Thursday, October 1, 2009

Why I Will Not Support the United Way

It's that time of year. The air is cool and crisp, the wind picks up, sometimes creating a bit of a chill, the leaves are changing, and the annual United Way campaign kicks in at work. The United Way is an organizational clearing-house that collects donations on behalf of designated charities and then distributes those funds appropriately.

There are at least three fundamental problems with the United Way, and it is for these reasons that I have not, and will not support the organization. The first problem is that the United Way skims money off the top of every donation. The second problem is that, although you can direct your donations to specific charities, the United Way actually utilizes an accounting trick to funnel money in the proportions that they see fit, and finally, and most egregiously, the United Way provides donated funds to organizations that discriminate. I'll address each of these problems in greater detail.

When giving to a charity, it would seem logical that the donated funds be directed to maximizing the mission of that charity. Administrative costs obviously cannot be avoided, but these should be minimized to the greatest possible extent so that the money can be put to work actually making a difference. There is a lot of information out there about how efficient charities are at putting donated money to work (e.g., www.charitynavigator.org). Yet, United Way isn't a charity in of itself, it's just a distributor of funds. So, money given to the United doesn't actually do anything until it is sent to the designated organizations. The actual charities then use the money from the United Way to operate their organization, including providing for their own administrative costs. So then, United Way is a middle man, skimming money off the top. The money that stays in the United Way's pocket does nothing for a given charity. Every charitable organization that I can think of accepts donations directly. So, why not give money directly to the charity? Why give it to the United Way so that they can just pass it along while skimming money off the top? It just doesn't make sense.

If you are willing to swallow the commission charged by the United Way, there is still the problem of their donation accounting tricks. When giving to the United Way, you can specify that your dollars go to a specific charity on their designated list. Here's the rub though. As best as I can tell, the local United Way Board of Directors decides in advance what fraction of the total annual take will be allocated to various charitable organizations. As long as the total amount of dollars specifically directed to an organization by donors is under the amount allocated by the Board, your donated dollars are considered to be part of the Board's allocation percentage. For example, suppose the United Way has, after taking their cut, $100 to distribute. The Board decides that $20 (20%) will be given to organization A, $40 (40%) to B, and $40 (40%) to C. Of the $100 dollars, individual donors requested that $15 go to A, 10$ to B, and $1 to C. Since these request fall under the amounts allocated by the Board, the Board allocations are unaltered. In other words, the amount of donor-directed dollars has zero impact on the allocation. Your "vote" has been thrown away. The ethical way to divide donations is for the Board to allocate a percentage of undirected dollars and to send the directed dollars as a separate disbursement. In the case I gave, that would result in a total undirected amount of $100-$15-$10-$1=$74. The amount of undirected dollars going to A, B, and C would be $14.8, $29.6 and $29.6, respectively. When directed dollars are added in, that would result in $29.8 to A, $39.6 to B, and $30.6 to C. That's quite a bit different than what the Board allocated, but it is reflective of the donors' wishes.

The biggest problem of all, however, is that the local United Way chapters decide to which charities they will distribute funds, and they are free to choose charities that discriminate. Even if one accepts the two other fundamental flaws, this one is unforgivable. Why anyone would give or support an organization that permits this is beyond me.

The Boy Scouts of America (BSA) is an organization that openly (and legally!) discriminates . Members may not be GLBT and they must profess in the belief of a god. The SCOTUS has ruled that because the Boy Scouts are a private organization, they are free to determine who is eligible for membership. While I find discrimination deplorable, I also strongly support the rights of private groups to do so. It turns out that a substantial fraction of funding for the Boy Scouts is provided through donations distributed through the United Way.

My local chapter (Foothills United Way in Boulder), it turns out, will not support the local Boy Scouts, because of their policies. However, the chapter of our corporate headquarters (San Antonio) does support the Boy Scouts. Some will argue that because the local chapter will not distribute to the BSA that donations to the local United Way chapter or morally allowable. I beg to differ.

Although, thankfully, the local United Way will not support discriminatory organizations, the fact remains that the national organization under which they are chartered allows this to continue. Supporting the United Way locally or nationally provides legitimacy for an action that is indefensible. The solution is for the national United Way to make it clear in no uncertain terms that they will not support organizations the discriminate. Period. That the local chapter will not support discriminatory organizations is nice, but it is no more meaningful than knowing that some local chapter of the KKK does not support segregation of blacks.

Above are the three fundamental problems with the United Way. In addition, there are various other issues, including strong-arm tactics--bordering on coercion--that are still rampant. Maybe I'll write some more about that while prospective United Way campaign contributers are enjoying a pizza party courtesy of the company.

30 comments:

Anonymous said...

Kudos for the education on United Way! --Nothing beats being in the loop.

