Taking a Back Seat in Giving : County Lags in Comparisons of Support for United Way : CHARLES R. RINEHART

The 1988 presidential race has made volunteerism a hot topic. Vice President George Bush speaks of the “1,000 points of light”--those volunteers and charitable donors who, he says, take up where government leaves off in caring for needy Americans.

Democrat Michael Dukakis also praises the nation’s volunteers, but he says more government intervention is necessary if the homeless and helpless are to attain better lives.

If corporate giving in general and the annual United Way fund drive in particular are any indications, Orange County’s points of light are a tad dim.

United Way, which raises money for 121 local charities, has evaluated patterns of giving in Orange County and seven similar geographic areas: Hartford, Conn.; Minneapolis and St. Paul, Minn.; San Francisco and Santa Clara, Calif., Seattle, and Washington, D.C.

In nearly every comparison, Orange County is at or near the bottom of the pile. In amount of money raised per person employed, the county ranks No. 8. In amount raised per capita, it is also No. 8.

In some cases, the United Way is turned down flat by the chief executives of local corporations who say they are philosophically opposed to charity. Others express a variety of reasons for declining to support the campaign.

As the United Way enters its 1988 fund drive, volunteer campaign chairman Charles R. Rinehart talked to Times staff writer Maria L. La Ganga about corporate citizenship and the giving history of Orange County companies.

While he acknowledges some of the problems here, Rinehart is quick to defend the county and its business owners, who “put in a lot of time and effort and support for United Way.”

Rinehart is president and chief executive of Avco Financial Services in Irvine. In that position, he has direct responsibility for all of the company’s lending and credit-related insurance operations. He holds a degree in mathematics from the University of San Francisco and is a fellow in the Actuarial Society.

Q. Let’s talk about Orange County corporate giving compared to other similar areas.

A. United Way does comparisons, grouping cities according to similarities of income, employment, growth rate, population. Hartford, Minneapolis, Orange County, San Francisco, Santa Clara, Seattle, St. Paul, Washington, D.C., are similar in size. The populations range from a low of 655,000 in Hartford to a high of about 3.5 million in San Francisco. In the case of these relatively similar areas, Orange County is second from the bottom in terms of giving in 1987, with only $16.7 million. The only area below Orange County is St. Paul, Minn., at $16.3 million. But St. Paul has a population of 695,000. Ours is 2.1 million.

Look at Minneapolis. It has only got a population of 1.3 million and it’s raising $36 million. Hartford is 655,000 people and is raising $21 million. Any statistic you look at, we tend to be at the bottom of the list.

Q. Why?

A. I can only give you conjecture. I really think it’s a combination of things. One is that we are such a new county in terms of so much growth and so many new businesses and so many new people.

I lived in San Francisco prior to coming here five years ago. San Francisco was a very established business community, a very established society. As a result, things like United Way were also very established. The major companies in San Francisco supported United Way. In my company, we had 90% to 95% participation in United Way fund-raising efforts.

People just did it. It was the right thing. The information was always provided. Everybody believed in it. It was just kind of an expectation. If a new company came into the area, it automatically joined up because all the rest of the major companies were already in it, the senior officers were usually involved in it, and it was the thing to do.

Q. That’s called peer pressure; doesn’t Orange County have any?

A. Well, nobody was saying you had to join. It was an indirect form of pressure. You sort of felt like you should because everybody else did. It was just part of the way it was done.

That doesn’t exist down here. In part, that’s probably because there isn’t a hard core of major businesses down here that have been around a long time. The major companies have changed. You’ve got a lot of new companies entering the area that have grown very rapidly.

Q. Do you think it has anything to do with the political climate? San Francisco is predominantly Democratic; Orange County is predominantly Republican.

A. Off the top of my head, the answer is no. But I’m not really close enough to the political climate here, nor was I close enough even in San Francisco, to really tell you if there was any significant difference.

Maybe it’s that a lot of people here are trying to get established, starting up. We’ve got a lot of entrepreneurial businesses. Just reaching them, getting to them and letting them know that the United Way exists, is difficult. And a lot of businesses are really struggling, trying to make it. Once they’re more established, they can kind of settle back and think about things like this, once they’ve met the payroll.

Q. Why have corporations here said no to your requests for support?

A. I can tell you the reasons that are expressed at the CEO (chief executive officer) level. One is they say they just don’t believe in charity. It can be anything from religious to political to personal beliefs. They just don’t believe in charity. People ought to be able to help themselves. Maybe they think that’s what the government’s for; that’s why we pay taxes.

