Reconsidering United Way contributions

[pb4uski]

Don't know where people are getting their (high) %age numbers for UW overhead.....

In my case it is DIRECTLY from my local UW's FY 2012 financial statement.

(Allocations + Other Grant Services)/Campaign Income = 63%

(Salaries & Benefits + Professional Fees + Supplies + Other Operating Expenses)/Campaign Income = 64%

If I replace the denominator with Total Income (which includes a big slug of Other Revenue) rather than just Campaign Income the percentages are 51% and 52%, respectively (expenses > revenue by 3% in FY 2012)

So no matter how you cut it the ratio of aid to income is really low.

 

[Keim]

Why? Some orgs do way bigger jobs than others. Red Cross is a huge operation & big percentage of where the donations go. Recall Hurricane Sandy? Katrina? Andrew? What else causes more need than those events?

You are comparing apples to oranges, Gerntz. Sure, the national organization might be highly efficient. But people here aren't talking about the national organization. They are talking about their local UWay, which is a separate legal entity. Think of UWay as a franchise operation, where corporate gets a slice of each local groups pie.

ETA: Whoops, wrong gerntz quote. Point still stands tho!

 

[braumeister]

In my case it is DIRECTLY from my local UW's FY 2012 financial statement.

+1
I was using the local UW's audited financial statement for 2011.

 

[plsprius]

For a very different take on overhead costs in charity, this TED talk presents a perspective that challenged my assumptions about overhead.

(Watch at least four minutes into the talk to get the speaker's point of view. The rest of the talk elaborates the point.)

Activist and fundraiser Dan Pallotta calls out the double standard that drives our broken relationship to charities. Too many nonprofits, he says, are rewarded for how little they spend -- not for what they get done. Instead of equating frugality with morality, he asks us to start rewarding charities for their big goals and big accomplishments (even if that comes with big expenses).

Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com

 

[Snidely Whiplash]

Years ago my wife and I both worked for companies where our supervisors "strongly encouraged" our donating to the United Way via payroll deduction.

About the same time we owned a four story apartment building in a nearby small city and had to begin eviction proceedings against a problem tenant. One of his particularly offensive faults was that he drank daily to the point of intoxication and would pee out his third story apartment window on to people walking down below (Oh, the landlord stories I could tell).

On the day of and just prior to his eviction hearing, outside the courtroom a smarmy looking man approached me and handed me a "notice of representation" which advised that he (lawyer) and his legal-aid agency was representing my tenant (free of charge, of course) and planned to fight the eviction every step of the way. Boldly printed at the bottom of the lawyer's notice was a line which proclaimed that their organization was proudly funded and supported by the United Way.

Not one more dime ever went from my pocket to the United Way. And the judge wasn't at all impressed with the tenant, his activities, or the defense of them by said legal-aid attorney and granted my eviction request quite promptly.

Pretty much the only charity I support now, aside from our church, is the Girl Scouts during their cookie sales, but that is more a matter of my low resistance-level to the cute little girls doing the selling and my taste for thin mints than it is for the concern over how much of my purchase / donation goes to overhead costs.

 

[TuborgP]

We recently received our United Way solicitation for 2013 as our local UW is about to do their annual campaign. We have given substantial amounts to UW each year for as long as I can remember. UW is by far our largest contribution and is anywhere from 16-22% of our total contributions for each of the past 6 years.

Last year I remember reading their annual report and was surprised at the staggering amount of administrative costs. If I take their allocations and grants (what gets to the charities they fund) divided by their campaign collections (which includes my contribution) only about 63 cents of each dollar goes to charities - the rest is absorbed by their administrative costs. Their salaries and benefits are 38% of their total income (and 80% of their income is the campaign).

Anyhow, I'm thinking these admin expenses are outrageous and am considering ditching UW and just making contributions directly to some of the organizations they support.

Thoughts? Anyone else gone through this?

Yes and yes. Eventually my employer stopped the United Way campaign even after they shifted to designated contributions. I was one of the management folks who spoke out about trying to pressure people to give. Administrative cost said it all

 

[braumeister]

Yes and yes. Eventually my employer stopped the United Way campaign even after they shifted to designated contributions.