Loretta said...

Have no idea why you would not donate directly to the cause!!

Anonymous said...

I understand and respect your right to an opinion on BSA. However you forgot to mention that they also have rights and you forgot to mention the discrimination of let's say the United Negro College fund and many others that only help/support certain segments of society. I do have a question, how did Ducks Unlimited and some other organizations get on their list?

brin3m said...

Thank you for posting this. I have always had an issue with a large group sending funds to various "charities" so I always give directly to the charity of my choice. The reason I am posting though is that (where I work) our local public school's Superintendent is asking that we contribute to our local United Way. Wondering what your thoughts might be on it.

Scot Rafkin said...

Thanks for the comment, brin3m. My thoughts on this haven't changed. If you're still considering donating to UW, I would at least check to see what your local chapter supports. I still think the best bang for the buck is to go straight to those you wish to help.

Anonymous said...

Hi all! I just wanted to drop in and give you a little bit of insight into why the United Way isn't always a waste of money. I currently work for a mid-sized United Way, and we support over 55 different charitable organizations. I can give you two reasons why people can take comfort in supporting those agencies through UW:

1) When you give your money directly to an agency (no middleman, as it were,) there is absolutely no guarantee that your money will be used for anything in particular. Could just be for pizza for the staff. Sure, they might tell you that you can designate it within their agency...but I wouldn't hold my breath on that. Each United Way is autonomous, which means we each make up our own rules (so to speak...we all use the same basic model but there are details we get to decide on for ourselves). At my United Way, money is given to agencies in the form of grants. To get a grant, an agency has to approach us with a plan on how the money will be spent, how they will keep track of it, and most importantly, how they will measure results of the program. Accountability is very big at my UW, and it should be important to any UW.

2) Quite simply, many, many of the agencies we fund can not afford their own in-house fundraising team. The few local nonprofits that do employ Development Directors? Those directors spend the vast majority of their time trying desperately to cover the bills they have when the fiscal year simply begins. Many agencies would not be able to add programming, try new things or just keep the doors open without United Way money. Some of these agencies only employ 5 people, all of whom provide direct services...believe me when I say that they have no time for fundraising. The vast majority of our community will not designate money to a place like the Rape Crisis Center, but we do because we know how valuable they are!

I can also say, from personal experience, that we do NOT like people being pressured to give. All it does is bias people against us. We want people to enjoy giving to United Way. If you feel pressured, and under-educated on what exactly your local UW does, that's a big failure in communication on the fundraiser's part right there.

I also hear a lot of complaints about what we get paid. I don't think this is very fair. Our president oversees a multi-million dollar agency, and he is paid lower than what a CEO at a private company would be paid for doing the same thing. There's an idea that anyone working in charity and nonprofit work should live like a pauper, and that's not very fair to those of us who devote our lives to helping people. Trust me, at the age of 32, I make far less at UW than I could as a sales associate for a private company, but we choose this work because we believe in it!

Hope this helps a little!

n2cycles said...

I made a promise long ago to never support UW again. My previous employer threatened to fire me if I did not give. I was broke, paying my way through school and working full time and getting no help from anyone. 2 months later I was laid off and my employer deducted my fair share from my last pay check. If I give to anything now it's a one off. There is no way to insure where your money goes. The local chapter of the UW has a beautiful elaborate building. And the parking lot is full of late model cars. Doesn't look like like a charity organization to me. I'll give directly to the salvation army. They are more reputable.

Anonymous said...

The days of United Way being a funnel organization are long gone. Now United Ways do community assessments to determine the root causes of issues that are causing the most harm in the community, then community volunteers evaluate application for programs -- the programs must show data drive results that measure impact. United Ways also help with collaboration among agencies to reduce duplication of services or save costs and ultimately work together toward lasting solutions. Basically UW is the checks and balance system that holds agencies accountable to do what the say they are doing. While this may not be as big of an issue with national organizations like Salvation Army, Boy Scouts, etc. -- it most certainly is with smaller local agencies. Many agencies have great intentions, but ultimately they are reacting to situations and only addressing symptoms (which is needed too), and not helping people break the cycle. And sadly many feel that getting people signed up for "resources" is the answer rather than a temporary assistance while they change their lives.

Dave said...

