Financial/Reporting Practices - United Way of Central Alabama

Financial/Reporting Practices

We take our role as a trusted community leader very seriously. You can count on our high standards of accountability.

INDEPENDENT ORGANIZATION

United Way of Central Alabama is an independent organization founded and governed by local volunteers to help people in our service area.  We are not a branch or chapter of any national organization.

CHECKS AND BALANCES

Our stringent system of checks and balances ensures that we are fiscally responsible

Our operating budget and community investments are reviewed and approved by several volunteer communities, including our board of directors

AUDIT RATINGS

The independent CPA firm of Warren Averett conducts an annual audit of United Way of Central Alabama, Inc., and Subsidiaries and Affiliate. The 2018 audit was completed in August 2019.  Warren Averett reported that our financial statements fairly and accurately present the financial position of United Way of Central Alabama, Inc., and Subsidiaries and Affiliate.

Also in accordance with OMB Uniform Guidance, we will examine, on a test basis, evidence about United Way of Central Alabama, Inc., and Subsidiaries and Affiliate’s compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Uniform Guidance applicable to each of its major federal programs for the purpose of expressing an opinion on United Way of Central Alabama, Inc., and Subsidiaries and Affiliate’s compliance with those requirements. While our audit will provide a reasonable basis for our opinion, it will not provide a legal determination on United Way of Central Alabama, Inc., and Subsidiaries and Affiliate’s compliance with those requirements.

The Service Organization Control (SOC) report confirmed applicable trust services criteria were met with no corrective action required. SOC Type II reports focus on controls at a service organization relevant to the following principles: Security, Availability, Processing Integrity, Confidentiality and Privacy. For questions regarding the SOC report or to obtain a copy, please contact our Information Systems Department by emailing us here.

The annual audit, which includes the Single Audit, and the SOC report are reviewed by the volunteer Audit Committee and also approved by the board of directors.

Our organization also follows the American Institute of Certified Public Accountants’ (AICPA) Audit and Accounting Guide for Non-Profit Organizations to ensure financial statements conform with Generally Accepted Accounting Principles (GAAP). Also adhere to US Office of Management and Budget (OMB) Circular A-133 and Government Auditing Standards (GAS) and in accordance with Statement on Standards for Attestation Engagements (SSAE) 18: Concepts Common to all attestation engagements.”

POLICIES AND PROCEDURES

We openly provide our donors with information, policies and procedures regarding your donations. If you have any questions, please email us.

United Way of Central Alabama, Inc. (hereinafter referred to as UWCA), a not for profit organization organized under the laws of the State of Alabama, encourages the solicitation and acceptance of gifts that will help fulfill its mission. The following policies and guidelines govern acceptance of gifts made to UWCA or any of its programs.

The goal of United Way shall be to produce an ever-growing use of funds for: distribution to non-profit agencies through the general allocation/review process. The goals for the income stream generated by endowment funds are: to provide a stable source of annual funding in addition to the annual campaign, for emergency needs, for venture funding for community initiatives, and for new and innovative programs of existing or new member agencies of United Way.

PURPOSE OF POLICIES AND GUIDELINES

The Board of Directors of United Way solicits current and deferred gifts from individuals, corporations and foundations to secure the future growth and missions of UWCA. It is the purpose of these policies and guidelines to govern the acceptance of gifts by United Way and to provide guidance to prospective donors and their advisors when making gifts to United Way. The provisions of these policies shall apply to all gifts received by the UWCA.

USE OF LEGAL COUNSEL

United Way shall seek the advice of legal counsel in matters relating to acceptance of gifts where appropriate. Legal fees for the completion of any gift shall be the responsibility of the donor. If for any reason UWCA pays the legal fees, all conflicts of interest should be avoided. Review of counsel is recommended for:

  • review of closely held stock transfers that are subject to restrictions or buy-sell agreements
  • review of documents naming UWCA as Trustee
  • review of all gifts involving contracts, such as bargain sales or documents requiring UWCA to assume an obligation
  • review of all transactions with potential conflict of interest that may invoke IRS sanctions
  •  instances in which use of counsel is deemed appropriate

CONFLICT OF INTEREST

All prospective donors shall be strongly urged to seek the assistance of personal legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences. United Way will comply with the Model Standards of Practice for the Charitable Gift Planner as adopted by the National Committee on Planned Giving, shown as attachment #1 of this document.

