Message Board

Outfoxing United Way Restrictions On Donor Choice

pmaguire — Tue, 22 Sep 2009 23:40:32 GMT

United Ways are refusing to honor donor designations to other charities. Here's what charities can do about it:

Bear with me. This is a little complicated...

When you receive checks directly from a local United Way it's because a contributor has "written in" your agency on his or her United Way pledge card. These contributions, referred to by United Way as "donor option" gifts, are transmitted to you after the United Way has subtracted a handling fee, typically 10-20 percent.

That is, those gifts used to be transmitted. These days it's more likely that instead of a check you'll receive a form or forms from the United Way you are required to complete and return to establish your "eligibility" to receive the gift, regardless of the fact that your contributor specifically named you to receive it.

Over the past several years most local United Ways have made it much more difficult for donors to direct their contributions to specific charities. United Ways have instituted additional fees to discourage donor option gifts or have added "local presence" or "category of service" restrictions or have required special donor option pledge cards that are difficult if not impossible to obtain. Many have dropped donor option altogether.

Too often, much too often, the donor is never notified if United Way finds his designated charity ineligible. United Way just keeps the money. That's not ethical, but it appears to be legal.

Of course, your prospective workplace giver could simply decide not to participate in the United Way campaign, but the reality is in many companies there is still a strong expectation that loyal employees will support the company's United Way fund drive.

So the question is: How do you accommodate constituents who wish to give to you through their workplace campaigns but who no longer can because of United Way restrictions?

Answer: Send them to the United Workers For the Untied Way Restricted Gift Receipt Service. (www.theuntiedway.org)

That site has a free service that enables your contributor to make a one-time or periodically recurring credit card "restricted" gift to the United Way. The restriction is that United Way must agree to honor your contributor's designation of your organization as the ultimate beneficiary if United Way wants the privilege (and profit) of processing the gift. If the United Way does not agree to honor the designation the gift funds are forwarded directly to you instead.

The contributor is able to print a receipt evidencing his gift to attach to his United Way pledge card when he turns it in.

It's a win-win-win result. The employee shows support for the company's campaign but keeps his freedom-of-choice in giving. The United Way gets its service fee if it is willing to respect the employee's instructions. And you get a contribution you otherwise would never have seen.

Our advice and counsel used to be that your organization should promote "donor option" as a giving option on your web site, in your newsletter, and in other communications with your constituents.

Now our advice is that you counsel your constituents to make sure their local United Way will honor "donor choice" before they attempt to support you at work, and if there is any problem or question about that to visit http://www.theuntiedway.org to take advantage of the Restricted Gift Receipt Service.

John Kelker Is A Thug

pmaguire — Mon, 09 Mar 2009 21:59:39 GMT

John Kelker Is A Thug

John Kelker, the President of United Way of Central Illinois, is a thug. Go ahead. Sue me, John. Truth is the ultimate defense.

As reported in the February 26, 2009, issue of the Illinois Times, Kelker over the past several years has conducted a campaign to deny other charities their legally-entitled equal access to municipal employee workplace charity fund drives and replace them with what effectively constitutes a United Way-only campaign. (http://illinoistimes.com/gyrobase/Content?oid=oid%3A9592).

He's done it by bold-faced lying to municipal leaders, promising to manage an "open" campaign in their workplaces and then showing up with United Way biased pledge cards and policies. Example: if a donor makes a gift to United Way there is no surcharge deducted and no minimum gift is required. If the donor attempts to give to a non United Way charity, there is a $25 minimum requirement and a 15 percent "handling" fee.

It's just not credible that the leaders of the affected municipal campaigns would tolerate this prevarication and abuse of trust. What possible reason would they have to go along with it? Unless... Unless. You know.

The State Attorney General should be taking a really close look at this.

Under The Bus Again, Ms. King

pmaguire — Wed, 17 Dec 2008 19:18:15 GMT

Today the United Way of Central Carolina (Charlotte) released a report on its internal investigation into how its former CEO, Gloria Pace King, managed to engineer a pension package so outrageously generous that she was fired when the details of the pension became public. Yes, even though the UW Board's executive committee had signed off on the plan, when it became public they threw Ms. King under the bus.

Now, with this new report, they've thrown her under the bus again. According to the report, published today in the Charlotte Observer, Ms. King manipulated details of her proposed pension payout to triple its value. Basically, what the UW Board is saying is "she fooled us."

Right. Under the bus again, Ms. King.