I was once told by a UW employee that those designations are largely ignored. Each of the supported organizations receives a percentage of the campaign donations, and the only way your designation would have any effect would be if the sum of all the individual designations for that organization totaled more than their normal allocation, which happens very rarely.

 

[TuborgP]

I was once told by a UW employee that those designations are largely ignored. Each of the supported organizations receives a percentage of the campaign donations, and the only way your designation would have any effect would be if the sum of all the individual designations for that organization totaled more than their normal allocation, which happens very rarely.

That was my sense and the sense of others. It survived on political pressure and eventually many employers dropped out of the annual campaign. Bad publicity and touch of a well educated public with their own favorite charities

 

[Sue J]

When DH was working (a county social services agency) he did the payroll deduction to United Way. I didn't mind as it was a small percentage and automatic and easy. Then they asked you to increase your donation every year. Then they asked him to lead the campaign and "encourage" his fellow employees to join the automatic payroll deduction and increase their amount. As the leader he had some info on the donations, no specifics but it was surprising how few people did the automatic payroll deductions although some people did one time donations instead. On his pledge form you could direct your donation to a few specific funds or let UW use it anyway they wanted. Some years we specified a battered women's shelter.

Our son still works at the same county agency and he said last year his department won the contest for the department with the highest percentage of participants and the prize was a free breakfast buffet brought into the office. So there is some peer pressure/team effort incentives going on.

Here in the Akron, Ohio area we are used to seeing Goodyear blimps all the time. In the early fall we see them at night with the scrolling lights and messages about the United Way campaign.

After DH retired UW sent us a form for automatic monthly direct donations since they lost his payroll deduction. We didn't sign up. Instead we donate to local fundraisers (the high school band or girl scouts, etc) if they look worthy. Also, I donate blood every 8 weeks. I started that many years ago when we were too broke to donate cash. At least you know it's something that will be used as intended. I know the Red Cross has administrative expenses but I like to think my blood is going to another human who has a need for it.

 

[anethum]

I used to work for a megacorp which strong-armed employees to contributing to the local UW. I willingly gave. Then I learned that my local UW was giving money to local organizations which actively discriminated against gays & lesbians. I spoke with a local UW official and I asked him why the UW was continuing to fund these organizations which practiced discrimination despite the supposed rules of the local UW, but would not fund organizations which practiced racial discrimination, also against the UW rules. His outrageous response was "different demographics".

I decided then and there not to give the UW another penny. I told my boss why I was not going to contribute anymore to the UW. To his credit, he backed me up, and the higher-ups left me alone.

 

[Shawn]

I used to work for a megacorp which strong-armed employees to contributing to the local UW. I willingly gave. Then I learned that my local UW was giving money to local organizations which actively discriminated against gays & lesbians. I spoke with a local UW official and I asked him why the UW was continuing to fund these organizations which practiced discrimination despite the supposed rules of the local UW, but would not fund organizations which practiced racial discrimination, also against the UW rules. His outrageous response was "different demographics".

Outrageous indeed. A primary reason I do not contribute to the United Way is due to what I consider their hypocritical policies regarding funding or not funding groups that discriminate against certain demographics. The UW in my area funds dozens of groups that provide services exclusively to women (and girls) (i.e., deny services to men), yet they fund essentially no groups that provide services exclusively to men (and boys). I used keep track. Of those groups practicing this type of discrimination, the ratio was about 20 to 1. This is despite the tremendous and often disproportionate societal problems faced by males (illiteracy, education, homelessness, health care, drug abuse, violent victimization's, justice system, gang activity, etc). I can see both sides of the argument. Just because a group discriminates against a given demographic does not mean that the group does not provide valuable services to the selected demographic that they do serve. However, some UW chapters proudly cite their non-discriminatory policies when defunding groups that discriminate against gays/lesbians, for example, yet they continue to fund groups that discriminate against boys/men. They are inconsistent and oblivious to their own hypocrisy. Either allow discrimination or do not. The UW seems to prefer smugness and the political winds over adherence to their stated policies. This is not the type of organization I wish to support.