RESTRICTED GIFTS

United Way will accept unrestricted gifts, and gifts for specific programs and purposes, provided that such gifts are not inconsistent with its stated purposes and priorities. The United Way will not accept gifts that are too restrictive in purpose, or too difficult to administer, or gifts that are outside the mission. All final decisions on the restrictive nature of a gift, and its acceptance or refusal, shall be made by the Executive Committee of United Way.

RESTRICTED MAJOR GIFTS

In addition to its mission of increasing the organized capacity of people to care for one another, United Way can play a pivotal role in matching donor’s philanthropic interests with community needs. In order to accommodate each donor’s vision, and at the same
time United Way’s system of allocating funds to its agencies, United Way of Central Alabama will work with donors giving annual gifts of at least $100,000 giving them the ability to direct their contributions. Such contributions are deemed vital to the current and future growth of the organization. Restricted gifts of $100,000 or more will be accepted as long as the gift:

  1. Enhances the long term relationship with the donor
  2. Increases the United Way community fund
  3. Fits within the overall mission of the United Way of Central Alabama.

United Way appreciates its donors and their contributions. Every effort will be made to give appropriate recognition to those individuals and families who make a contribution at the mega gift level. The donor will receive recognition for the portion of the gift that pertains directly to the above criteria.

Planned Gifts that have matured (or current gifts) will be deposited into the United Way of Central Alabama sub account of the Community Foundation of Greater Birmingham Endowment Fund.

MINIMUM AND MAXIMUM GIFT

There is no minimum gift to UWCA’s Endowment Fund. However, for recognition in the Covenant Society, a minimum of $1000 total commitment is required. There is no limit to the amount of gift UWCA will accept, with the exception of a Charitable Gift Annuity (CGA). If a donor wishes to take out a CGA in excess of $500,000, it will require the approval of the Finance Committee.

PAYROLL DEDUCTION

Generally, planned gifts will not be accepted by payroll deduction, unless authorized by the President of United Way.

TYPES OF GIFTS

The following gifts are detailed in this document:

  1. Bequests
  2. Cash
  3. Charitable Gift Annuities
  4. Charitable Lead Trust
  5. Charitable Remainder Trust
  6. Life Insurance
  7. Life Insurance Beneficiary Designations
  8. Memorial and Honorariums
  9. Real Estate
  10. Remainder Interests in Property
  11. Retirement Plan Beneficiary Designations
  12. Saving Bonds
  13. Securities
  14. Tangible Personal Property
  15. Time Share Interests

The following criteria govern the acceptance of each gift form:

BEQUESTS:

Donors of United Way shall be encouraged to make bequests to United Way under their wills and trusts. The present value of that gift will be recorded as an expectancy of $1000 unless the donor notifies United Way otherwise. United Way requires no proof from the donor as to the details of their bequest. Matured bequests will be deposited into United Way’s endowment fund, unless otherwise directed by the donor. The legal name to be used in bequests is “United Way of Central Alabama, Inc.”

CASH:

Cash is acceptable in any form. Checks shall be made payable to United Way of Central Alabama. Gifts of cash can be made each year in addition to your annual gift. You can also endow your annual gift to make it last forever with a contribution of 20 times your annual contribution. Annual cash pledges and multi-year pledges will also be accepted. Pledges are deductible in the years they are fulfilled, not in the years they are made. The date of a mailed check is the date of delivery, in other words, if a donor mails a check on Dec. 31, the deduction can be taken, even if UWCA does not receive the check until January 1st.

CHARITABLE GIFT ANNUITIES:

A charitable gift annuity (CGA) is:
The irrevocable transfer of property to United Way of Central Alabama (UWCA) with the execution of an annuity agreement; Where UWCA promises to pay the donor, or individuals designated by the donor, a stream of payments for life; Where the annuity amount is fixed in advance, does not vary, and is guaranteed by UWCA without regard to whether the original contributed assets are sufficient to cover the stream of payments; Where the payments to the annuitant(s) are based on the age of the annuitant and the number of lives (which can be no more than two) to which the annuity will be paid. Where UWCA receives the remainder of the assets.

