The United Way system has developed comprehensive requirements for completion of audited financial statements. They are intended to create a uniform set of standards for all United Ways to follow in preparing audited financial statements to ensure consistency and transparency on the part of each United Way. The requirements are based on current best practices in our industry as well as generally accepted accounting principles and requirements of the Financial Accounting Standards Board. The United Way system has also developed requirements for completion of the IRS Form 990 that clarify various areas of ambiguity and establish a single United Way standard for the 990 where the IRS allows for several different approaches.
At United Way of America, we know our success is measured by how well we deliver on our mission to make measurable improvements in communities nationwide. And we know the importance of setting high standards for ourselves and for our local partners. New membership standards were implemented for United Ways in 2003 and enhance the level of accountability and transparency in local operations. Annually, all United Ways must certify to United Way of America their adherence to these requirements.
Every United Way must:
- Be tax-exempt under Section 501(c)(3) of the Internal Revenue Code as well as corresponding provisions of other applicable state, local or foreign laws or regulations. United Ways must file the IRS Form 990 annually in a timely manner. Large United Ways will submit their entire IRS Form 990 to United Way of America annually.
- Comply with all other applicable legal local, state, and federal operating and reporting requirements (e.g., nondiscrimination, Sarbanes-Oxley Act, USA Patriot Act).
- Have an active, responsible, and voluntary governing body, which ensures effective governance over the policies and financial resources of the organization.
- Adhere to a locally developed and adopted statement to ensure volunteers and staff broadly reflect the diversity of the community it serves.
- Adhere to a locally developed and adopted code of ethics for volunteers and staff which includes provisions for ethical management, publicity, fundraising practices and full and fair disclosure. All large United Ways will submit a copy of their code of ethics to United Way of America.
- Undergo an annual audit conducted by an independent certified public accountant whose examination complies with generally accepted auditing standards and GAAP. United Ways with annual revenue totaling less than $100,000 may have their financial statements reviewed by an independent accountant. Large United Ways will submit their audited financial statements to United Way of America annually.
- Annually submit to United Way of America a report of the total resources generated (annual fundraising campaign plus other resources such as in-kind donations and proceeds from special events). This report must be completed according to a policy that ensures an accurate, unduplicated national accounting for the United Way system.
- Biennially submit to United Way of America a report on United Way income and expenses.
- If managing donor-designated gifts, base any fee charged on actual expenses. If receiving designated gifts from another United Way organization, not deduct fundraising or processing fees.