The other reason I do not contribute to the UW is due to their "middleman" overhead costs. This equally applies to the high administration costs at many other large charitable organizations. Anecdotal story ...

About 12 years ago, I was out running on a semi-rural road in the San Francisco Bay Area and came across a domestic rabbit that was presumably hit by a car. The rabbit was still alive, but struggling. I ran home as fast as I could and came back with my car. I took the rabbit to a local vet, who recommended euthanasia. I did not like that response so I took the rabbit to a 24/7 veterinary emergency hospital. The internal medicine specialist on duty provided options: 1) euthanasia; 2) care at that hospital, but emphasizing that they were not rabbit experts; 3) care at a near-by veterinary practice specializing in rabbits; 4) 24/7 care at the veterinary teaching hospital at the University of California at Davis. UC Davis has veterinary specialists in everything. I took the rabbit to Davis.

The rabbit was in intensive care for a few days and then went to regular care. About a week later, the primary veterinarian called to tell me that while the rabbit was not in direct pain, his quality of life may be limited (would not get better). While I can evaluate quality of life for an injured/disabled cat or dog, I cannot do the same for a rabbit. I am not a rabbit person. I needed guidance.

On the veterinarian's advice, I contacted a national rabbit organization. It took several days before speaking with a real person. Finally, a woman from Seattle called to let me know that there were options. This woman runs a charitable shelter for rabbits and rodents. A few days later I drove back to UC Davis to get the rabbit, and then drove through the night to the animal shelter in Seattle. I was touched by what I saw. There were perfectly healthy animals available for adoption, and there were some animals in "long-term care" situations who were obviously happy and receiving quality/loving care. The shelter took the rabbit. (Incidentally, I was never able to locate the owners.)

I gave a donation to the shelter at that time and continue to donate today. I never receive any solicitation. I want my money going to hands-on organizations like this, not to large charities that spend time and money continuing to contact me today even though I have not contributed in 20 years.

The woman told me that she cashed in her 401k to start the shelter (there's a FIRE connection if I've ever heard one). While the UW issue itself has limited direct relevance to FIRE, the same cannot be said for charitable contributions in general. For me, they play a big role when calculating my soon-to-be retirement expenses. In fact, I am currently contributing money to a "donor advised fund." I can get the larger tax break today while I am still working and have a higher tax rate. I will be able to parcel these dollars out to my charities, including the one above, throughout retirement.

 

[daylatedollarshort]

DH and I got drafted once to help fill seats at a fancy United Way Awards dinner for a Fortune 500 company we worked for that had been a large donor. We thought we would get some award or at least recognition because our company was a pacesetter organization, and had given a huge amount, breaking all previous years records, to that year's UW campaign.

Instead we had to sit there while the United Way people all gave awards -- to each other! But the UW people were just doing the jobs they were paid to do. The corporate donors were the ones who were providing the contributions that paid the UW staff's salaries.

None of the major companies actually giving them money got any awards or recognition that night. The donor company reps were just there to clap and see this self serving awards dinner go on and on, funded by our campaign donations.

We stopped donating any of our own money to the UW campaigns after that experience.

We give money to a local sanctuary for abused animals and the local food bank, where I think it is less likely to be spent on awards dinners and other overhead. I hope the money we do give goes more directly to animal care or feeding the poor and homeless.

 

[Badger]

I never respond well to pressure and heavy handed tactics from management or administration. And a few decades ago was appalled at the amount of donated money that went to salaries in UW. I also didn't approve of a portion of my donation going to some of the "charities". As far as I'm concerned they shot themselves in the foot and as a result I stopped donations after the first time.

I prefer to donate directly to charities of my choice where I know the majority of it goes to those that need the help.

Cheers!

 

[Meadbh]

Many years ago I was strong armed into a two year commitment to monthly donations from my pay to fund the hospital's research foundation. They got the most revered professor to do the marketing, and of course he could make a good case. Fortunately sdministration costs were low. When the two years was up, I just played dead and they ignored me.

If I was approached about UW or another charity that I didn't feel comfortable supporting, I would ask for the financials and dispositions in writing and would write a nice letter outlining why this did not meet my charitable goals, and the fact that I have a donor advised fund (contributions welcome).

