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April 27, 2019

Where Does $100 to United Way of Lee County Go?

by Anne Paddock

United Way of Lee County, Inc. is the United Way agency for Lee, Hendry, Glades, and Okeechobee counties in Florida. Recently recognized by Charity Navigator as a 4-star charity with a perfect overall score of 100, United Way of Lee County, Inc. (UWLC) awarded $75 out of every $100 in revenue ($8.5 million out of $11.4 million) to local human service organizations.

In 2017, UWLC reported total revenue of $11.4 million, most of which came from contributions, gifts, and grants, including $1.4 million from the government.  Expenses totaled $11.1 million and can be viewed two ways:  by general category (i.e. grants, program services, management, and fundraising) or by specific line item category (i.e. grants, compensation, office-related, travel, etc). Both provide important information with the latter providing a more detailed description of how revenue was spent.

Expenses by Broad General Category

The $11.1 million in expenses were categorized as follows:

  • $8.5 million (75% of revenue):  Grants
  • $1.7 million (15% of revenue):  Program Service Expenses
  • $0.6 million (5% of revenue):  Fundraising Expenses
  • $0.3 million (3% of revenue):  Management Expenses

The difference between revenue collected ($11.4 million) and revenue spent ($11.1 million) is $300,000, which was added to the fund balance, with a year-end net fund balance of $11.1 million.

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$ 15:  Program Service Expenses

-$  5:  Management Expenses

-$  3:  Fundraising Expenses

-$ 23: Program, Management, and Fundraising Expenses

$ 77:  Revenue Remaining

-$ 75:  Grants

$  2:  Revenue Remains:  To Fund Balance

As illustrated above, UWLC spent $23 out of every $100 in revenue on program, management, and fundraising expenses and $75 out of every $100 on grants to nearly 100 local non-profit organizations.

Expenses by Specific Line Item Category

The $11.1 million in expenses were categorized as follows:

  • $8.5 million (75% of revenue):  Grants
  • $2.0 million (17% of revenue):  Compensation-related Expenses
  • $0.3 million (3% of revenue):  Office-related Expenses
  • $0.2 million (2% of revenue):  Other Expenses, Travel and Conferences
  • $0.1 million (1% of revenue):  Payment to Affiliate

As illustrated above, UWLC spends $2 million to compensate 39 employees which equates to an average compensation of $51,300. 1 employee, the President, Cliff Smith was compensated more than $100,000 (his total compensation was $221,965).

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$ 17:  Compensation-related Expenses

-$  3:  Office-related Expenses

-$  2:  Other Expenses, Travel and Conferences

-$  1:  Payment to Affiliate

-$ 23: Total Compensation, Office, Other, Travel and Conferences, and Payment to Affiliate

 $ 77:  Revenue Remaining

-$75:  Grants

$  2:  Revenue Remaining:  To Fund Balance

As illustrated above, $23 out of every $100 was spent on compensation, office, other, travel and conferences, and a payment to an affiliate (although the largest expense is the compensation for the 39 employees).

Grants

UWLC, like other United Way offices, is a grantor of grants and is what the organization is known for. People make donations to United Way so they can in turn make grants to local organizations that have gone through their vetting process.

83 grants greater than $5,000 were awarded to 83 501 (c) (3)’s with the 23 largest recipients listed below:

  • $530,204:  Lee County School District of Fort. Myers Florida – non-cash donation of school supplies
  • $441,800:  The Salvation Army of Lee, Hendry, and Glades of Fort. Myers, Florida for general support
  • $363,392:  Saluscare of Fort Myers, Florida for general support
  • $347,100:  Children’s Advocacy Center of SWFL of Fort Myers, Florida for general support
  • $332,200:  Abuse Counseling and Treatment Center of Fort Myers, Florida for general support
  • $295,000:  Community Cooperative Ministries of Fort Myers, Florida for general support/hurricane relief
  • $249,500:  LARC of Fort Myers, Florida for general support
  • $224,786:  Children’s Home Society of Florida of Fort Myers, Florida for general support
  • $224,600:  Boys and Girls Club of Lee County of Fort Myers, Florida for general support
  • $181,500:  Literacy Council Gulf Coast of Bonita Springs, Florida for general support
  • $167,000:  The SKY Family YMCA of Venice, Florida for general support
  • $159,750:  Boy Scouts of America SWF Council of Fort Myers, Florida for general support
  • $150,345:  Harry Chapin Food Bank of SWFL of Fort Myers, Florida for general support
  • $135,800:  Goodwill Industries of SWFL of North Fort Myers, Florida for general support
  • $134,000:  IMPACT for Development Education of Fort Myers, Florida for general support
  • $122,000:  Catholic Charities of Fort Myers, Florida for general support
  • $112,626:  Healthy Start Coalition of SWFL of Fort Myers, Florida for general support
  • $107,100:  Childcare of SW Florida of Fort Myers, Florida for general support
  • $103,600:  Community Cooperative of Fort Myers, Florida for general support
  • $103,567:  Good Wheels of Fort Myers, Florida for general support
  • $103,260:  Friendship Centers of Sarasota, Florida for general support
  • $102,600:  Lehigh Community Services of Lehigh Acres, Florida for general support
  • $101,750:  Alvin A Dubin Alzheimer’s Resource Center of Fort Myers, Florida for general support

As illustrated above, the largest grants were primarily made to other non-profits in Fort Myers, Florida for general support, which is consistent with what United Way does:  they collect revenue and distribute about 75% of the funds to local organizations, which leads readers to ask: Is distributing 75% of every dollar worthy of a 4-star 100% rating by Charity Navigator?

Conclusion

It is important for donors to understand that if a donor’s goal is to maximize their donation, then ideally they would make a donation directly to a local organization instead of to an organization that makes grants to other organizations.  Otherwise the functional expenses of the local United Way office, in this case UWLC, uses about 25% of the donation to cover their functional expenses and the recipient organization ALSO has to cover their functional expenses with the remaining funds used to further their mission. What this often translates to is that about half of a donation actually goes towards the mission of a local non-profit. To make donation dollars go further, donate directly to a local organization that does not deduct their expenses and then make a grant to another organization.

Some people may say that local United Way offices are essentially the fundraisers for local non-profits vetting local  organizations (so that people don’t have to research which charities to give to) and there is some truth to that statement. Without United Way may of these local organizations wouldn’t receive general support or they would have to raise the money themselves, but donors pay for that service to the tune of about 25%.  Paying $2.5 million for 39 employees (including more than $220,000 to the top employee) to do this is a big price to pay (it cost $2.5 million to raise $11.5 million) especially when you think what $2.5 million could do in a local community.

To read the IRS Form 990 (2017) for United Way of Lee County, click here.

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