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Analysis of Local United Way Chapters: Everything You Wanted to Know and More

December 1, 2005

Dealing with Local United Way Chapters

Of the 1,350 local United Way chapters, only about 70 ceased to support the Boy Scouts of America (BSA) when the BSA announced that it was adopting a national policy of discriminating against atheists and homosexuals. I was curious as to why the number was so low, especially when I found out that the National Office of the United Way had an explicit policy that precluded discrimination of any form in agencies receiving United Way support. In addition, I was faced with several problems in the Southern Region that involved United Way decision-making. I decided to do a little research into United Way practices in order to understand the situation. I have summarized my findings below. Hopefully, this effort will help us all deal with United Way issues more effectively in the future.


The United Way is comprised of a National Office and 1,350 local chapters located throughout the country. You can learn more about the National Office and how it operates by visiting its Web site at: Most local chapters also have Web sites. You can use the National Locator to find a local chapter. The locator is organized by state. Within each state, you can look for local chapters by city or by chapter name. The locator is available at:

Each local chapter is an independent non-profit organization chartered by the state in which it is located. This is unlike the BSA, in which the National Council charters local Councils. Local chapters generally accept guidance from the National Office, but are not bound to follow its recommendations. This explains why local chapters can choose to ignore the non-discrimination policy recommended by the National Office. Local chapters tend to apply the "preponderance of good test" in deciding whether or not to support a candidate partner agency. According to this test, an agency will be accepted if the chapter finds that the value of its services greatly outweighs the negatives associated with policies the chapter disagrees with. The chapter may even attempt to place a value on the services provided by an agency (relative to negative factors) when reaching decisions on funds allocations. If a local chapter veers too far away from national guidelines, however, the National Office can terminate the affiliation with the local chapter. The local chapter can lose its right to operate under the "United Way" banner and can lose its access to all trademarked materials supplied by the National Office.

The motivation for local United Way chapters is quite simple. By centralizing fund-raising for a number of smaller charities under one roof, you can minimize the duplication of effort and the overhead involved in soliciting funds. The National standard for overhead expenses is 20%. Local chapters are expected to hold their overhead expenses (paid staff, office expenses, etc.) to less than 20% of the funds raised.


National Office

The National Office comprises at least six operating divisions. The one of most interest to Scouting for All is probably the Financial Accounting Office. There are three national working committees:
(!) Finance, Auditing & Compliance - Establishes financial accountability standards for local chapters
(2) Community Impact & Resource Development - Identifies strategic partnerships and public policies
(3) Governance - Identifies qualified candidates for the National Board of Directors
The National Office maintains and updates performance standards for the local chapters in its Standards of Excellence document. The Code of Ethics section of the document contains the now-famous statement precluding discrimination of any form in agencies receiving United Way support.

Local Chapters

There is considerable variation in the organization of individual local chapters. I have taken two extremes as examples. The United Way of Central Oklahoma is a large chapter that covers seven counties in central Oklahoma. Its annual campaign target is roughly $15M. As a model small local chapter I have selected the United Way of Madison County, Alabama. This chapter is one that I have been dealing with in handling S4A business. It covers a single county and has an annual campaign target of roughly $1.5M.

The organization of both the large and small chapters has one thing in common. Both have a combination of paid and volunteer staffs. The paid staff represents the "executive branch" of the chapter; the volunteer branch combines the functions of the "legislative and judicial branches." All policies and all decisions regarding the allocation of funds are made in the volunteer branch.

The paid staff of the Central Oklahoma chapter comprises the following offices:

President's Office - Administers all business and paid personnel of the chapter
Community Investment Office
Labor Relations Office
Marketing Office
Research & Special Events Office
Resource Development Office

A Vice President heads each of the last five offices. Each VP has two staff assistants, as does the president.

The volunteer staff is comprised of the Board of Directors. The Chair of the Board heads the chapter. There is a Director corresponding with each of the last five offices listed under paid staff above. Each Director heads a committee of volunteers. The Board of Directors also includes a large number of Members at Large who sit on the various committees. A number of ad hoc volunteer committees can be used to conduct chapter business activities such as screening candidate partner agency applications and reviewing candidate partner agency financial statements.

The paid staff of a small chapter is similar in nature to that of a large chapter. There are no assistants for the Vice Presidents, however. The paid staff of the Madison County United Way comprises:

Vice President of Community Investment
Vice President of Corporate Research & Development
Vice President of Marketing
Vice President of Major Gifts
Manager of Information Services
Secretary of Administration & Finance

The volunteer Board of Directors of the Madison County United Way is much less formal than that of the large chapter. It is comprised of a Board Chair and a fairly large number of Members at Large. The latter work with the paid staff to accomplish the various required functions. Ad hoc volunteer committees, similar to those described for the large chapter, are also used.

Financial Decision-Making
There a number of factors involved in decision making in the local chapters. I will consider some of the major factors I have encountered.

Makeup of the Board of Directors
Most members of the Board of Directors of local United Way chapters are high-ranking managers in the business community. These individuals are selected for three reasons. First, they are ranking officers in large organizations. As such they have a great deal of influence in seeking corporate support for the local United Way campaign. Second, they are in a position to encourage United Way contributions from their employees and to organize payroll deduction programs. Third, these individuals have a vast network of connections in the local business community. This enables them to promote the United Way in businesses that may not be directly represented on the Board of Directors.
Given the business background of the Board, it is not surprising that United Way chapters tend to be conservative organizations.