  • Registration
    Alabama law classifies charitable gift annuities as securities. UWCA has filed the appropriate documents with the state and has registered all staff involved in offering gift annuities to donors as “restricted agents” with the Alabama Securities Commission (President, Sr. V.P. Resource Development, Chief Financial Officer, V.P. Planned Giving and Director of Planned Giving). United Way will provide full disclosure to all donors who execute gift annuities. (Disclosure statement is attachment #2. If, in the future, the Alabama Insurance

Commission regulates charitable gift annuities, then United Way will register each appropriate individual with the Insurance Commission.

  • Marketing
    United Way will offer one and two-life and current and deferred gift annuities. The minimum age at issue on the current annuities will be age 60. Deferred gift annuities will be offered beginning at age 40. The minimum amount for each gift will be $10,000. United Way will accept cash and marketable securities in exchange for a CGA. The rate to be used will be those recommended by the American Council on Gift Annuities. The assumptions they use in establishing the rates are as follows:
    The remainder of the gift at the end of the annuitant’s life should be at least 50%.
    Life expectancies are based on the Annuity 2000 mortality tables recommended by the Society of Actuaries.
  • Recognition: The donor can be included in the Covenant Society, and other campaign recognition, and the portion of the gift annuity which is tax deductible will be credited for recognition. (Because a charitable gift annuity is part gift and part annuity, only a portion of the annuity is considered a gift)
  • Liability/Asset Management/Administration
    The annuity stream payable to the donor becomes a liability to United Way backed by its general assets. It is an obligation, however, which United Way believes it can manage based on the assumptions that are part of the rate structure. United Way’s Investment committee will determine the investment mix, and the finance committee will oversee the accounting system to be used for the administration of gift annuities issued by UWCA. United Way’s Finance staff will be responsible for the administration and accounting functions and distribution payments of the gift annuities and uses GiftWrap software from PG Calc in the administration.
CHARITABLE LEAD TRUSTS – (CLT)

Definition–Assets that are placed in a trust for a specified period of time. Certain specified payments are paid to United Way during the life of the trust. The principal goes to your beneficiaries when the trust terminates. A CLT can also save estate and income taxes. UWCA will not accept an appointment as Trustee of a Charitable Lead Trust.

CHARITABLE REMAINDER TRUSTS – (CRT)

Definition–Assets that are placed in a trust and an income stream is paid to you and your beneficiaries. CRTs can save estate and income taxes. Upon the death of the last beneficiary, the principal goes to United Way. United Way may accept a designation as remainder beneficiary of a charitable remainder trust. United Way will not accept appointment as Trustee.

LIFE INSURANCE POLICY:

There are two ways in which UWCA will accept this type of gift, if it is a whole life policy: 1. As the irrevocable transfer of an older policy which the donor no longer needs, and 2. As the transfer of funds to UWCA to purchase a new policy.

  • Donor’s Existing Policies
    The gift is valued at its “interpolated terminal reserve value”, or cash surrender value, upon receipt. If the donor contributes future premium payments, United Way will include the entire amount of the additional premium payment as a gift in the year that it is made. If there are premium payments due, UWCA would need to decide the following: Do we continue to make the premium payments? Do we convert the policy to a paid up policy? Do we exchange the policy for its cash value? Do we sell the policy to a viatical company? Approval to accept a policy that is not fully paid up is required by the President.
  • New Policies using Matching Funds (Revised Dec 30, 2008. See Attachment 2)
    A donor may name United Way owner and beneficiary on any policy that they own. We have no requirements on this type of gift. If, however, the donor wants to utilize corporate matching funds to purchase a new life insurance policy, we do require the following:
    1. Donor names United Way of Central Alabama, Inc. owner and beneficiary
    2. Use a Universal life Insurance policy.
    3. Endow the face amount no older than age 100.
    4. For premium illustration purposes, the projected rate shown will be one percentage point below the current rate. The current interest rate is a rate determined by the insurance company, based on its current investment portfolio rates. The donor premium is the result of endowing the policy at age 100 at the projected rate.
    5. Fund the policy with a maximum five-year annual premium. The donor also has the option of funding it with a one year fully paid up premium.

