United Way struggles amid slump Federal panel irked by tallying method

March 21, 1993|By Laura Lippman | Laura Lippman,Staff Writer

Over the past two years, the United Way of Central Marylan has struggled through its first fund-raising slump in recent memory, a problem the agency masked with a new method of tallying receipts.

Instead of counting only money raised in the private sector -- as it had done in the past -- United Way began in 1991 to include money from fund-raising drives it administers for the city, state and federal governments.

While the United Way is paid to run those fund-raising drives, the workers donate to a variety of charities, many of which are not part of the United Way system. In fact, United Way is not even mentioned during the drives.

If United Way had not added money from the government campaigns to its 1991 total, the agency would have reported raising only $31.4 million, instead of a "record" $39 million. Similarly, the 1992 campaign results would have been $28.4 million -- a five-year low -- instead of $31.3 million.

The change in reporting came in a year when the United Way, which enjoyed double-digit increases in the mid-1980s, failed to match its previous year's collection for the first time in recent history.

United Way officials say there was no intent to deceive the public, which they maintain would be confused by a more detailed accounting of how the nonprofit agency raises money for agencies other than its own.

"I think just the fact that we changed may have been confusing," Vice President Kim Scheeler said in an interview this week. "It certainly wasn't intended to be [deceptive], not by any stretch of the imagination."

Mr. Scheeler said other United Way chapters, including the one in Washington, D.C., also use this method. But in those chapters this has long been the case. In Central Maryland, the switch made it virtually impossible to compare campaigns from year to year.

The Maryland chapter's decision to use this new system angered the Federal Executive Board, which had hired United Way to administer the combined Federal Campaign.

"We said, 'You guys know you're not supposed to do that,' " recalled Graham Brest, executive director of the board, which is made up of the chiefs of various federal agencies.

Mr. Brest said the board's contract with United Way prohibits the agency from lumping the results together, and that less than a third of the contributions from federal workers go to United Way charities.

The federal board warned the Maryland chapter not to include federal figures in the 1992 total, which presented a dilemma.

The Maryland chapter had announced a $40 million goal at the autumn kick-off for the 1992 campaign. If it could not include the money from the federal campaign, it would inevitably fall far short of the goal. But if it did not heed the federal board's wishes, it could lose the contract to run the campaign, which has a budget of about $200,000. That amount includes the United Way's costs and the materials needed.

So United Way released partial figures: $31.3 million collected in the private sector, and from city and state government workers. Mr. Scheeler said the agency could not release any results from the federal campaign.

That irked Mr. Brest and other members of the federal board, who felt their campaign had not received the credit it deserved.

Mr. Scheeler of the United Way noted: "I think they were a little bit miffed."

In an interview, Mr. Brest noted that the federal fund-raising campaign had a much better year than the United Way. Federal employees gave $4.5 million, only a few thousand dollars short of the 1991 total.

He also said his board members never told United Way not to release the figures from the federal campaign. They simply ordered Maryland officials to refrain from lumping them with the money raised by the agency's private-sector campaign.

While United Way did not include federal contributions in its 1992 total, it continued to include money donated by city and state workers. Those contributions inflated the figure by $2.9 million.

Mr. Scheeler said United Way plans to continue this practice. The idea, he said, is not to inflate the United Way's figures but to emphasize how much money is raised in the community.

The United Way is not accustomed to having trouble raising money. Six years ago, after two years of double-digit increases in its private-sector campaign, United Way optimistically predicted the trend would continue through 1993. Now the campaign cannot even match previous years -- a once unthinkable development.

"That's one thing we're struggling with," Mr. Scheeler said. "There's that mind-set that whatever you raised last year is a given. It used to be pretty much that way."

One reason United Way's fund-raising has slowed is that the recession has hurt many of the companies that contribute money to the agency. Since 1991, more than 14,000 jobs have been lost at the 50 largest area corporations that contribute to United Way.

But United Way is not the only charity whose fund-raising efforts have been hampered by the recession. Mid-Town Churches Community Association came close to shutting down two homeless shelters this winter, but was bailed out with money donated by the Weinberg Foundation. Christmas charities, such as Toys for Tots, saw their donations fall, too.

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