too different than an approach with a non-profit. There has to be trust.
PAYONK: So while we’re going this way. I was having a conversation with my wife about United Way and what we’re doing and she said, isn’t that kind of like the government philosophy of tax and spend on programs? And I said, no, because donations are voluntary, and asking the donor to get involved in the process is really different than the government saying they need a percentage and telling the people they’ll take care of it. We’re asking donors to join the fight. We all have to come together and say we’re doing it together. Ultimately, we’ve got to get our business leaders who also want to sit at the table. Fort Wayne has gotten some traction, but they have about thirty businesses who are active. And this is top level managers saying let’s talk. We’re trying to reach out to those, but it’s hard to get them to even take a phone call.
SHUCK: Have you gone and asked those organizations that are pulling in those business leaders?
PAYONK: This is what we’re starting. We’re talking to our top fifty people in the community, telling them we needed them to be involved. And we sent out letters. Practically begging them to come to one hour meeting and just listen. So far we haven’t had a single top level CEO RSVP and say they want to come and hear about it.
SHUCK: Do you think they’re jaded?
PAYONK: This is the chicken and the egg. It goes back to that trusting. Saying this is what we’re doing and get them to trust in the process. We want to show them, this is the United Way we want to be. So you have to get that big win across the line for them to say they want to be a part of it. There was an article on the front page of the paper yesterday, on the childcare initiative. Indiana Youth Institute just put out a big study on the economic impact of early childhood education. If quality childcare means better prep for kindergarten, which makes better grades, which means higher graduation rates, which means a better educated workforce, which draws more businesses to the community, which increases wages, it’s a twenty year outcome. So that’s what United Way is investing in and bringing experts in childcare and business together. But we should be doing that in substance abuse, in health access, in job skills development, let’s bring the experts to the table.
SHUCK: There are almost fourteen hundred non-profits in Vigo County, almost $36 million in charitable giving based on 2015 tax data. What kind of impact is that making?
PAYONK: You look around and say, which social issue is getting better?
PAYONK: That’s because we’re all doing our own thing. Very well. But we’re not saying, let’s work on this generational poverty issue.
SHUCK: A lot of people seem to have the preconceived notion that giving to an organization like United Way means their money doesn’t stay in a local community. Do you run into that?
PAYONK: All the time. People want to feel okay not donating. In fact, all the money stays here. We’re constantly trying to correct that myth. …People need to think broader.
SHUCK: So, if I understand this correctly, the United Way of the Wabash Valley is changing its model in order to ween off its major funding partners.
PAYONK: We are, over three years. It doesn’t mean they will necessarily stop receiving support. But we’re going to start offering grant funding out of these councils, like Success by Six, that group will be experts in early childhood education, passionate volunteers, business people, sit on the panel and come up with the right grant that will help increase the number of openings at high level child care [organizations]. Put a publication out, let people apply for the grant money, put it where it needs to go. Someone who was getting funding from us, could still get funding, in that manner. But it doesn’t mean just because Salvation Army has gotten funding from us for the last twenty years, means they’ll have an impact on childcare.
SHUCK: So it sounds like these councils are going to be based on goals for social outcomes you’re setting using the ALICE data.
PAYONK: Exactly. How can we reduce ALICE by providing access to healthcare. How can we reduce ALICE by reducing housing costs. …ALICE is the goal, but those councils will have shorter term goals that impact ALICE. ALICE will take years to move that needle. Can we start measuring drug arrests per segment of town, based on projects we’re funding and programs we’re implementing? Could we measure people with access to healthcare based on program tracking?
SHUCK: So do you anticipate as that model changes, you’re allowing other agencies who have never received funding from you before, to receive dollars now?
PAYONK: Hitting the nail on the head. My biggest issue with United Way…where you have to be a member to get funding… We closed the books on membership ten years ago. If your dollars are going down, you can’t offer new funding. And I never really agreed with that… I get it we have less money, but shouldn’t we be investing in the best programs out there? Our volunteers will evaluate the programs, and invest with funds. You have to be a good program that’s going to make the outcome we’re looking for.