To place the policy in effect, the donor makes a check to United Way and United Way pays the life insurance company. United Way does not advance this payment to the donor, unless authorized by the President.

If the donor does not elect to continue to make gifts to cover premium payments on the life insurance policy, United Way may:

  1.  Continue to pay the premiums
  2.  Convert the policy to paid up insurance
  3.  Surrender the policy for its current cash value
Matching Program

UWCA periodically has matching funds available from corporations to be used for the purpose of increasing philanthropy. The funds are used to cover any additional payments that might be required for current life insurance policies in place or for matching funds for new life insurance premiums. If the donor wants to spread the premium payment over a longer period of time, United Way can match dollar for dollar up to $10,000 a year for a maximum of five years for each policy (as long as matching funds are available).

  1. United Way Corporate matching funds: The matching program provides corporate matching funds that have been given to United Way for the purpose of reducing the premium for any donor who chooses to purchase a life insurance policy for the sole benefit of United Way or to cover any additional payments that might be required for current life insurance policies in place.
  2. Corporate Exclusive matching funds: Some corporations will choose to make matching funds available to its own employees exclusively. In this case, United Way may apply both matches to further reduce the premium. It will work as illustrated for a sample $3000 annual premium.
“Corporate Exclusive matching funds ” scenarios

If no matching corporate funds are used from United Way, the employee’s company exclusive match works as follows:

Donor’s company provides no matching funds: Donor (100% of the premium) $3000
Donor’s company provides 1 for 1 matching funds: Donor (50% or ½ of the premium) $1500 Donor’s Company (50% or ½) $1500 Total Premium $3000
Donor’s company provides 2 for 1 matching funds: Donor (33.3 % or 1/3 of the premium) $1000 Donor’s Company (66.6% or 2/3) $2000 Total Premium $3000
Donor’s company provides 3 for 1 matching funds: Donor (25% or ¼ of the premium) $ 750 Donor’s Company (75% or ¾) $2250 Total Premium $3000

Scenario if United Way provides Corporate Matching Funds: If United Way provides matching funds for the employee premium, the company match would work as follows:

If the donor’s company provides no matching funds for the premium:
Donor (50% or ½ ) $1,500 United Way match $1,500; Total Premium $3,000

If the donor’s company matches the premium one-to-one:
Donor (25% or ¼) $ 750 United Way match $ 750 Donor’s company one for one match $1500; Total Premium $3000

If the donor’s company matches the premium two-to-one:
Donor (16.66% or 1/6) $ 500 United Way match $ 500

Donor’s company two for one match $2000; Total Premium $3000

If the donor’s company matches the premium three-to-one:
Donor (12.5% or 1/8 of the premium) $ 375 United Way match $ 375 Donor’s company 3 for 1 $2250
Total Premium $3000

LIFE INSURANCE BENEFICIARY DESIGNATIONS

Donors and supporters of United Way shall be encouraged to name United Way as beneficiary or contingent beneficiary of existing insurance policies. Such designations shall be recorded as expectancy gifts to United Way.

MEMORIAL AND HONORARIUM GIFTS

An endowment gift to United Way in honor of loved ones can be created immediately and/or added to periodically. UWCA will send an acknowledgement to the donor and to the donor’s honoree. All memorial and honorium gifts received by United Way will be deposited into United Way’s Endowment Fund, unless requested otherwise by the donor/honoree. Naming opportunities are attached at the end of this document.

REAL ESTATE

Prior to acceptance of real estate, the gift shall by approved by the Executive Committee of United Way. Gifts of real estate may include developed property, undeveloped property, or gifts subject to a prior life interest. The date a properly executed deed is received by UWCA is the date of delivery. Prior to acceptance of real estate, UWCA should make an on-site inspection of any property. After an initial inspection, and/or initial interview with the potential donor, if deemed appropriate, a more qualified inspection by a broker, licensed contractor, or other appropriate person, should make an on-site inspection for UWCA. Prior to acceptance, United Way shall require an initial environmental review of the property to insure that the property is not contaminated with environmental damage. “Prior use” questionnaire is attachment #3 of this document. In the event that the initial inspection reveals a potential problem, United Way shall retain a qualified inspection firm to conduct an environmental audit. The cost of the environmental audit shall generally be an expense of the donor. Where appropriate a title binder shall be obtained by United Way prior to the acceptance of the real property gift. The cost of this title binder shall generally be an expense of the donor. Generally, property should be located in UWCA service area, or contiguous counties, to facilitate the inspection and management of the property.

