United Way Of America Business Information, Profile, and History

Company Perspectives:

The mission of the United Way movement is to increase the organized capacity of people to care for one another.

History of United Way Of America

United Way of America (UWA) is a charitable organization with the simple goal of enabling people to help one another in any and all circumstances. Operating over 1,400 individual United Way chapters throughout the United States, UWA also works with more than 45,000 humanitarian groups, setting standards for fund collection, coordinating activities, and making recommendations for disbursal of donations. Through its innovative use of corporate payroll deductions (collected by the local chapters), United Way keeps operating expenses to a minimum, well below the usual administrative costs allowed for charitable organizations. Though plagued by a management scandal in 1992, UWA has remained at the forefront of emergency relief services for more than 100 years.

In the Beginning: 1887--1949

Charity has always begun in the hearts of the well-intentioned; the origins of the United Way of America chapters throughout the United States were no exception. This particular organization can be traced back to several disparate societies, the earliest of which was the Charity Organizations Society, founded in Denver, Colorado, in 1887. Several related groups began distributing goodwill both nearby and in other cities and states, operating under various names yet with the same goals. By 1888 the Denver outfit had organized its first campaign and raised $21,700 for its causes, an impressive amount of money at the time.

In 1894 when a federal act decreed that for-profit companies must pay taxes, charitable groups or nonprofit agencies received a major coup--tax exemption. With relief from any tax burden, nonprofit groups flourished; however, the tax-free status attracted a number of unsavory characters, who had no intentions of dispersing their funds for altruistic purposes. These imitators led to the creation of the Committee on Benevolent Associations, formed by the Chamber of Commerce in Cleveland, Ohio, in 1900. This committee was the earliest attempt to regulate charitable and philanthropic endeavors, to set clear guidelines, and to safeguard the interests of both those contributing and those receiving funds.

Over the next several years, after the reelection and assassination of President McKinley and into the Teddy Roosevelt years, charitable organizations grew rapidly around the country. In Chicago alone, there were over 3,000 registered charities by 1905; in 1913 the first Community Chest was formed, a name brought to instant fame by the wildly popular Parker Bros. Monopoly game, in which players were given a yellow card for landing on the 'Community Chest' space. The cards either rewarded players with cash gifts or sought 'a donation' for various community-related projects.

As nonprofit agencies blossomed, so did efforts at self-regulation. Through a number of committees and associations, including the Associated Charities (founded 1908), the National Association of Societies for Organizing Charity (1911), the National Information Bureau (1918), and the American Association for Community Organizations (1918), standards and policies continued to evolve. The American Association for Community Organizations (AACO), created by the leaders of 12 charitable groups in Chicago to gain a clearer focus into community planning and the role of social work, was considered the breeding ground of what led to the formation of the United Way of America. Those involved with the AACO set in motion the critical tenets and goals of what a charitable organization should be, and how such goals should be met.

If World War I and its aftermath gave humanitarian groups a sobering glimpse into the depths of human suffering, the onset of the Great Depression was a panoramic view of despair. Charity was in high demand and those who freely contributed in the past found themselves hard put to donate much of anything. Even after the United States recovered, and a majority of Americans were back on their feet, sharper, deeper lines had been drawn between the haves and the have-nots. United Way chapters struggled to provide for their constituents, and relief was ironically provided by another declaration of war. World War II production fueled the nation's economy in the 1940s; in the postwar years, with the Baby Boom and widespread financial security, the urgent need for charity itself declined while donations from both corporations and individuals increased.

A Larger Focus: 1950--89

As the 1950s ended and the 1960s began, charitable agencies continued to evolve on local, state, and national levels. More service organizations were created to safeguard the altruistic from the malevolent, including the National Council on Community Foundations (later renamed the Council on Foundations in 1964), the Institute of Community Studies (which evolved into the Management and Community Studies Institute), the Commerce and Industry Combined Health Appeal, and the National Budget and Consultation Committee (made up from combining the American Way Community Services and the Joint Budget Committee of the Community Chests and Councils). From this conjoined council came the 1963 publication Standards for National Voluntary Health, Welfare, and Recreations Agencies, a much needed procedural for the ever-growing nonprofit societies popping up across the country. In the same year the procedural came out, more than two dozen Community Chests and United Fund chapters in Los Angeles, California, joined forces and officially began using the name United Way, Inc.

Two presidential proclamations--the first in 1957 from President Eisenhower and the second in 1963 from President Kennedy--allowed charitable groups to receive contributions from federal employees. The earliest executive order created the Uniform Federal Fund-Raising Program, permitting federal employee gift-giving to local accredited groups; the second presidential edict broadened the network of health and welfare agencies eligible to receive gifts from federal employees. In 1964 United Way chapters declared a 'War on Poverty' and instituted various programs to combat hunger in the United States. Help for the crusade came from the newly initiated federal employee payroll deduction plan, while the charitable groups eligible for these deductions (those originally instituted under Presidents Eisenhower and Kennedy) merged to form the Combined Federal Campaign (CFC).

