Charity Navigator Appears to Question Continuing Relevance of United Way

April 11, 2011; Source: Register Guard | In response to questions about its low rating of an Oregon-based United Way, a spokeswoman for Charity Navigator, the charity rating system for donors, appeared to question the continuing relevance of the intermediary.

The situation in question was the one star and two star ratings given to the United Way of Lane County, which has seen declining fundraising revenues over the last five years. Reportedly, the area has seen heavy job losses partly due to pre-recession plant closings starting in 2003 and partly due to the recession itself.

In that environment, the United Way chose to erode its own reserves rather than cut member agencies. By 2007 and 2008 it had only two months of reserves and apparently this, in combination with reduced fundraising receipts, resulted in the one star rating, which signifies “poor performance.” By 2009 its reserves had risen back up to four months and then to just a little less than five months in 2010 and this has resulted in a two star rating.

In discussing the rating however, Sandra Miniutti of Charity Navigator said that the organization had become a “more risky philanthropic investment because they’re shrinking over time.” This seems to ignore the fact that the sustainability of the United Way is not the point of a contribution made through them. In fact, apparently, this United Way was willing to take the hit rather than pass it along to their affiliates who are actually providing the services to community.

We’re not getting it.

Miniutti, however seems to have a larger contextual analysis that she is linking to the situation and this has to do with United Way’s future. “Many people view them as a pass through,” she said. “It was a very necessary service maybe 15 or 20 years ago, but with the advent of the Internet, many donors can find even the smallest charity in their neighborhood and donate to them directly online.”

Maybe so, but we have to admit that the logic of Charity Navigator often eludes us. Here you have a charity pass through that puts itself at the same kind of risk that its grantees are taking and that makes them a less worthy recipient of charitable dollars in the eyes of Charity Navigator. We hope that the people of Lane County are a little smarter than that and recognize that the behavior of this organization during a time of shared economic stress may make them more trustworthy – not less.

We’d love to hear your opinions on this situation.—Ruth McCambridge