Will United Way of Central Indiana Divert Charitable Contributions to Support Mass Transit Referendum

I have always encouraged people who contributed to United Way of Central Indiana to rethink their contribution.  UWCI, like all United Way affiliates, acts as a clearinghouse for charitable contributions, aggressively pursuing those contributions and redistributing those funds to various charities at the direction of the donor or the United Way if the donor doesn't direct.  Of course, the United Way doesn't do this work for free.  Their executives are paid handsomely.  The director of UWCI makes over a quarter million dollars a year, while three other executives at UWCI pull in over $150,000 a year.  So by not giving money to UWCI instead of directly to a charity, a substantial part of that contribution gets eaten up in administrative costs.

But there is another reason to be wary about giving UWCI your contributions.  UWCI has deeply involved itself in political advocacy and is using your charitable contributions to fund that activity.  Here on the UWCI's web page is their "2013 Public Policy Advocacy Agenda."

 That Agenda starts out innocently enough recounting general goals, then it gets to the nitty gritty of what the organization will do with your charitable contributions:

Advocacy efforts

The increasing need for assistance in our community

demonstrates that the need for public policy change is greater

than ever. In addition to our programs and the work of nearly

100 partner agencies, United Way advocates for policies

that support our four priorities and create opportunities to

strengthen the community.

To achieve policy change, United Way is

leading advocacy efforts in support of:

•Policies that recognize early learning as an essential

component to a child’s educational success and an

investment in our community’s future, including:

›policies that improve the quality of child

care available for working families.

›mandatory full-day kindergarten for all

Indiana children. 

›state-supported community-based

preschool programs.

›standard kindergarten assessment. 

›policies that preserve critical programs for

low-income families to ensure that children

have access to health screenings.

•Policies that strengthen the nonprofit sector and

communicate the range of services and support that

nonprofits provide the community. 

United Way is also engaging advocates

to support:

•Policies that provide transportation options for

individuals and families in United Way of Central

Indiana’s six-county region. 

•Sustained funding for effective and efficient

human services programs that serve our most

vulnerable citizens.

*Universal access to and government funding for 2-1-1.

•Community meetings of stakeholders to discuss

education issues, reinforcing that schools belong

to the entire community.

•Policies and programs that help children stay in school.

•Policies that aim to improve the overall health of

Hoosiers and ensure healthier workplaces and schools. 

•Policies that ensure children and young adults have

access to opportunities allowing them to become

financially independent and financially stable adults. 

•Immigration reforms that reflect a spirit of inclusion

and respect for individuals and families.

I highly doubt that the people making charitable contributions intend for that money to be directed to pet causes of those setting the United Way of Central Indiana's "public policy agenda."  And who are those people.  UWCI provides a list of its Public Policy Subcommittee members:

Lawrence Barclay

Civic Volunteer

Joseph Calderon

Partner, Real Estate Group,

Bose McKinney & Evans LLP

Sue Anne Gilroy

Executive Director, St.Vincent

Hospital Foundation, Inc.

Jane Henegar

Executive Director, American Civil

Liberties Union of Indiana

Nancy Holle

Civic Volunteer

Dan Hoyt

Civic Volunteer

Laura Schenkel Johnson

Political Programs Manager, 

Indiana Association of Realtors

Mark Miles

CEO, Hulman & Company

Doran Moreland

President, Exponent Strategies, LLC

Karega Rausch

Indianapolis Director,

Stand for Children

Michael Rosiello - Chair

Attorney, Barnes

& Thornburg LLP

Dennis Sasso

Senior Rabbi
Congregation Beth-El Zedeck

Michael Schultz

Partner, Parr Richey Obremskey
Frandsen & Patterson

Ron Stiver

Sr. Vice President of Engagement

and External Affairs, IU Health

Ninad Thanawala

Youth Board Intern

Fishers High School

Most noticeable on its current agenda is UWCI's support of a mass transit plan which is geared not toward helping poor people with transportation, but putting the public's money into the pockets of politically-connected lawyers, engineers, contractors, architects, etc., all those people that make up the City's well-greased pay-to-lay political structure.

But as a 501(c)(3) organization isn't UWCI prohibited from political involvement?  Actually 501(c)(3) can spend money on "lobbying" and that includes spending money in support of (or opposing) a referendum.  As long as UWCI keeps its 2013 expenditures in support of that cause (and other lobbying activities) below $1 million, the activity is legal.

Of course, you may have people contributing to the UWCI during 2013 and 2014 with the intention of their money being funneled to a pro mass transit political action committee.  That would make a political contribution tax deductible as well as allow the corporate limits on contributions to be evaded.  (At least until the IRS figures out what they're doing.)  That is exactly what appears to have happened with the Wishard referendum in 2009.  As I've written before, there were only a handful of individual contributions to the well-funded Citizens for Wishard PAC.  $1 million in contributions came from one health care 501(c)(3) and $750 thousand came from another health care 501(c)(3).  It appeared that all those physicians, executives and others strongly supporting the new hospital were making charitable contributions to the 501(c)(3) health care organizations with the intention that that money be redirected to political activities in support of the referendum for a new hospital.

In its 2012 tax return, the UWCI reported over $67 million in revenue and net assets and over $116 million in net assets, including interestingly an investment of $5,276,074 in Central America/Caribbean.  But despite the UWCI's aggressive lobbying activities, only $604 is listed as a lobbying expense on the UWCI's 2012 tax return.

My guess is you will see a pro-mass transit PAC set up if the General Assembly gives the go ahead for the referendum in 2014. Then you are going to see UWCI and other non-profits use their 501(c)(3) status to use tax deductible contributions for a political purpose, i.e. support of the mass transit referendum.