Meanwhile, the United Way of America is conducting a survey of all local United Ways to make sure the King pension story in an anomaly. The UWA will no doubt conclude that the remuneration and retirement plans at other United Ways are reasonable and customary. Guess how many nonprofit professionals outside of the United Way would agree with that assessment.

Charlotte NC United Way - What A Mess!

pmaguire — Fri, 31 Oct 2008 21:59:35 GMT

Kudos to Reporter Kerry Hall and her colleagues at the Charlotte Observer for their expose on one of the most mismanaged United Ways in the country. That they had the journalistic courage to do so is good news. The bad news is that the Charlotte United Way was just doing what United Way of America told it to do. That doesn't bode well for the rest of the UW system, but don't say we didn't warn them.

Details of the newspaper's reports are available at http://www.charlotteobserver.com, but here's the gist of it. Charlotte has a number of large corporations that haven't gotten the word that coerced giving to United Way is not OK. United Way is (was) a sacred cow in this town. Then, a few months back, somebody leaked the details of the incredibly generous pension plan given to the UW CEO, along with her equally magnanimous salary, and the pledge cards hit the fan.

Next, the United Way board of directors, the same board that had authorized the pension payments, fired the CEO for accepting them. (The excuse they gave was that with all the uproar over her salary and benefits she could no longer be effective.)

So the Charlotte Observer started taking a closer look at United Way's numbers, and that's how they discovered a total lack of accountability and transparency within the United Way itself. It turned out that the fastest growing "program" funding was spending on four mysterious UW inhouse programs. This is money that would otherwise have been allocated to community charities. United Way allocated the funds to itself instead. Only problem was, nobody at UW, execs or board, could explain what these programs do or what the UW employees that were hired to work on them do. On the face of it, they appear to be a complete waste of money. Or, as some have suggested, perhaps they were shells used to disguise overhead administrative costs as program costs.

As the newspaper pointed out, United Way is a stickler for vetting other charities' programs before it gives them your money but when it comes to their own programs it's a whole different story. Who knew?

The tie-in with United Way of America? The Charlotte UW was simply adopting the new operating paradigm UWA is pushing so hard -- increase UW infrastructure at the expense of outside charities and use the added capacity to "convene," "track trends in government funding," "study," and "advocate." In other words, to turn United Way into a lobbying organization to push for more tax dollars for the social programs its "experts" favor. Of course, the United Way system has no such policy expertise, but this approach will enable it to buy it. The reason this is a good thing, UWA contends, is that it keeps the United Way "relevant" and "focused on the community" rather than being "a mere pass-through organization."

As I've said before, United Way's arrogant hubris is unbelieveable.

What Is "Fat By Five"?

pmaguire — Thur, 16 Oct 2008 20:22:39 GMT

You've heard of the United Way program "Success By Six," but you probably haven't heard of the other program, "Fat By Five"? Is it...

1. United Way of America's new childhood nutrition initiative.

2. United Way's 5-Year plan to increase United Way staff infrastructure five-fold.

3. Code talk for the United Way system's incredibly overly-generous pensions for their top executives.

If you think you know the answer, reply to this post.

Heart of Florida United Way

pmaguire — Mon, 29 Sep 2008 22:24:04 GMT

An employee of a large grocery chain in Orlando Florida that has a reputation for "strongly encouraging" its employees to give to the United Way asked UWUW what we thought of the United Way in his area. Here's our response:
**********

You'd be smart not to support Heart of Florida United Way (Orlando area) and send any gifts you can spare directly to your charities instead. According to HFUW's latest tax return, for the year ending June 30, 2007, they took in $22,297,184. But of that amount they only sent $11, 706,185 to local charities. That's an effective overhead rate of almost 50 percent!!!

Where's the rest of the money? Let's see. President & CEO: $213,973 salary, $39,442 benefits, $14,400 expense account. Etc.

Here's something else interesting. More than 40 percent of its donors don't trust HFUW to make the allocation decision for them. United Way allocations account for only $6,849,719 of the $11,706,185 sent out to local charities. Donors designated $4,105,930.

That fact probably explains why, if you go to http://www.hfuw.org, you'll see that beginning this fall the Heart of Florida United Way is abandoning the old allocation to United Way member charities model and moving to the new model suggested by United Way of America that we talk about on the web site (www.theuntiedway.org). Meaning, for anyone giving this fall, that United Way won't tell you in advance what charities will benefit. Charities now have to request grants, like the foundation model, and United Way will only fund grants in two categories of service next year. That means that a whole lot of charities you used to support with your United Way gift will now lose that support.

I've attached the relevant pages of the tax return documenting the above. Feel free to share it. Your colleagues are being sold a bill of goods and deserve to know the facts.

