Freedom Fry

Look at that freedom fry! A collection of political hotlinks and original articles.

Tuesday, April 12, 2005

United Way Misleading 100% Donation Claim

6:01 PM

I saw an ad for United Way (of Rochester, NY) recently that boasted that now 100% of your donation goes to help those in need. I was incredulous. I went to the United Way of Rochester site and saw that they make the same claim there: "Your Support Matters.... 100% of your gift helps others." Now I was even more incredulous: Did they mean that 100% of your donation helps someone, including the workers at the United Way?

I went to and found that not only does their listing of the United Way of Greater Rochester show that the United Way gives 88% of your donation to programs, this percent is actually down this year (fiscal year 03/04) 1.9% from last year.

So I did some investigative journalism. I emailed Donna Dedee, the Senior Vice President for Marketing for the United Way of Rochester. She replied that this year they are using money from a Community Endowment Fund to pay for administrative and advertising costs and that this year, 100% of your donation indeed goes to programs.

I did some googling on "Community Endowment Fund" and found that it is simply a fund of unspent money from years gone by. I replied to Ms. Dedee, pointing out the fact that the new "100% campaign" is only true as a semantic technicality: In order for the organization to allow current donations to go 100% to programs it has to, essentially, cut into previous years' donations, double. Thus the advertising campaign is simply masking the real financial goings on at the United Way.

Ms. Dedee responded that I was correct: the United Way is "dealing with semantics in the advertising...." She reiterated that the 100% of donations going to programs statement is technically true, but that she understood my concerns that they were masking their true financing.

So there you have it. The fact is that non-profit organizations are competing tooth and nail to gain community funding. I think it's a pity that they are resorting, in the case of the United Way, to misleading advertising to make themselves look more efficient than they actually are, and thus more appealing to donors. The fact is the only way an organization may become more efficient is to become more efficient, not to play games with accounting.

What's more, the United Way is already on thin ice with me (and others) because they are simply a middle man organization: they take donated money and then redistribute it to other organizations. Thus you are paying twice as many operational costs as you would if you donated to the organization of your choice. It is true, to be fair, that the United Way raises a lot of money that may well not have been raised otherwise, but I think it's silly that we are not spending our money wisely. Rather than non-profit organizations competing for aid with huge advertising campaigns, we need to cut back on the number of organizations and increase the remaining organizations' budgets. The final number of employees will stay the same but the amount of dollars spent for advertising will be hugely decreased. To increase the amount going to programs (rather than advertising or administrative costs) further, we could decide on a national priorities list (like which would allow us to allocate funds by need rather than by whim.

I don't mean to set an unreachable ideal here but it seems that no one would prefer a system which exists more to pay salaries of non-profit employees rather than to help those in need. If we spend less money and energy competing for funding then we can spend more money on programs.

It may be of interest (I assume it is) that it is not only Rochester that is using this ad tactic. A quick search of google will find that other chapters are doing this also.


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