Whether that’s the real reason or just the stated reason, we just don’t know. Some feel that they’re protecting their employees so the employees won’t be hounded in campaigns of this type. In some cases, they’ll make corporate contributions, sometimes sizable, sometimes minimal. Sometimes we just don’t get an answer; we can’t get a response at all.

Q. If Orange County’s corporate community had a longer history, more practice at giving, how much money do you think charity and community organizations could raise from them?

A. If you just look at some of the counties of similar size, Minneapolis, with 1.3 million people, is raising $36 million. For a county this size, in terms of population and income, $30 million to $35 million is not an unreasonable number.

If you look at the amount raised per $10,000 of individual income, we raise $4.95 a year. That’s about half of what is raised in the other geographic areas. If we could get our ranking up from eighth on a list of eight counties to sixth, we’d be doubling our fund raising. Instead of $16 million or $17 million, like we did in 1987, we’d be raising $33 million or $34 million.

Q. Orange County in particular is a very politically conservative county and is very proud of that. A major plank in George Bush’s platform is that there are these “1,000 points of light” out there, volunteers helping and giving. Does Orange County prove him wrong? This is a Republican Party stronghold, and giving here is really low compared to other places. What does this say about the county?

A. My experience is that it’s not an issue of Republicans vs. Democrats. When I was up in San Francisco, most of those guys running those companies, even though San Francisco was liberal, didn’t vote Democratic. And yet there was a very strong support for the United Way program there.

I see our employees here who do volunteer work and go spend a Saturday building a home for abused kids. They’re part of Orange County. I don’t know whether they’re Republicans or Democrats. Again, they’re part of this place. The people here do care. I don’t think it has anything to do with that particular aspect of it. And I don’t think that makes George Bush right or wrong about that particular point. I think people, given the opportunity, will tend to be supportive. It’s the nature of our culture.

Q. But United Way statistics show that it’s not being done here on a corporate or a personal level. Why not?

A. I think that the real problem is the lack of long-term residence or permanence in the county. Some people who have been here 20 or 25 years know everyone around them and want to help. When you’ve been here five days, you don’t know the next-door neighbor. Sure, if their house is burning you’ll throw water on it. But for something less than that, maybe you wouldn’t feel compelled to do something. You just don’t feel the attachment. You haven’t made the connections yet. I see a lot of that.

Q. So you think it’s the newness that’s causing the county to behave this way?

A. I think that’s a part of it. Let’s face it. This also tends to be a fairly material county. That probably plays a role. I don’t know how much and with how many people. But I suspect there are some people like that.

But I think the major issue is really the immaturity of the county in terms of its population, the number of new people here as well as the number of young organizations here struggling just to make it. They’re entrepreneurs, and they have to make ends meet. The biggest thing they’re worried about is making the payroll this Friday.

Q. Because it covers such a range of charitable organizations and reaches out to so many companies, the United Way fund-raising campaign can be looked at as a kind of lens on local charitable giving. Can you tell me how much has been given through corporate campaigns in recent years?

A. There is a giving history, a 10-year history here in Orange County. It peaked in 1985 at about $17.5 million and then fell back to $16.5 million in 1986 and recovered to $16.7 million in 1987. After pretty steady growth rate, the last couple of years have been fairly flat.

Q. Why?

A. One reason is that during that period we had some major companies here in Orange County that had been major contributors to the United Way campaign and had heavy employee cutbacks and some budget tightening. I think that hurt the campaigns. Secondly, the whole issue up in L.A., with the L.A. United Way.

Q. That’s right, the loan scandal. (At least three United Way officials were forced to resign in 1985 after reports that the agency made $300,000 in loans to five employees.)

A. Well, I don’t know enough about it to call it a scandal.

Q. OK, then. The questionable loans that were granted.

A. Or maybe the fact that it was unwise not to have made them more public.

Q. You’re saying that the only problem in 1985 was a lack of discretion?

A. My view is that there was nothing wrong with making the loans to the individuals. Look at the price of houses in Orange County. Lots of companies in Orange County have to help employees. When you move people into this county, you have to provide them some sort of help on their mortgages if you ever want to get a good employee into this place. Otherwise their standard of living is going to fall. It’s hard to get people to move for a job, to take a reduction in their standard of living.

