Introduction
The United Way/Member Agency Task Force was established by the United Way Board of
Directors on June 28, 2001 to strengthen and enhance the United Way and Member Agency
partnership. The purpose of the Task Force was to deal with concerns that had been raised
by the Association of United Way Executives. The charge to the Task Force was expanded by
the United Way Board Chairman to focus on creating a better working relationship with the
agencies and communications that need to occur between the parties, as a result of the
series published in the Arizona Daily Star. The Task Force members include United Way
Board members, Executive Directors of United Way Member Agencies, and United Way staff.
(Attachment B lists Task Force members). The Task Force met seven times between June 19th
and August 28, 2001.
Task Force recommendations are in response to the following five key issues:
I. The relationship between the United Way and Member Agencies needs to
be improved.
II. The United Way's current financial reporting and cost allocation plan is
perceived as confusing and misleading.
III. The "new branding" strategy promoted by the United Way has raised
many questions.
IV. The perception in the community is that the business practices and marketing
messages of the United Way are in conflict with the organization's stated
purpose.
V. Concerns have been raised about United Way management, leadership,
efficiency and credibility.
Examples illustrating Issues II, IV and V are attached to this document as Attachment A.
Issues and Recommendations
Issue I: The relationship between United Way and Member Agencies needs
to be improved.
Recommendations:
A. Charge the United Way CPO to work with Association of United Way Executives to identify
and institutionalize systems to improve communications and restore the relationship between
the United Way and Member Agencies.
B. Increase United Way Board of Director and Member Agency communications by scheduling
Member Agency reports to the Board on a regular basis.
C. Survey member agencies annually regarding their opinions and report
the results of this survey annually to the United Way Board of Directors.
Issue II: The United Way's current financial reporting and cost allocation
plan is perceived as confusing and misleading.
Recommendations:
A. Comply with National Charities Information Bureau (NCIB) financial standards:
* Use only audited figures in United Way Annual Report.
* Disclose net worth in United Way Annual Report.
* Consider requesting that the Balance Sheet be categorized into "current" and "long term"
to allow for the calculation of the comparisons required in the NCIB standards.
B. Reconsider current overhead practices:
* Use percentage for administration/overhead arrived using 990 figures from the most recent
990 filing when stating the percentage of administration/overhead for United Way.
* Discontinue practice of offering varying amounts to be taken from donations depending on
the source of the donation. The amount of admin/overhead from each donation would be the
same as amount calculated from 990 filing.
OR
Establish a percentage that is taken from each United Way product (form of
donation---payroll deduction, check, philanthropic fund, etc.) and do not vary the amount
taken from donations within the same product.
Note: The recommendation selected above needs to be expedited so that
it is in effect for the 2002 allocations process.
* Establish a reasonable, consistent approach to cost allocation which would more closely
reflect the actual costs incurred in obtaining and administering contributions. The
allocation methodology would be released to member agencies and other constituents at least
annually.
C. Change month of United Way Annual Meeting to insure that the audited statement will be
available.
D. Have materials produced by the United Way, which include financial information,
reviewed by the United Way auditor and Chair of Finance Committee prior to
publication. All such information should be presented in a format consistent
with, or easily reconcilable with, the audited financial statements.
E. List all recipients on United Way Annual Report or add a note that states the amount
raised for health and human service organizations outside of southern
Arizona and for non health and human service organizations in and outside
of southern Arizona - including the total number of recipients.
F. Review accounting policies and procedures from United Way of America to
ensure our compliance and consistency.
G. Have the auditors prepare a two year reconciliation of the audited financial statements
to the annual report, in conjunction with the staff, and have it
reviewed by the United Way Finance Committee and the Board of Directors.
H. Expand the management letter prepared annually by the auditors to include progress on
prior year comments. This should also be reviewed annually by the United Way Finance
Committee and the Board of Directors.
I. Revisit the policy regarding funds recovered from pledges in excess of estimates.
J. Improve the interim financial statements to include the following on a quarterly basis:
* A presentation format more consistent with the audit.
* Include all budget categories.
* Calculate and disclose overhead percentages for all categories.
* Include a prior year statement of financial position (balance sheet) for comparison
purposes.
* Include an informative narrative outlining significant financial issues, variances
(campaign and operations), etc.
* Include disclosure regarding actual v. projected pledge collections.
K. Develop a formal communication piece to distribute to Member Agencies and other
constituents (at least annually) explaining contributions received in their name, both
designated and undesignated, and related overhead charges.
L. Improve the audited financial statements by upgrading the supplemental
schedule to a footnote (ie included in the opinion) which reconciles
campaign funds to total revenue (per statement of activities).
Issue III: The "new branding" strategy promoted by the United Way has
raised many questions.
