United Way of Central NY gets lowest rating due to inefficiencies

The United Way of Central New York closely scrutinizes the finances of area charities to make sure donor dollars are used wisely.

But the agency’s own financial performance has not passed muster with an independent charity watchdog group, which says the United Way has spent too much on fundraising and hasn’t brought in enough money to sustain itself over the long term.

The local United Way was given the lowest ranking possible, a single star, by Charity Navigator. The independent nonprofit evaluates more than 5,000 U.S. charities based on their annual IRS form 990 tax returns.

The one-star rating, which means “poor,” is given to charities the group says perform far below industry standards and below nearly all comparable charities.

United Ways in Buffalo, Rochester and Albany all received three- or four-star ratings, which mean “good” or “excellent.”

Frank Lazarski, president of the United Way, said the low rating primarily reflects a sharp downturn in contributions triggered by the recession.

Lazarski said the local United Way — which collected more than $8 million last year to fund 39 agencies that feed the hungry, shelter the homeless and provide other human services — has already made changes that he hopes will be reflected in an improved rating next time around.

The watchdog group’s analysis shows the slice of every dollar raised by the United Way that goes to fundraising costs has been rising. The amount spent to raise $1 was 11 cents in 2007, 12 cents in 2008 and 13 cents in 2009.

The average amount spent by comparable charities in the Northeast was 10 cents, according to Charity Navigator.

Lazarski said he’s frustrated that the Charity Navigator rating is not based on the most recent data available, which he said show the United Way’s finances in a more favorable light.

The United Way’s 2010 fundraising expenses were more than $100,000 lower than they were in 2009, according to its most recently filed form 990.

The agency recently cut its own budget by 14 percent, or $243,000. It has reduced its staff from 28 to 25 and cut printing and other public relations expenses. The agency also has trimmed costs by using fewer paper pledge cards and more electronic pledge cards donors fill out online.

Factoring in those reductions in expenses reported on the United Way’s 2010 form 990, the charity spent about 8 cents to raise every dollar, significantly less than the 13 cents in 2009.

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