Wednesday September 24 | United Way of the Carolinas

September 23, 2008 at 7:50 am | Posted in Coming Up | 4 Comments

Stay tuned for an in-depth look at the United Way of the Central Carolinas on today’s Charlotte Talks. The local fundraising entity has been very much in the news lately concerning their pay and benefits package to former C.E.O. Gloria Pace King. The agency also fell under scrutiny for the subsequent firing of King and for their handling of the matter in the public eye. Their yearly fund drive is under way and they join us to talk about the scandal and the role of the United Way in their own words.
Guests
Mac Everett – Interim C.E.O., United Way of the Central Carolinas
Carlos Evans – Incoming Board Chair, United Way of the Central Carolinas

Listen to Show

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  1. Why has no one insisted that UW interim president Mac Everett justify his $20000 monthly (not annual, but MONTHLY) salary for a TEMPORARY position? When will citizens realize that corporate boards specialize in keeping vast sums of money in the family? I hope people wake up to this fleecing and wake up to the fact that we cannot trust business executives to decide who is and is not worthy of charitable support. That right belongs to individual donors and employers should keep it out of the workplace.

    Source: http://www.charlotteobserver.com/100/story/158210.html

  2. Excellent job, Mike. It’s about time someone pressed those people for answers. Isn’t it funny though for them to declare “more transparency” and yet they wouldn’t answer your questions.

    And for clarification, the list of the Executive Committee members was NOT published in the Observer. I specifically looked for their names and have never seen them published. Transparency? I guess the Exec Committee is so transparent they’re invisible!

    Thanks for your show.

    Kate,
    Charlotte

  3. I just listened to the rebroadcast and WOW! GREAT SHOW MIKE! I agree with Kate’s comments. Mac Everett has no concept of “community service” and is just plain greedy. Twenty thousand per MONTH is the very definition of obscene. How many public school teachers could his temporary salary fund? I really hope UW implodes. Man I wish I could have been in the studio after the show.

  4. Decent job on this Mike. I called in with the question concerning the UW’s operational efficiency being within the 15% OH rule of thumb for non-profits. I don’t believe I accurately portrayed my displeasure with the UW. I started by offering a kudos to Mac and Carlos, which I stand by. I think they are both mishandling this in close to the worst possible way. However they are at least attempting and not bailing like Ann Caulkins did. That stated, Mac and Carlos are being extremely convenient and hypocritical. I am, like most, extremely upset with the UW and folks like Mac – rage might even be a better description. Unfortunately I don’t think I conveyed that feeling in my call. I had several comments that I would’ve like to convey but understand the time constraints. I didn’t want to be cut off. So I am posting those comments here.
    You did good job continuously coming back to the transparency issue. I found Mac to be very hypocritical on this issue. He stated that people need to know the facts. However, people have been requesting the facts and they haven’t been provided in the form of meeting minutes etc. Using an independent auditor is fine but that doesn’t mean that meeting minutes and expense reports couldn’t be released. They are clearly trying to figure out the best way to frame the situation and minimize the resulting public anger. Their resistance to release these prior to or during the campaign is clearly tactical. However the point that it consumes staff time is legitimate. That does not outweigh the need to be transparent though. I also find it interesting that the independent review is being provided pro-bono yet Mac is working at $20K/month!
    Mac skirted the question when pressed about whether people had a right to be upset and his comments made in the Observer article. His answer was that based on his phone calls he knew people were mad. That didn’t answer the question of whether he thought people have a right to be mad. This shows that they still have not accepted responsibility for the issue. They still believe that the problem is that they underestimated the public perception of the compensation, which is what they have apologized for. They had never apologized for nor stated that the compensation was inappropriate. I believe they still don’t understand how wrong the compensation was.
    Carlos also showed some hypocrisy. He went into detail about how he decided to accept the position of Chairman. He stated that he questioned why he should do this when it wasn’t his problem. Again – this skirts responsibility because he was on the board and they were collectively negligent in their duties. They continuously state that it was the executive committee that worked out the compensation. My issue is this – their annual revenues are around $50M. At that level an expenditure of $2M, which was allocated to King, represents 4% of the annual revenue. That should have stuck out like a sore thumb! I reiterate – 4% of their annual revenue to 1 person – this does not include her expense allowances! Certainly any competent board member could pick up on this. It must have been the largest line item in the budget. At 4% it represents just over 25% of total OH –FOR JUST 1 PERSON! So the fact that the executive committee worked out the compensation does not alleviate the board from being responsible for those decisions. I find it hard to believe that they didn’t recognize this in approving the overall budget and that it wasn’t discussed informally outside of the meetings among the members of the executive committee and the board.
    I do believe you were wrong Mike when you stated that if you were presented with the compensation package that you would’ve accepted. A primary responsibility of a non-profits CEO is to maintain a certain public perception of the organization. They are almost completely dependent on the community giving at will for them to exist. Therefore perception is everything. That stated she should have recognized that the compensation was inappropriate and protected the image of her organization by accepting less compensation and requiring more transparency. That was her responsibility. The board is clearly more in the wrong but she is not innocent either. People who work in non-profits should understand that they are perceived to have truly altruistic motives and that they should do everything in their abilities to ensure that the majority of funds raised go to the charities they work for. The average person who contributes to these charities are altruistic in their motives for donating and expect the same in administration of those donations. Ms. King violated that public trust.
    My question regarding the efficiency of operations was answered although most people probably didn’t extract how important that was. The UW constantly flaunts their OH as being within the 15% rule of thumb used to evaluate non-profits metric of efficiency. However this is severely skewed. The UW performs fundraising for 91 organizations. In principle this is an efficient model. Why have 91 different fundraising campaigns? They combine into 1. However the problem is this. The UW counts the revenue raised for all organizations. However they only account for their OH. In reality they should be accounting for only the revenue that the UW keeps. Then allocate the costs of fundraising as weighted by the distribution of revenues accordingly. Then calculate the efficiency. For example, if the revenues were $50M and the UW OH is 15%. That equates to $7.5M in OH. However the revenues that UW uses for their own services are just $25M then the efficiency changes. Assume that the fundraising costs $1M and therefore the amount appropriated to the UW is $500K since they would be keeping ½ the revenue. The corresponding efficiency would be about 28%. That’s nearly double what they state! Most likely the amount given to other charities exceed 50% which would make the efficiency rating even worse! Another bookkeeping issue I found peculiar is that the UW specifies that the process of allocating funds to the agencies is considered as providing a service and not as OH. In private sector this would be OH. So there are many issues that are clearly interpreted conveniently by the UW to make their efficiency look better.
    Mike you were spot on when asking if this was linked to the current financial crisis. It indeed shares a common thread. Something that is universal throughout corporate and public sector America. That common denominator is a severe lack of leadership. The board is made up of people who are supposed to be corporate leaders. We are finding out what corporate leaders really are. Our deficiencies in leadership in this country are blatantly obvious now. Back to the compensation issue and whether you would accept the package if offered. Strong leaders would recognize the risk and do what is ethically correct. They would manage the inherent greed that we have. Greed is emotionless. It can be good and it can be bad. Greed is a survival tool. Solid leaders are aware of this and manage it effectively. Much like an alcoholic manages alcoholism.
    Good show and good conversation. I particularly thought your closing line emphasizing them listening to your program and recognizing the obvious that they didn’t really answer them. Thanks Mike!


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