Recommendations:
A. Complete the United Way Board Strategic Planning Process and develop a roadmap
of specific actions and concrete operational plans to educate United Way partners and the
public on the strategic model.
B. Solicit United Way partner input in creating the tactics for implementing the
Board Strategic Plan.
C. If a decision is made to discontinue United Way Member Agencies, announce this
decision as soon as possible and develop a plan for a smooth transition to this
new circumstance.
Issue IV: The perception in the community is that the business practices and
marketing messages of the United Way are in conflict with the organization's stated
purpose. *
* Purpose of the United Way of Tucson and Southern Arizona as stated in the
Bylaws, Article III: To work in partnership addressing critical community needs
and to secure, leverage and deploy resources that will contribute to an
economically viable, strong, safe and healthy community for southern Arizona
residents.
Recommendations:
A. Align fundraising goals and marketing messages of the United Way with
the stated purpose of the organization by using the amount raised for health
and human services in southern Arizona as the primary measurement of
United Way success. Continue to allow donors to designate their donations
to non-health and human service organizations and to organizations outside
of southern Arizona but make special mention of the funds that further our
purpose such as:
* Amount raised for Community's Greatest Needs Fund.
* Amount designated by donors to health and human services organizations in southern
Arizona.
* In-kind contributions for health and human service organizations in southern Arizona.
* Philanthropic funds raised/distributed to health and human service organizations in
southern Arizona.
* Amount for health and human service organizations in southern Arizona from other United
Ways.
B. Clearly define "health and human services."
C. Emphasize the Community's Greatest Needs Fund in United Way fundraising ---not at the
expense of donor designation, but as an additional focus to bring more total dollars into
the campaign and provide the United Way with the maximum flexibility to work with the
community.
D. Reconsider the current donor designation policy and clearly document the policy
after this review.
E. Consider limiting donor designations to United Way Member Agencies beginning
with the 2002 United Way Campaign.
F. Re-affirm the decision to discontinue the operation of programs that deliver direct
services as a function of the United Way and develop policies and procedures related to
"incubator" programs and special program opportunities.
Issue V: Concerns have been raised about United Way management, leadership,
efficiency and credibility.
Recommendations:
A. Comply with all National Charities Information Bureau (NCIB) Standards.
B. Contract an outside, professional consultant to evaluate United Way policies,
practices and operation.
Attachment A - Examples Illustrating Issues II, IV and V
Note: The members of the Task Force strongly believe that the five identified issues are
legitimate issues that the United Way Board of Directors needs to address, regardless of
whether or not there is complete agreement about every detail of information concerning the
United Way, which has led to concerns expressed in the media and in the community.
Issue II: The United Way's current financial reporting and cost allocation plan is
perceived as confusing and misleading.
Examples:
A. United Way overstated amount received by agencies by $1.9 million.
B. Nearly $1 mil. raised and intended for California was passed through and added to
the campaign total.
C. United Way says that 13% is taken from donations but, in reality, the amount varies
depending on the source of the donation and is not tied to the percentage calculated
from the annual 990.
D. Financial statement on the United Way Annual Report did not match the United Way
audit.
E. Out-of-state recipients of donations were not listed on United Way's Annual Report.
Issue IV: The perception in the community is that the business practices and marketing
messages of the United Way are in conflict with the organization's stated
purpose.
Examples:
A. A significant amount of the dollars raised by the United Way is for things other than
health and human services or leaves southern Arizona.
B. While campaign totals continue to increase, the amount received by United Way from all
United Way sources has decreased or not has not increased at the same rate.
C. The original purpose which was to support an infrastructure of health and human service
agencies has diminished over the years.
Issue V: Concerns have been raised about United Way management, leadership,
efficiency and credibility.
Example:
A. The United Way is not in compliance with NCIB standards:
* United Way Annual Report does not use audited figures.
* There is no disclosure of net worth in United Way Annual Report.
* United Way Annual report does not cover the same period and categories in
* audited financial statement.
* United Way Annual report does not state the audited figures are available.
* Information presented to the public is misleading
* There is a United Way policy that allows annual contributions which are not designated as
gifts to the Millennium Fund to be placed there.
Attachment B - United Way/Member Agency Task Force Members
Nanci Beizer Fink, United Way Board
Major Bill Dickson, The Salvation Army
Gail Gurney, Girl Scouts
Adaline Klemmedson, United Way Board
Sue Krahe, Our Town Family Center
Ted Lawton, United Way Board
Janet Marcotte, YWCA
Rick Myers, United Way Board
Hank Roraback, United Way Staff
Susan Rubin, Jewish Family & Children's Services
Ron Russel, United Way Board
Jean Tkachyk, United Way Board & Financial Committee Chair Representative
Beth Walkup, Mayor's Office - Agency and United Way Board Representative
Rita Weatherholt, Information & Referral
Neal Eckel - Facilitator
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