United Way Taps New Sources, Looks for Turnaround After 2 Lean Years

Merritt L. Johnson, president of United Way of Orange County, last year continually had to put aside more important matters to try to convince irate callers that a scandal involving the United Way in Los Angeles was not connected with the local organization.

“The calls about that scandal came in almost daily,” Johnson recalled recently.

This year, however, there has been only one call to his Garden Grove office inquiring about the controversy in Los Angeles, in which at least three United Way officials were forced to resign because of the scandal involving personal loans of more than $300,000 in agency funds to five employees.

The tainted public image from that episode in Los Angeles, changing tax laws and tough economic times were blamed for a shortfall of $2.5 million in the 1986 campaign goal of $19 million for the United Way of Orange County. The year before, only $17.5 million of the $18.4 million pledged was collected.

The two lean years, following nearly a decade of steady growth that had made the local United Way the fastest growing such organization in the nation, resulted in a 10.5% budget cut for the 123 agencies the United Way helps finance.

Going into this fund-raising season, which concludes Dec. 15, local United Way officials had set a campaign goal of $17.4 million. More importantly, campaign director David Carroll, the area vice president for Pacific Bell, had pledged to “stop the down-slide of funding.”

Confident of Turnaround

And with less than a month to go, United Way officials and Carroll are confident that the local chapter has made a significant turnaround.

While Johnson said it appears that the $17.4 million goal will not be met, present calculations point to a collection of $17 million by Dec. 15, or $500,000 more than was raised last year.

Johnson said the recent crash of the stock market and new tax regulations for deductions of charitable contributions have not affected this year’s campaign. Those factors, he said, mostly influence wealthy contributors who give to the arts and to large foundations--not the average worker, many of whom have payroll deductions for the United Way.

Carroll, the campaign chairman, also said that this year’s fund-raising effort should have lasting beneficial effects on the local United Way.

“I think we have turned it around,” Carroll said. “The first step was to stop the erosion of funding, and the second step was to increase our funding. We’re going to (finish) between goal No. 1 and goal No. 2, and that is certainly encouraging.”

One way they have done it is to tap financial resources the United Way has ignored in the past. Traditionally, the United Way has collected more than 90% of its funds from large corporations. That practice has continued, but large individual donors and smaller companies are now being pursued more actively.

Last year, the United Way created the Leadership Circle, a group of contributors who personally give between $1,000 and $10,000 each. It started as a group of 25 that now has grown to 109. Johnson said the group probably will contribute about $350,000 this year.

More Target Companies Identified

“I expect this particular group to continue to grow until the end of the year,” he said.

Another positive sign, Carroll said, was the identification of 114 Orange County businesses that employ at least 100 employees. United Way officials previously were unaware of the existence of many of them, he said.

“We are starting to work with these accounts. . . . In the last few weeks of the campaign, we will try to work with these companies for contributions,” Carroll said.

Johnson also emphasized that the financial crisis of last year which led to cutbacks in United Way funds to 123 local agencies actually has been beneficial in that it has pushed the organization to change its operation.

The United Way, which hopes to double its campaign goals by 1992, now will concentrate on more regional offices and try to link with community organizations such as chambers of commerce and service clubs.

“Rather than centralize, we have to decentralize. We have to find other ways to reach the 2 million people here,” Johnson said. “But any kind of crisis is good if you can come off it well, and I think we’ve come out of it well.”

In the last year, the United Way also has instituted study programs to try and identify specific community needs. For example, last summer, a task force concluded a yearlong study and reported that 16% of Orange County’s population--360,000 people--did not receive adequate health care.

More Studies Planned

Johnson said that more such studies are planned, and the results will allow the United Way to be in a stronger position to solicit funds from the community because it can identify the community’s particular needs.

“Now the question and the challenge is to find the real needs,” Johnson said. “People want to know where their money is going and what problems it is solving.”

Tom Hassell, the local organizations’s new vice president for resources, said that in an era when most contributors are being inundated with requests for charitable contributions, it is important for the United Way to involve the community as much as possible.

“United Way is getting back into the communities, and that is a very positive step, especially from the standpoint of involving people,” Hassell said. “The real challenge is to make people understand what the United Way is and how it works, and how it helps our communities.”

The past year has not been easy for most of the United Way agencies that provide services to the community because of the 10.5% funding reduction. The current funding levels for the 123 agencies will remain the same through 1988 when the United Way hopes to restore the cuts.

San Clemente Seniors Inc. only lost about $3,500 in funding last year, but the cut was painful, said executive director Marilyn Ditty. She said that although her organization has a $1-million yearly budget, all funds are earmarked for specific purposes.

The United Way funds, she said, had been committed to a shared-housing program for senior citizens that “had to be cut back because of the shortfall.”

“Money was very tight and we had problems even paying the phone bill for awhile,” Ditty said.

An almost $9,000 reduction in United Way funds for the Laguna Beach Community Clinic also was critical. The clinic provides “almost free” medical, dental and counseling services to about 14,000 clients a year, in addition to operating a 24-hour sexual assault hot line, said director Suzanne Hard.

“The community has responded to some of our fund-raising efforts. But the competition for donations is really tough,” Hard said. “State and federal grants are down, but we’ve managed to continue without having to turn down anybody. But we badly need our funding restored.”

For the very small agencies, such as the Community Day Nursery in Garden Grove, the United Way funding reductions have had an acute impact. Director Phyllis Neal said the nursery, which provides low-cost child care for single working parents, receives about 40% of its $80,000 yearly budget from the United Way.

Cost-Cutting Efforts

“We haven’t done anything major, but we have cut back in a lot of things, and we haven’t been able to expand like we wanted,” Neal said. “I just hope we don’t have to raise tuition.”

At the Visiting Nurse Assn., fund-raising and cost-cutting efforts were implemented to make up for $26,500 of the $188,000 it normally receives from the United Way. The association provides home nursing and rehabilitation services to almost 5,000 people a year in the county.

Executive director Jo-Anne Andre said that United Way funds help subsidize the patients who can’t afford to pay all, or any, of their nursing costs.

“Obviously, an agency like ours can’t afford to lose any funding, but we’ve done as well as could be expected,” Andre said.

But for a few agencies, the funding reduction has not hurt. John Garrett, the executive director of the Orange County Assn. of Mental Health, said that the cutback has been “a blessing in disguise.”

The agency gets about a third of its $285,000 yearly budget from the United Way. With the reduction, the association lost almost $18,000. But Garrett said volunteers around the county organized to stage two fund-raising activities in the last year that have netted the association $25,000.

“The cuts encouraged us to do more for ourselves, and we broke even,” Garrett said.

Johnson, the United Way president, said there are encouraging signs that the agencies will be provided the funds needed in another year, if not sooner. He also said that there might even be an opportunity in a year or two to add a few more agencies to the list of United Way organizations. “This year has been good for us in some ways,” he said. “We have people out there who have taken hold and said, ‘We’re going to turn it around.’ Now, we’re feeling good about ourselves.”