The United Way of America Governance in the Nonprofit Sector A Case Solution

1. Identify the major issues/problems facing the organization; what problems did the scandal bring to a fore?

Following the controversy, the organization was beset by a slew of issues. First, the claims against the organization's president meant that the United Way of America (UWA), which was previously America's biggest reputable and respected charity organization, would suddenly face a public backlash. The most serious claim was that Aramony'son was selected in multiple UWA spin-offs, and that Mr. President chose acquaintances for UWA and spin-off posts regardless of having dubious backgrounds.

Second, questionable data suggested that the spin-offs were exploited to provide undeserved perks to Aramony and his associates and relatives. This was a significant issue for the organization since it risked losing funds from numerous consumers if they found the organization untrustworthy. The organization faced several issues, including why Mr. President's son served for four of the spin-offs and how the organization's panel allowed the UWA to give real power over several of the spin-offs. The allegations included using the Concorde and excessive travel expenses, a personal and business trip with a young woman, a high salary, hiring unqualified friends, and questionable spin-off purchases. The scandal led to a loss of trust and support from the local market and donors.

Furthermore, the organization received concerns from local chapters concerning the panel's pattern of just assembling twice per year. Another local authority stated that she would no longer pay dues to an institution whose executive appears very rarely. Numerous local chapters retaliated to the issue by refusing to pay their annual dues. Suspending membership funds generated a catastrophic financial problem for the UWA, necessitating drastic expenditure and job cuts. Although the majority of public outrage was focused at Aramony, much of it was also aimed at the UWA executive committee, some of which had approved Mr. president's income, incentives, and spin-offs. Several observers felt that the true criminal for the "insane squandering" of the organization's funds was the board, who exercised insufficient control. One of the possible factors mentioned for the UWA panel's inability to effectively carry out its supervision responsibility was a widespread belief among the philanthropic world that excessive monitoring was poor etiquette.