Local United Way hits its fund-raising goal for first time in years

Declines were blamed on struggling economy, scandal at D.C. branch

February 04, 2005|By William Wan | William Wan,SUN STAFF

United Way of Central Maryland announced last night that it reached its fund-raising goal last year for the first time since 2001, raising $40.4 million.

The organization had seen steep declines in recent years, hurt by the struggling economy and a financial scandal at the Washington, D.C., branch.

The news came as a relief to many local nonprofit agencies that have faced funding shortfalls from United Way, as well as the state and federal government, and private donations.

"That's what made this year's campaign so critical," said branch President Larry E. Walton, whose organization made the announcement at a volunteer event. "Hopefully, this will help some of the agencies recover."

From 1996 to 2001, donations to the local United Way jumped from about $33 million to $45 million. But in 2002, as the economy and stock market plummeted, giving to foundations decreased nationwide. Locally, United Way fell almost $6 million short of its goal.

Several issues made the past two years especially hard for Maryland's United Way, Walton said.

The organization depends heavily on giving through payroll deductions - a source that has been reduced by layoffs at many of the region's large industrial companies and by corporate mergers and relocated headquarters.

The local branch also struggled to distinguish itself from the United Way of the National Capital Area, which was nearly destroyed by a financial scandal. In May, a federal judge sentenced Oral Suer, the former chief executive of that charity, to 27 months in prison for defrauding it of almost $500,000 in trips to Las Vegas and other personal expenses.

"There's no connection between our group and theirs, but we all got painted with the same brush," said Walton, who estimated that in the past two years, the Maryland branch has lost as much as $1.5 million each year because of the scandal.

Also, the state as a whole tends to give proportionately less than most other states, according to a study by the Catalogue for Philanthropy. While the state's average family income is the fourth-highest in the nation, it is 16th in giving, which made it 30th in the study's ranking of generosity.

At the same time, local agencies funded by United Way have had to deal with cuts in government funding because of the budget crisis.

"Many are referring to this time we're going through as `the perfect storm,'" said Peter V. Berns, director of the Maryland Association of Nonprofit Organizations. "All the funding sources we depend upon are under stress or strain."

The shortfalls in funding forced local agencies such as Family and Children's Services of Central Maryland to cut staff and reduce services.

"The majority of budgets in human services is staff," said director Stan Levi. When United Way cut its funding for Levi's agency in 2002, 21 of his employees were laid off or had their hours reduced.

Last year, the Central Maryland United Way almost fell short of its financial goal again. In November the group projected it would be $500,000 short of its goal.

But the group closed the gap with a last-minute push, asking some of its longtime supporters to contribute a second time.

The local United Way's success last year comes in part from lowering its fund-raising expectations. In 2001, the group set and met its goal for $45 million. This year the goal was for $40.4 million, $6.6 million less than 2002 but $300,000 more than the 2003 goal.

Walton called last year's goal realistic and said it would help build momentum for the group.

"We're now moving in the right direction, climbing back up the mountain," he said.

And local agencies believe United Way's success in meeting its goal bodes well for their own efforts.

"United Way is something of a barometer for how things are going in the individual and corporate giving world," Berns said.

By the numbers

United Way of Central Maryland fund-raising campaigns:

Goal Money raised

2004 $40.4 million $40.4 million

2003 $40.1 million $39.4 million

2002 $47 million $41.1 million

2001 $45 million $45 million

2000 $43 million $43 million

Organizations that contributed at least $1 million:

the Johns Hopkins University, Legg Mason, McCormick & Company, National Security Agency, Northrop Grumman, T. Rowe Price, U.S. Social Security Administration, Constellation Energy

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