Criteria for acceptance of the property shall include, but not be limited to:
a) Is the property useful for the purposes of the United Way?
b) Is the property marketable?
c) Are there any restrictions, reservations, easements or other limitations associated with the property?
d) Are there carrying costs, which may include insurance, maintenance, property taxes, mortgages or notes, etc., associated with the property?
e) Does the environmental audit reflect that the property is not damaged?

REMAINDER INTEREST IN PROPERTY

United Way will accept a remainder interest in a personal residence, farm or vacation property subject to the provisions of paragraph 4 above. The donor or other occupants may continue to occupy the real property for the duration of the stated life. At the death of the donor, United Way may use the property or reduce it to cash. Where United Way receives a gift of a remainder interest, expenses for maintenance, real estate taxes and any property indebtedness are to be paid by the donor or primary beneficiary.

RETIREMENT PLAN BENEFICIARY DESIGNATIONS

UWCA will accept beneficiary assignment of retirement plans. Until the gift matures, United Way will record the gift as an expectancy.

SAVINGS BONDS

United Way will accept Saving Bonds, as assigned by the donor. Donors generally cannot transfer ownership of savings bonds during life without triggering the income tax due on those bonds because savings bonds have restricted transfer requirements. A donor who wishes to donate these should transfer them by specific bequest under will. Bonds that are owned jointly, however, will pass to the survivor and will not be subject to the terms of the will.

SECURITIES

United Way can accept both publicly traded securities and closely held securities.
A. Publicly Traded Securities: Marketable securities may be transferred to an account maintained at one or more brokerage firms or delivered physically with the transferor’s signature or stock power attached. If mailing stock certificates, the certificate and stock power letter should be mailed separately and the certificate should be mailed unendorsed. As a general rule, all marketable securities shall be sold upon receipt unless otherwise directed by the Investment Committee. In some cases marketable securities may be restricted in some manner related to the securities laws; in such instance the final determination on the acceptance of such restricted securities shall be made by the Executive Committee of the Board of United Way.

B. Closely Held Securities: Securities that are not readily marketable can be accepted. However, gifts must be reviewed prior to acceptance to determine that there are no restrictions on the securities that would prevent United Way from ultimately converting those assets to cash. If potential problems arise on initial review of the security, further review of an outside professional may be sought before making a final decision on acceptance of the gift. The final determination on the acceptance of closely held securities shall be made by the Executive Committee and legal counsel where necessary. Every effort will be made to sell non-marketable securities as quickly as possible.

C. Stock Acceptance Procedures: The purpose of this procedure is to describe instructions to provide donors on how to donate stock to United Way. The date of the gift shall be the date of postmark, if by mail, or if hand delivered, the average of the high and low price of the stock on the date it is delivered.

STOCK DONATION VIA BROKER TRANSFER

Ask the donor what broker they will be using. Refer to list attached (attachment #3) and provide donor with the United Way of Central Alabama account number, our broker’s name and phone number, if applicable A letter outlining the stock as a United Way contribution should be sent to the broker.

Get the following information from donor:
Name Address
Name of Stock and number of shares
Purpose of stock (new gift, satisfy pledge, gift to endowment, etc.) Ask if they are affiliated with a company or individual pledge

If donors’ broker is not on our list, give the donor our broker’s name and account number for Stifel. Their broker can make the transfer into our account. The delivery date is the date the stock is transferred to UWCA’s account. The value of the gift is the average of the high and low market value of the stock on the date of delivery, and is to be determined by the donor.

