United Way of Dane County and other groups are in the middle of their annual workplace fundraising drives, and one big question looms: How will the cuts to public-sector workers affect donations this year? Historically, about 10% of the local United Way's donations have come from employees who work for the city, county, state and university. In 2010, that amounted to $1.62 million from public-sector workers. United Way's overall fundraising goal this year is $16.6 million. United Way officials say they are sensitive to the reduced household income of public workers and are trying to strike the "right balance" when seeking help for area nonprofits. Steve Mahoney, a purchasing agent with the Department of Corrections, says he knows some state workers who immediately discontinued their paycheck deductions this summer when their paychecks started to reflect the increased premiums for retirement and health care benefits called for in Gov. Scott Walker's budget. Mahoney and his girlfriend, also a state worker, have lost nearly $700 a month in their take-home pay due to these increases (see "Wisconsin State Employees Brace for Lower Paychecks," 8/18/11
Mahoney says it's too early to know what giving will be like this year. But there might be some symbolic redirection of funds. Mahoney says his own union, the Wisconsin Professional Employees Council, is encouraging its members to donate to United Way outside of the workplace campaign to protest the new state prohibition on paycheck deductions of union dues.
Salli Martyniak, president of Forward Community Investments, which provides loans and other assistance to nonprofits, says cuts of $300 to $600 a paycheck will certainly have an impact on the discretionary income of affected households. And charitable giving, she adds, is discretionary spending.
"Is it going to hurt? The answer is yes."
Martyniak's group is in the process of compiling its third annual report on Wisconsin's nonprofit groups. In recent years, she says, individual giving from middle-class donors has either gone up or stayed flat. "Where you saw the decline in giving was really the upper-income households."
But Martyniak predicts there will now also be a drop in donations from middle-income folks. "It's the middle class who are being truly hurt now."
And that decrease in giving, she says, will likely translate into scaled-back services at nonprofits.
Martyniak says there is a real "mind shift" going on among those who work in nonprofits.
"In the past couple of years, organizations - whether or not they considered themselves financially healthy or a bit unhealthy - were still trying to squeeze out every possible penny so they could increase the services offered to people. Now they're starting to say we can no longer keep up."
Martyniak saves her biggest concern not for this coming year, but the next. "You can only pull so hard before the rubber band breaks," she says. "At what point do the pieces start unraveling a bit?"
