Tag Archives: United Way

Wall Street 9, Charity 0

The news last week was stunning, but at the same time utterly unsurprising: When The Chronicle of Philanthropy compiled its annual Philanthropy 400 list of the nonprofit organizations that had raised the most money in the United States last year, the top dog was not United Way or the Salvation Army, but Fidelity Charitable.

The finding sparked a series of stories around the country: The New Yorker,  The Washington Post , The San Francisco Chronicle, The American Prospect, and National Public Radio, to name a few. Journalists are gob-smacked by the idea that an affiliate of a financial services firm could claim the title of top charity – and that it did so by the hefty margin of $900 million over United Way Worldwide. (Last year Fidelity’s take rose 20%; United Way’s dropped 4%.)

But those of you who have been reading my rants about the commercial donor-advised fund industry have seen this coming for five years. It’s like watching the sea levels rise from climate change. We’ve long known what was going to happen. Now, the evidence is incontrovertible. I take some grim satisfaction in the news, but mostly I feel despair. Continue reading

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Income Inequality: The Nonprofit Edition

Who here is old enough to remember the William Aramony scandal?

In 1991, Aramony, the head of what was then called United Way of America, was found to be having a series of affairs, culminating with a long-term liaison with a girl who was 17 years old (Aramony was 59) when they met. Moreover, Aramony traveled with her in style (four-star hotels, the Concorde to Europe, nights in a specially-purchased luxury condo in New York City), all on United Way’s dime. And this was on top of what was discovered to be a lavish $390,000 annual salary.

Aramony became the poster child for abusing the trust people place in charity. The scandal damaged the independent local United Ways, which were tarred by association, even though they had only a tangential connection to Aramony and his shenanigans. In fact, the scandal impugned the reputation of the entire nonprofit sector. And the United Way of America’s board of governors was roundly seen as equal parts negligent and clueless, and so extremely wealthy that they didn’t realize that paying the CEO of any charity that kind of money was utterly inappropriate. While Aramony’s travel style and sexual peccadillos clearly attracted attention, people were stunned enough by his salary alone that they raised their eyebrows and voices.

Flash forward a couple of decades. Continue reading

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Wall Street Muscles In

I really wish I’d been wrong in my earlier warnings about the growth of commercial donor-advised funds. But the latest Philanthropy 400 rankings from the Chronicle of Philanthropy indicate that the Wall Street acquisition of the nonprofit sector is, if anything, ahead of schedule.

It turns out that for the second year in a row, the second-largest “philanthropy” in terms of funds raised in the U.S. is an entity called Fidelity Charitable. Fidelity Charitable’s growth rate was an astonishing 89% over the year before, and with donations of $3.2 billion, it is positioned to overtake United Way Worldwide (that is, the combined United Ways of the entire country), which only grew 1% and raised $3.9 billion.

How is something named Fidelity considered a charity at all, let alone one that is poised to become the nation’s largest? Here’s a history lesson. Continue reading

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