How Is The United Way Like Paulson's Bailout Plan?

pmaguire — Fri, 26 Sep 2008 19:22:45 GMT

How Is The United Way Like Paulson's Bailout Plan?

Glad you asked.

1. Give us billions of dollars. Only we will decide how to spend it. We can't tell you in advance how we'll spend it. No second-guessing our decisions after we spend it.

2. Do it now. Don't wait. This is an emergency. Our community is in crisis.

PS: Don't ask us about the salaries of our top executives or about the generous golden parachute packages we've bought for them, courtesy of your previous gifts.

News Release: UW Charlotte

SteveH — Thur, 28 Aug 2008 16:32:57 GMT

This just in:

CHARLOTTE NC, August 28, 2008: United Way of Central Carolina's Executive Board of Directors announced today that Sally Struthers has been engaged as the agency's new spokesperson. Her salary has been set at $365,000 with catch-up pension benefits to be offered unnecessarily at a later date and concealed for as long as legally possible.

Teary-eyed ads are being filmed on location at the 60th floor of the Bank of America executive offices in Charlotte. They will appear in local television markets during the September 2008 UW campaign with a theme of "Please... Please... Save our reputation."

UW CEO Compensation Fiasco in Charlotte

SteveH — Wed, 27 Aug 2008 02:04:06 GMT

UW in Charlotte NC has had a rough month.

http://www.charlotteobserver.com/100/story/151472.html?mi_pluck_action=comment_submitted&pageNum=2

An astute TV news reporter checked their IRS 990 last month and saw that the CEO had an $822,000 pension contribution granted to her in 2007. Upon further investigation, her board chair revealed that they were adding another $1.2 million over the next few years to "catch up" with a commitment they made to provide a $200k/year pension for her. Her current salary is $365,000 and she receives a $36,000 expense allowance from an agency that brought in a moderate $42 million last year with them skimming off UW's typical 15% overhead.

Big big numbers here. It finally came to a head today when the board asked for her resignation because of the controversy.

http://www.charlotteobserver.com/100/story/152153.html?pageNum=2

Hopefully the ignorant, arrogant board will follow her to the door. But this might be a good time to foster a change of mindset in the community. I've plastered the UWUW and ICA links on the various comment pages because this issue is hot within the community and people are searching for alternatives. If anyone has any ideas about what else we can do here to dethrone this abusive UW agency, please let me know.

Steve Hofstatter

Charlotte, NC

United Way and the NFL

pmaguire — Tue, 05 Aug 2008 19:00:21 GMT

How about banning those stupid United Way commercials shown during NFL televised games. You know, where the linebacker pretends he volunteers at the day care center. Yeah, right.

In addition to being cloying, these ads are hypocritical. Only a few NFL teams are close to United Way these days, the scandals and the incompetence having driven the owners to turn toward NFL Charities instead. So why sic 'em on us fans?

Why Not Full Disclosure About the United Way "Members" List To Public Sector Employees?

pmaguire — Tue, 22 Jul 2008 20:03:09 GMT

Why Not Full Disclosure About the United Way List To Public Sector Employees?

These days it's not uncommon for United Way campaign solicitation materials distributed to donors to not include any list of "United Way Member Charities." Many United Ways no longer have "member" charities. In any case, the "new United Way" paradigm is to encourage gifts to the United Way community fund and discourage gifts to individual charities. Including a list of charities with the solicitation materials would only remind donors they have a choice.

But when it comes to at-work fund drives for public sector employees at the federal, state, and municipal level, the participating federated groups, including the United Way, are required to list their respective member charities in the campaign materials. In the cases where the United Way has no members it nevertheless "certifies" charities that it has persuaded to apply for inclusion in the fund drives under United Way's name.

Everyone turns a blind eye to the fact that these charities are not "members" in any commonly understand definition of the term. When donors see the United Way list they presume those charities are somehow supported by or affiliated with the United Way. They also presume that if they make a gift to United Way that money will be shared among the "members." After all, that's the traditional federation model.

But nothing could be further from the truth. United Way will not share any funds designated to it with these charities. The only support United Way will give these charities is to pass along any gifts that have been designated by donors to these individual charities, and it will charge a 10, 15, or 20 percent service fee off the top for the privilege.

Isn't it time for this practice to be disclosed? If a federation is not going to share gifts with the charities it lists under its name, shouldn't donors have right to know that?

