United Way Official Resigns, Alleges Inflated Numbers

Washington Post staff writer Jacqueline L. Salmon was online Monday, April 22, at 12:30 p.m. ET to field questions and comments about the resignation of United Way's chief financial officer, Kim Tran. Tran alleges that the organization is exaggerating how much money it is raising and that the bad habits she tried to fix persist.

Read More: United Way Official Resigns, Alleges Inflated Numbers (Post, May 22)

The transcript follows.

____________________

Jacqueline L. Salmon: Welcome to the discussion. I've already received a number of questions, so let's get underway.

_______________________

Springfield, Va.: This United Way stuff just seems to be going on and on, for years and years.

Is this type of misbehavior just typical for all nonprofits?

Jacqueline L. Salmon: The fact is, most nonprofits operate with little or no problems or controversy. You just tend to hear more about the ones who do have problems.

_______________________

Arlington, Va.: Given this news, what are the potential long-term implications for United Way? For its name?

Jacqueline L. Salmon: This local United Way has been on a difficult path for several years because of the scandal that erupted several years ago. It's also facing the same types of challenges faced by other United Ways--that is, more and more corporations are buying specialized fundraising software and handling their own workplace charity fundraising drives. The United Way is trying to find a way to be relevant in that type of environment.

_______________________

Arlington, Va.: Ms. Tran and Mr. Owens were once high-ranking members of the staff at the United Way of the National Capital Area. Given the fact that the numbers that are currently being reported were for a prior year's campaign, I think it is important to point out that, although there is little excuse for Mr. Anderson's actions, these two individuals surely contributed greatly to the problem by being either complacent or perhaps even supporting his decision. Nothing is more damaging than a poor CEO surrounded by 'yes men' in an organization with past issues such as the United Way's.

Jacqueline L. Salmon: Employees have told me that Ms. Tran and Mr. Owens fought the decision to include the $1 million in questionable donations. To be fair, the United Way says that it investigated Ms. Tran's allegations and found them to be unfounded. It says it simply made some projections about the amount of money that it would raise during the 2004 campaign and those projections fell short.

_______________________

Reston, Va.: How do you tell a good charity from a bad one?

Jacqueline L. Salmon: I get this question all the time! If you're a numbers person, you can go to guidestar.org or charitynavigator.org and look at the charities' tax returns.

If you're interested in large, national charities, the BBB Wise Giving Alliance evaluates them and posts its evaluations at give.org.

For descriptions of local charities, go to touchdc.org, which profiles every local nonprofit.

But here's another suggestion...check out which charities the local foundations are giving grants to. Foundations employ program officers who have a thorough knowledge of the local charitable scene and who vet charities before giving them grants.

Local foundations include the Eugene and Agnes E. Meyer Foundation, the Consumer Health Foundation, the Cafritz Foundation, the Freddie Mac Foundation, the Fannie Mae Foundation and the Washington Area Women's Foundation.

Check out their Web sites and see which organizations they're funding!

_______________________

Alexandria, Va.: Dear Ms. Salmon,It would appear that the temptation of helping themselves to "easy money" continues to be a problem with United Way executives and, as a result, fewer people will donate to help those in need. I worked for several years at the United Way headquarters in Alexandria and saw, first hand, the wretched excess of greed as then-President Aramony and his V.P.'s used the charity's resources as their own personal ATM machine. It would appear that not much has changed since those days, and that is sad. When you give a dollar to a street beggar, you know that the money will be used by someone that needs it, but when you donate to the United Way, chances are the money will end up in the bank account of an executive. I've seen it happen. Same as it ever was in Alexandria.

Jacqueline L. Salmon: Well, I'm not a big fan of giving money to a 'street begger," because I think there are many worthwhile shelters and soup kitchens that can help these folks.

But it is true that several United Ways around the country have had some rather spectacular scandals in the last couple of decades.

That said, Brian Gallagher, who has been the CEO of the United Way of America (the national organization) has been working hard to clean up the problems. UWA has tightened its standards quite a bit in order to rein in, or eliminate, problems.

_______________________

Washington, D.C.: You seem to suggest that other local United Way chapters are free from this sort of trouble.

