Today, Benz reigns over another forceful, although less structural, pride of Cleveland — United Way Services.
In his seventh year as president and CEO, Benz carries a reputation of wizardry. Last year, in the shadow of a faltering economy, he conjured up $42.6 million in donations.
This year’s mission is not about cutting up the same size pie, says Benz. It’s about building a bigger pie with many more ingredients. But, like every business leader faced with economic uncertainty, Benz is shopping wisely.
SBN Magazine sat down with Benz to discuss methods of survival for an organization that depends on discretionary income and how running a nonprofit like a business is imperative in today’s economy.
Should philanthropic giving follow the same roller coaster ride as profits during economic fluctuations?
You can’t be philanthropic unless your company survives. But a lot of us benefit from the services, facilities and programs of this safety net of health and human services called United Way. It’s not just for people who hit the bump in the road; your life can change in heartbeat.
Three years ago, I was in a car accident and almost died. I needed blood, and a little bit later I needed visiting nurses to help me rehabilitate and learn to walk again. You cannot build the capacity to render that type of service based on a fast or slow economy. It’s important that your philanthropy budget remain intact.
What is United Way’s strategic plan to ride out the storm?
We look at expenses closer, and you try to maintain where you are with your current set of companies. We are an organization that funds other agencies and programs, as well as assisting at a community level.
You may have to scale back some of those services, but to totally wipe out everything, it’s hard to recover from that.
Does United Way have a contingency plan and emergency funds?
We have a reserve. If we got into real trouble operationally, we could go to it. But there isn’t enough of a reserve to cover the allocations to agencies for their programs. That’s really what we’re in business to do –work through agencies and their programs to improve the quality of life.
We raise over $40 million a year, but there’s no way we’d have a reserve big enough to cover a whole year of operations. There may be a few less workers and, in some cases, a lot less workers. We can’t charge more for our administrative services, so we have to make sure we wring every penny out.
We also have to double our efforts to get people to continue to (donate to) the degree they can handle. We have to be realistic so we don’t lose long-term friends and customers for short-term gains.
Finally, we can’t be wasteful. We watch our budgets very carefully and have been in the black for the last several years. We’ll be in the black this year, even if we have to cut back on programming and/or people and salaries. I don’t anticipate that because we’ve done awfully good planning and we’re monitoring it one step at a time. We’ve been watching the economy for a year, and as it started to slow down, we didn’t add a great deal to our budget.
That seems very much in line with a typical business owner, doesn’t it?
The mission in a slower economy is to stay in business and keep your current customer base. We can’t act like we don’t know what’s going on in the economy. We have to run like a business because frankly, we’re the largest private sector founder of health and human services in this area.
We represent the business community. So if we don’t look, act and operate like a business, business leaders and their employees are not going to invest in United Way.
How do you execute this?
We want to be a facilitator, a convener and a better partner for our donors, and create that public/private partnership in health and human services that we’ve not had before. If it’s fact-driven, the facts drive you to a set of priorities. You start attacking those priorities and then you should start being able to measure and benchmark the outcomes.
We communicate and market constantly and give people cause-related marketing opportunities. United Way has to hit certain levels, so we don’t want to get into something that won’t generate enough recognition and information, as well as the dollars we need.
Are there other changes United Way is going through?
When we do a kick-off, we no longer do it quietly. We continue to make sure that we’re in front of the media’s eyes. We have our own TV show on cable and we have a radio show. Every chance we get, we try to not only get our name out there but also the purpose of why we’re doing this — we are the most efficient vehicle to bring money in and push it back out. Our administrative fee is approximately 11.3 percent, so almost 90 cents of every dollar goes right back to these programs.
We help people who hit that bump in the road, but we also are kind of this catalyst that works on solving community problems. While we are a charity by organizational structure, at the end of the day our mission is to improve the quality of life for all Greater Clevelanders. We do that by running like a business. How to reach: United Way Services, (216) 436-2100 or www.uws.org
Deborah Garofalo ([email protected]) is associate editor of SBN Magazine.