Management Mistakes and Successes, Tenth Edition

Chapter 16. United Way: A Not-for-Profit Organization Also Needs Controls and Oversight

The United Way of America, the preeminent charitable organization in the United States, celebrated its 100-year anniversary in 1987. It had evolved from local community chests, and its strategy for fund-raising had proven highly effective: funding local charities through payroll deductions. The good it did seemed unassailable.

Abruptly in 1992, the image that United Way had created was jolted by revelations from investigative reporters of free-spending and other questionable deeds of its greatest builder and president, William Aramony. A major point of public concern was Aramony's salary and uncontrolled perks in a lifestyle that seemed inappropriate for a charitable organization that depended mostly on contributions from working people.

We are left to question the callousness and lack of concern with the ethical impact on the public image of this major charitable and not-for-profit entity. After all, unlike business firms that offer products or services to potential customers, charitable organizations depend on contributions that people give freely out of a desire to help society, with no tangible personal benefits. An image of high integrity and honest dealings without any semblance of corruption or privilege would seem essential for such organizations.

THE STATURE AND ACCOMPLISHMENTS OF THE UNITED WAY

Organizing the United Way as the umbrella charity to fund other local charities through payroll ...