For the first time in 25 years, the United Way will not run the Washington area's Combined Federal Campaign, the annual charitable fundraising drive among 180,000 federal employees.
A panel of federal employees that oversees the campaign said yesterday it had rejected a bid by United Way of Central Maryland and awarded the contract to an Alexandria organization, Global Impact, which runs a smaller campaign among employees at overseas U.S. military installations.
The competition to run the federal campaign intensified this year after the embattled United Way of the National Capital Area bowed out to focus on rebuilding its organization. The Washington area United Way had run the local federal charity drive for a quarter-century but has been beset by financial mismanagement problems in the parallel campaign it operates in private workplaces.
Leaders of the Washington area United Way had made a pact with their sister organization in Baltimore under which the Maryland group would step in and bid for the 2003 contract. The Washington group hoped that would allow it to win back the contract in 2004 after its financial health improved.
Yesterday's announcement, however, crushed the United Way's hopes that the nation's largest Combined Federal Campaign would remain in the United Way system. It is also the strongest signal yet that United Way affiliates have lost what had been a virtual lock on most federal fundraising campaigns across the country. In recent years, federal employee panels in Chicago, Boston and Minneapolis have chosen organizations other than United Way affiliates to run their campaigns.
"We were stunned," said Larry Walton, chief executive of the United Way of Central Maryland, which runs the CFC among federal employees in the Baltimore area. "I don't know what rational reason [the panel] used to pick [Global Impact]. . . . This group's never managed a campaign like this in their history. They're going to have to start from scratch and build from zero. I don't understand the rationale behind it at all."
But Vince Micone, chairman of the 16-member panel of federal workers that chose Global Impact, said the committee "felt unanimously that Global Impact presented a superior application."
The committee, Micone said, was "impressed with the breadth of experience that Global Impact brought to the table and . . . some of the new ideas."
He said Global Impact projected that it could raise $45 million in donations from federal employees in the fall, at a cost of about $3 million. The 2,500 charities that participate in the CFC campaign pay for the fundraising drive from the donations they receive through the program.
That cost is higher than the $2.3 million in overhead costs reported by the local United Way for last year's campaign. Micone said, however, that the panel believes the costs for last year's campaign may be adjusted upward when an audit is complete.
Renee S. Acosta, president of Global Impact, which changed its name last month from International Service Agencies, said the organization has plenty of experience to handle the local contract. It has run the CFC campaign among 92,000 military and civilian employees of overseas Department of Defense installations for eight years. Last year, it raised $11.2 million, up slightly from the previous year.
"We're used to a very complex, far-flung organizational structure," she said. "In addition, there are four different branches of the service. We deal with all that complexity."
The Washington area's federal campaign is by far the nation's largest. Although its pledge drive last fall raised less than the previous year -- $47 million in 2002 vs. $50 million in 2001 -- it was considered a success compared with the local United Way's campaign in private workplaces.
That campaign, sources said, raised less than $15 million, compared with more than $40 million in donations in 2001. The donations fell off sharply after revelations that the local United Way exaggerated its fundraising, improperly documented expenses and made misleading statements about overhead. The organization also was criticized for making a $1 million pension payment to a former chief executive nearly two years before he retired.
The decision to select a non-United Way organization to run the Washington area CFC cheered organizations that have pushed for years to reduce the United Way's virtual monopoly in the workplace fundraising business.
Sloan Wiesen, spokesman for the National Committee for Responsive Philanthropy, said the decision "hopefully will send a message to managers of other workplace campaigns that competition is important."