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What happens when a nonprofit partner of the city misappropriates funds?
By Ana McKenzieThis is what the city knows about its partnership with United Way: Every year since the '70s, staff have been asked, though have not been required, to raise money within their ranks for the nonprofit, which supports about 200 other nonprofits in the Charlotte area. Last year, about 40 percent of staff participated by either donating money or their time by making pledge-seeking phone calls to other government workers during business hours. But what the city doesn't know is how much time staff takes, and in turn how much tax-payer money is spent, on raising money for the nonprofit and what should happen if and when a nonprofit partner of the city misappropriates funds.
"Time spent varies and depends on the involvement of the employee and departments," says Kenneth Brown, a spokesman in the city manager's office. "The only criteria is that time spent should not impact an employee's ability to conduct daily business. Staff time spent as a city is not compiled."
After a scandal in 2008 in which the CEO of United Way of Central Carolinas was receiving a pay package topping $1 million, the local chapter made headlines again in August when Jane McIntyre, the woman who replaced Gloria Pace King, announced she was retiring, according to WCNC. McIntyre was hired to essentially turn the ship around; to make the local chapter more transparent and accountable to donors. And she succeeded, by all accounts.
But what did not change after 2008 was the city's partnership with United Way. Barring the recent addition of rules for blood drives, the policy that governs the city's partnerships with nonprofits (the only other organization it partners with is the Arts & Science Council) hasn't changed since the '70s. Absent in the policy are any steps the city should take if a partner nonprofit misappropriates funds.
In the private sector and, to some degree, government, partnerships with nonprofits are common. Some companies even require their employees to donate, or foster a culture in which employees feel immense pressure to give. Still, a partnership can be beneficial for both parties.
"At the end of the day, nonprofits are serving a real need within the community in terms of being able to address where there are specific market failure areas," said Christopher Gergen, the CEO of an entrepreneur-focused nonprofit and a fellow at Duke University's Innovation & Entrepreneurship center. "Through their work, they can often alleviate the need for government services. The better job we do in terms of making sure that kids are well taken care of ... the less social cost we'll have in the long run in terms of being able to continue to care for those children and families later on."
But after 40 years, is it time for the city take another look at its policy that governs such partnerships?
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