By the mid-1960s United Way was a well known organization with more than 30,000 affiliated agencies nationwide, and sought consolidation and cooperation from the federal government and national groups. To promote these goals, the Statement of Consensus on Government and Voluntary Sector in Health and Welfare was issued. By 1967 the population of the United States totaled more than 195.8 million people, with an entire generation in turmoil over the Vietnam War. War supporters marched down Fifth Avenue in New York City, antiwar demonstrators gathered at the Lincoln Memorial, and United Way agencies managed to collect more than $700 million through its 31,300 individual agencies across the country. Funds were distributed to more than 27 million families in need.

The onset of the next decade found United Way's national governing body, the United Community Funds and Council of America (UCFCA), reorganizing itself into the streamlined and more simply named United Way of America (UWA) in 1970. At the same time, William Aramony was appointed to head the group, and he brought forth the 'Thirteen Point Program for Rebirth and Renewal of United Way.' The new program's purpose included attracting more volunteers on local, regional, and national levels, as well as raising public awareness of just what the United Way chapters did and for whom. Additionally, in an effort to bring uniformity to its many chapters, UWA leaders passed a resolution to discontinue use of names other than 'United Way,' and the national headquarters moved from New York City to Alexandria, Virginia.

In 1973, two years after relocating from New York to Virginia, UWA scored a major coup in public promotion of its goals by partnering with the National Football League (NFL). Players and coaches made public service announcements about their involvement with United Way chapters, and these associations brought widespread attention to UWA's programs. The NFL exposure helped UWA garner support and initiate the 'Program for the Future,' in which national goals were transcribed for use at local levels in 1976. A year later, the Program for the Future's success led to annual contributions of more than $1 billion for the first time. Leaders of the UWA agencies continued to plan for the future and identified five areas in which to concentrate their efforts: inclusiveness, area-wide services, volunteers and public policies, agency relations, and personalization of services.

Always Ready to Help: 1980s--1993

With the emergence of another decade came diversified goals within the charity sector. Programs to deal with newer issues affecting the country, including environmental concerns and societal pressures on women and minorities, were instituted. As UWA's focus became more all-encompassing, its member agencies' money-raising abilities increased as well; nationally more than $1.68 billion was raised in 1981, amounting to the highest single-year increase in funds (more than ten percent over 1980). In 1982 the organization opened its new National Service and Training Center in Alexandria, with all costs covered by a $4 million fundraiser sponsored by John V. James, chairman of Dresser Industries, and John R. Opel, chairman and CEO of IBM. At the same time, a Volunteer Leadership Development Program was established to educate and train group leaders to maximize their skills.

Both new programs came in handy when the government established FEMA (Federal Emergency Management Agency) in 1983 with an initial $50 million grant, followed by a subsequent grant of $40 million a few months later. Charged with the responsibility of managing FEMA funds, UWA created a national board with its own representatives as well as those from five other nonprofit groups, so funds could be administered on an as-needed basis to local agencies throughout the United States.

By the middle of the 1980s UWA had come a long way from its humble origins in Colorado. What had begun as a handful of like-minded charitable agencies had become a multifaceted alliance of thousands, united in purpose and achievement. In 1985 contributors anted up an amazing $2.33 billion, up some nine percent from the previous year and just eight years from first topping the billion-dollar mark. As the organization approached its 100-year anniversary in 1987, it published a treatise called Rethinking the Future and Beyond. The tome discussed UWA's current focus as well as thoughts for its second hundred years and beyond. During its centennial year, the U.S. Postal Service honored UWA with a commemorative stamp as more than 3,000 gathered in the nation's capital for the Centennial Volunteer Leaders Conference. In addition, UWA established a program for young people called the Young Leaders Conference.

Continuing its focus on America's youth, UWA gave gifts totaling more than $100,000 to youth volunteer programs in four cities across the United States (Galesburg, Illinois; Tucson, Arizona; Tulsa, Oklahoma; and West Palm Beach, Florida) in 1987. Two years later, northern and central California were devastated by an earthquake, and UWA led the emergency services. Local chapters not only coordinated operations with FEMA teams but brought in major contributions from the NFL ($1.25 million), Sony Corporation ($1 million), and scores of concerned Americans.

With the debut of the 1990s, UWA was again putting its ideals and beliefs on paper, this time in a publication entitled Mobilizing a Caring America: Principles for the 1990s. The 103-year-old organization was definitely doing something right: Americans donated more $3 billion dollars to UWA chapters in 1990, just in time for the next imbroglio, the outbreak of the Gulf War in 1991. UWA set up an Operations Center and coordinated services with the U.S. military, as well as other groups such as the American Red Cross and USO.

The early 1990s, however, also brought controversy to the UWA. In 1992, William Aramony resigned as president, and the post was temporarily filled by Kenneth W. Dam. Aramony was under investigation for fraud and mismanagement of funds, and the organization underwent intense scrutiny for its overall policies and dealings, as well as specific transactions with seven agencies that had been spun off in recent times. After soliciting suggestions from some 6,000 UWA volunteers throughout the country and outside counsel, UWA's Board of Governors voted for sweeping changes and reformed much of the organization's financial operations. The Board itself was expanded to 45 members, 15 of whom were United Way representatives, and a new president and CEO was installed: Elaine L. Chao, a former director of the Peace Corps. Chao was UWA's first woman president, as well as its first Asian American director.