United Ways Mirror Community Values
It is a stated policy that individual contributors can allocate their contributions among the various partner agencies if they choose to do so. It is also well known that the Board of Directors can then adjust the allocation of funds that have not been specifically designated for specific agencies to ensure that the overall allocation is in line with Board recommendations. For this reason, the Board of Directors tends to listen to the voices of community members when it decides on allocations. If the community views the BSA as a "national treasure," you can bet that the Board will think twice before it even considers cutting support. For example, the United Way of the Bluegrass in Kentucky threatened to cut off funding for the local Boy Scout Council after the Dale decision in 2000. The community rose up "as one" and made a counter-threat to cut off all support for the United Way. Guess who gave in?

United Way Fund Allocations
As noted above, allocations are likely to mirror community values. Allocations also reflect the total budgets of the various partner agencies. One typical approach to allocating funds is by percentage. The local chapter totals the budgets of the partner agencies and compares that sum to the total available from the annual United Way campaign. The latter divided by the former (expressed as a percentage) is the initial allocation for each partner agency. Adjustments are then made to reflect specific situations (such as the availability of funds from private foundations).

Many chapters are sensitive to where their funding dollars go. There is a general push to ensure that the funds remain local. This means that national organizations like the Boy Scouts are having an increasingly difficult time in convincing United Way chapters that all funds are remaining in the community and not going to support the National Council. Fiscally responsible chapters are taking two steps to help ensure that funds support community needs. Many chapters now specify activities they will support within partner agencies. Keeping the example within the BSA, a chapter may specify a dollar amount to support "summer camp scholarships." Some chapters have taken this one step further by requiring "specific performance." A chapter might state that it will fund "ten summer camp scholarships @$100 each." At the end of the accounting period, the chapter will ask for a list of names and phone numbers for the recipients of the scholarships. This practice makes it very difficult to siphon off funds for a national office.

Reporting Allocations to the Public
Each United Way issues an Annual Report and files a Form 990 with the Internal Revenue Service each year to summarize chapter financial activities. Some chapters report dollar amounts granted to partner agencies in their Annual Reports; some report allocations by type of partner agency; some only report a list of partner agencies and a total campaign amount raised. This inconsistency makes it very difficult to draw up a national picture of fund-raising for a specific partner like the BSA.

United Way Chapters and Special Interest Groups
As noted above, United Way chapters are led by very conservative "business types." Chapter values tend to mirror community values. In the broadest sense, the chapter is accountable only to the community it serves. With this in mind, it should come as no surprise that national special interest groups, such as Scouting for All, have a hard time influencing decisions made by local United Way chapters. About the best we can do is serve as a source of information. It really is possible that a local chapter doesn't realize that the BSA practices discrimination. It's definitely possible that local chapters don't understand that funds given to a local Scout Council or to Learning for Life don't necessarily remain in the community served by the United Way chapter. Some of that money can definitely end up in the pocket of the National Council of the BSA if it is not accounted for in specific activities. I have noted at least one occasion in which a local chapter decided to cease funding the BSA when the latter situation came to light. Remember that the Board of Directors is a group of businessmen. They understand fiscal accountability and accountability to the communities they serve. They want United Way funds to serve their communities, not some national organization.

Communicating with a local chapter can be challenging. My first tendency was to try to get in touch with the Chair of the Board of Directors. After all, the Board is where policy decisions are reached and where policies can be changed. While all that is true, Board Chairs are not really interested in communicating with national special interest groups. In addition, they are usually busy business leaders who would have to take time out of their personal lives to communicate with you. Remember that they are volunteers. They do not have ready access to United Way office staff members to write letters and send e-mail messages on their behalf. There are a few exceptions to this rule. If you find an e-mail link on the chapter Web page for the Board Chair, feel free to use it.

The most productive point of contact that I've found is the chapter President (sometimes referred to as the Chief Executive Officer). This person usually has an e-mail link on the chapter Web site. Do not expect to influence decision-making by communicating with the chapter President. Remember that this person executes decisions made by the Board of Directors. He/she doesn't make or change policy. However, he/she is probably the individual who is most likely to know chapter policies and how to explain these policies to individuals like us.

Some local chapters use online e-mail posting services. You type a message in a 'window' and post it to be read by a "communications officer" at the chapter. You can use this in an attempt to reach the president's office. Sometimes it works, and then there are the other times. If all else fails, there is still "snail mail." There are times when this is actually preferable. After all, you get the opportunity to use the S4A letterhead and enclose your S4A business card and perhaps some of our literature.

Local United Way chapters are independent non-profit organizations that are primarily accountable to the communities within which they reside. They generally follow policies formulated by the National United Way office, but they are not legally bound to do so. Volunteer Boards of Directors manage local chapters. Board members tend to be upper-level business managers. Special interest groups, such as Scouting for All, can supply information to local United Way chapters, but are not likely to influence chapter policy unless they can show that their recommendations have sound business merit. Even then, the local chapter may opt to follow existing policy if it judges that community sentiment strongly favors that existing policy.

Scouting for All Researcher




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