Dream home lotteries, donations and bake sales have brought in a lot of cake for charities across Canada through the United Way of Halifax over the years, but overhead, operating costs and a growing competition for your donations has stagnated the organization.

 

A data analysis using their own annual financial reports, audited statements and the Canada Revenue Agency tax records has revealed that while their revenue is declining, director compensation, travel and vehicle expenses and occupancy costs are increasing.

 

Evelyn Barkhouse, chief operating officer of Halifax’s United Way says, “We are continually trying to lower expenses, cut the cloth where we can, but we have to operate a business.”

The United Way of Halifax is designated as a “Public Foundation” by the CRA not a “Charitable Organization” as many people assume. Public foundations are essentially fundraising organizations for other charities.

Barkhouse says they have gone as far as considering double-sided printing and copying to trim costs.

18 per-cent of expenses are classified as fundraising costs, however since 2010 30-39 percent of the United Way’s annual revenue has gone to costs other than funding for other charities–their primary objective.

 

Part of their expenses go toward what the organization calls “Community Impact”, a number of small local programs funded by the organization. Peter Mortimer who oversees this part of the United Way says it aims to fund local research-driven programs in Halifax.

 

He says the United Way’s role is as a project manager and ties together fundraising and vision.

 

“It about making a measurable lasting impact,” he says.

 

Despite higher expenses, the United Way has increased their funding for community impact annually each of the past five years.

 

According to their own audited financial statements community impact accounts for 46 per-cent of total expenses, but only results in 15 per-cent of money invested into the community. Community impact expenses include a portion employee salaries.

 

Mortimer says the expenses would be higher if the United Way used external contracted labour to run the program.

Another constantly rising cost for the organization is their 7000 square foot facility in the heart of downtown Dartmouth.  In 2013 occupancy cost them $230,000, $55,000 more than the same building cost them in 2009 according to their CRA filings.

 

When asked if they considered moving operations to a less costly neighbourhoods like Spryfield– a neighbourhood that the organization sought to make an impact in–Barkhouse says they had not considered such a location. She says that when the United Way was looking for a new home in 2002, they looked in Downtown Halifax and Bayers Lake- both of which she says would have been more costly than Dartmouth at the time.

 

The United Way operates a separate organization called The Tomorrow Fund started in 1985 with the hopes of investing funds to offset the operating costs of The United Way with interest from long-term investments, but thus far it has failed to do that. The fund remains active and the organization hopes it will eventually realize its purpose.

 

 

The problems with big charities

 

United Way of Halifax’s Detailed Expense Breakdown: 

Experts agree that charity is a big business in Canada.

 

“I’m more surprised when I see low operating costs, than high ones,” says Tom Juravich, a professor of sociology at The University of Massachusetts.

 

He researches and teaches how to investigate not-for-profits and charities in both The United States and Canada. He operates a website devoted to providing resources on the subject.

Juravich says high expenses and compensation costs are commons problems in both Canada and the United States. He notes working as director or senior manager of a charity can be extremely profitable.

 

He says most people are not entirely sure how much of the money they are donating is actually going to the disclosed cause.  It worsens for international charities operating programs outside of North America, but he says there are plenty of charities lacking transparency domestically as well.

 

Juravich says big established charitable brands like the United Way are more accountable than many smaller charities, but they have high operating costs due to their size and the amount of money they raise.

 

Charity Intelligence Canada researches and grades the level of transparency of Canadian charities, in their most recent grading The United Way of Halifax received a ‘B’ for transparency, but they also rated it as a four-star charity overall, which is the highest grade they give out.

 

You can see their grading criteria here.

 

How the United Way works

 

There are two main ways of donating money to The United Way of Halifax:

 

1) Donate directly: You may chose to donate to local programs by donating to the “General Fund”.

 

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2) You can donate to your charity of choice through United Way’s designations.

 

If you donate directly The United Way says your money will be used locally, however if you donate through them than you can pick any organization that is recognized as a charity by the CRA.

 

Organizations the CRA recognizes include charities, non-profits and anything from hospitals to universities.

 

28 per-cent of donations to The United Way of Halifax are designated, because this money is technically raised by The United Way it is counted as a part of their revenue, even though in many cases it does not benefit local organizations or programs that have anything to do with the United Way.

The designated money in 2013 went to 1083 different organizations.

 

The organizations people chose to donate to through the United Way of Halifax ranged from cancer research to churches, to universities, to international organizations, to Rabbit Rescue of Ontario.

When asked if they were reconsidering a change the designation program to only include organizations approved by The United Way–as other United Way branches do– Barkhouse says they are not.

 

She says the goal is to promote gifts to their own organization, but they have no control over who people designate too.

 

The United Way takes a small percentage of the designated money as a processing fee.

 

They do not provide a breakdown of where designated funds go to, but the data analysis shows 28 per-cent of donations made through the program are designated.

 

Who’s at the top?

 

Managing the cake and eating it too, the CEO of the United Way of Halifax is Catherine Woodman.

 

She has been with the organization as the CEO since 2005.

 

Despite the financial stagnation and rising expenses, the top salary at the United Way of Halifax increased  from $80,000-$120,000 bracket to the  $120,000-$160,000 between 2011 and 2013.

 

Her responsibilities include overseeing the entire operation and being the face of the campaign.

 

Multiple attempts were made to contact Woodman for this story, but she was not available.

 

She is active on Twitter and Facebook.

 

Her social media presence is a mix of local initiatives, United Way news and vacation pictures from around the world.