STOCK DONATION BEING ASSIGNED TO UNITED WAY VIA STOCK CERTIFICATE

Stock certificate should be assigned to United Way of Central Alabama, Inc. Stock should be hand-delivered or sent via certified mail to United Way of Central Alabama, Inc. 3600 8th Avenue South, Birmingham AL 35222, Attn: Accounts Receivable Manager. If it is sent certified mail, the certificate should be unendorsed, and mailed separately from the stock power letter. The mailing address is United Way of Central Alabama, P.O. Box 320189, Birmingham, AL. 35232-0189.
A letter outlining the stock as a contribution to United Way should be mailed separately from the stock certificate.

Staff should secure the following information from the donor:
Name Address
Name of Stock and # of shares
Purpose of stock (New gift, satisfy pledge, etc.)
Ask if they are affiliated with company or individual pledge

Normally the broker will notify United Way when stock has been transferred from a donor’s account into ours. However, as a safeguard, please alert the Accounts Receivable Manager at 205.458.2082 when a transfer is being made so that proper follow-up can occur. Upon receiving the proceeds from the stock sale, United Way will notify the donor in writing that the money has been received and how it has been credited. The delivery date is the date UWCA receives the properly endorsed stock certificate.

HOLD STOCK REQUEST

If a donor asks United Way to hold onto a stock for a specified time, such as until it splits, United Way will ask the donor for a letter requesting the donor’s broker to do this. The broker will be asked to transfer the date of ownership immediately, but not sell the stock until the split, so that United Way owns the stock before and after the split, so United Way will be the owner of the increased number of shares.

TANGIBLE PERSONAL PROPERTY

Definition–Tangible personal property shall include jewelry, furniture, cars, boats, livestock, clothes, works of art, collections, books and any other personal property item owned by a donor. The date of delivery is the date the gift is received by UWCA. The deduction for personal property contributed to a CRT is limited to the cost basis. Donors of personal property in excess of $5,000 will be issued a written valuation signed by a qualified appraiser and signed by United Way. Acceptance shall be examined in light of the following criteria:
§ Does the property fulfill the mission of United Way?
§ Is the property marketable?
§ Are there any undue restrictions on the use, display or sale of the property?
§ Are there any carrying costs for the property?

The final determination on the acceptance of other tangible property gifts shall be made by the Executive Committee of the Board of United Way.

TIME SHARE INTERESTS

Generally, UWCA will not accept Time Share Interests in real estate.

MISCELLANEOUS PROVISIONS

A. Recognition: United Way will list as a Covenant Legacy Society member, any donor who gives according to the acceptance guidelines and signs the “Letter of Intent” form, authorizing United Way to do so. (Individuals who have given under previous guidelines will remain as members of the Covenant Legacy Society.) Individual donors will be recognized for their total giving to United Way, including endowment and annual campaign. United Way will add a donor’s cash gifts to the endowment, or life insurance premiums paid by the donor, to the donor’s annual campaign gift, for recognition purposes in campaign publications. United Way will recognize the “tax deductible” portion of a donor’s planned gift and will use the matching gift portion for annual campaign recognition. (Leadership gifts that use matching funds)

  1. Recognition for Planned Gifts will not be categorized according to size of gift, or present value of gift, other than recognizing donors who have made current or deferred gifts of one million dollars or more, and individuals who have perpetuated their annual Alexis de Tocqueville gift. (These donors are recognized at a national level through the National Legacy Circle.)
  2. Million dollar donors will be recognized as a separate category for both current and deferred gifts, in annual campaign as well as endowment publications.

B. Securing appraisals on gifts to United Way: It shall be the responsibility of the donor to secure an appraisal for all gifts of property made to United Way.

C. Valuation of gifts for development purposes: United Way shall record a gift at its appraised value on the date of the gift.

D. Receipt of gift recorded by United Way: United Way shall record contributions based upon the cash value of the gift at the time of sale.

E. Responsibility for IRS Filings upon sale of gift items: The Finance Department of United Way is responsible for filing IRS Form 8282 upon the sale of any charitable deduction item or certain publicly traded securities with a value greater than $250.

F. Acknowledgement of gifts: Tax receipts and compliance with the current IRS requirements in acknowledgement of such gifts shall be the responsibility of the Finance Department of United Way. The Planned Giving Department will send an appropriate personal acknowledgement of gifts.

