United Way Campaign Falls Short; Member Agencies Facing Cutbacks

Orange County United Way officials announced Monday that their $19-million fund-raising campaign for this year, an attempt to increase contributions more than 8% despite a shrinking economy and a tainted public image for the agency, will fall short of expectations.

The announcement means that the 123 social service agencies that receive United Way funds in Orange County will get less money than last year--perhaps as much as 10% less, officials said.

Orange County United Way communications director Judy Trest said officials were blaming company closings, layoffs by large corporations, and takeovers and mergers for the shortfall. United Way collects 90% of its contributions from corporations and their employees.

“We have run into a glitch because of the economy,” Trest said. “The shifts in the economy are making us all short.”

Two key United Way corporate contributors, the Irvine Co. and Flour Corp., have announced drastic layoffs during the last two years, causing both employee and corporate contributions to fall accordingly.

However, United Way officials concede that a controversy involving the Los Angeles United Way contributed to the fund-raising problems. Earlier this year, it was disclosed that about $300,000 in cash loans had been made since 1980 to five top employees of the Los Angeles organization. The loan money--much of it unsecured and most of it without interest--came from United Way donations.

Trest said exact figures on the Orange County fund drive will not be available until later this week. But she said the heads of agencies that receive money from United Way have already been told that cuts will be necessary.

“We’re going to fall short of our goals,” Trest said. “We’ve already met with the agencies, and it looks like a ballpark figure of 10% on the cutbacks. But things still could change. We won’t be sure of anything until later.”

The Orange County United Way’s official fund-raising campaign concludes today. This year’s goal was 8.6% higher than the $17.5 million raised in 1985.

Trest said the Emphasis Committee, which includes agency heads and United Way volunteers, is studying the impact of the fund-raising shortage.

That committee will make its recommendations to United Way’s Finance Committee before the board of directors makes a final decision on Thursday, Trest said.

“The agency people and the volunteers will be involved in the entire process,” she added.

After the Los Angeles controversy earlier this year, an independent citizens panel found that the five officials involved had used “flawed judgment” but had not acted illegally.

Merritt L. Johnson, president of the Orange County United Way, acknowledged early in the three-month fund-raising campaign that there “would be fallout.”

“It has definitely had an effect, although it is difficult to measure,” Johnson said.

Before this year, the Orange County United Way had experienced dramatic growth--445% in the last decade, the highest per capita gain of any such agency in the country. Also, in the last five years, the number of United Way-sponsored agencies grew from 88 to 123.

Funding allocations to the agencies served by United Way also increased 90% during the last six years, Trest said.

The reduction in funding for the 123 social service agencies, however, will further hamper these organizations. Last summer, the United Way was forced to trim funding 5% when contributions fell off because of companies’ ceasing operations or laying off large number of employees.