The board of the United Way of Central Maryland was meeting today to decide whether it should withhold dues to its national trade group, the United Way of America, which has been hit by allegations of financial abuses.
The local board already has withheld payment of about $80,000 in first-quarter dues to the national organization. Today's meeting was the first time the local board has met to discuss how to respond to the allegations and stem distrust of the organization.
Withholding dues "is a tough call for the board of directors to make," said Mel Tansill, spokesman for the local group, which paid $346,000 to the national organization last year. "But it is absolutely critical that the public trust be sustained through this," he said.
Employees of 3,500 private companies in the Baltimore area and employees of government agencies across Maryland pledged to donate money in the United Way of Central Maryland's latest campaign, which raised a record $39 million despite the recession. The local group says 86 percent of that money goes directly to more than 300 charitable organizations, including the Red Cross, the Salvation Army, the YMCA and other groups. The rest of the money raised is spent on fund-raising activities and administration, Mr. Tansill said.
In return for dues paid to the national organization, the 2,100 local United Way groups receive the benefits of national advertising on television and other media, training of volunteers, market research and other assistance in fund-raising.
A 57-page investigative report released April 4 by United Way of America's new management accused the group's former president, William Aramony, and two aides of transferring millions of dollars a year to other organizations under their control and spending hundreds of thousands of dollars on perks, including expensive travel and extravagant salaries.
While local United Way boards continue to debate their affiliations with the national group, it is clear that the fallout from the allegations is hurting, Mr. Tansill said.
Local officials already have received reports that some employees of private companies, who donate parts of their paychecks to United Way, are canceling pledges.
"We think the loss has been minimal," Mr. Tansill said. But, he said, "There's no doubt it's been damaging to every local United Way in the country."
The 37-member board governing United Way of Central Maryland apparently is not ready to sever all ties with the national group, Mr. Tansill said, as several local affiliates have done.
United Way of Greater Milwaukee this week cut ties with the national group. Two other affiliates, in Kalamazoo, Mich., and Warren County, Ohio, also have cut ties.
The allegations couldn't have come at a worse time for the affiliates, Mr. Tansill said.
Demand for services has increased dramatically during the recession, he said. Calls to the local group's 24-hour referral telephone line increased by 50 percent last year, to 30,000.
Mr. Tansill said the affiliates are doing all they can to correct "misperceptions" about their relationships to the national group.
Fund-raising campaigns are run solely by the affiliates, he said. The national group does not raise money, he added, and it survives on the dues it receives from the affiliates.
Decisions about how the affiliates distribute the money they raise also are made locally, Mr. Tansill said.
"There's no link at all with the United Way of America" other than what is received in return for dues, Mr. Tansill said. "This United Way is working, and it's working for everyone," he said.