United Way of America has been rushing to put out brush fires all across the country in the two weeks since we disclosed the inner workings of the national headquarters in Alexandria, Va.
With an annual budget of almost $30 million collected from United Way affiliates around the country, the national headquarters pays salaries to its top executives that are more fitting for a profit-making venture than a charity. And, United Way of America has spun off a network of private companies that employ relatives and friends as double-dipping staffers and consultants.Some of United Way's 2,200 local affiliates announced that they were unfazed by the reports, but others were quick to see how the bad news could hurt their own fund-raising efforts and are distancing themselves from the national organization. Five large affiliates - Chicago, Washington, San Francisco, Portland and Seattle - have announced that they will withhold the dues they owe to the national organization until they see how the current controversy shakes out.
United Way of America counts on those dues for its operating cash. Local affiliates pay the umbrella agency about 1 cent for every dollar donated to them. In return, United Way of America advises them on fund-raising techniques and promotes the mission of United Way as a unified charity rather than a collection of competing organizations.
The relationship has worked well under current United Way President William Aramony. He has won the support of corporate America and turned United Way into the most efficient machine for collecting and distributing charitable dollars around the country. But along the way, Aramony has done some things that don't mesh with the altruistic mission of United Way.
He created subsidiaries to provide services such as banking and bulk purchasing for United Way affiliates, but some of those subsidiaries have spun off into thriving private ventures employing friends of Aramony, and Aramony's son, as generously paid staffers and consultants. Aramony himself has lived the life of a Fortune 500 president, flying on the Concorde when he was in a hurry, hiring chauffeurs to ferry him around, treating some executives to Super Bowl trips, and collecting salary and benefits of $463,000 a year.
We informed board members about a former chief financial officer for United Way of America who told colleagues that she didn't like the "unusual" financial arrangements between United Way and its spinoffs and subsidiaries. She left the job in 1989, and we have learned that she reportedly signed a confidentiality agreement saying she wouldn't talk publicly about her misgivings. Sources say that agreement includes a clause that she can talk to United Way board members about her experience, but apparently they aren't interested. We asked 11 board members if they would contact the woman, but they declined.
United Way officials have consistently refused to answer our questions directly.