 

[ERhoosier]

Don't know where people are getting their (high) %age numbers for UW overhead.

"The overall United Way system’s administration/overhead rate in the U.S. of 13.8% remains extremely competitive with the top 100 nonprofits in the U.S., and is well below industry standards and recommendations (such as the Better Business Bureau Wise Giving Alliance at 35% and the Office of Personnel Management/OPM at 25%). Moreover, United Way helps hundreds of other non-profits maintain low overhead rates."

Contact US | United Way

Sadly, philanthropy has become HUGE business where (according to UWW quote) 1/4 to 1/3 expense overhead is now "industry standard". With all due respect, IMHO this UWW link is organizational propaganda. The 13.8% overhead claim is creative accounting, but review their latest (2012) financial statement for yourself-
http://unway.3cdn.net/0ba0bc9e9527915ff9_y5m6b85zk.pdf
And most folks view UW as single entity, but in reality a donor's total overhead giving via UW is UW Worldwide PLUS local UW. As stated in the UWW link, funding for charitable projects or organizations must be funded through local UW organizations...who must pay UWW. As said earlier, local UW's vary a lot in overhead efficiency from good to rather disgraceful.

I sharply DISagree with UWW's claim that it helps other groups "maintain low overhead rates". Many very worthy and highly efficient charities (<10% ACTUAL total overhead) choose to remain independent. These charities are the ones I choose to support.

 

[Helen]

I never donated to the CFC in the 20 years I worked for the Feds. For me, it was some of the homophobic organizations they supported and the high overhead.

I instead have donated to local animal shelters, local food banks, and local support organizations for gay youth. My favorite thing to do though is to adopt a family at Christmas time.

I am about to go in for a test to see if my platelet count is high enough to donate to the Red Cross. I'm on the small side so they will only accept me if my platelets are really high. I really want to be able to donate.

 

[Texas Proud]

I have resisted for awhile, but have decided to weigh in on this subject...


I have hated the UW for many decades... when I first started working for a large company (in the mailroom at almost minimum wages), I got my first taste of the UW pressure... we were under intense pressure to do our 'fair share' as a percent of salary...

To make a long story short, I left the company and was very surprised to get a BIG amount of withholding for the UW on my last paycheck (IIRC, it almost zeroed out the check)... when I called to find out what was happening, I was told 'this is to satisfy you pledge amount for the year'.... now, I did not read all the fine print, but I thought I had signed up for a % of my salary... and now was not getting any salary...

IMO, they stole money from me.... so I have no interest in giving any money to them.....

After graduating from university.... the UW pressure came back with my first job.... and I refused to give anything... I was the ONLY employee of my group that did not give anything.... so, the whole group was putting pressure on me as they were going to get a party if I contributed... the girl running the UW for our group came by and put a $5 bill on my desk and said 'donate this and we all will get the party'.... I decided to spend my own $5, but did not go to the party... (BTW, this happened for the three years I was there)...

In my next job.... we were FORCED to attend the sob story presentations from the UW.... and we were FORCED to turn in a card stating what we were going to contribute or not contribute.... I did not turn in my card and eventually a top executive called asking me about it.... (BTW, at this company, all high level employees were required to donate their 'fair share', which at that time I believe was 1.2%)....

Even my last job that I had for many years had high pressure, but not anywhere near as the previous two....

Luckily, I am in a small firm now that does not have UW.... so I am free of the BS.....

 

[MRG]

Lots of good info, I was brainwashed as a kid due to DF involvement in that organization. Was forced by one employer to give my fair share, seriously it was grounds for term in this small co.

Megacorp always did it and I just did what I thought was expected. Always shocked the poor guy in the office when I handed him my form 'hey you don't have to give that amount', money that could have been better used.

My issue today is 40 years after DF involvement in UW he calls and asks about individuals contributions, and they give him that information. It's caused a lot of grief for the family, as he's very ill and uses this information to manipulate others.

MRG

 

[FIREd]

Another UW thread bites the dust.

Porky Pig Cartoon Ending "That's All Folks!" - YouTube