United Way Frets as Pace of Giving Slows in L.A. Area

Pushed two months behind schedule by last summer’s revelations of financial improprieties and hurt by an uncertain business climate, the Los Angeles-area United Way’s annual fund-raising drive is showing signs of weakness that have some charity officials worried.

Soft spots in the local campaign are appearing at a time when donations to charities, including the United Way nationally, are generally on the increase, and officials here are concerned that their record $90-million goal may not be met.

The local campaign, which is a quarter to a third completed, is scheduled to end June 30.

“It’s a tough year, maybe the toughest we’ve ever had here,” said volunteer board Chairman William Kieschnick. “It’s too early to get the sense of the whole campaign, but obviously there are places here and there where our newspaper bashing has put doubts in the minds of some people. That takes time to turn around.”

Publicity Hurts

Although a substantial number of large companies have yet to be canvassed by the charity, several major contributors, including Los Angeles County, Southern California Gas Co. and Southern California Edison Co., have fallen behind their pace of last year, when the United Way raised $84.6 million countywide.

At the gas company, where only 6,700 employees donated to the current drive, compared to 8,200 last year, company officials are blaming the drop “on the publicity around the events of last summer.” Overall, gas company collections dropped from $1.68 million last year to $1.41 million this year.

“I think people were concerned,” said company spokesman Rich Puz. “We’ll have to see what happens next year.”

Southern California Edison fell 10% off last year’s pace with 16% fewer employees donating this year, said C. E. Hathaway, vice president in charge of human resources. The company, which collected $2.35 million this year, had hoped to raise $2.7 million. Last year’s donations reached $2.6 million.

Shifting Donations

The county government drive, while still not officially complete, is expected to be 8% to 10% off target, said Evelyn Gutierrez, chief of the county’s special programs. In contrast, county employees are expected to increase their contributions to the nonprofit Brotherhood Crusade by 5%, she added. Brotherhood Crusade, which is based in South-Central Los Angeles and calls itself the Black United Way, provides money for programs for minorities, the homeless and battered women.

United Way came under siege last summer when a series of controversial financial dealings that included lending donated money to agency executives were made public. Two investigations were conducted into the dealings and United Way executives had hoped that the results would resolve the controversy.

In the first of the investigations, a citizens’ committee found that top officials and volunteers of the charity had used poor judgment in authorizing almost $330,000 in loans to five agency executives, but the panel concluded that there had been no dishonesty. The bulk of the money loaned--some of which was unsecured and interest-free--was not repaid until recently.

Moreover, the citizen panel criticized officials for turning over almost $260,000 in donated money to bail out the now-defunct United Way credit union and for loaning $150,000 to an East Los Angeles human services agency. Among the reforms recommended by the citizens’ group were sweeping changes in accounting and personnel practices.

Acted in ‘Good Faith’

Drawing heavily on the conclusions reached by the citizens’ committee and applauding their recommendations, a second investigation by the Los Angeles County counsel’s office concluded that some of the transactions may have been improper but contended that the officials acted in “good faith.”

But the controversy paralyzed the agency at a time when key decisions should have been made and organizational work done on the annual fund-raising drive, pushing it months behind schedule. To make matters more uncertain, many companies that traditionally conduct their fund-raising campaigns in the early autumn opted to postpone them for several months to make certain that United Way’s problems were over.

Other companies, because of mergers, consolidations, assorted labor problems and fewer workers, are not expected to keep pace with previous years. Still others, including Los Angeles’ huge aerospace companies, which traditionally hold their campaigns in the spring, are major question marks. The City of Los Angeles, another major employer, is launching its campaign now.

“The giving is mixed,” said John Holliday, vice president of the United Way’s Long Beach-area region, one of six in the county. “In cash flow, we’re right where we were last year. The thing we don’t know is if we will come out with the . . . new dollars we need.

“We had some companies that had given before that just totally refused to do it. Now that the reports are out, they probably will reconsider. We had some companies that were not happy with their (employees’ donations). They are finding the right time to go back to their employees in the right way.”

Holliday, like other United Way officials, said the next several months will be crucial in determining whether the fund-raising goal can be met or even neared.

“It’s the end of the campaign that makes a difference, the last 10% or 15%,” Holliday said. “I know it’s going to be a tough year to close and we’re trying to search everywhere we can.”

Regional Vice President Dan Griffin of the Ontario area said fund-raisers have faced “significant questions about the issues of last summer.”

But, he added, “in the cases where a firm has gone down (in giving), we don’t know if it’s the issues or labor management problems inside the company, or economic concerns. We are concerned, but we will plug on.”

The concern may have been magnified this week by news that Orange County’s United Way drive--plagued by economic problems and also hurt by the controversy in Los Angeles--would fall $2.5 million short of its $19-million goal.

Some Bright Spots

Despite the potential problems, the campaign in Los Angeles is not without bright spots, officials said.

United Way President Francis X. McNamara said donations from individual givers are running 23% ahead of last year and said that “fantastic jobs are being done” by some companies.

Among those he cited are Union Oil Co., which managed to raise $40,000 more than last year despite losing 400 employees, and United Parcel Service, which recorded increases of 17% and 20% in its two locations.

“We’re trying new methods, new ideas, new thoughts,” McNamara said. “We’re not sitting back and saying, ‘We can’t do it.’ We’re saying, ‘How can we do it?’ ”

“I don’t know how this is going to come out,” Kieschnick added. “There’s always a chance (we can still reach the goal).

“But from our point of view, you don’t sit on your hands and cry. . . . If I could do one thing, I would somehow cause . . . anybody who thinks about (curtailing donations) to think about it as a success or failure of the community.

“Obviously, we haven’t succeeded in doing that yet.”