I have been involved as an unpaid volunteer with United Way and some of their agencies for over 20 years. Some of the criticism that has been posted here was true to some extent 30 years ago but not recently. For instance, UW absolutely does not want employers to pressure their employees to give and works with companies as much as possible to make sure they don't do that. Also, the dollars that go to the United Way for overhead are typically a very small and efficient portion (see charity navigator or other such sources) and largely go to pay for the campaign expenses and some programs that UW directly runs, like 211. UW volunteers from the community (like me) watch all UW spending like a hawk and work on volunteer run committees to review agency programs to ensure that only the most efficient and effective get funded. Those of you who think you are being more efficient by giving directly to agencies most likely have no idea how that money is being spent and don't have the time to go find out and track the results. Also, the subject of 211 has been raised - this was originally a government service in many communities that was left for UW to fund in many cases - sometimes with some government support and sometimes not. It is a valuable community service that directs people in need to resources available in the community from agencies - whether UW or not. In my county, we're talking about calls from people who are hungry, have lost their home, are victims of abuse,or can't pay the electric bill. UW helps them. It is really unfair to criticize UW for taking some government money to help pay for 211 when originally it was a government function in most cases. As to big salaries for employees, I have sat on salary review committees and know that UW employees are paid much less than the equivalent positions in for-profit work.
I have never been paid a dime by any UW. In fact, in addition to donating my time and travel costs, I donate money to 3 different UW's because I believe in the work they do. But don't just believe me - go visit a UW funded agency and see what work they are doing and ask them what kind of support they get from UW.
I applaud all of you for your interest in charitable causes and hope you will learn more about UW rather then just repeating some of the standard old stories.

Unknown said...

Does the President/CEO really need to make $740,000/yr? I think about $500,000 of that could REALLY help local communities...but that's just me.

Anonymous said...

To answer the question above me regarding what the President/CEO should REALLY be making. The wage paid is far less than a CEO of a private company at the size of the United Way. Having a talented CEO leading a large organization, even a nonprofit such as the United Way, is key to the success of the organization. The talent that the CEO holds is why CEO's are paid such large amounts of money. If a community wants a nonprofit to run well and be successful, then YES that CEO and the other leaders within the company need to be paid at a reasonable amount for that position. If the nonprofit was to pay an extremely low wage for a position, they would get candidates lacking skill and experience, and in turn place unqualified candidates in positions that could (and would) damage the organization. That is a simple way for me to answer this question, as the entire answer would be a book, or two, for that matter. Hope this helps you see the business side of it.

Anonymous said...

Ah yes, the despicable annual UW drive at my work begins. We get summoned into the conference room 10 at a time, with pens and the donation form. We are given the spiel by a Manager, then asked to fill out the forms. If you don't wish to donate, you are asked to stay behind and questioned why. A higher up Manager is then sent in to talk to you- and if you still refuse, you'll be summoned to a meeting with The head director to defend your choice. The best part? They post sheets in the lunchroom showing who donated and who DID NOT. SO it's not bad enough you get bullied into donating- when you say no- they post a sheet for 400 of your co-workers to call out for not doing "your part". Every year it's the same- the bullying, the attempt to shame people for not contributing to their drive. It's a load of BS that the United Way doesn't know that people donate to them using strong arm tactics.

Brian Olson said...

united way pays the bills to keep the iluminati and insurance fraud up and moving. their is always a front to make evil look good. today i learned they are linked to the government!! i think freedom and goodwill will die before the rest of the truths come to light.

Brian Olson said...

the united way is government related. anti christian, terrorist supporters, insurance fraud. what will we find out tommorrow.

Alistar Johnson said...

Great article, thanks for sharing. I have recently discovered Tony Charalambides fundraising blog, you should check it out.

Anonymous said...

The following outlines corruption and sketchy accounting at United Way.
http://hubpages.com/politics/United-Way-Fraud-Scandal-and-Scams

Anonymous said...

I volunteered for a local united way as co-op student for my diploma for 6 months. To be honest it is a very slow and relaxing work environment. Regular employees take leaves or work from home all the time. Even when they come to the office there's not much going-on except for meetings. Given that the salary and benefits are way over average I do think donations benefit uw's employees than those in need in the community. People keep saying it takes great compensations to retain great talents, that's true but the local uw I was involved had less than 20 employees, yet the CEO and ET team make 6 figures according to governments open source of registered charity's tax return record. I think one has to be the insider (either volunteer or serve in the board) to really know what's going on. I was "talked into" donating to uw during my time there but never again once I finished my co-op hours.

Anonymous said...

United Ways are run by individual chapters region-wise. Just like all non-profits trying to justify the thousands of dollars paid to their executives by saying market compensations are needed to recruit capable leaders, UW's compensations are top of the charity/non profit market even for some small chapters in specific regions. It is hard for donors to swallow the fact that a UW CEO running a separate chapter of less than 50 employees gets paid over $250K in compensation per year, let alone other VPs and Directors (executive grade) who are paid around the same range. Yes you can say CEOs of international corporations get paid million but those are responsible for their global marketing, quality of products and services to the public. When I buy their product I buy to use it to better my life, the purpose is not about paying their CEO handsomely but if that's the case they've earned my money.

