New local United Way fee among highest for charities
A new 15 percent charge on designated gifts moves the United Way of Allegheny County from among the lowest to the highest fees in a sample of philanthropies.
“We want to see how this 15 percent thing works out in Allegheny County,” said Bruce Simmeth, executive director of the United Way of Beaver County. “One thing you don’t want to do is upset your donor.”
Designated gifts are earmarked for specific charities and processed by the United Way.
Beaver County does not charge a fee on designated gifts to member agencies. It charges $6 for each designated gift to nonmembers to cover administrative costs that are now more than 20 percent. United Way of Allegheny County also had a $6 fee to cover its 15.2 percent overhead.
United Way officials in Allegheny County said the increase, starting with the 2003 campaign, is necessary because of a rise in designated gifts and a decline in unrestricted contributions to its Impact Fund.
Designated gifts made up 33 percent of the revenue of the United Way of Allegheny County in the mid-’90s, said spokesman Bob De Witt. Now, they make more than half. That has meant a 26 percent decrease in allocations to the Impact Fund, which distributes money to 71 agencies that improve the quality of life here and are able to demonstrate measurable results.
Simmeth sees a similar trend in Beaver County. The proportion of donor-choice gifts there has nearly tripled from 10 percent five or six years ago to almost 30 percent today.
The United Way of Westmoreland County has seen its designated gifts rise by 3 percent between 2001 and 2002. During the same year, its Impact Fund dropped by 12 percent.
“As long as the Impact Fund grows, that’s fine,” said Dana Bauer, vice president of community investment of the Westmoreland United Way. “Once that becomes lopsided, then we could have a shortfall in what we have (for) member agencies.”
The Westmoreland United Way charges a 10 percent fee with a cap of $100 on designated gifts to nonmember agencies. The fee offsets its 11.6 percent overhead.
“At this point, we believe it’s helping to cover our expenses, that it’s an appropriate charge to have,” Bauer said. “It’s difficult to say what the future will hold.”
The Community Foundation of Westmoreland County did not have unrestricted money until two years ago. It has launched a $3 million campaign over the next three years to raise such money.
“It’s good that people are engaged in their philanthropy,” said foundation President Bobbi Watt Geer. “But it creates a problem when there aren’t enough funds to meet community needs.”
The foundation increased its fees this year by 0.5 percent. Endowed funds are now assessed a charge of 1 to 2 percent. The philanthropy deducts 5 percent for its overhead for processing gifts for special projects such as a Vietnam Veterans Memorial.
Here’s a sample of fees deducted by United Ways and community foundations from donations designated for specific recipients: