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January 1, 2017

Where does $1 to United Way of New York City go?

by Anne Paddock

United Way New York City (UWNYC) is just one of  46 United Way chapters in New York and one of 1,256 chapters in the United States, but this northeast chapter office raised more than $57 million last year and distributed nearly $40 million (69%) in grants to organizations that focus on health, education, and income. United Way is – for lack of better words – a way to unite people and organizations.

UWNYC is a non-profit 501 (c) (3) organization that is required to submit an IRS Form 990 annually which reveals important financial information about the organization including revenue, expenses, grants, key employee compensation, assets, liabilities, and more. The 2014 IRS Form 990 (which covers the year ending June 30, 2015) reveals that a $1 contribution was spent as follows:

 $1.00:  Contribution

-$0.15:  Compensation and Benefits

-$0.04: Office and Administration

-$0.04: Services and Other Expenses

-$0.01: Advertising and Events

-$0.01: United Way and Dues

-$0.01: Interest

-$0.01: Conferences and Travel

-$0.27 Subtotal: Operating Expenses

-$0.04: Pension Related Charges, Provision for Uncollectibles

-$0.31: Subtotal Operating and Pension/Uncollectibles

-$0.01: Grants to 11 other United Way’s

-$0.68: Grants to other non-profits, commercial enterprises, and individuals 

  $0.00

As illustrated above, 31 cents of every dollar collected was spent within the organization (including other United Way(s)) while 69 cents were distributed in grants to other non-profits, individuals, commercial entities, and other United Way organizations.

The specifics of the UWNYC as filed on the IRS Form 990 are summarized as follows:

REVENUE

United Way of New York City raised $57.5 million primarily from four sources:

  • $30.4 million:  Campaigns
  • $19.7 million:  Government Grants
  • $ 4.0 million:  Other Contributions
  • $ 2.4 million:  Fundraising
  • $56.5 million: Total

An additional $1 million was raised from campaign fees, investment income and the sale of assets for a total of $57.5 million.

TOTAL EXPENSES

Expenses totaled $55.3 million, of which $39.6 million (69% of revenue) were grants to other organizations and $15.7 million (27.3% of revenue) were expenses of operating and managing UWNYC.

Operating, Management, and Fundraising Expenses

$15.7 million (or 27.3% of the revenue collected) was spent on operating, managing, and fundraising.  The organization has 108 employees – 12 of which received more than $100,000 in compensation and 6 which received more than 200,000 in compensation:

  • Sheena Wright, President and CEO:  $368,888
  • Michael Carren, Former COO:  $295,953
  • Jay Aronowitz, Former CFO:  $240,384 plus $112,000 (appears to be a severance payment)
  • Elena Pak, Former VP of Resource Development:  $226,065
  • Nicole Gallant, Senior VP of CI:  $208,704
  • Sunita Subramanian, Gen Counsel and Asst Sect’y:  $200,783

UWNYC divides expenses into three categories: program service, management and general and fundraising expenses. But, because UWNYC is primarily engaged in raising funds and distributing these funds to other non-profits, the expenses will be summarized together.

  • $8.5 million (14.8% of revenue):  Compensation and Benefits
  • $2.4 million (4.1% of revenue) :  Office Administration
  • $2.4 million (4.1% of revenue):  Fees for Services and $1.9 million in expenses not detailed
  • $  .6 million (1% of revenue):   Advertising and Events
  • $  .6 million (1% of revenue):   Interest
  • $  .4 million (.8% of revenue):   United Way and Dues
  • $  .3 million (.5% of revenue):  Conferences and Travel
  • $15.2 million (26.3% of revenue): Total Operating Exp (net of deprec of $0.5 million – 1% of revenue)

It is important to note $655,488 was paid to five contractors (which is included in the above categories):

  • $172,425:  Fulcrum Leadership Development for performance management program
  • $138,968:  Cooke and Co. for marketing and communication
  • $120,084:  The TASC Group LLC for marketing and communication
  • $115,000:  Marks Paneth LLP for auditing
  • $109,011:   Wendy Fleischer for change capital fund coordinator

Grants to Other Organizations

UWNYC made 128 grants of $5,000 and greater; 98 of which were to other non-profits including other United Way chapters and 30 to other entities (consultants, farms, commercial entities, etc). The largest grants were given to 13 organizations totaling nearly $12 million:

  • Driscoll Foods:  $3,865,790 (3 grants)
  • The Children’s Society:  $1,147,588
  • NY Community Learning School:  $973,717
  • Bronxworks:  $790,301 (3 grants)
  • East Side House:  $786,856
  • Partnership with Children, Inc;  $762,937
  • Good Shepherd Services:  $620,108
  • Pathways to Leadership:  $615,242
  • Global Kids, Inc:  $549,395
  • NY Center for Interpersonal Development:  $476,856
  • Sports and Arts in School Foundation:  $472,144
  • Make the Road:  $467,747
  • The Door-A Center of Alternatives:  $457,796

With the exception of Driscoll Foods, all of the above grants were to non-profits.  Of the 30 grants to organizations that are not non-profits, the largest three were to:

  • Shane Katherine Safir (California):  $160,000 (appears to be coaching and facilitation services)
  • Wendy Fleischer (New York):  108,657 (donor’s representative for Change Capital Fund)
  • Balter Sales Co (New York):  $113,624  (restaurant supply store)

BALANCE SHEET

UWNYC has total assets of $36.7 million, which is nearly a $1 million increase over the previous year. Assets are concentrated in five primary areas:  pledges and grants receivable ($13.5 million), investments ($10.8 million), $9.6 million in lands, buildings, equipment, $1.4 million in cash and savings, and $1 million in prepaid expenses.

Liabilities total $23.9 million, of which $10.5 million are unsecured notes and loans payable, $6.6 million in grants payable and campaign designations payable, $4.5 million in pension and post retirement obligations and $2.2 in accounts payable.

Net assets or the fund balance total $12.8 million, which is virtually unchanged from last year even though the organization did not distribute $2 million in contributions. This appears to be because of pension obligations and collectible pledges that were not expensed.

CONCLUSIONS

After reviewing the 2014 IRS 990, several issues seem to be of significant importance:

  • UWNYC used 31 cents of every dollar for expenses, leaving 69 cents to be distributed to other organizations.
  • UWNYC distributed nearly $1 million dollars to other United Way organizations ($348,242 on the income statement and 11 grants to United Way’s in NY, NJ, CT, and MD totaling $499,524. Each of these organizations will deduct their operating expenses (approximately 25%) before distributing these dollars, which means more than $200,000 will be deducted from these dollars to pay the operating, administrative, and fundraising costs of the other United Way’s, which is not an efficient way to use donor dollars.
  • More than $1.7 million was spent on compensation for 6 executives.

Instead of making a contribution to UWNYC, consider making a donation directly to any of the 98 non-profits listed on  Part IV of the Form 990. Your $1 donation will not be reduced to 69 cents before the funds are distributed.

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