Under an agreement authorized by Cleveland city attorney John Kimball, Cleveland Utilities and United Way of Bradley County Inc. will sign a “Donor Restriction Agreement” which allows Project Round-Up to funnel customer donations to the nonprofit to assist area families facing difficulty paying their utility bills, as well as meeting housing and medical expenses, among other related needs.
The new initiative, which is patterned after existing programs offered by other utility companies, will allow customers to have their utility bills “rounded up” to the next dollar. The difference will be placed into a separate account for support to struggling families.
For example, if a customer’s bill is $25.55, Cleveland Utilities would “round up” the amount to $26. The added 45 cents would then be donated to an emergency fund. Another example would be for a bill that is $25.01. The full 99-cent difference would be donated.
All CU customers will be included in Project Round-Up in the beginning; however, it is an opt-out program, meaning that customers who do not want to participate may do so simply by contacting the utility company.
The proposal was first discussed a month ago by the CU board, and members then asked that United Way representatives be invited to the October session to discuss implementing such a program.
Matt Ryerson, United Way president and CEO, and Allen Mincey, vice president of Communications, attended Thursday’s session to explain its details.
“Project Round-Up is a volunteer program that could have an amazing impact,” Ryerson said. The United Way leader had already met with CU President and CEO Tom Wheeler, and Ken Webb, senior vice president and chief financial officer to discuss the organizations’ mutual interests in operating such a project.
Ryerson told board members these types of Donor Restriction Agreements are “... not all that uncommon in the world of nonprofits.”
Wheeler and Webb introduced the Project Round-Up concept last month because of CU customers’ dwindling support for the thirty-something-year-old family assistance initiative called Project HELP. Under this program, customers are allowed to mark monetary donations on the backs of their monthly statements. Project HELP once had more than 1,000 donors per month, but that number has dropped to about 500. Total donations are down to some $800 per month.
Project HELP funds are transfered to Neighbors in Need, a new division of The Caring Place. There, a social worker distributes the limited support to families in need. The worker doesn’t just write out checks, but explores the causes of a family’s financial misfortunes. Ryerson said Neighbors in Need doesn’t just “treat symptoms,” but also closely examines “core issues.”
It is expected that Project Round-Up donations will be routed to a third party through United Way. Any third party must be authorized by both United Way and Cleveland Utilities.
The concept of Project Round-Up also surfaced within CU because of an alarming number of customers whose utilities are being disconnected in spite of efforts by the public utility to provide flexible options for payment.
From Jan. 1 through Sept. 17, some 6,289 CU accounts came up for “disconnect,” meaning they were behind in their payments and were in danger of having their utility service disconnected, Webb explained. Of this number, 3,003 were actually physically disconnected during the period. The others avoided disconnection because of CU’s practice of resolving customer needs when possible.
By design, Project Round-Up will not be limited to utility support nor will it be exclusive only to Cleveland Utilities customers. Of all CU Project Round-Up donations, 80 percent of the funds will be distributed for utility needs and the remaining 20 percent will be set aside for housing, medical and other related needs.
As described in the Donor Restriction Agreement contract between United Way and CU, “utilities” will include electricity, heating products or services (gas, wood, fuel or others), sewer and water. It will not include telephone nor cable television.
Ryerson praised Wheeler and Webb for their interest in offering some of the funding for emergency needs other than just utilities, and for making it available to the customers of other utility providers.
“They (Wheeler and Webb) felt like anybody in this community who is having problems with their utility bills, no matter who their utility provider is, could utilize this service,” Ryerson stressed. “This is a real tribute to the spirit of this organization (CU) and their desire to help people, and not to have an agenda associated with it.”
Under the contract agreement, United Way will provide Cleveland Utilities with a semi-annual report on the fund expenditures and community impact of the funds, beginning six months after the program’s launch.
Ryerson pointed to the Neighbors in Need agreement between United Way and The Caring Place, and praised its effectiveness in helping to meet family needs while protecting the donors’ dollars. The same type of safeguard will be in place for Project Round-Up, he said.
“What this means is that 100 percent of the money that comes from Project Round-Up will go directly to serve people in need,” Ryerson stressed. “There will not be an administrative cost. There is not an overhead. There is no administrative fee off the top. One hundred percent of those dollars will go to people who need it.”
Ryerson told the CU board preliminary numbers are not yet available; however, he pointed out “... literally pennies on people’s utility bills collectively can have a significant impact on some of the needs in this community.”
He added, “While we don’t have any firm numbers [yet], our early estimates are really exciting. It’s going to expand our existing program and really address our needs.”
In last month’s CU board meeting, Webb projected unofficially that Project Round-Up has the potential for raising about $100,000 per year with only 50 percent participation. In most cases, because customers’ bills would be rounded up only 12 times each year, their total individual commitment to the program would probably be about $6 per year.
On a motion by Cleveland Mayor Tom Rowland, who represents the Cleveland City Council on the CU board, and second by Chari Buckner, the governing body approved Project Round-Up on a 4-0 vote. Also voting in favor were Joe Cate and board chairman Aubrey Ector. Eddie Cartwright, the board’s fifth member, could not attend.
“We’ll get started on it,” Webb told the board.