SHUCK: And, make the argument in your presentation, that you are responsible and have the data to back it up.
PAYONK: Always. We’ve always done that, making sure we’re investing the money in the right way. That’s always been there. But this is investing in the organizations we’ve never seen in ten years.
SHUCK: So, this is a capitalistic approach, in that you want them to show a product, and encourage people to work a little bit harder to be more organized, diligent on spending, focused on mission. What’s the unintended consequence of that? What do you say to the people running shoe-string organizations saying there’s no way they can compete?
PAYONK: We’ve always had to make sure that if we’re using donor dollars to invest in a program, they’re financially viable. At a bare minimum. Let’s start there and make sure you’ve got a checklist of things. The smaller, mom and pop groups, I don’t know if they can compete. If they don’t have a board that’s overseeing them, and they don’t do the financials, it’s just harder to do.
SHUCK: Do you think that’s an opportunity for more consolidation?
PAYONK: Absolutely. I’ll give you an example right now. And they are the most compassionate, wonderful people providing diapers for needy families. And we just had another one called “Covered with Love” starting, just got their non-profit status. They’re providing diapers for families in need. They’re about the fourth group doing that. And, Union Hospital has one that’s a tobacco cessation, it’s “Baby and Me, Tobacco Free.” They don’t like the new one, because the new one doesn’t care if you smoke or not. Because babies need diapers and you can’t withhold diapers from babies. I get it. That’s nice. But this one over here says if you get ‘em to stop smoking we’ll provide free diapers if they’ll commit to it. Well this one’s providing ‘em anyway. So imagine, could we get all the diaper providers around the table and let’s see what the best program is, and let’s all work together. Include the community component, meet the needs, compromise, and not have six different groups doing the same thing. Versus one group saying, okay, you can’t manage the finances, but this one can. So if your heart still wants to help will you support the services of the one that can manage the finances?
SHUCK: Sort of a trading of services. If you’re not actually legally combining the organizations, you can at least collaborate.
PAYONK: I don’t know what that’ll look like. The councils, this is where I’m trying to draw businesses in, it took us a while to figure out, you’ve got a number of entities in the area that are experts, let’s go back to early childhood education. But the experts also want funding. Which is a conflict of interest if they’re setting up the outcomes required to get funding. So we’re trying to get a separate group, with the business knowledge and the purse strings to approve the funding, but these people cannot have any affiliation to the group being funded.
“Collective impact requires a backbone organization that wants to coordinate and convene. That’s all we’re saying right now.”
SHUCK: Richard, I think you’re setting up your own micro government. There’s checks and balances…
PAYONK: Maybe, but we couldn’t find a better way to do it. We had to ask these people if they’d come to three or four meetings a year to look at some budgets and help improve areas where their businesses might have interest in improving the situation.
SHUCK: And the response has been?
PAYONK: So far they’re not too interested. We’re on the learning curve. We’ve really got to show some wins.
SHUCK: Do you think it’s United Way’s role to step in, let’s go back the diaper example, do you think it’s your role to go in and bring those people to the same table?
PAYONK: It should be. That’s bold of us to say. We need a backbone to hold it all together. Collective impact requires a backbone organization that wants to coordinate and convene. That’s all we’re saying right now. We may have resources to bare, and that’s the reason we need these councils, but right now, it’s a please come and learn, see if you want to help point our community in this direction. It is a little bold.
SHUCK: But nobody else is doing it.
PAYONK: I don’t think so. I don’t think there’s enough of, let’s all just coordinate together.
SHUCK: So ideally, what you want to come out of this is a bunch of organizations doing it on their own. Saying you know what, we need to do an education piece and we have to do it together. Because the community foundation has resources CODA doesn’t have, but I’m willing to step up and do an interview or two, and write an op-ed, maybe Catholic Charities has the money to send a mailer out, and yeah, we’re hitting specific donors in our own way, but it supports the goal across the board.
PAYONK: When you called that meeting and said let’s do it, that’s collective impact. Let’s get a number of entities together instead of doing something on our own. It’s getting the right number of people to the table to go do it. It’s going to take years to make it happen. And you know, honestly, the way our United Way is structured, it’s gonna take three or four years to go do it.
