United Way decides to pay dues monthly Abuse scandal makes local board wary of national.

April 16, 1992|By Bruce Reid | Bruce Reid,Staff Writer

The board of United Way of Central Maryland today decided to change the way it pays dues to its national trade group, United Way of America, which has been hit by allegations of financial abuses.

The board, meeting in Baltimore, decided to pay the dues monthly, rather than quarterly, said Norman O. Taylor, president of the local group. It also will monitor the management of the national organization more closely, a process that will include periodic reviews of financial reports, he said.

"They need to be held accountable," Mr. Taylor said. "We want to look at what they are doing with those dollars."

Before today's meeting, the 37-member local board had withheld payment of about $80,000 in first-quarter dues to the national organization. Today was the first time the local board had met to discuss how to respond to the allegations and stem distrust of the organization.

Mr. Taylor said the affiliate also will reduce the amount of dues it pays to $303,000 this year, compared with $346,000 last year.

Other affiliates have withheld dues or cut ties with the national group.

"It is absolutely critical that the public trust be sustained through this," said Mel Tansill, spokesman for the local group.

Employees of 3,500 private companies in the Baltimore area and employees of government agencies across Maryland pledged to donate money in the United Way of Central Maryland's latest campaign, which raised a record $39 million despite the recession.

The local group says 86 percent of that money goes directly to more than 300 charitable organizations, including the Red Cross, the Salvation Army, the YMCA and other groups. The rest of the money raised is spent on fund-raising activities and administration, Mr. Tansill said.

In return for dues paid to the national organization, the 2,100 local United Way groups receive the benefits of national advertising on television and other media, training of volunteers, market research and other assistance in fund-raising.

Mr. Taylor said the local board stopped short of withholding all dues, in recognition of the value of assistance from the national group.

A 57-page investigative report released this month by United Way of America's new management accused the group's former president, William Aramony, and two aides of transferring millions of dollars a year to other organizations under their control and spending hundreds of thousands of dollars on perks, including expensive travel and extravagant salaries.

While local United Way boards continue to debate their affiliations with the national group, it is clear that there has been fallout from those allegations, Mr. Tansill said.

Local officials already have received reports that some employees of private companies, who donate parts of their paychecks to United Way, are canceling pledges.

"We think the loss has been minimal," Mr. Tansill said.

United Way of Greater Milwaukee this week cut ties with the national group. Two other affiliates, in Kalamazoo, Mich., and Warren County, Ohio, also have cut ties.

The allegations couldn't have come at a worse time for the affiliates, Mr. Tansill said, because the demand for services has increased dramatically during the recession.

He said calls to the local group's 24-hour referral telephone line increased by 50 percent last year, to 30,000.

Mr. Tansill said the affiliates are doing all they can to correct "misperceptions" about their relationships to the national group.

Fund-raising campaigns are run solely by the affiliates, he said.

The national group does not raise money, he added. It survives on the dues it receives from the affiliates.

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