United Way may see more competition for donations

The American Cancer Society is lobbying Charlotte companies to allow their employees to make direct payroll donations, a new option that would compete with the United Way.

For the first time, the cancer society is focusing on choice campaigns in selected cities, targeting Charlotte, Washington and Richmond, Va.

No Charlotte company has accepted the cancer society's proposal, said Steve Rabb, the society's senior corporate development officer. He said it typically takes a year or more of discussions before companies commit to broadening their campaigns.

He said he's lobbied 20 companies in the region but declined to name any. He said he's surprised by the enthusiastic response from business leaders, especially in a community so closely tied to the United Way.

Across the country, “there's a pent-up desire among employees to have more choices,” he said. U.S. workers give roughly $3 billion annually to charities.

The cancer society's pitch comes at a troubling time for United Way of Central Carolinas.

The cancer society approached local companies in April, two months before reports broke about the United Way paying its CEO more than $1.2 million in salary, bonus, expenses and retirement contributions in 2007.

The payment included what the United Way board says is a one-time pension contribution. News of the pay package angered donors, adding to board members' concerns about raising money in a shaky economy.

In a written statement, the United Way said it has met with cancer society officials and they are exploring ways to work together, especially on health issues.

“We are not hearing about the American Cancer Society campaign from our partner companies, and our large corporate partners (Bank of America, Wachovia, Lowe's, Duke Energy) that are currently implementing their United Way campaigns,” the agency said.

Charlotte's United Way supports 98 agencies across four counties. Last year it raised a record $45.3 million. Donors currently can earmark contributions to specific agencies, but the money still passes through the United Way.

Board member Russell Robinson said a move away from a United Way-centered campaign would be “very, very bad.”

“I think that would be an undermining of a really very essential part of the community … The social needs of the community, particularly in times like this, are so critically important.”

Impact uncertain

Rabb, of the cancer society, said donations to all charities rise with a choice campaign, but donations to United Way agencies may fall.

He declined to provide specifics, but said some companies saw a “double-digit” drop in United Way funding.

He said the cancer society is not trying to take money from other nonprofits.

“We're fighting the concept that United Way is the singular conduit to funding community issues,” he said. “We saw it as an opportunity to make the case that the playing field has changed in the workplace.”

The United Way of America, however, said employees give more in United Way-led campaigns compared with other types of fundraising drives, averaging $104 per worker versus $29.

“We recognize that with more than one million nonprofits in the U.S., and with more than 35,000 being added each year, that competition is fierce,” the agency said in a statement.

Carol Hardison, chief executive officer of Crisis Assistance Ministry in Charlotte, prefers the traditional way.

She worries smaller groups “would never have the resources to approach a corporation the way a larger nonprofit could,” she said. “They might fall off the map.”

Smaller nonprofits are most at risk in a choice campaign, said Suzanne Coffman of GuideStar, a charity watchdog group in Williamsburg, Va.

“There are needs in your community you aren't personally aware of,” she said. Another nonprofit expert, Dwight Burlingame, said it's not clear the United Way suffers in a choice campaign, and that such drives may increase overall giving.

“I don't think we have real evidence yet that it's made a negative effect on other nonprofits in the community,” he said.

Microsoft, for example, has always offered its local employees a choice of giving to a variety of nonprofits. The company still donates heavily to the United Way.

In 2006, Microsoft received the United Way of Central Carolinas' Community Leadership Award, given to the top five corporations that have combined corporate and employee gifts exceeding $1 million.

Considering choice

Charlotte's United Way may prove vulnerable to the cancer society's push.

The agency is trying to soothe donors upset over news the United Way paid its chief executive, Gloria Pace King, $365,000 in salary and bonus, and more than $822,000 in retirement contributions last year. The pension contribution was more than six times the previous year's payment.

The United Way board says the money compensates for six years of low contributions to her pension fund. King will receive contributions between $425,000 and $500,000 each year for the next three years – when she can retire.

King has declined repeated requests for comment.

Business owner Mark Ahlstrom plans to talk with his 20 employees about how they want to contribute to charities.

Ahlstrom, president of Carolina Industrial Equipment, Inc., said his company has held annual United Way campaigns for 20 years because “it was easy to do and it felt right.”

He said he's not bothered by King's salary. Rather, it's the retirement compensation that he finds “unseemly.”

Allowing his employees to choose is something Ahlstrom said he's considered for years.

“This year,” he said, “they've given us a real good reason to do it.”

News of high executive compensation can send donors running from an agency, said Coffman of GuideStar.

It's an issue that “comes up all the time … whether it is justified or not,” she said. “Giving to charity is a voluntary act, and if they think it's inappropriate, they'll go someplace else.”

Staff writers Eric Frazier and Mark Price contributed.