United Way’s annual fund-raising campaign will start in less than two weeks--on Sept. 22. Fortunately, the findings of a staunchly independent citizens’ committee that examined the charity’s operations has arrived in time to assure contributors that United Way deserves their continued trust and financial support.
The committee, led by Robert R. Dockson of California Federal Savings & Loan, found lapses in judgment, particularly with respect to $220,000 worth of bad loans that United Way assumed on behalf of its employees, but no hint of dishonesty. Nobody in United Way, the committee concluded, profited personally from the transactions. Moreover, an anonymous group, “Friends of the United Way,” is repaying those bad loans so that the money will go where it was intended to go--to Southern Californians in need of help. El Centro Human Services Corp., a mental-health agency in East Los Angeles, expects to repay, by the end of the year, $150,000 that it borrowed from United Way to see it through an emergency. But the charity does not expect to recover the $257,000 in subsidies made years ago to its own now-defunct credit union.
Changes in management and monitoring practices proposed by the citizens’ committee would ensure that the questionable transactions don’t happen again. More formal policies and procedures, including more rigorous oversight by volunteer directors, would replace a management syle of clubby informality.
Under the new policies, United Way would advance no funds to its employees for relocation assistance, family emergencies or any purpose other than travel on agency business, except in rare and extraordinary circumstances as determined by the board of directors. The charity would not guarantee any employee loan, and would grant emergency loans to member agencies only under limited circumstances--with guarantees for timely repayment.
Under the new procedures, United Way would not run a credit union or any other business requiring special knowledge. The charity would also improve its auditing and budgeting systems and seek more legal and management advice.
The charity’s leadership would also change. The 95-member board of directors would shrink so that more work could be accomplished in less time. The senior management position--held by Francis X. McNamara Jr., who built pledges from $21 million to $85.5 million during the past 19 years--would be divided. A chief executive officer would be responsible for planning, promotion and fund-raising. A chief operating officer would supervise day-to-day management.
Although McNamara has been reinstated after a paid leave of absence to avoid a management void just as the new fund-raising campaign is starting, he has wisely indicated that he will retire next June. A search has already begun for new management.
New leadership, new policies, new procedures will allow a more efficient and more open United Way to do an even better job. The millions whom it helps in Los Angeles County and western San Bernardino County deserve continued support.