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Statement: United Way of Central Carolinas

Statement of The Board of Directors, United Way of Central Carolinas, Inc.

Those of us who live in the region served by the United Way of Central Carolinas are fortunate indeed. Our United Way has been one of the most successful in the country at raising money so that the more than 90 agencies we support throughout our region can provide essential services to those who need them most. Equally important, our United Way works very hard to make sure as many dollars as possible go to those in need.

As a community, we have all shared in this success as Charlotte has become known nationwide for its generosity – exemplified by efforts such as last year's record-setting $45.3 million United Way campaign.

Unfortunately, the continued success of our United Way is threatened by an erosion of public confidence and trust resulting from the current controversy over compensation, including the supplemental retirement benefits for president Gloria Pace King. While such supplemental retirement plans are not uncommon for top United Way executives, it has become increasingly clear that the retirement package exceeded what our community expects for a leader of a nonprofit organization, no matter how successful the organization.

The board of the United Way of Central Carolinas has listened, and the community's reaction can lead us to only one conclusion: We made a serious mistake. This was not an error made by a single individual at a single point in time, but a collective breakdown at many levels over a period of time.

We owe the community a sincere apology. Executive committee members who approved the retirement plan offer a simple statement to United Way agencies, volunteers, donors, staff, other board members, and the public: We are sorry.

More important, we owe the community a commitment to rectify our mistake. Today the board of the United Way of Central Carolinas announces several steps to begin the process of restoring public confidence and trust in our organization and refocus the community's energy on working with the United Way to do what we do best – lending a helping hand to those in need.

These steps, the result of deliberate and careful consideration over the past two months by an ad hoc committee of past, present and future United Way of Central Carolinas chairpersons, include the following:

* The ongoing controversy has impaired the ability of current leadership to perform effectively. As a result, the United Way of Central Carolinas has decided to end Ms. King's employment and bring in new leadership.

* The United Way of Central Carolinas will fulfill its contractual obligations under its employment agreement with Ms. King. To the extent allowed by that agreement, payments against remaining salary will be reduced by earnings Ms. King receives from other employment during the contract period. It is the intent of the board to seek private-sector assistance to defray the cost of outstanding salary obligations.

* The United Way of Central Carolinas will fulfill its obligations to Ms. King under her supplemental retirement plan. However, the Board will also make use of the standard provisions of the supplemental plan that allow the Board to reduce or terminate future employer contributions and limit the payout of the existing supplemental plan trust. No additional contributions will be made to the supplemental plan.

* Mac Everett, whose name is synonymous with community service in Charlotte, will assume the title of interim president and work with the organization's skilled staff through the conclusion of the 2008 United Way campaign.

* An independent review panel will be appointed to make an audit of and public report to the United Way of the Carolinas that will include a review of the process and decisions that have led to the current compensation controversy and recommendations designed to assure a transparent, focused and informed process for executive compensation and other major decisions of the organization. The panel will also evaluate and propose changes deemed necessary to improve the governance of the United Way of Central Carolinas, including but not limited to possibly reconstituting the board of directors and its executive committee.

The panel will be headed by Robert C. Sink, an attorney with Robinson Bradshaw & Hinson and an individual with a distinguished record of service to the Charlotte community.

A search committee will be appointed within weeks to find a replacement for Ms. King. Members of this committee will be named soon and announced to the community.

An organization that exists to serve the community and relies on the generous support of that community can ill afford to ignore what the community is saying. We have listened and learned. We regret that our action has diverted attention from the vital role of the United Way of Central Carolinas in supporting member agencies that offer more than 200 programs delivering crucial community services.

We hope the actions outlined here will encourage the community's support of our annual workplace campaign, which assures the most effective charitable organizations – from the biggest to the smallest – benefit from our community's generosity. Now more than ever in these tough economic times, our community cannot afford to reduce our commitment to help better the lives of residents in our region.