Friday, October 16, 2009

United Way Ratings Declining

According to figures released by United Way Worldwide, 57 percent of local chapters reported a decrease in contributions in 2008 when compared to the previous year. Only 32 percent of chapters reported an increase in donations, down sharply from the previously reported 55 percent.

Charity Navigator publishes ratings for over almost 140 local chapters, as well as for the United Way of America, the national organization dedicated to leading the United Way movement. Based on the most recent tax returns filed with the organizations on our site, we noticed the following:

 Based on 2008 (99)Based on 2007 (42)
4 Star13.1%35.7%
3 Star43.4%38.1%
2 Star32.3%23.8%
1 Star11.1%2.4%
0 Star0.0%0.0%

Even though our ratings take into account much more than just the amount of contributions, it is very telling to see the drop in the number of United Ways that have achieved our highest 4 star rating. You can review more in-depth information about any of the United Way organizations that are rated on our website by clicking here.

5 comments :

Pete said...

Hmmm... Could you please explain further, for this bear of little brain? "Even though [Charity Navigator's] ratings take into account much more than just the amount of contributions," as you note, what other factor, other than a significant drop in funds raised, could explain such a widespread, sharp decline in the number of 4-star orgs from one year to the next? And this during the roughest economy in generations. (Full disclosure: I work for a United Way.)

Leonie Giles said...

Pete,

Charity Navigator's ratings take into account seven performance categories (as you can see explained in the methodology section on our site.) Each of these categories carry equal weight. Therefore, just looking at the overall ratings displayed here, it is impossible to infer if any other consistent change occurred across the United Way organizations that could explain the drop.
Of course, we are aware of the economic circumstances facing all organizations, but the drop as experienced by United Way is not witnessed across the board at this time.

Leonie Giles

Pete said...

Leonie,

Thanks for your reply. Would it be possible for you to chart out or analyze the change in each of the 7 factors, so we can get a better sense of what led to the drop? Though all 7 factors may be weighted equally, they may not all be equal in terms of their impact on overall results. In this instance, were there significant declines in all 7 factors, or just one or two? I have a feeling this is an important question to answer, not just for United Way, but in terms of assessing the volatility of an index like your ratings. Is there someone at Charity Navigator who can run a regression analysis to see which factor had the greatest impact? Have you done research to see which factors most often lead organizations to rise or fall in the rankings?

Thanks,

Pete

Leonie Giles said...

Pete,

Thank you for your suggestion. This is a great idea for a follow up blog, and something we will think about covering in the future.

In the meantime, please remember that all registered users on our website can view the historical rating for any charity by clicking on the 'Historical Data' tab on the ratings page. This is a great tool for getting some of your questions answered immediately.

Leonie

keggernaught said...

Also, the focus of the United Way has changed from being merely a distributor of funds to a community involved organization. Some do this to a greater extent than others, so judging them under the fund raising only category does many of them a dis-service. If the admin costs are going towards development of volunteer programs, convening groups (such as asset developing programs), and helping with children's and elderly concerns, then it is difficult, in my mind, to understand putting them in a fund raising only category. I too work at a United Way.