Heart (less) West Michigan United Way

pmaguire — Tue, 22 Jul 2008 18:57:05 GMT

Heart of West Michigan United Way runs the funds distribution program for the Raymond James Investments company's United Way campaigns conducted around the country. The company is a big United Way supporter, especially of the United Way of Tampa Bay, where the company has its headquarters. Employees are strongly encouraged to support the United Way, but "write-in" gifts to individual charities are permitted so long as the gifts are to "organizations whose primary mission focuses upon health and human service issues."

Guess who determines whether the intended recipient charity is a "health and human service" organization? And guess who keeps the money if the charity is determined not to be a health and human service organization?

Last fall a Raymond James employee in Tampa Bay made a designated write-in gift to a charity the donor had supported for years. In due course the Heart of West Michigan United Way contacted the charity and asked it to provide evidence that it met the health and human service criteria. The charity did so. A few weeks later the United Way wrote back, saying: "After careful review, it has been decided that the PRIMARY mission of (charity) is not health and human services."

And what does this charity do that makes its PRIMARY mission NOT health and human service. Wait for it...

It provides material support to orphanages and helps couples adopt orphans.

To add insult to injury, the United Way's letter pointed out that the charity's application had been reviewed by the Vice President of Resource Development -- in other words, by the executive responsible for bringing in money to the United Way. Conflict of interest anyone?

There was no mention of an appeals process in the letter, but the charity appealed anyway and eventually prevailed. The charity eventually got the gift, about six months after the donor had given it, with 10 percent taken off the top as United Way's "service" fee.

We asked the United Way in writing whether the donor would have been notified had the charity not eventually prevailed and, if so, would the donor have had the option to have the gift refunded? No response. A month later we asked again. What we got back was a fax of our request letter on which was a handwritten note that said: "I've been busy." We've heard nothing since.

Another Day, Another United Way Cookie Jar

pmaguire — Mon, 21 Jul 2008 23:20:04 GMT

Another Day, Another United Way Cookie Jar

In December 2007 the Atlanta Journal-Constitution (www.ajc.com) reported that Mark O'Connell, the former CEO of United Way of Metropolitan Atlanta, received nearly $1.6 million in cash as a pension supplement. There followed the usual and customary howls of outrage.

I say, give Mr. O'Connell a break. If his corporate masters on the United Way board thought he was worth it, who are we to second-guess them?

Just one problem: Nobody told the board. They did not vote on this increase. According to AJC's story, although leaders of the compensation committee claimed they informed the board, board members AJC contacted said they didn't know O'Connell was on track to receive this supplement.

Sound familiar?

I wonder how many other UW execs out there have similar retirement packages their boards don't know about.

Defenders of the payout said they did it so as to not lose a valuable chief executive. Huh? According to its most recently available IRS 990 return, for the year ending June 30, 2005, United Way of Metropolitan Atlanta operated at en effective overhead rate of 27.6 percent. That is to say, they paid out to charities only 72.4 percent of what they took in. That's poor management, even by United Way standards.

United Way To Others: We Are The Deciders

pmaguire — Mon, 21 Jul 2008 23:15:39 GMT

United Way To Other Charitable Federations: "We Are The Deciders"

Here's yet another example United Way's arrogant, short-sighted, treat-givers-like-sheep "Take Back The United Way" movement -- the systematic effort to eliminate giver choice in employee workplace charitable fund drives and replace it with the United Way being the sole decision-maker for determining which charities get the money.

This one's from Illinois, a hot spot of the movement. Illinois has a law that requires municipal employee fund drives, like cities, counties, or school districts to allow all the charitable federated groups the state recognizes to participate. For example, if a county government lets United Way participate in its employee fund drive it has to let Independent Charities of America participate, too, as well as the other federated groups the state recognizes. As a result, most of these campaigns are jointly managed by the federations, with one of them being selected to take the "coordination" role.

In Lake County that coordinator is the local United Way. Here's an email from the coordinator to the other participating federations, followed by one federation's response:

*******

Hi,

I am the United Way coordinator for the Lake County Federated Campaign for this year.

To help save the cost of printing a large volume of booklets this year we are trying something different this year which we feel will help all federations. This year we are going to print on the back of the pledge card a listing all the federations with their number and logo. If an individual wants to designate to a specific agency within the federation they will have the option to pledge on line with a searchable database with all agencies or they can go to their team leaders who will have a printed booklet with the federations and agencies in it.

Our thoughts on this were that the employee does not need to go any further than their pledge card to donate to a federation. As a federation we of course would like to have the monies come to the federation directly so we can put the dollars to the most needed places.

I hope this is in agreement with all of you. Hopefully all federations will see more income directly to them.

