United Way makes major economic impact in region, study finds

President and CEO of United Way of Southwestern Pennsylvania Bobbi Watt Geer and her staff and board know the profound impact their organization makes on people’s lives. It reached 1.3 million residents last year through its direct services and the grants it awarded to 110 partner agencies, according to its website.

But does all this good work have an economic impact, too? They believed it did, but could it be proven?

The answer? A resounding yes, according to a PwC economic contribution study, believed to be the first significant application of well-established accounting methodology and technology to a nonprofit human services organization’s performance. The objective was the same as for any profit-making company: demonstrate a measurable financial return on investment for every dollar contributed.

The study revealed that United Way’s operations, charitable investments and free tax preparation service added up to 581 regional jobs, $34.7 million in labor income and a $65.4 million gross domestic product contribution to the five-county regional economy, based on a thorough review of its fiscal year 2023 financial data. Every dollar invested by United Way essentially doubled, generating at least $2 of positive economic value. 

And most likely those numbers are even larger, given the connections its PA 211 Southwest Hotline makes for residents in immediate and crisis need and the work of all those nonprofits supported with United Way grants that reach residents with employment and financial assistance in those counties.

Geer said the United Way board and staff have had conversations about a study like this for several years. “We wanted a more unique way to talk about our overarching impact,” she said. “We’ve always known this anecdotally. We do more important work than just giving grants. It really was being able to talk about our work in a different way. Our board of directors — this is their language, [as they’re] business leaders, corporate leaders — they’re always working to measure impact. [So they were] asking us how to quantify our impact, how we can demonstrate to donors and the community why they should support us.”

Justin Kaufman, PwC Pittsburgh office managing partner, who is on the board, understood this request from both his professional perspective and his United Way volunteer service. PwC has completed these reports for sports and arts organizations here and across the country, including the Pittsburgh Steelers, and it has the framework and methodology to do so. The staff took several months to review all the United Way financial reports and data provided, a process that he was not involved in, and then produced the report. It is available on the United Way website.

“What I like is the accountability,” he said. “The board holds Bobbi and her team accountable. This quantitative aspect makes [United Way operations] more black and white.” 

Through its three offices, United Way employed 108 people full time in 2023, and the report cited that each of those jobs contributes more than $600,000 to the GDP — including community investments, job creation and income generation — something that has a multiplier effect on the economy. That’s because those employees spend money and stimulate local business activity and overall economic output. It also indirectly boosts GDP via its operating expenses throughout the region’s supply chain, including purchases of goods and services from local companies and industries.

Taking this into consideration, plus community investments and activities that generate new employment opportunities, the report determined that each United Way job supports an average of 4.4 additional jobs across southwestern Pennsylvania.

United Way directed $19.6 million to its community partner agencies and organizations, and donations without restriction to be used where needed most, its former Impact Fund, served more than 750,000 people’s needs.

Its Free Tax Prep Coalition also generates income. Volunteers and staff prepared more than 8,400 residents’ tax returns in 2023, resulting in refunds totaling $11.4 million. Geared to help those who can’t afford professional help and who often are unable to access earned income tax credits or child tax credit benefits on their own, the report pointed out this service increases thousands of people’s incomes. “These refunds enabled individuals and families to spend more on goods and services from local businesses, move to financial stability and, in turn, support the health of the local economy,” according to the report.

United Way did not use any donations for the study. Rather, the board had developed and donated to the United Way Forward Fund that permits it to test strategies to advance its work in the community, Geer said, and monies from that helped pay for it.

She wishes it were possible to quantify the economic impact of the United Way’s PA 211 Southwest hotline. “It is not part of that $64.1 million,” she said. “We can state our economic impact is even broader [because of it].”

Kaufman said it is difficult to quantify the entirety of United Way’s community impact. “I don’t think you can ever capture it all,” he said. “I see them go above and beyond to do the right thing all the time. I didn’t need a report to know what good the United Way does in Western Pennsylvania.”

Geer shared the report with her employees before circulating it in recent weeks. “I think it is really validating for those of us doing the work that the impact is so much broader and deeper than we realize, and we realize a lot,” she said. That realization comes both from direct experience in the region and reviewing grant recipients’ reports.

“I think we all believe very strongly in the mission and get gratification from the work we are doing,” Geer continued. “But to say this impacts our entire community, not just those who receive services, is important to us.”

Pittsburgh Scholar House CEO Diamonte Walker and Just Harvest’s Free Tax Preparation Coalition Training Manager Vaughn Schmid see firsthand every day the difference United Way funds make in people’s lives.

Walker’s organization uses two-generation strategies to disrupt the cycle of poverty by enabling income-eligible single parents to earn postsecondary degrees bolstered by comprehensive support services. All of this aims to improve the quality of life for those parents and their children, according to its website. 

Just Harvest, a well-known nonprofit organization that launched a free income tax service in 2003, has managed the United Way’s coalition since 2009. It has four sites — its  South Side location, Bedford Envision Center in the Hill District, Bhutanese Community Association of Pittsburgh in Brentwood, and Community College of Allegheny County’s Boyce Campus in Monroeville — for in-person help, and it assists many Volunteer Income Tax Assistance program locations throughout the United Way’s service area. This year it will also add Centro de Impuestos at its South Side site, which is its Spanish language tax prep, and it will also complete Individual Taxpayer Identification Number applications for those not eligible for Social Security numbers.

Schmid started volunteering for the service in 2010 through the Bloomfield-Garfield Corp. as a graduate school student, then joined Just Harvest as a reviewer in 2013. Since 2021 he has been the coalition tax preparation training manager. The volunteers become IRS-certified tax preparers.

