United Way Eases Fees For Designated Gifts

Change Could Free Up To $400,000 For Nonprofits

April 19, 2009|By Liz F. Kay | Liz F. Kay,liz.kay@baltsun.com

Charities that receive money from the United Way of Central Maryland could benefit from lower fees levied when donors designate which nonprofits should receive their contributions, United Way officials say.

For 2009 campaigns, the organization will charge a minimum $5 "designation" fee for all earmarked donations under $100, and 5 percent for larger donations. Fees will be capped at $500.

In the past, the United Way charged 17.5 percent for pledges entered on paper and 12.5 percent for electronic pledges. Fees were capped at $375.

Donors directed a little more than a third of the approximately $25 million donated last year, said Mark Furst, the organization's chief operating officer. Also, those who contributed $10,000 or more could avoid any "designation" fees if they left half of their contributions without earmarks.

The lower fees could result in more than $400,000 in additional money distributed to local charities, Furst said.

"So many nonprofits out there are struggling," he said. "We were looking to see what we can do to help."

The fees cover the cost of getting pledges, customer service, sending records, collecting the money and sending checks to the benefiting nonprofit organizations.

"We defray a lot of fundraising and marketing expense that all nonprofits would have," Furst said.

United Way has taken other cost-saving measures. Two employees were laid off in March, and eight vacant positions were eliminated, he said.

The United Way has also decreased the 403(b) match, and employee contributions for benefits will increase. In addition, all staff will take unpaid furlough days in the fiscal year that starts July 1, with senior managers taking up to four, Furst said.

More people are donating electronically, which helps keep costs down.

Given the economic climate, the United Way anticipates collecting only 90 percent of the pledges made in 2008, although they haven't set a goal for 2009 campaigns.

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