United Way’s Financial Woes Reach Breaking Point : Social services: After three years of cutbacks, the nonprofit agency may be forced to drop some organizations from its family.

As the master nonprofit agency that gathers charitable donations in the workplace and channels them to organizations that provide for the San Fernando Valley’s most basic human needs, United Way provides the backbone of the social services network that carries on the work government cannot. But the agency has been sliding precipitously in its mission.

As the recession was beginning three years ago, United Way’s North Angeles Region distributed $5.9 million to its 63 affiliate agencies across the Valley.

This year’s distribution was less than half that, at $2.9 million. Projections for the current campaign that will fund next year’s distribution remain modest--at worst to level off the decline and at best to do a little better than last year.

The shrinking campaign base of the last three years posed an impossible problem for the committee of volunteers who convene each year to decide upon grant requests: how to apportion a 50% cut among programs that feed the homeless, counsel troubled youth and care for the frail elderly.

Until now, the cuts were made almost the way a family would whittle down its budget in hard times: the volunteers asked almost every organization to sacrifice, but took more from those that could get by best without it, maintaining the goal of keeping the family intact, said Patricia Murar, vice president in charge of the United Way’s North Angeles Region.

But this coming year, some of those old family ties are likely to break.

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Seeking to clarify its role in adversity, the agency has put itself through a sort of self-counseling. The product, a three-year needs assessment being completed in the next few weeks, will fundamentally change the way the North Angeles Region of United Way evaluates which social services to support.

Under the new guidelines, an agency that provides dental care to infants or gets poor parents involved in their children’s education will fare better than one that assists mentally ill adults or developmentally disabled children, Murar said.

It’s not because one does a better job than the other, or is any less vital than those it serves. It’s simply a matter of priorities and limits.

“All these areas are needy and all equally worthy of attention, but we can’t do them all,” Murar said.

The key to these seemingly impossible distinctions will be a set of seven principles designed to “magnify the dollars in terms of human benefit,” Murar said.

The first demands “emphasis on root causes of problems, prevention/early intervention, commitment to measurable outcomes.”

Others press for collaboration among agencies to “ensure that multiple needs of individuals and families are treated as a whole,” outreach to overcome barriers to services “especially to non-English speaking communities” and focusing of dollars on those who have too much money to qualify for public support but not enough to purchase services outright.

Moreover, the assessment identified children through 12 years old as the group of most critical need and recommended an array of services such as quality day care, constructive use of leisure time, latch-key child care, health care, dental care and school-linked services.

Six other groups identified as priorities were children up to age 5, teen-agers, families, at-risk older people, people with HIV/AIDS, abused women and children, and communities.

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Taken together, these principles and priorities established by the needs assessment will narrow the focus of United Way money. Some agencies will maintain a high level of funding. Some will get less money or none at all.

Because of its underlying goal of maintaining a social services network, the agency has never funded cultural arts or environmental activities, Murar said.

But now even some groups that are generally considered to be part of the social services network will have a harder time getting money.

“You won’t find housing here,” Murar said of the list of priorities. Similarly, United Way’s support of the Salvation Army’s program to feed the homeless will fall in order of priority because it “does not fit with the overall system of prevention.”

Also being de-emphasized are programs for the developmentally disabled.

“We currently have two in our family, very effective, immensely popular,” Murar said. “If we want to fund preventive programs, then (those programs) may fall out.”

However, Murar added, factors other than the new priority scheme may come into play in weighing one program against another. Among them is the goal of maintaining the integrity of the social services network.

Consideration will be given to how well the service is supported by other funding sources, said Sally Hoover, a statistician for United Way’s North Angeles Region.

Thus, a program for at-risk older people, though identified as a priority in the needs assessment, may be less likely to receive funding than one to provide dental care to schoolchildren because there already is a well-established advocacy structure and funding stream for the elderly, Hoover said.

On the other hand, United Way’s studies have shown pediatric dental care to be one of the most seriously neglected problems facing poor communities.

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Other programs that will receive high priority are child and infant care, “warm-line” telephone advice, group parenting education, guidance to high-risk teen-age parents and child mental health.

The three-year needs assessment process grew out of a 1990 strategic plan issued by United Way of Greater Los Angeles recommending that each region examine its own priorities. The North Angeles Region needs assessment began in 1991, before the United Way was rocked by the double blows of the economic recession and a scandal over the salary of the agency’s former national executive director.

The worsening crisis only heightened the importance of the self-evaluation, Murar said.

As United Way staff and 200 volunteers toiled over the future, the allocations committee began to apply some of the emerging principles in making decisions the last two years.

“We had to make some extremely tough decisions about which organizations may have been doing less urgent services,” said Ross Hopkins, a governmental affairs consultant who headed the allocation committee during those two years.

He said the agencies that got cut the most “tended to be some of the bigger agencies. They tended to be ones serving older populations. We really are trying to focus more on the early stages and some of the most serious problems. The ones cut the least would be the ones providing services to the poorest and most abused.”

Typical of agencies that received the smallest cuts were El Centro de Amistad, which serves a poor Latino population in Canoga Park, and El Nido Family Center, which focuses on families and children. Haven Hills, the Valley’s only shelter for battered women and children, was not cut.

Among the hardest hit were Scout groups, YMCAs and Catholic Charities, the giant charity that serves the poor in centers across Los Angeles County. A $300,000 bite from Catholic Charities’ allocation forced a major restructuring in which the Valley region closed centers in Glendale, Lancaster and Palmdale and to cut staff at its centers in Canoga Park and Pacoima, said regional director Moeed Khan.

Although United Way officials hope for a modest upturn in donations this year, they don’t hope to quickly repair the damage of the past three years. The difficulty arises from the displacement of large, highly paid work forces at companies such as Lockheed, General Motors and Transamerica Insurance Groups by the crews of smaller, more diverse and dispersed shops. Collectively, they may represent an equal potential, but they have become harder to reach.

“We have thousands of companies in Los Angeles County that employ fewer than 100 people,” Murar said.

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Getting the message to them is labor-intensive work that will require the agency to fundamentally change the way it solicits donations as well as the way it distributes them.

Hopkins said he expects that it will take five or six years to repair the damage, and that some changes will prove irreversible.

He said he is now involved in a pilot project to examine 19 United Way agencies to find out if some can permanently forgo United Way funding without leaving the United Way family. In place of money, they might be offered other services such as access to corporations, planning or public policy advocacy.

“Out of this I think we’re going to develop some new relationships,” Hopkins said. “In the past we have tended to treat all the agencies about the same. If you think about it, it really doesn’t make a lot of sense.”