 

FUNDAMENTAL OVERVIEW

The intent of the Annual United Way Campaign, initiated in Denver, Colorado in the late 1880’s, is to have one appeal for many partners. The foresight of those who initiated the Annual Campaign counted on community volunteers to study the current and most pressing needs, and allocate the funds accordingly. Keeping the Annual Campaign dollars in a general and unrestricted pool for allocations provides the allocation volunteers the greatest opportunity to meet the most pressing needs.

Over time, many communities have allowed donors to designate, or restrict their gifts, to one or more United Way partners and outside agencies. This practice has diminished the ability of these communities to meet their most pressing needs. Many of these communities recognize that this was the wrong road to travel and have tried, with great difficulty, to curtail this practice.

UWCA has always tried to provide the allocation volunteers with the largest pool of unrestricted dollars and to limit designated or restricted gifts. It is in this spirit that the Board of Directors appointed this Donor Designation Committee to look at the current designation environment and advise the Board of its guidelines on designations going forward.

The policy took effect January 1, 2005.

Policy

1. All designations to UWCA partners and initiatives receiving funding from the allocation process or board designated funds will be treated as “First Dollars In” with the exception of the previously accepted “Over and Above” designations that will be “Grandfathered”.

2. The minimum gift required for a designation to UWCA partners, affiliates, United Way Initiatives, and special funds will remain at $25.

3. Designations to outside (501)(c)(3) health and human service agencies will require a $1,000 gift with a maximum designation of $500 so that 50% of the gift will remain in the general allocation pool (See Attachment B for examples).

4. Gifts received through a Donor Advised Fund cannot be further designated except to UWCA agencies or initiatives. These designations will be treated as “First Dollars In”. Designations paid from a Donor Advised Fund will not reflect an individual donors name on remittances to an agency or initiative.

5. The United Way of Central Alabama will provide in its printed material an explanation of the importance of contributions to the general allocation pool.

6. A committee, designated by the Chairman of the Board of Directors, will be named to determine gift acceptance guidelines as needed.

7. Matching dollars will not be designated to either United Way partners, affiliates, United Way Initiatives, funds or approved outside agencies. They must remain in the general allocation pool.

8. Companies must agree in writing to allow outside designations. If a company has no signed agreement form on file with Resource Development, it will be assumed that the company does not permit designations to outside agencies. Designations to partners, affiliates and United Way Initiatives funds are allowed. The exception to this is a designated gift from a major donor ($5,000 and above) whose company has fewer than 10 employees and/or the major gifts make up 80% of giving for that company. The company will not be required to have a letter allowing designations on file. All other aspects of the designation policy apply.

9. Principal Gifts (gifts over $100,000) are to follow the spirit of the designation policy.

10. The United Way Global Corporate Leadership (GCL) program enhances a company’s ability to impact communities around the world through strategic philanthropic partnerships leveraging United Way’s global reach and local leadership in communities worldwide. United Way USA helps companies with a national and global footprint implement their philanthropic goals by increasing employee engagement, furthering corporate social responsibility (CSR) work and enhancing consumer engagement and brand image in their communities. In the United Way of Central Alabama catchment area there are approximately 88 companies who actively participate in the GCL program. This means the corporate headquarters works with UW GCL Staff to select the level of involvement, timeline, approach and reporting process for its entire footprint and the local United Way serves as the ground agent. The corporate headquarters of that GCL Company makes the decisions on its designation policy and its pledge processing vendor on behalf of all its locations. Examples of GCL companies in our area are: AT&T, Publix, and Wells Fargo.

Each Local United Way (LUW) establishes its own donor designation or donor choice policy based on the Board of Directors’ recommendations. The United Way of Central Alabama Board of Directors represents the community, and in this capacity believes in the importance of maintaining gifts locally, supporting partner agencies and initiatives and holding an annual allocations process. Through the allocations process, the United Way of Central Alabama counts on more than 600 community volunteers to study the most pressing needs and to allocate the funds raised through the Annual Campaign accordingly. We believe that through this process, United Way adds value to the community and is able to maintain a certain level of quality control. The United Way of Central Alabama is fully invested in this process but at the same time respects the donor, and thus the Board of Directors has established a policy for outside (non-partner agency) designations:

  • The company must inform United Way of Central Alabama that it will allow outside designations.
  • The minimum gift accepted for an outside agency is $1,000 with at least 50% of this gift remaining with United Way to be allocated to its partners.
  • Designated agencies must be 501(c)(3) tax-deductible health and human service organizations. This does not include churches, schools, athletic teams, environmental agencies, etc.
  • When a pledge made within these guidelines is paid, United Way forwards the payment, minus cost, to the designated organization.