We still need your list of agencies for the online pledge and to print a minimal number of booklets for the team captains and departments. I would like these as soon as possible so we can start getting what we need printed and setup on the web.

Any questions please feel free to contact me. We are planning the campaign to run from October 2nd through October 19th.

*******

A Response:

Community Shares of Illinois is STRONGLY opposed to the changes you are proposing. The campaign materials should be about giving donors the opportunity to choose the charities they wish to support not so that "federations will see more income directly to them." That may be what United Way wants, but we are committed to giving donors more control over where their dollars are directed.

In terms of costs, I believe that the charities can provide a donor guide that includes all of the state certified charities at little or no cost to the campaign. The materials you are proposing are both biased to United Way and unfair to the donors in that it makes it difficult for donors to find out which charities they have the right to choose from.

Thanks for the opportunity to comment on your suggestions.

******

I have no idea whether this coordinator is a true believer in the all-money-to-the-federations philosophy or if she was merely following orders. Probably both. But it's one thing to give donors an opportunity to direct their gifts to an institution to re-distribute among charities as the institution sees fit. It's quite another to propose a system that is deliberately designed to make it harder for a donor to exercise his or her own choice of which charities to support.

This United Way proposal is analogous to your being given an election ballot that only lists the political parties, not their respective candidates. You have to go online if you want to select which candidates get your votes, or go to a campaign official to get a special form. Sound like a good idea to you?

Earth To United Way: You are not smarter than the people, and your choices are not somehow inherently better than their choices. Get over yourself.

Seven Questions Every Donor Should Ask United Way

pmaguire — Sat, 19 Jul 2008 22:32:40 GMT

Seven Questions Every Donor Should Ask United Way

1. How much money did you take in last year? How much of that did you pay out in grants or distributions? (The difference between those two numbers is the most accurate reflection of the United Ways effectiveness. You cant rely on United Ways self-reported number of its administrative and fund raising overhead percentage because they label much of their internal paper-shuffling as program costs. )

2. If I earmark my gift to a specific United Way member charity, will United Way treat that gift as first dollars against the charitys United Way allocation? (This is a common practice. The United Way subtracts the amount of the donors gift from the amount of the grant it has pre-determined it will make to the charity. Thus, the donors gift results in no net benefit to the charity. Had that donor given to the charity directly, there would have been a net benefit. This practice dis-empowers donors and insults their intelligence.)

3. Is this list of member charities I see in your brochure or on your web site really a list of members in the sense that if I make a gift to the United Way they will all share in that money? (Dont assume that the charities United Way presents are really member charities that are going to share in your generosity. Sometimes the lists are just window dressing, such as United Way of the San Francisco Bay Areas community certified charities. None of these charities are necessarily going to get any United Way dollars, and few will. Other times the lists are composed of so-called community partners. These are charities that the United Way has made grants to in the past, but there is no guarantee they will get any money (i.e. your money) in the future.

4. If I earmark my at-work gift to a specific charity of my choice, how much of that money will United Way deduct before sending the remainder on to the charity? Will this cost vary if I choose a charity not on United Ways list as opposed to if I choose a charity that is on United Ways list? (This information should be disclosed up front on United Way campaign materials, but often its in the small print.)

5. If I earmark my at-work to a specific charity, will United Way honor my designation unconditionally or will United Way only honor the designation if it is to a charity United Way approves? (The policy among United Ways to only allow designated gifts to health and human care charities is increasingly widespread. There is no universal definition for this term it can mean whatever the local United Way wants it to mean. Charities are asked to prove their health and human care bona fides with documentation. As a result, the recipient charity sometimes has to spend more to receive your gift than the amount you gave.

6. If this United Way has a health and human care limitation on designated gifts, and you determine that the charity I chose didnt meet that criteria, what will happen to my gift? Will you return it to me or will you re-direct it to the United Way general fund? Is that re-direct automatic, or will you re-direct only with my express permission? (If United Way were a business or a government program instead of a sacred cow, people would be going to jail for this practice of re-directing designated gifts to the general fund. Even in a best case scenario, where donors are notified of United Ways decision, United Way has an unconscionable conflict of interest by putting itself in a position to benefit if it determines that the charity the donor intended to benefit doesnt meet United Ways criteria.)

7. How much of the United Way operating budget is spent on lobbying governments to provide more money to social welfare and entitlement programs in other words, to raise my taxes. (You probably wont get a straight answer to this question, but you should understand that networking with government is now a key component of the new United Way program. Basically, the United Way is trying to reinvent itself as the communitys ombudsman for public health, job creation, education, etc., joining a long, long list of other self-appointed ombudsmen at the public trough.)