The United Way, which evolved from the local community chests of the 1920s, is a national organization that funnels funding to charities through a payroll deduction system. Ninety percent of all charitable payroll deductions in 1991 were for the United Way, this system however has been criticized as coercive. Bonuses, for example, were offered for archiving 100 percent employee participation. United Way system of spending also came under fire through the actions of William Aramony, president of the United Way from 1970 to 1992. During his tenure, United Way receipts grew from $ 787 million in 1970 to $ 3 billion in 1990.
In August 1992, the United Way board of director, to replace William Aramony at a salary of $ 195.000, with no perks. In September 1994, William Aramony and two other United Ways officers, including the chief financial officer, were indicated by a federal grand jury for conspiracy, mail fraud, and tax fraud. On April 3, 1995, Aramony was found guilty of twenty-five counts of fraud, conspiracy, and money laundering. Two other United Way executives were also convicted. By April 1998, donation levels were still not completely reinstated, but did increase (up 4.7 percent) for the first time since the 1992 Aramony crisis. United Way’s donation fell 11 percent since 1991 while overall charitable giving was up 9 percent. In January 2000, a federal district court judge awarded Mr. Aramony the full value of his deferred compensation plan, or $ 4.2 million. Judge Shira Scheindlin ruled in favor of Mr. Aramony because she said there was no clause for forfeiting the money if Mr. Aramony committed a felony. However, Judge Scheindlin also ruled that united Way could withhold $ 2.02 million of the amount due to cover salary, investigation costs, and interest on those amounts. Many in the nonprofit field say that the shadow of William Aramony looms over the nonprofit world.
No comments:
Post a Comment