From my perspective, it's another emanation of the Aramony days.

I don't trust this charity, and my charitable contributions go elsewhere.

Are you certain this isn't a national problem again?

Jacqueline L. Salmon: That's a good question. See my answer above about United Way CEO Brian Gallagher.

_______________________

Alexandria, Va.: "Is this type of misbehavior just typical for all nonprofits?" Let's see...Enron, Haliburton, MCI/Worldcom. Seems that it would be hard to pigeon-hold this type of behavior as just be non-profit behavior. Corporate entities seem to have been proven equally as guilty. Let's concentrate on one of them at a time rather than making sweeping generalizations.

Jacqueline L. Salmon: Good point

_______________________

Change the board: It seems that the Board of Directors just don't understand the public's anger and mistrust of how the United Way has handled the previous scandal, and now this. They seem to have insulated themselves and circled the wagons and can't see the damage that this type of news is doing to their credibility.

My wife and I decided, after the last scandal, that we would no longer contribute through the United Way in her CFC, but donate directly to the charities on our own. We could NOT TRUST the United Way to spend those donated dollars properly, or not misuse them.

Jacqueline L. Salmon: As long as you keep giving to charity. That's the important part.

_______________________

Woodbridge, Va.: My employer runs a drive every year to donate to United Way. The push is for 100 percent employee participation. I have not contributed since the accounting problems surfaced. I think it is questionable any way for a government employer (like the one I work for) to run a charity drive anyway ...

Jacqueline L. Salmon: Workplace campaigns that pressure employees to give, whether or not they want to, have long been the source of complaints by employees who'd rather donate in their own way.

_______________________

Arlington, Va.: I believe that United Way lost its connection to the Federal Government's Combined Givers Fund a few years ago and doesn't seem capable of getting it back. Who is doing the work for the Feds; I believe it is another United Way from the area?

Jacqueline L. Salmon: The fund drive among local federal workers is handled by Global Impact, an Alexandria nonprofit. It won the contract to run the local Combined Federal Campaign in 2003 after the United Way gave up the contract because of the scandal.

_______________________

Arlington, Va.: Hi Jacqueline,

What areas are serviced by this "local chapter" - the entire D.C. metro area? And is there any distinction between the United Way and the Combined Federal Campaign, or is it one and the same organization?

Jacqueline L. Salmon: As noted above, the Combined Federal Campaign is run by Global Impact, an Alexandria nonprofit.

It can get complicated, though! United Way does have some involvement in the CFC campaign, in that it handles the applications to the CFC from its member charities and forwards those applications onto Global Impact. (So it does involve some work on the part of the United Way.) But it is then allowed to 'count' the money that its member charities get from the CFC. So about one-half of the $38 million that the United Way raised in the 2004 campaign came from federal employees. The other half from corporate employees--and that's where the problems were.

Like I said, it's complicated.....

_______________________

McLean, Va.: Please can you tell us the new standards put in place by Brian Gallagher of the national United Way to rein in or eliminate problems and if the local United Way is implementing them?

Jacqueline L. Salmon: The United Way says it has implemented the new standards which, among other things, regulate how United Way raise money, how they report it to the public and to their accountants. It's all pretty technical, but it's important stuff to United Ways, which often judge themselves by how much money they raise. (The United Way of America is trying to discourage them from doing that, but old habits die hard.)

The local United Way has said that, as the result of new United Way standards, it will no longer announced 'projected' campaign results but will wait until it has the actual numbers.

_______________________

Silver Spring, Md.: Ms. Salmon:

One problem expressed in your article reflects my experience at a mid-sized nonprofit. The board is enamored with the executive and increases his or her compensation or offers a big bonus, but no thought is given to the adequacy of the wages for everyone else who works there.

It creates a terrible work environment. Workers are given the sorry excuse that revenues are low and raises will be modest or non-existent, but everyone knows that the boss just got a big raise.

It is the board's fault, but they are oblivious to the work environment and other issues. All they know is what the executive director wants them to know.

washingtonpost.com: United Way Official Resigns, Alleges Inflated Numbers (Post, May 22)

Jacqueline L. Salmon: Thanks for the comments.