The idea of interest-free loans or reduced interest rate loans as incentive to get someone to move into an executive-level job is not unusual. So United Way was an employer trying to attract quality people. I don’t have any big problem with the fact that they did it. You’ve got to pay people if you want them to do a good job. Where they fell down, in my opinion, was in not making it public right from the beginning.

Q. Yes, but the question is that when people and corporations give money to an organization, money that they have worked hard to make, they are given a specific promise about how much of it will into go to the hands of the battered woman or the homeless child. I guess that that’s one transaction that didn’t quite fit into administrative costs as the average person looks at it. It was donated money, wasn’t it?

A. Oh, sure. United Way doesn’t have any money that is not donated.

Q. I think it might be the perception on the part of the public that the money they give is not going to the people targeted for help.

A. That’s the difficulty. It was an interest-free loan. Whether you make an interest-free loan or turn around and give someone a salary, it’s the same. You can give them more money so they can pay interest rates. Back then, doing an interest-free loan was better for the United Way, because there was the tax situation. You give a salary and you have to pay taxes on it.

Q. I’d like to talk about the concept of corporate citizenship, because that’s what corporate giving comes down to. A lot of people believe that it’s hackneyed. As you said, some think it’s not the corporation’s responsibility. Is it something that more companies should pay attention to?

A. First of all, from a company standpoint, I think these kinds of things should be done. Obviously, or I wouldn’t be doing this. The company itself should be a good citizen. We’re here. We’re part of the community. It is certainly in our best interests to see this community do well, even though in (Avco’s) case, we don’t generate all of our earnings in this particular community. We just happen to have our corporate headquarters here. But our employees live here, so they’re still going to be interested in the place. If Orange County deteriorated significantly, then our employee base would deteriorate, too. So it’s in our interest as well.

Also, just from a individual standpoint, we’re here, we take things from this area, we make a good income from being here. So we need to give some of it back.

Q. What company is the best corporate citizen in Orange County?

A. I’d hate to try to single one out.

Q. Single three out, then.

A. I can tell you those that support United Way well. There are some others that have taken on other causes, like the Performing Arts Center or individual charities they decided to support. I’m not familiar with what everybody does outside of United Way.

In terms of United Way, historically the Irvine Co. has been a major contributor. The Fluor Corp. has been a major contributor. They’re not as major as they have been because of financial concerns and employee cutbacks.

Q. What about the major employers in Orange County?

A. Rockwell has been involved historically and has been a good contributor. The phone company, Pac Bell, has been a good supporter. The power company down here, Edison, has been an excellent supporter, providing people to help with memberships (on key United Way committees). Parker-Hannifin Corp. has been a good supporter.

It’s not a question that there are just one or two that are really pulling the weight. There are a lot of companies down here that have done it. We just can’t get all the companies that we want to, and that’s been a problem.

Q. How have company cutbacks affected charitable efforts here?

A. Take Fluor as an example. (The late J. Robert) Fluor, who was CEO, was a very strong believer in the United Way. The corporate contribution, which was large and significantly cut back, and also the employee participation, have been cut back. In a company like that, which has a really strong backing of the CEO, you tend to get very high participation among the employees. So when those employees are eliminated, there is a significant impact on the United Way.

Q. What companies do you want to get more from?

A. Any company, particularly any large company that has not let us in the door.

Q. Any one you can think of off hand?

A. None that I probably should mention, because it will slam the door for sure. We don’t need that problem. I have to confess that I’m tempted at times to publicly read the list and find out if those people who have those beliefs, really believe them strongly enough to let it be public.

UNITED WAY FUND-RAISING IN 1987 CAMPAIGN

Selected areas ranked by amount raised per capita

Amount Amount Total Amount Raised per Raised per Area Population Raised Capita Employee Hartford, Conn. 655,546 $21.5 million $32.81 $61.91 Minneapolis 1,320,912 $36.8 million $27.86 $49.36 Seattle 1,371,400 $34.3 million $25.00 $47.32 St. Paul 695,390 $16.3 million $23.44 $43.24 Washington, D.C. 3,223,200 $59.3 million $18.40 $32.12 Santa Clara Co. 1,409,100 $21.6 million $15.32 $28.40 San Francisco 3,532,900 $47.0 million $13.31 $25.96 Orange County 2,177,300 $16.7 million $ 7.87 $13.90

Source: United Way