United Way to Shift Funds to Smaller Groups

Seeking to address the widening gap between rich and poor, board members of the United Way of Greater Los Angeles agreed Wednesday to shift a portion of its charitable giving from large national groups to smaller community agencies serving the working poor.

The organization will shift as much as $5 million a year in discretionary funds away from such large institutions as the American Cancer Society, American Heart Assn., Cedars-Sinai Medical Center and Childrens Hospital of Los Angeles beginning in July, the start of the 2000-01 fiscal year, United Way officials said.

Officials said they plan to give the money to agencies in Los Angeles County that promote learning, help move the working poor up the economic ladder and provide health care in medically underserved communities.

“If we’re going to bridge the gap between rich and poor, we need to address the root issues of poverty,” said Dominic Ng, chief executive of EastWest Bancorp and head of the United Way task force that recommended the change. “There is only so much money in the pot and we’ve decided smaller agencies can better address the local needs.”

Ng said United Way has yet to select specific agencies, but the groups will be required to show that they are helping people reach the middle class. “About 30% of the county lives in poverty,” he said. “And 30% of Los Angelenos lack adequate literary skills.”

The shift will affect about 10% of the local United Way’s annual budget, said Los Angeles County United Way President Joe Haggerty. The Los Angeles office is one of only a few of the charitable group’s 1,400 branches nationwide that is adopting the new strategy, he said.

Haggerty described the 15 charities that will lose funding as “good and strong. We know they will carry on successfully.” Speaking at the Pediatric and Medical Family Clinic, which serves the poor of downtown Los Angeles, Haggerty said, “Our concern is about people without medical insurance--people who come to clinics like this one, not Cedars-Sinai.”

The agency distributes about $49 million annually to 250 charities in Los Angeles County, with 90% of the donations coming from payroll deductions. Of the total, $24 million is designated for specific organizations by donors. The other $25 million is distributed at the discretion of the United Way board, Haggerty said.

Officials at the organizations scheduled to lose funding were surprised by the decision.

“We were in the dark,” said Lois Pedersen of the Myasthenia Gravis Foundation, which stands to lose $36,844 a year, or about 10% of its annual budget. “We’re so shocked. I don’t how we’re going to deal with such a cut.”

At the American Cancer Society, which will lose about $700,000, Regional Executive Director Abigail Roddie-Hamlin said her agency reaches the same people United Way is seeking to help. “Cancer doesn’t discriminate based on economics,” she said. “We offer many free and low-cost programs where others don’t.”

Marcy Woodhall, spokeswoman for the American Diabetes Assn., said she is disappointed at losing a United Way share of $14,000 a year. “The services provided by ADA aren’t provided by other groups,” she said. “There are 1 million people in Los Angeles County with diabetes.”

Officials at Childrens Hospital of Los Angeles--scheduled to lose $620,400--said they only learned of the cutback Wednesday. “It would be our intention to contact the United Way to discuss with them the very unique needs of Childrens Hospital,” a spokesman said.

Wednesday’s biggest loser was the American Heart Assn., which will lose $805,727. “It’s premature to comment,” said spokeswoman Lisa Jones Barker.

United Way officials said the American Heart Assn. will still receive $70,724 in the coming fiscal year, an amount specified by individual donors.

Others praised the United Way’s decision.

“I applaud the United Way for shifting its funds to be more meaningful in Los Angeles,” said Arturo Vargas, executive director of National Assn. of Latino Elected and Appointed Officials.

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Funding Shift

The United Way of Greater Los Angeles will reroute most of its donations from large national groups to small community agencies. Some money for large organizations will be retained because it is designated by givers for those specific groups. Here is a look at the charities that will no longer receive regular allocations.

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1999-2000 1999-2000 Charity Allocations Designated donations American Heart Assn. $805,727 $70,724 American Cancer Society $712,927 $313,878 Childrens Hospital Los Angeles $620,400 $240,043 Orthopaedic Hospital $303,100 $12,805 Cedars-Sinai Medical Center $257,000 $7,150 American Lung Assn. $172,705 $20,254 Girl Scouts, Spanish Trails Council $74,400 $5,689 National Multiple Sclerosis Society $64,937 $41,979 Arthritis Foundation $55,726 $41,447 Camp Fire Boys & Girls, Mt. San Antonio Council $53,600 $800 Myasthenia Gravis Foundation $36,844 $8,629 American Diabetes Assn. $14,047 $81,331 Legal Services Program for Pasadena, San Gabriel & Pomona Valley $12,900 $1,036 Hemophilia Foundation $11,514 $2,111 Les Kelley Family Medical Center, Santa Monica/UCLA Medical Center $4,000 $343

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Source: United Way