posted on: Tuesday, July 15, 2008

By Lisa Ranghelli

In late June Charlotte’s WCNC-TV and The Charlotte Observer broke a story that the board of directors of United Way of Central Carolinas (UWCC) approved a compensation package for its president that topped $1.2 million in fiscal year 2007. This represented a jump of more than $800,000 to the executive’s employee pension plan, reportedly to retroactively provide increases promised since 2001.

NCRP’s executive director, Aaron Dorfman, commented in The Charlotte Observer, “Nonprofit executives deserve fair compensation packages, but this is outrageous. Why do people believe that we can retain the trust of the public when we pay people at outrageous levels like this?”

The Charlotte news outlets subsequently reported that many local United Way donors were outraged and pledged to stop supporting the organization.

In a message to NCRP, Charlotte resident Steve Hofstatter urged continued attention to this issue. “Charlotte is a caring community where conformance and group think is overwhelming, particularly when it comes to workplace giving and accepting the foibles of a routinely reckless United Way agency,” he wrote. “I wish there was something more I could do beyond writing letters to the editor and consoling my many corporate-employed friends who are coerced to pledge more and more by their overzealous employers.”

Whether or not the compensation package given to the UWCC president was justified, Steve raises an important point—many people who give through the workplace have no alternative to the United Way.

Luckily, this is not always the case. A Columbus Dispatch article by Rita Price, which was published only a few days after the UWCC scandal broke the news, reported on the alternative workplace giving options available in Central Ohio. A handful of federations in Central Ohio are competing with the United Way for charitable donations and are experiencing growth, while United Way donations are down. These include Earth Share and Community Shares. Earth Share donations go to environmental causes, and Community Shares typically distributes funds to organizing, advocacy, and activist groups. These regional federations help increase resources for charities that are often denied the opportunity to become a United Way partner agency or are underrepresented in United Way because they are not traditional social service agencies.

As NCRP recounted in its 2007 report, Charitable Fundraising in the Workplace:

“Many of the early workplace funds were set up in a time of movement building
when the groups that were going to benefit from the funds raised were not as
easily marketable as most mainstream social service organizations. These pioneer
funds were created to raise money for specific communities of color, for civil
and human rights work, for environmental causes, for women’s rights and
pro-choice organiza­tions, for gay/lesbian/bisexual/transgender
popu­lations, and for groups promoting social justice, community organizing
or advocacy.”

These types of organizations continue to suffer from underfunding. Despite the growth of alternative workplace giving options, these funds raise less than 10% of the total raised by United Way affiliates. And foundation support for social justice causes accounts for only 11% of all grants.

As the Charlotte story suggests, having a monopoly on workplace charitable giving may be bad for governance, but it is also bad for society – locking out many important constituencies and causes from needed resources.

So if you’re looking to support nonprofits through payroll contributions but would like an alternative to United Way, you might want to visit Our Giving Community, which lists various alternative workplace giving funds. Encourage your employer to consider partnering with OGC and ask your friends to do the same.

Lisa Ranghelli is a senior research associate at the National Committee for Responsive Philanthropy (NCRP).