The United Way is a fine organization staffed by fine people and supported by excellent people as well. The United Way funds many programs that would not normally get supported to the level they should be by the local community--both businesses and individuals. The United Way is a highly effective way to contribute to those programs and public benefit corporations (nonprofits) that are truly making a difference in your community because of the stringent criteria and reviews that programs have to go through in order to receive initial and subsequent funding from the United Way.

However, I would like to highlight the inefficiency that comes in donating to the United Way. When I give $100 to my local United Way--the United Way of Washington County--East, they tout that 86% or $86 goes to fund programs, "well below the 70% the Charities Review Council sets as a standard." That stat is misleading.

The United Way's "program" donation goes to another public benefit corporation that has overhead and fundraising costs. For instance, at The Salvation Army division where I work, 80% of each dollar goes to program expenses while fundraising and administration costs are covered by the remaining 20%.

So in the end, if I give my local United Way $100 and designate those funds to The Salvation Army, $14 goes to the Administrative and Fundraising costs of the United Way, and $17 goes to the Administrative and Fundraising costs of The Salvation Army. Only $69 goes to serve those in need!

That all said, my wife and I are United Way donors, and most likely always will be. United Way's are generally fantastic community supporters, and that's why we give.

Giving to the United Way however, is not an efficient way to support community programs--in fact, it's quite inefficient.