‘It is a slap in the face . . . ‘ ‘ . . . We would be hurt very badly.’ : Charities Fear Crunch From Tax Plan

Jesus Leon, an unskilled worker, was owed $28 for doing seven hours of hard labor the other day, but he got stiffed, so on Friday he wandered into El Modena Community Center in Orange in search of a warm meal and a little conversation.

“The guy took me to work, but then he sent somebody else to bring me back and I got no money,” said Leon, 23, as he and two buddies polished off the gelatin dessert that followed the meat loaf.

Life isn’t easy for Leon, who sleeps “wherever I am when night falls,” but he can get his hot meal at El Modena, where as many as 15 unemployed laborers dine daily. He is not proud of taking the handout, but says, “If I can’t work, I can’t eat. I’m only here on days I can’t work.”

Finds Friendship at Center Lucy Solorio, 75, takes three buses to reach the community center from a Santa Ana housing project when her arthritic knees are not too painful. Unlike Leon, El Modena provides her with friendship and aids her in combatting the loneliness that haunts many elderly people.

“That’s what is important for me--the friendship I have here,” Solorio said while chatting and crocheting with four other women. Several men also were socializing, only substituting playing cards for the needles.

Leon and Solorio are just two of the thousands of needy people in Orange County who get a helping hand through the generosity of area residents. Some need a ride to the doctor’s office. Some, victims of family violence, need shelter and a comforting shoulder. Others just need to be among friends, nurtured by love and affection.

Through their United Way contributions, county residents make it possible for Jesus Leon to have a warm meal when someone denies him his hard-earned money, and for Lucy Solorio to get together with her friends. But a potential problem looms that could affect El Modena and the 114 other human services agencies that receive a total of $16.4 million a year from the Orange County United Way.

And the culprit could be the U.S. government.

The Treasury Department has proposed a tax-reform package that would eliminate deductions for charitable contributions on all short-form income tax returns. Those filing a long form would be able to deduct only contributions that exceed 2% of their adjusted gross income for the year.

A Duke University study of charities around the country has estimated that the proposed tax law would cost the Orange County United Way about $2.3 million a year--a 20% reduction.

“Those $50 and $100 bills wouldn’t count anymore,” said John Flores, the executive director of the Orange County Development Council, the county’s official anti-poverty agency that oversees nine human service programs.

Letter-Writing Campaign The potential loss of charitable donations has prompted United Way organizations to launch a nationwide letter-writing campaign to combat that part of the tax proposal, which is still under review by the Reagan Administration and has not yet been presented to Congress.

Kathryn Wright, the local United Way’s agency relations coordinator, said the proposal would seriously hamper an agency such as El Modena Community Center, which gets more than two-thirds of its $90,000 annual budget from the United Way. The center, which director Margaret Reister said already operates “on a shoestring budget,” could lose as much as $16,000 from its small slice of the local United Way pie.

“That’s a significant loss. I think to recover that in fund-raising would be very difficult, if not impossible,” Wright said. “(These people) are not going to have anywhere to turn to, or their choices will be very limited.”

Reister would have a tough task trying to run El Modena on a smaller budget. She is the only full-time employee. Some employees work more than 40-hour weeks but get paid for only 25 hours.

“It would have a tremendous impact on us. We might have to run the center on a part-time basis. I know for a fact that we couldn’t do much with less money,” Reister said.

An informal survey by The Times of human services agencies in the county that rely on United Way funding confirmed that the “helping hand” provided for the needy may not be quite as strong in the future if donors cannot deduct their contributions.

Bill Erikson, director of Catholic Community Agencies, which receives $385,000 of its $1.9-million annual budget from United Way, said the proposal is unjust because those who traditionally donate money for human service agencies are working people trying to provide their share of help.

“It will impact on those who are least able to pay. It is a slap in the face,” Erikson said.

Statistics suggest that Erikson is probably right. In 1982, the Internal Revenue Service amended the law to allow deductions for charitable contributions on short-form filings. The next year, charitable contributions nationwide increased by 31%, reaching about $10 billion nationwide.

“There is a direct-cause relationship there,” said Traci Werner, another United Way employee.

The small donations are what keep many small agencies afloat. The Battered Women’s Self Helpline in Laguna Beach is a good example. The 16-bed facility, used to shelter female victims of family violence, operates on only $137,000 a year.

“We would be hurt very badly because we get a lot of donations of $100,” said Vivian Clecak, executive director of the 2-year-old shelter.

Where Budget Goes Clecak said most of the shelter’s budget is used for rent and the salaries of the eight paid employees, who earn just “$5 or $6 an hour. They are very dedicated.”

The letter-writing campaign to squash the Treasury Department tax reform proposal is focusing on getting officials to recognize that the deduction is a big incentive for working people to donate money to charitable, nonprofit organizations.

Maury DeWald, board chairman of the local United Way, said the agency gets 60% of its money from low- and middle-income residents.

“Organizations such as the United Way are aware that those who contribute are doing so for altruistic reasons,” DeWald said. “However, how much they donate is directly related to their ability to deduct that amount.”