Strategic Management – The United Way of America

The United Way of America has been has been described as a mutual fund for charitable causes. That’s because its 1400 local chapters support thousands of community agencies, especially in the area of health and human services. Funding recipients have ranged from the American Cancer Society, Big Brothers Big Sisters, and the Salvation Army as well as to local organizations that a devoted to addressing local needs. And the United Way has been very successful in carrying out its vision; to improve people’s lives by mobilizing the caring power of communities. The latest available figures show that the United way raised over 4 billion dollars during 2002 and 2003. Despite its important roll of helping local chapters address critical needs, the UWA itself has had to work through some problems.
One issue that never seems to go away is the competition for donor dollars. Many deserving organizations depend on donations from individuals and businesses. Coupled with a sluggish economy that has slowed down donations in general, you can see the difficulties that UWA and its local branches face when it comes to funding. Then there was the organizational scandal in the 1990’s. William Aramony who had served as the United ways president for 22 years, resigned after charges that he had diverted organizational funds to finance a lavish lifestyle, including limousine transportation, trips on the concord jet, exotic vacations, and expensive gifts for a teen age mistress. He was convicted in 1996 of mail, wire, and tax fraud and served a seven year prison sentence. The negative publicity surrounding that whole situation had a significant impact on activities and programs at UWA headquarters and at local chapters. However through the able leadership of Elaine Chao, it was able to move beyond those problems and stabilize donations and programs. After Chao resigned in 1996, Betty Beene came in as the new president. She lead a brand awareness campaign designed to stress the important benefits that local United way chapters brought to their communities. However Beene soon came under fire from local chapters when she suggested a national pledge-processing center and national performance standards. After she stepped down in 2001, current president and CEO Brian Gallagher came on board. He has some ideas fro ” a better way to make a difference.”
Gallagher’s approach is to deal with systemic community issues such as homelessness and racism with leadership and activism, as well as with money. He believes that the goal should be to show corporations and the general public that their donations really do make a difference. His main strategy for doing this is by converting the organization from a simple money collector and dispenser of cash into a community problem solver. How? He is proposing that local chapters work with communities to devise strategies for dealing with specific problems, such as crime or hunger. Then funds would be directed to those organizations and charities that feel they may be left out. However Gallagher responds that he’s interested in identifying critical issues and coming up with strategies to fix them, “not making sure that all agencies have financial support.”

1. What evidence of strategic management if any do you see in this organization?
2. What types of constraints do you think strategic decision makers at UWA face?
3. What should an external analyses for UWA include? Be specific. With what stakeholders might UWA have to be concerned?
4. What types of strategic evaluation and control would you recommend that UWA use? Be specific.
5. Using what you know about strategic management, how would you suggest that Gallagher proceed with his vision for changing UWA?

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