Next came the trial of Aramony and two codefendants. All were found guilty in 1995, with Aramony convicted on 25 counts of fraud, filing false tax returns, conspiracy, and money laundering. Sentenced to seven years in prison, three years probation, and a fine of over $550,000, Aramony vowed to appeal (which he did, unsuccessfully). Though UWA suffered a black eye from the extensive publicity, the organization was soon back doing what it did best when much of the Midwest was ravaged by floods, though with noticeably less in donations. After the Aramony scandal, contributions fell to their lowest point since World War II, and many United Way chapters withdrew from the national organization, though most would later return. To boost its public image, UWA initiated several new programs, including 'SkyWish' with Delta Airlines, wherein travelers donated frequent flyer mileage to critically ill patients in need of life-saving transportation.

1994 and Beyond

The middle and late years of the decade found UWA investing in technological advances and promoting the organization through its first major advertising campaign. Temerlin McCain of Irving, Texas, donated the time and effort necessary to create UWA's latest 'helping hands' logo, as well as the catchphrase 'Reaching those who need help. Touching us all.' Fortunately for UWA, Aramony's trial and sentencing had faded from the memory of most Americans, and by 1994 the organization was named as Financial World's leading charity. The following year, 1995, UWA was involved in the torch relays for the Atlanta Olympics and published Strategic Direction for United Way: Charting the Path for Building Better Communities, outlining plans for the future. Then came another catastrophic event requiring the expertise of UWA's many dedicated volunteers: the Oklahoma City bombing. UWA agencies not only helped survivors and the families of victims, but sent a technology team to the premises as well.

The national UWA organization received a jolt in 1996 when Aramony filed a $5 million lawsuit for earnings and retirement benefits he claimed were due to him. Moreover, Elaine Chao resigned as president and CEO. Chao was replaced by Betty Stanley Beene, formerly the chief executive of Tri-State (New York) United Ways chapters. As Beene took the reigns in 1997, there were 4,400 UWA chapters across the United States, and the organization had gone global with a UWA web site (www.unitedway.org) and United Way Online for use by its local agencies. The next year, 1998, UWA and the NFL celebrated 25 years of collaboration, an alliance that had brought recognition to both parties. The cost of the commercial air time--donated by the NFL before, during, and after televised games--was worth upwards of $1 billion; the exposure had been priceless. Additionally, another humanitarian-themed postage stamp was unveiled by the U.S. Postal Service, with the words 'Giving & Sharing: An American Tradition' printed on the stamp.

As the century came to a close, UWA was stronger than ever, with leadership programs for all ages and agencies working to conquer need on all levels of society. For its efforts on behalf of children UWA was given two remarkable gifts from the Bank of America Foundation, the first for $10 million, followed by a second grant for $40 million, with the latter being one of the largest corporate grants ever. Annual contributions also hit another all-time high, with donations totaling more than $3.5 billion for 1998 and $3.77 billion for 1999, due in large part to support from individuals (Bill Gates, Infoseek's Steve Kirsch, and Alexis de Tocqueville Society members) and such corporations as Bank of America, Boeing Company, General Motors Corporation, IBM, J.C. Penney Company, Pfizer, United Parcel Service, and Wal-Mart Stores. In 2000, Beene announced that she would step down from her leadership role at UWA in 2001. The organization's Board of Governors announced, in turn, that it would begin looking for a replacement and would also perform its own extensive review of the organization's structure and governance system. Specifically, UWA hoped to study ways in which the concept of community in the United States was changing, and sought, according to a press release, 'to evolve from community fundraiser for health and human services to catalyst for achieving real change in the quality of life in communities.'

Principal Competitors: American Red Cross; Goodwill Industries International, Inc.; The Salvation Army USA.

Chronology

• Key Dates:

• 1887: The Charity Organizations Society is formed in Denver, Colorado.
• 1888: First money-raising campaign, United Way, raises over $21,000.
• 1894: Federal act exempts charitable organizations from taxes.
• 1957: Uniform Federal Fund-Raising Program initiated by President Eisenhower.
• 1963: Several Los Angeles, California-based organizations come together under the name United Way, Inc.
• 1977: United Way agencies top the billion-dollar mark in donations.
• 1970: William Aramony becomes president; national agencies reorganize and become the United Way of America (UWA).
• 1971: Headquarters moves from New York City to Alexandria, Virginia.
• 1973: United Way alliance with the NFL begins.
• 1983: FEMA (Federal Emergency Management Agency) is founded and overseen by United Way and five other charitable groups.
• 1984: Nationwide donations top $2 billion.
• 1990: Donations top $3 billion.
• 1992: Aramony resigns and is indicted for fraud and mismanagement of funds; Elaine L. Chao is installed as first female president and CEO.
• 1996: Chao resigns and Aramony files a lawsuit.
• 1997: Betty Stanley Beene is installed as president and CEO.
• 1999: Annual contributions exceed $3.7 billion.