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Is the United Way a Good Charity to Give To?

Updated on July 26, 2013

Example of United Way in Illinois

Overview of the United Way

The United Way began as a small collection of religious leaders in Colorado during the late 1880s. These men and women wanted to create an organization that would help fund and support the local charities doing great work for their community. After over one hundred years and billions upon billions of dollars raised, it's safe to say they accomplished that goal.


Yet, many Americans are still unsure of what exactly the United Way is or does and where all of its annual fundraising dollars are going. Basically, the United Way is a support system for certain nonprofits and charitable organizations who need help with funding, fundraising, business practices, and other kinds of support. These come in the form of budget construction (with the United Way refusing to supply more than 40% of an organization's financial needs for a year), professional conferences and business connections, and actual business advice and planning.

The United Way is split into hundreds of local "chapters" such as The United Way of the Central Carolinas or The United Way of Greater Houston. These branches operate semi-independently to bring in a certain number of nonprofits and charities that will be their members. For instance, my chapter (Central Carolinas) has 45 organizations in its ranks ranging from the massive Charlotte YMCA to small-scale soup kitchens in Mooresville and everything in between.

These 45 organizations have become their own micro-community of nonprofits, greatly benefiting from shared data, knowledge, volunteers, and partnerships. And, it is important to note that all 45 share one of the three common traits that the United Way works to support: early childhood education, income stability, and public health. Though fairly broad in nature, these three areas are the heart and soul of the United Way's mission.

Statistics about the United Way

The United Way boasts some of the most impressive numbers and capabilities in the entire social sector. Here's a few examples:


-The United Way operates in 45 different countries with 1,800 branches worldwide

-25% of United Way donations are specifically given to a particular charity while the rest is strategically given out to United Way member organizations.

-2-1-1, Volunteer Solutions, and Teaming for Technology are all subdivisions found in many United Way offices which provide a greater level of outreach to their communities.

-Over 100 corporations participate in paycheck giving to the United Way.


-The United Way has made over 3 billion dollars every year since the 2000s began.

Why People Distrust the United Way

3.8 billion dollars is a lot of dollars. This amount alone gives many outsiders a certain wariness of United Way practices, especially since many do not understand their work.

Former and Current CEOs of United Way have also given the public reason to be suspicious. Examples include:

-Former CEO William Aramony retired in 1992 after being accused of defrauding the United Way, eventually landing him in prison

-A NYC branch director was caught financing personal expenses with United Way donations

-Oral Suer, former director of the D.C. branch, was forced to resign after embezzling funds


Many people struggle with the massive salary of the current CEO over all of the United Way chapters. His name is Brian Gallagher, and his salary is $763,394 (which equals out to .84% of United Way Worldwide's expenses for the year). Though we must understand that Mr. Gallagher could easily receive millions for his services elsewhere, it is still difficult to wrap one's mind around such a large salary for a man running a charity.


Another issue lies in the process the United Way uses to collect its billions every year. According to yearly reports, 57% of its donations come through payroll withholding and another 20% from corporate donations. So, 77% of all donations received by the United Way are actually taken out of paychecks and given in large amounts by corporations. Many employers pressure their employees to give, which often takes all the joy out of the process. It becomes a business transaction instead of a relationship to a nonprofit. This has been a very off putting experience for many people.


Speaking of pressure, United Way offices are known for pushing donors to give toward the general fund instead of specific organizations. Some people may feel quite passionate about giving to just the YMCA or just the soup kitchen down the street, but the United Way often makes it more difficult to give in a specific manner.

Why You Shouldn't Give to the United Way

If you have a strong desire to support a certain nonprofit that is really tugging at your heart, the United Way might not be for you. They discourage giving on a specific basis, and your dollars would typically have a greater effect on your chosen charity if you send funds directly to them.

Also, if you have a strong, principled dislike of the paycheck deduction program, you may want to avoid the United Way. There is definitely something to be said for giving out of love for your fellow man instead of giving out of compulsion.

On the off chance that the United Way does not operate in your area, they probably shouldn't be your first choice for giving.


And lastly, my biggest reason for not giving the United Way is the lack of personal relationship you have with your donation. If I give to the local homeless shelter, I can see the food I bought them. If I sponsor a child for summer camp at the YMCA, I get to see smiling pictures of him running around playing soccer. Sadly, the United Way cannot offer this to its donors. And, for many people, a lack of tangible results can lead to "donor burnout."

So, if that sounds like something you want to avoid, you might should give on a more personal, communal basis.

Global Giving Trends

Source

Why You Should Give to the United Way

The United Way is an amazing charity by many definitions. Just take some time to research. Many of your favorite local programs might not be possible without the financial and professional support that U.W. provides.