SHUCK: Exactly, I think it really behooves any non-profit to be a part of that group. It’s always been, we’re all competing for the same dollar. And, instead of saying there’s enough to go around, we need to figure out our priorities and funnel dollars in the right direction.
PAYONK: I think if the general public saw more of that, and saw that it’s put in the right light, that appeals to donors. Now there’s bigger bang for the buck. Now we’re putting dollars into something that is a comprehensive solution, that’s really affecting our community. It’s a little pie in the sky. Good for a Cubs fan.
SHUCK: Going back to this education piece, it occurred to me that if we’re inviting people just to listen to information, the assumption is, because it’s [hosted by a group of non-profits], the assumption is at some point we will ask them for money.
PAYONK: That’s always the assumption.
SHUCK: I’ve noticed, when you speak to organizations, you never ask for a dollar. What sort of public education piece is available, or can we come up with, that reduces that anxiety?
PAYONK: That’s a hard one. That’s a stumper. And it’s so key, because that’s exactly what we run into. I can barely get on the phone with a business leader in town, and I can tell it’s because they think I just want to come and ask their employees for money. Really, I’d like [them] to come and see the value of these entities working with us to see what we’re doing. But I can’t get them to do it. Because United Way has twenty years of a reputation of just coming in and talking to employees about donating. That’s the hardest thing, how do you get past that. So just as a piece of data, we’re probably only in two-thirds, maybe fifty percent of the businesses we used to be in. Many have just said okay, we don’t have time for that any more. I think a lot of that is on the leaders, they’re different than in the 70s and 80s, even the 90s. They’re more apt to say, we don’t have time for any extra stuff like that.
SHUCK: That makes sense, I guess.
PAYONK: That’s a great question, Christian. How do you pitch that?
SHUCK: In a way, you have to stop asking. And that scares people. Because, they think if they don’t ask for money, they’re not going to give it. Which, is true, but there are different ways of asking, where people don’t know that question is being asked of them. …Coming in and saying, tell me about growing up here, tell me what you love about it now. What do you wish you had here? Working that conversation to the point where they almost talk themselves into it. That’s a fine art, that’s not something you can teach anybody.
PAYONK: You’re good if you’re able to do it. Because I walk in all the time, and in the back of my head know they just think I’m here for money. So, you want to do all those things…
SHUCK: I think on a mass scale, that’s very hard to do, you have to pick a segment, which you’re doing, to get focus.
PAYONK: That’s why these councils, getting people in and participating, to be better advocates for what United Way is doing. When I started at United Way, I was really big on stop asking for money. I haven’t done it in a couple years, I used to show the clip all the time, from “It’s a Wonderful Life,” at the very end of the movie when people are streaming in, I would show the clip to people and say this is the greatest fundraising effort, ever. They all come in pouring money into the basket, in the middle of a snow storm, in the middle of the night, on Christmas Eve, all because Uncle Billy and Mary ran out into the street and said George is in trouble. Why would anyone do that? The only answer is, because they know George. We need to be George Bailey. If people know us, and they know what we’ve done, and how it’s been successful, and that it’s helped them, we’ll never have to do fundraising again! But how do you get to that, from what we have been, which is always [about fundraising goals]. That’s not our mission, we have to show people our mission.
SHUCK: What about personal stories?
PAYONK: This is the trouble we’ve had. All our stories come from other agencies, doing their thing. Our application for funding actually asks for some success stories. People are terrible at success stories.
PAYONK: Oh my gosh, sit down with Abby (Director of Marketing for UWWV) and cry over success stories. They don’t have time for it, they don’t think in terms of that. So we have to start building our own. That’s why it’s so important we were in the paper, …how are we advancing openings at high level child care? That’s a success story. That’s a direct result of donor funding that businesses and people can see. But long term, building a better workforce by kids being better educated in curriculum based child care. That’s a great success.
SHUCK: What’s your favorite success story?
