Written in 2010
Although I am big fan of philanthropy, admittedly, I am not a fan of the United Way. I was coerced into giving at a couple of employers and have never felt that the United Way has adequate controls to prevent coercion or the misuse of donated funds.
Many local United Way affiliates do great work, but they all have overhead expenses and they all pay a fee to the head office of UW. Although they can claim the scandals of other affiliates or the head office are unrelated to them, I do not understand why the good affiliates do not demand that the head issue standards of ethics and sound business practices that are beyond reproach and then compel all affiliates to live by these standards, including themselves.
I am somewhat perplexed by the claim that some locals make that they are “completely autonomous.” This is a double edged sword that in one sense means “don’t hold us accountable for the problems of other locals,” but it also would mean that there are no universal standards for giving or ethical conduct.
I have made an effort below to provide an objective look at some of the publicly available data about the United Way.
Examples of Reported United Way Overhead Costs:
UW Orange County (CA) – “below 20%”
Middlesex UW (CT) – 17.3%
UW of Metro Nashville (TN) – 15%
UW of Dodge County (WI) – 14%
UW Southeastern PA (PA) – 12.5%
Heart of Michigan UW (MI) – 10%
UW of Mid-South (TN) – 9.9%
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*I gathered this information from the local UW websites. Some of these same websites have the 990 disclosure forms. Alas, many local UW websites do not contain any information about the percentage of overhead nor online documents that detail giving. It is also important to keep in mind that these are self-reported numbers – there are allegations that the United Way’s method of calculating overhead expenses causes the reported numbers to be artificially low. Charity 990s are available from a number of free websites such as www.guidestar.org, but the United Way should require all affiliates post the past 5 years 990s and overhead percentages in order to support transparency.
High Profile Problems at Some United Way Offices
1995 – CEO (for 20+ years), CFO and another executive of the United Way (National) are convicted of charges involving millions of dollars resulting in prison sentences of 7, 4+, and 4+ years, respectively. From USA Today.
2003 – Head of charity convicted and sentenced to 3+ years after being able to take hundreds of thousands from the Burke County (PA) United Way over a 4 year period. From local paper.
2004 – Head of Washington, DC United Way sentenced to 27 months in prison after conviction for embezzling almost $500,000. From the Washington Post.
2006 – Audit of NYC United Way reveals former head “diverted $227,000 in charitable assets.” Although some restitution was paid, criminal charges were not pursued. From the NY Times.
2010 – United Way of Tucson and United Way of the Central Carolinas are still resolving issues of mismanagement of hundreds of thousands of dollars.
* Although the above scandals are not representative of the vast majority of United Way offices, the number of serious problems is an indication to many that there is insufficient oversight.