Walker launched her organization three years ago with assistance from the Pittsburgh Council on Higher Education and three foundations. The United Way invested in it with a multiyear operating grant, which in turn unlocked other grants and funding. She believes that without that investment, her organization would not be serving clients.

“United Way was the first grant to signal that they believed in the Pittsburgh Scholar House,” she said. “The reason why we have been able to have staying power is the largesse of the United Way.”

United Way grants make up one-tenth of Pittsburgh Scholars House’s budget. That covers two full-time employees, she said, who work directly with its students.

The nonprofit this month celebrated its first cohort of 11 graduates who finished their two- and four-year degrees. At the event it also recognized 11 students who completed a series of courses through its Wayfinders University, a college readiness program. They will start classes in the spring, with seven headed to CCAC and two to Point Park University.

Walker has a listserv of 300 families in its Wayfinders Program, with her organization actively working with 150 currently. She has read the United Way economics report and calls what the results “staggering” at how it contributes directly and indirectly to the region.

From her work she knows how its work affects people in what United Way has termed the ALICE — Asset Limited, Income Constrained, Employed — data category. While a common belief is that if you show up and work hard you can support your family, that is not always true, according to information on its website. The federal poverty level, which measures only food costs, is $15,500 per year for a family of four. By comparison, the ALICE budget for a family of four with two children in child care in Pennsylvania is $88,896 annually. In United Way’s service area, 41% of people regionally do not earn enough to afford basic needs and survive.

Her clients are indeed hard-working people, Walker said, but those numbers explain why people who work still depend on entitlement programs. Once they earn the degrees Pittsburgh Scholar House helps them attain with its programs and other support, they can own a home and a reliable car and start saving.

“Our whole premise is earning a degree increases the economic impact of an individual,” Walker said. “The United Way doesn’t just help people. It takes a longer-term look to relieve dependence on these services in the long term. 

“That is why I am so grateful for their help. We help folks, and they in turn become United Way contributors. It’s a very positive, virtuous cycle created by the United Way.” 

Walker has data that further illustrates a college degree’s economic power.  She said that when a single mother earns a two-year degree, it means she will earn $500,000 to $600,000 in salary over her lifetime. By earning bachelor’s degrees, that increases from $800,000 up to $1 million in earning capacity.

That also results in graduates paying more federal, state and local taxes while reducing their dependence on entitlement programs over time. Plus, they can grow and not be stagnant in their careers, she said.

Walker and her staff spend time with their students, adding in social confidence and preparing them for new careers. An example of who needs this help would be a maintenance or food service worker in a health care setting transitioning to a nursing position.

“We help them develop the confidence and capacity to take on more of these jobs,” she explained, “creating a sense of economic belonging for themselves as well.”

To accomplish the latter, Pittsburgh Scholar House embeds a financial literacy component in its programs. “We are looking long term,” Walker said. “We see ourselves as the long-term investor in the families’ well-being. We focus on that long-term strategic planning with these families.”

Part of that long-term strategy includes working on affordable housing Downtown for her clients and other families in similar situations in additional to its Wayfinders Plus Housing program in a partnership with Naomi’s Place. Before leading Pittsburgh Scholar House, Walker was deputy director of Pittsburgh’s Urban Redevelopment Authority. That effort is currently underway, with details on its website.

Schmid helps educate his clients, too, as he works with them to prepare yearly income tax returns, a process he loves. He works nights and weekends to accommodate clients who can’t afford to take off work for tax preparation, noting some come straight from work still in their uniforms.

First, the program saves clients the average $300 fee for “big box” tax preparation services, he said. “If you’re only making $20,000, that’s big,” Schmid said. Plus, “That money is going to get back into the community instead of to a corporate preparer’s CEO,” Schmid explained.

In addition to those earned income tax credits or child tax credit benefits, he explains how IRA and other retirement plan contributions could result in saver’s credits his clients may not be aware of that can increase their refunds.  

In 2023, Schmid said Just Harvest’s 114 volunteers completed 3,180 returns, including 956 eligible for the earned income tax credit, for $5.16 million in refunds.

He recalled having to to tell a client who moved into a nursing career that because she doubled her income, her refund would decrease.

That woman’s response surprised him: She was happy about it. “She said it was good: ‘I am getting less help because I am doing better,’ ” Schmid said. “She recognized earned income tax is a bell curve. The goal should be surpass the bell curve, and you are completely self-sufficient. You don’t usually get people that see that kind of understanding.”

The Munhall native’s drive to help others comes from his own struggles. First, Schmid recalls standing in food lines after the steel industry collapsed and getting a stuffed bear as a Christmas gift. After high school he worked multiple jobs and struggled, burdened by a monthly payday loan that his sister helped him emerge from that set him on a better path.

Schmid earned associate degrees from CCAC before transferring to Pitt where he earned a bachelor’s in accounting and finance and finally a pair of master’s degrees from the Katz Graduate School of Business.

In grad school, a venture capital class instructor didn’t like his business plan for a payday loan organization that didn’t charge exorbitant interest but instead required people to take a financial literacy class. He says he knows better and how that is needed, as the educational system does not prepare students to learn that important information.

“People are busting their butts to do better,” Schmid said. “They need help. I was intelligent enough to get two master’s degrees. Not everyone will have that opportunity. I was blessed to rise up and help others.”

Walker said her husband was her blessing. He was very supportive as she earned her degrees while raising two daughters and juggling career demands. An inspiration for her nonprofit is her mother-in law, who earned a master’s degree while raising two children following years of generational poverty.

That effort took her mother-in-law 20 years to move from earning a high school diploma to completing a master’s degree. Walker’s goal is to cut that timeline by three-fourths.

“I did this for women like her. These women are going to figure it out for themselves,” she said. “I want to match their energy, to match their work and to make their journey possible.”