_______________________

Washington, D.C.: I previously worked for the American Red Cross. How do corporate and nonprofit executives continue to get away with whatever they choose to? Especially, unethical violations, command-and-control, do-what-we-say regardless of laws or internal policies, but 'spin' for the media and public.

Jacqueline L. Salmon: Don't forget that it happens in government as well!

_______________________

Washington, D.C.: I think it is important, based on the previous comments, to differentiate between the United Way in this region, and the CFC, which is no longer affiliated with the United Way. Government employees who give to the CFC in this area are not giving their money to the United Way and can feel safer about the way their funds are being distributed.

Jacqueline L. Salmon: Thanks for your comments. Yes, the two fund drives are separate, but it can be confusing to understand.

_______________________

Why people are angry: Many people are coerced by their employers to contribute to the United Way, even when the organization supports causes that act against the desires or beliefs of the employee. So to see yet another UW CEO stealing and another financial scandal wasting contributors' money is too much to stand.

Jacqueline L. Salmon: A correction...there are no allegations that the UW CEO is 'stealing.' There are some employee concerns about the size of his salary.

_______________________

Virginia: Do you have any evidence that this scandal is creating a lack of mistrust at all in the other United Ways?

Jacqueline L. Salmon: Too soon to tell. But, as any charity leader will tell you, controversy at one charity affects them all.

_______________________

Washington, D.C.: Will there be an investigation launched into the CFO's allegations? What steps will United Way take now?

Jacqueline L. Salmon: The United Way says it did look into her complaints. It said it was satisfied with the results of its inquiry. She says she wasn't. So there you go.

_______________________

Crofton, Md.: Does the Central MD chapter (Baltimore City and surrounding counties) have these types of problems? Can you compare and contrast how these two chapters are run?

Jacqueline L. Salmon: I'm not as familiar with the Central Maryland chapter as I am with the Washington area chapter.

Many United Way affiliates are struggling right now as their former corporate clients decide to bypass the United Way and handle their workplace charity drives on their own.

United Way CEO Brian Gallagher is trying to combat that trend by refocusing local United Ways on using donated money to make smart investments in local charities that can solve community problems, rather than just functioning as charitable donation "pass throughs," as in the past.

_______________________

Oakton, Va.: Why in the world would you publish comments made off the record saying "privately" United Way officials said Tran was a disgruntled employee? If they won't go on the record and you don't publish a name, it's very irresponsible for you to publish that kind of comment. It made a good, informative article turn to garbage. Shame on you and your editors.

Jacqueline L. Salmon: You have a good point.

_______________________

McLean, Va.: What documentation supports your statement 'the fact is, most nonprofits operate with little or no problems or controversy?' Are we to believe the nonprofits that we don't 'hear about' in the paper are any better?

Jacqueline L. Salmon: My point was that you can't tar all charities with one brush..any more than you can say 'all corporations' are corrupt or 'all government employees' are on the take.

_______________________

SW US: I worked for a local United Way and the problems there were, while not as extreme as DC, definitely headed in the direction of corruption and motivated by individual greed. Board members who disagreed with the Chief Executive were pushed out, staff members who did not approve the the Chief Executive's spending were fired, outrageous bonuses for the Chief Executive(amidst rapidly declining fundraising)were flabbergasting, etc. The biggest problem with the UW I worked at was that the Chief Executive and Board members treated the organization (and, ultimately, donors' contributions) as their personal expense account.

There is little oversight from UW of America, and these problems will persist and grow until UWA wakes up and demands absolutely transparent practices among all of their members. I have met Brian Gallagher and he seems like he's committed to professionalism and improving the UW system, but reluctant to exercise the controls, standards and oversight necessary to make that happen.

Jacqueline L. Salmon: Thanks for your comments.

Because local United Ways are all separate organizations (unlike the American Red Cross and its 800 chapters, which are all one organization), it is harder--though not impossible--for United Way of America to impose its will on the local United Way affiliates.

_______________________

Jacqueline L. Salmon: That's all for today. Thanks very much for your comments and questions. Clearly, there is a lot of passion around the issue of charities and money.

_______________________

Editor's Note: washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions. washingtonpost.com is not responsible for any content posted by third parties.