The Lightning Rod M/M Blog

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

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.

Seven Questions Every Donor Should Ask United Way

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 Way’s effectiveness.  You can’t rely on United Way’s 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 charity’s United Way allocation?  (This is a common practice. The United Way subtracts the amount of the donor’s gift from the amount of the grant it has pre-determined it will make to the charity.  Thus, the donor’s 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?  (Don’t 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 Area’s “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 Way’s list as opposed to if I choose a charity that is on United Way’s list?  (This information should be disclosed up front on United Way campaign materials, but often it’s 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 didn’t 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 Way’s 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 doesn’t meet United Way’s 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 won’t 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 community’s ombudsman” for public health, job creation, education, etc., joining a long, long list of other self-appointed “ombudsmen” at the public trough.)