PAYONK: This whole way that we funded the child care mission was totally new and different for United Way. We could never use donor dollars to put out a request for proposal to fund child care needs. We needed [money] because in order to be a level three quality path to child care, you have to have a certain number of qualified teachers, and [more facilities], and so we created 116 new openings in local child care. Local businesses are telling us they can’t contract employees because there’s not enough quality child care. That’s not the only one, we have some related to our mobile market, people having access to fruits and vegetables. But not enough. Not enough great impact examples.
“We need to be George Bailey. If people know us, and they know what we’ve done, and how it’s been successful, and that it’s helped them, we’ll never have to do fundraising again! But how do you get to that, from what we have been, which is always about fundraising goals.”
SHUCK: So what are some hypothetical outcomes you’d like to see.
PAYONK: Well, if we just keep funding [our member partners], we’re not necessarily creating anything innovative. But we go out and research new and innovative stuff. Like in neighborhood revitalization, we’re out there studying South Bend, and communities that are doing really neat things with neighborhoods. And one thing we just heard recently, that we’d love our neighborhoods council to evaluate, and businesses to invest in, is something called a COP house. Community Oriented Policing. You can read about it in Racine, Wisconsin. What they do is they go into the worst neighborhoods. High crime, high drug arrests, we don’t have near what Milwaukee or Racine has, but we’ve got drug arrests. And they go work with the city, and it’s non-profits, working with civic government. And they’re saying here’s an old house we’re considering bulldozing. It’s abandoned. Habitat for Humanity is going to pitch in, United Way is going to pitch in, they’re going to revitalize the house. So it looks, essentially, like a house. It looks nicer than other houses in the neighborhood. But it’s a satellite police station. And they take two people that would be downtown writing reports, and they say, you’re going to do your work from here. And you’re going to walk the neighborhood a couple times a day. And you’re gonna actually, even, in some cities, getting young, single cops to say they’ll live there. Rent free, for the next three years.
SHUCK: Like a fire station.
PAYONK: Just like a volunteer fire station. And so, Racine, you look at their numbers and you see a forty percent drop in drug and violent offense arrests. Because they’ve now put three of these in neighborhoods, and they’re building trust in the police force.
SHUCK: That’s amazing.
PAYONK: It’s a new concept. But the police department couldn’t afford to do something like that on its own. But, United Way helped fund building the house, Habitat helped revitalize the house, and business donors sponsored it, and recognize its worth investing in. That’s not something United Way could’ve ever invested in, in our old model. But in this model, if you’re getting groups to say they’ll all pitch in, it’s the kind of innovative thinking, that just takes someone being a backbone for the organization and collaboration. Let’s come together. Let’s not talk about why it can’t be done, what does it take to get done?
PAYONK: Wouldn’t that be a great success story? Even people driving by that house would say, hey, that’s making the neighborhood look a little nicer. Which is contagious. Then eventually other parts of the neighborhood start looking a little nicer. Small things. It’s what I dream about and get excited about. That could work here. We’re not that much different. It just takes people coming around the table.
SHUCK: But it takes those influencers.
PAYONK: We need those business leaders to come to those lunch and learn meetings, to hear about those opportunities.
SHUCK: Are you asking your board members and volunteers to invite them?
PAYONK: We’ve done an all out request on social media, in the paper, face to face. I’m doing invites by letter. By email. We’ve invited the county council, the city council. It’s just a lunch! Come and listen! Get a little bit excited about it. Don’t get me wrong. We’ve had 80 people sign up for two sessions. But they’re mostly non-profits, asking if it will be a funding opportunity. And I’ve told people, please come. But don’t come just to see if you can get money for it.
SHUCK: Man, you’re in between a rock and a hard place. People either think you’re asking for money, or you’re handing it out.
PAYONK: It’s a problem.It was pretty clear that Payonk and I could have continued our conversation for hours. The world of non-profit organizations is changing, quickly. Regardless of class or tax status, laws that affect charitable giving inevitably impact all of us in one way or another. I hope Payonk’s plan to rally the Terre Haute community is as inspiring to other cities as it was to me. We could all use a little more money. But what we really need, now maybe more than in the past several decades, is a sense of belonging.