If you ever work or volunteer for UW you will find that they are full of agendas. Employees there are like everyone else, staying there for stable job, good pay and generous benefits. They get support from the government and apply for multiple grants and funds every year. Yes they claim 80% of our donations is used towards the cause but it's just a number game. Let's say if they get 1 million grant from government and 1 million donations from the public, and they use $400K for payroll and fundraising. You can say it's 20% but it's actually 40% if you just count public donation. Any charity uses government funding to dilute their numbers don't earn my respect.

Another thing I really don't like about UW is that they use volunteers extensively. Managers have no work but to attend meetings and discuss the same social issues all day. Front line work are left for smaller non-profit staff (their funded agencies) and/or volunteers. That doesn't help the economy nor employment in the region except for those handful working at UW. Why would I use my after-tax money to donate to them given the government already uses my tax to grant them? Oh right! It's because UW workplace campaigns force people to donate through payroll deduction! Kudo to them!

If I have extra money to spend I prefer to give directly to people I know who are in need, or buy new stuff so local businesses can keep on running and retaining their staff, not to support UW employees thousands of dollars to keep on having meetings and discussions about the same social issues over and over.

My two cents only and if your opinion differs I respect that.

Sam said...

I never had to profess a belief in god to be in scouts..

Unknown said...

I had a similar experience when I worked at AT&T in the early 2000. (Pre SBC merger) While they didn't post names, They made it quite clear they expected you to donate and kept track of who did and who didn't. This is why I have animosity and distrust to this day for the United Way.

Anonymous said...

My mom used to teach ESL classes at a factory, where they pressured employees who were barely getting by to donate. These employees felt their jobs were at stake if they did not donate.

I donate directly to local-only charities. How do I know the money will go to those who need it and not "pizza for the staff"? Easy: I used to volunteer extensively for those charities. Our Special Olympics head coach worked her ass off for no pay because as a small team, we got practically nothing from state.

Acro Girl said...

I have been pressured once to which I declined telling my boss that I already contribute to local and foreign organizations monthly and I'm not interested in expanding to another charity. Also I pointed out that the money I make is allocated for certain things and it's not going to uw. I was firm and angry for being pressured and repeatedly trying to be persuaded by my boss. That is not how charity works. Also I researched that UW gives 2 Billion to planned parenthood; which claims 90% of their services are for abortion. They are also pro lgbtq and part of indoctrinating young children into being genderless and that feelings determine gender not biological make up. They encourage sexual intercourse and sexual exploratation for young children. This is child abuse and exploration.

Acro Girl said...

I have been pressured once to which I declined telling my boss that I already contribute to local and foreign organizations monthly and I'm not interested in expanding to another charity. Also I pointed out that the money I make is allocated for certain things and it's not going to uw. I was firm and angry for being pressured and repeatedly trying to be persuaded by my boss. That is not how charity works. Also I researched that UW gives 2 Billion to planned parenthood; which claims 90% of their services are for abortion. They are also pro lgbtq and part of indoctrinating young children into being genderless and that feelings determine gender not biological make up. They encourage sexual intercourse and sexual exploratation for young children. This is child abuse and exploration.

C William said...

I have contacted Untied way personally several times over different matters and NEVER received any help. Oh, and I am a disabled veteran.

Anonymous said...

I think they are lying about the amount of money that they keep. I believe they use most of the money on themselves.

Anonymous said...

I agree with you Brian Olson.

Unknown said...

I've been giving to United Way, & every paycheck I've chosen 3 local charities I fully support to give to. I recently received a letter from one of my charities thanking me for my donation of $19.80. I give $5 a week to this one charity which should amount to well over $150. Had I not received this letter I would have no idea that a huge amount of my donations are NOT going to my charities. I will be dropping United Way as soon as possible and am severely disappointed by this epiphany. The charities I support desperately NEED these funds & I will start giving directly. I knew there would be some administrative costs but this amount is unacceptable.

Anonymous said...

Back in the 90's the Toronto chapter published a story in the Toronto Sunday. A full half page. It delved into the divorce issue and basically called all men mean, abusive offenders. I asked for a simple rebuttal of including the words "some men". It was denied and I will never support them as long as I breath. Same pressures at work too but I simply refuse AND explain why. I donate directly to the charities I support. Each to their own.

Anonymous said...

Why is it United Way's fault some of you work for terrible companies who force/shame you into giving? Instead of that being a reason to dislike UW it SHOULD be a reason to dislike your employer.

As for the person claiming they were fired and UW funds were withheld from their last check against their will, I cal 100% total BS. But even if you aren't a narcissistic liar, that's still an issue with your terrible company. Not UW.

LuanneKea said...

Annonymous April 2014, THANK YOU. Your response here helped me tremendously.