In recent years, many companies with national headquarters and those participating as Global Corporate Leadership (GCL) have increased their utilization of central processing and e-pledging services. These services are managed by other local United Ways or independent pledge processing companies, and they typically process contributions raised by multiple United Ways. They often have different approaches to the handling of donor designated pledges and have differing donor choice options.

In keeping with the various policies, local pledges made through a company utilizing another processor will be counted in the United Way of Central Alabama campaign as “where raised.” These dollars are raised by the United Way of Central Alabama, who has built and maintained the relationship with the local company. Results are tabulated by the processor and UWCA receives a report on the pledges made and the detail of designations. As these results are raised in the community, UWCA recognizes the company for its total pledges (including all outside designations).

If a donor chooses to follow the United Way of Central Alabama outside designation policy, he or she will receive credit for the entire gift. For example, if a donor pledges $10,000 through the processor, he or she will be recognized as a Tocqueville donor if the donor designates 50% of the gift to United Way and 50% to the chosen organization.

However, if a donor chooses to designate the entire gift to an agency and does not follow the outside designation policy, he or she will not be recognized at the leadership level. This is because the pledge and payment would not meet the established aims of the policy. As referenced above, this donor’s designation will be recognized as part of the company’s giving results, but the individual donor will not be recognized in any giving category unless the UWCA designation policy is followed.

This policy has been established to provide the donor with designation options while protecting the importance of the allocations process.

GIVING GUIDELINE DEFINITIONS

1. “First Dollars In” means that designated dollars to a UWCA partner will go into the general allocation pool to be distributed by the allocation process. These dollars will be a part of the allocated dollars to that partner unless the total designations exceed the allocated dollar amount. In that case, the partner will receive the amount of the total designations.

Designations to UW Initiatives receiving funds from the allocation process or from board restricted funds will also be treated as “First Dollars In”. If total designations received exceed the amount of funds allocated or approved to use from board restricted funds, then the initiative will receive the excess amount as designations.

2. Each designation to a UWCA partner must be at least $25, but can be more.

3. Each designation to an acceptable (501)(c)(3) must be at least $500, but can be more.

4. A minimum of 50% of a donor’s personal contribution must be left with the UWCA general allocation pool as undesignated, i.e. $50,000 of a $100,000 contribution may be designated either to United Way partners or approved outside health and human service agencies. ($25 minimum to each UWCA partner or $500 minimum to each outside agency.)

5. All matching dollars must stay with the general fund. This means that any donor’s gift that is matched must leave the matching dollar amount as undesignated to the general allocation pool.

6. A United Way Initiative is defined as a Board approved program that has a clearly outlined plan of action with an identified campaign code. (Example: Success by Six, Financial Stability Partnership, 2-1-1).

7. A United Way special fund is defined as a short term project activated as a response to an emergency situation that calls for immediate community action. (Example: Community Crisis Fund, Hurricane Katrina Assistance)

Gift Giving Examples

1. A donor contributes $10,000 and requests a $5,000 designation divided between several UWCA partners. The donor is able to do this as long as the $25 minimum designation is met, and they leave at least 50% in the general allocation pool.

2. A donor contributes $10,000 and requests a $5,000 designation to an approved outside agency. The donor is able to do this since they are leaving at least 50% of their contribution with the general allocation pool.

3. A donor contributes $1,000 and requests that $500 be designated to an approved outside agency. The donor is able to do this. They are leaving 50% of their total contribution to the general allocation pool. They can designate to UWCA partners as long as each designation meets the $25 minimum.

4. A donor contributes $1,000 with the assistance of matching dollars. They request that $500 be designated to an approved outside agency. The donor is able to do this since all of the matching dollars remain in the general allocation pool.