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January 4, 2016

Where does $1 to the Town of Palm Beach United Way go?

by Anne Paddock

United Way is a large network with 1,256 independent offices in the United States, each of which is required to submit an IRS Form 990 that provides information on the local organization’s activities, revenue sources, expenditures, assets, liabilities, and more. Focusing on education, income, and health, each local United Way office/chapter acts as a community oversight committee by collecting revenue and making grants to other non-profit organizations that provide needed services or goods.

The Town of Palm Beach United Way‘s (TPBUW) most recent 990 (2013) for the year ending June 30,2014 reveals the following:

$5 million was collected, of which $4.4 million (88%) were cash contributions and nearly $600 thousand (12%) derived from investment income.

$775,382 (16% of revenue) was spent on expenses (of which $13,000 were non-cash expenses  – depreciation) broken down as follows:

  • $413,551 (8%) on salaries, wages, benefits (the President/CEO received $135 thousand)
  • $172,334 (4%) on office, IT, occupancy, insurance, telephone and postage, accounting, fees, other
  • $103,903 (2%) on conferences, meetings, conventions, and travel
  • $54,310 (1%) on dues and subscriptions
  • $31,284 (1%)on advertising, donor cultivation, agency liaison

Nearly $710,000 (14%) was kept with the organization to increase the endowment (contributing to the increase in their fund balance from $7.1 million to $8 million)  which will be invested with the earnings potentially subsidizing future operating expenses.

$3.5 million (70%) were given to 63 organizations with the largest recipients:

  • ARC of Palm Beach County: $205,000
  • Boys and Girls Club of Palm Beach County:  $200,000
  • Seagull Industries:  $192,900
  • Palm Beach Habilitation Center:  $173,700
  • 2-1-1 PB/Treasure Coast:  $162,000
  • Glades Initiative:  $149,700
  • Center for Family Services:  $141,000
  • Adopt-A-Family:  $136,883
  • DATA:  $129,000
  • The Lord’s Place:  $124,000

As illustrated above, 10 organizations received about $1.6 million (or about 46% of grants given).

$1 in revenue was used as follows:

$1.00:   Revenue

-$0.08:  Salaries, wages, benefits, etc.

-$0.04:  Office, occupancy, etc.

-$0.02:  Conferences, meetings, travel, etc.

-$0.01:   Dues and subscriptions (detail not provided but possibly to United Way Worldwide)

-$0.01:   Advertising, donor cultivation, etc.

-$0.16:   Subtotal Management, Program, and Fundraising Expenses

-$0.14:   Placed into the endowment fund at Town of Palm Beach United Way

-$0.70:   Distributed to more than 63 non-profit 501 (c) (3) organizations

The bottom line is that 70 cents of every dollar was spent in grants to other organizations. These organizations also have administrative, program service, and fundraising expenses which means the 70 cents is further diluted because there are two layers of overhead expenses – those of the United Way local office (TPBUW) and those of the agency in which grants were distributed. A $1 contribution will go further if given directly to one of the 63 organizations listed on the Form 990 because only one layer of overhead expenses will be deducted from every dollar. However, to fully understand where the money flows, the 990 of the receiving organization also has to be analyzed.

To review the entire 2014 IRS Form 990 for the Town of Palm Beach United Way, click here.

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