3.8 billion dollars per year is a huge number, but expense reports show that a very, very good percentage of that money goes directly to the nonprofits and individuals who need it most--not toward administrative expenses. The highly respected site CharityFinder.com rates the United Way very highly at 65 points out of a possible 70. Many of the organizations that you may have never given a second thought about donating to probably don't come with nearly as good of a rating.


Also, though corruption is unacceptable, we cannot be too upset about the salary of United Way CEOs. Oftentimes, these individuals are the MOST experienced, sought after members of their fields, and they have decided to take a substantial pay cut (up to 80-90%) in order to join a cause they believe in that has helped millions (if not billions) of people throughout the world.

Paycheck deductions are another field that needs addressing. If we take an honest look at this process, we see a system of fundraising that has transferred billions of dollars from the typically well-paid members of the work force and injected that money into only the most innovative and smartest nonprofits that the United Way has decided to partner with. Now, yes. The choice of where to spend your own money is important and being pressured to give it away is sort of very uncool. But, can we really argue with the results? A few million people signing up for this program has undoubtedly helped change our world for the better and given people an extremely easy, meaningful use for their excess pay.

Where Global Giving Funds Go

Source

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    • Kathleen Cochran profile image

      Kathleen Cochran 

      24 months ago from Atlanta, Georgia

      All these complaints are about individual United Ways. Don't assume they apply to your local chapter. If you are really concerned about how your chapter is distributing their funds, join their community advisory group. Each UW has one made up of local leaders who make the choices every year as to what organizations will be chosen to make up their UW and who will get how much of the money. No UW chapter can operate on less than 15-20% of the funds raised. Check out CharityNavigator to see this is true across the board for not for profits.

    • profile image

      Annoymous 

      2 years ago

      I worked for a United Way chapter (mid-size) for almost 1 year for my co-op hours. Despite their mission statements and pillars are great, the organization is full of corrupted individuals whom you would be amazed why they would work for a charity. I guess the answer is job security and easy work (no physical product, no inventory, no return, no tax, no R&D etc.)

      Executive Team's KPIs and performance bonuses depended on if the fund raised meet target for the year. All middle management does is to please the bosses to keep their jobs. The real work get passed to millions of unpaid students and volunteers who get involved thru different channels hoping one day they can get their foot in the organization and secure a comfy position.

      If you check you will find out United Way's salary and compensation is leading the charity/non-profit work, in average 20-30% more than in smaller non-profit, where the workers of the latter have larger workload, longer hours and deliver front-line work to people in need. It is all because United Way is government-backed, apart from the notorious forced workplace pledges they also receive different large-sum grants from the government. And they get a lot of donations coming in case of disasters (which happen every year) and bequests. They are loaded.

      With my experience I only have bad things to say about United Way. But I understand different chapters may operate a bit differently. I strongly advise to do your own research before you donate your hard-earned money. There's no changing-mind or return for donations. When you give to a big bully non-deserving charity with hidden agendas you are diminishing the survival chance of small, better and more efficient non-profits. And most importantly your money will get into their employees who already have fat pockets instead of people in need in the community.

    • profile image

      Jonathan Buttall 

      2 years ago

      I had personal experience with United Way while working for one of the agencies that received money from it. We were ordered to do so, which tells you a lot. This organization is riddled with scandal and lack of transparency, and charity rating organizations that give it high ratings are therefore suspect as well. This organization should have been investigated by the Justice Dept. decades ago.

    • profile image

      pinkyp 

      2 years ago

      No, United Way is a scam.

      The organization is so greedy it limits when a partner agency can schedule fundraisers all the while decreasing funding? If the United Way is about helping people who need help; why limit when other agencies partnered with them can schedule fundraisers? Could it be the United Way cares more about the money being funded through them than the money getting to the people in need via any charity? Why does the United Way see other charitable agencies as competition and not partners? Why is the UW afraid of other charities fundraising during certain times?

      The answer is due to them wanting to take their 15-20% administration fee right off the top. If the other charities get direct donations the UW does not get a piece of the pie. UW is a bully agency. They lure in smaller agencies with promises of donations, limit the smaller charities fundraising days (thus making them more dependent on the UW), and then decrease funding on a whim. The UW is not a charity it is a business and should lose their non-profit status.

      The United Way of Butler County lost its partnership with the Salvation Army and the Boy Scouts, and now the United of Lawrence County is losing its partnership with the Salvation Army.

      We saw infighting between local United Ways about naming rights. The United Way of Beaver County and the United Way of Butler County took complaints to the media when two other United Ways chose to Merge and change the name to reflect the change.

      http://www.ncnewsonline.com/news/local-salvation-a...

      http://www.ellwoodcityledger.com/news/local_news/n...

      http://www.thecranberryeagle.com/article/20150805/...

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