Charity Plans to Expand Its Base : New United Way Policy Shifts More Power to Minorities

The Los Angeles area United Way has adopted a major policy change designed to shift more power to minorities and diminish the influence of white male executives and old-line health charities in the federated fund-raising and social planning organization.

The new policy, adopted last week, commits United Way Inc., to active recruitment of human services agencies as new members and to nurture them, especially if they are run by Latinos, Asians and blacks. In some cases, new agencies would be created under United Way’s aegis.

“A new membership policy in an organization like this touches every aspect of its life,” said Terry W. McAdam, chairman of United Way’s Task Force on Future Membership Policy and vice president in charge of program at the Conrad N. Hilton Foundation in Century City.

‘Defunding’ Considered

The new policy adopted by United Way’s 95-member board of directors also suggests that some United Way agencies should be defunded for “consistently” failing to perform, action that would free money to be allocated to more effective agencies.

Some United Way agencies are concerned that adding more members will divide the United Way financial pie into too many slices. Judy Lau, executive director of the Children’s Bureau and chairman of United Way’s Council of Executives of member agencies, said the council supports the policy but remains concerned that United Way examine whether existing agencies can do a better job of providing new services than new agencies can.

The policy provides that “a modest amount” of money designated for new participants can instead go to fund new programs by existing members. Task force discussions focused on setting aside 15% of the new admission total, expected to be about $660,000 next year, for existing agencies to create new programs, participants said.

Lau praised McAdam’s task force for taking the time to let member agencies air their case, contrasting this with the hasty, and unsuccessful, attempt two years ago to establish a new policy on independent fund-raising by member agencies.

Implementing the new admissions policy will require increasing United Way’s staff and new internal management procedures, task force members and United Way staffers say.

The measure of its ultimate success, they say, will be whether the policy prompts a broader spectrum of people in metropolitan Los Angeles to become United Way givers and volunteers who rise to positions of power.

The action by the United Way board of directors implicitly approved the Task Force on Future Membership Policy’s report, “Toward a Constructive Long-Term Admissions Policy.”

The report validates many of the strongest criticisms leveled at the local United Way by officials of charities not under its umbrella.

Prominent among these criticisms, the report states, is that minorities “feel they have been kept from substantial United Way membership, especially for agencies particularly important to and controlled by them.”

Under the new policy volunteers and United Way staff are supposed to help prospective new members build community support, strengthen their boards by attracting influential volunteers and develop reliable financial and management plans. This involvement would continue after the new agencies joined United Way.

This approach of actively participating with new agencies and emphasizing quality of services contrasts sharply with United Way Inc.’s practice in admitting new agencies during the last five years.

Without any formal system of involvement after admission, United Way Inc. has added 78 new agencies since 1980, when admissions were resumed for the first time in years. Of these, 36 agencies were dominated by Asians, Latinos or blacks.

Currently United Way has 349 members. There are also 15 old-line health charities who are partners in United Way, with the American Red Cross also sharing in the federated fund-raising drive. The partners and the Red Cross have substantially more power in United Way than do the members. (There are an estimated 19,000 nonprofit organizations, excluding churches, in Los Angeles County.)

Under the old policy, getting into United Way, charities wanting to join had to brave a complicated admissions process.

The preliminary application form was three pages long and the formal application required 15 pages, while getting to the final stage of approval often required 200 pages of documentation, according to Cristina Castro, United Way associate director for allocations and agency relations. Of 1,977 agencies sent preliminary applications since 1980 only 73 agencies or 3.9% won admission. (The other five new agencies were admitted outside this process.)

Capricious Decisions

Despite this intense scrutiny, the old system sometimes resulted in capricious decisions on which charities got admitted, Alice McHugh, senior vice president for planning and resource development, acknowledged. Many charities, McHugh and others said, decided that the average first-year allocation of $23,000 just wasn’t worth the trouble.

During the last five years, McHugh and Joan Hanley, chair of the Agency Services Committee, said there were widespread complaints that some agencies became ineffective after being admitted. Only two of the agencies admitted since 1980 have been defunded, however. Hanley said the ineffectiveness issue also involves some longtime United Way members, which she declined to identify.

Determining agency effectiveness will require more staff work and improved management tools to assess performance, according to Hanley, McHugh and Eleanor Hawkins, United Way Inc. director of agency relations and allocations.

The new admissions policy addresses this issue by calling for actively monitoring newly admitted agencies, a responsibility that McAdam and others said will require additional staff.

Today the local United Way has fewer professionals on its payroll than it did seven years ago, when it raised less than half the $86 million sought in the current campaign (total staff has declined from 216 to 211).

Many United Way professionals complain of excessive workloads, which continue growing, causing some important tasks to be shunted aside.

Tremendous Staff Turnover

These staff members, and some outsiders familiar with the issue, say excessive workloads combined with inadequate compensation for all but top-level executives partly explains United Way’s tremendous staff turnover. In turn, the loss of experienced managers reduces United Way’s effectiveness, these staff members and some key volunteers say.

Making the new admissions policy work will also require different personnel and management policies, McAdam and others said, in some cases giving more discretion to both United Way managers and volunteer committees.

If the new admissions policy succeeds, McAdam, Hanley and others said, more minorities will become involved in the Los Angeles-area United Way both as givers and power brokers.

Communities, such as Compton, with few United Way agencies would be targeted under the admissions policy. A United Way committee is studying how to better serve such areas.

Adding more minority-run agencies would inevitably reduce the traditional influence of the small corps of white male executives and leaders of the old-line health charities. McAdam, McHugh and others say such a broadening of responsibility should imbue a broader spectrum of the county’s residents with a sense of ownership in the federated fund-raising and social planning agency.

In turn, this broader sense of ownership could significantly increase giving to United Way Inc., which stands first among the 2,200 United Ways in America in total dollars raised, but ranks a distant 24th among the 25 largest such agencies in money raised per capita. While the current campaign seeks $86 million, a campaign that enjoyed as much per capita support as Cleveland’s would bring in more than $300 million.

“This is a sensitive matter,” McAdam said, “both to those who feel United Way has been doing enough in this area and to those who don’t want to get close to minorities.”