United Way to offset funding cut

Organization to trim allocations despite record 1998 campaign

`Designation' at issue

Board agrees to tap into endowment to close financial gaps

June 18, 1999|By Kate Shatzkin | Kate Shatzkin,SUN STAFF

The United Way of Central Maryland's board of directors approved yesterday a dip into the organization's endowment funds to help bail out agencies that have been told they will receive less money this year.

The $938,800 one-time boost will alleviate the cuts to agencies by 40 percent. But several directors of programs depending on United Way said they expect to still feel the pain.

Despite a record 1998 campaign that raised $39.4 million, some of the organization's 140 member agencies and affiliates were told they will receive less money this year, as much as 13 percent less than last year's allocation.

The cuts stem from an increase in donors' contributions funneled directly to outside agencies not affiliated with United Way. Those contributions, called "designations," can be directed to any organization the donor dictates, even if the program falls outside United Way's mission of addressing basic human needs, such as well-financed private schools.

Designations also may be made to directly benefit individual agencies of United Way. In some cases, designations to those agencies rose, but their allocations will fall because so much money is going to outside programs.

Associated Catholic Charities, one of seven affiliates that raises money through United Way, expects a $180,000 cut even after the board's bailout, said Executive Director Hal Smith.

"That's a lot of money for us," Smith said. "How that actually translates into programming, I don't know. I know the United Way is really working at this and really trying to deal with the designation issues as well as the overall campaign issue."

United Way President Larry E. Walton said outside designations have been eating into the pool for member agencies over the past several years, but the board had been making up the difference with interest on the organization's $23 million endowment, aided by the booming stock market.

Jim Uveges, the board's finance committee chairman, said the larger issue is raising more money in the region, an area that should be bringing in $55 million to $60 million based on cities of similar size.

"There are more needs out there than money to meet those needs," Uveges said. "What the efforts of all the United Way and member agencies and affiliates should be focused on is reaching out in the community and generating more money."

The Central Maryland organization, which serves Baltimore City and Anne Arundel, Baltimore, Carroll, Howard and Harford counties, was the first on the East Coast to offer the designation choice.

During this year's campaign, United Way solicitors are being trained to encourage more gifts of unrestricted money to the "community safety net," a pool for programs that address four basic areas of need, although donors will be able to choose where their gifts go.

"We're going to do everything we can to make our donors aware of the need for undesignated money so we can fund this package of agencies critical to the needs of all of our citizens," Walton said. "But we're still going to offer donor choice. It's the right thing to do."

Some agency heads question the board's plans to continue its large financial commitment to Baltimore's Safe and Sound campaign -- an initiative to improve education and reduce violence in the lives of city children -- despite the diminished allocation pool.

The agency has committed $10 million to the initiative, half of which is to come from its endowment. Included in that pledge is $500,000 a year from the pool for United Way agencies.

But Walton said agencies will be able to compete for those dollars through Safe and Sound.

Pub Date: 6/18/99

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