Originally created 07/25/99

United Way to redirect funds



Since 1994, the United Way of the Central Savannah River Area has celebrated a series of successful fund-raising campaigns. The money benefited a variety of charities -- locally and elsewhere.

Even as officials reported record increases in pledged donations, the gap between what the organization collected and what it distributed to member agencies widened.

This happened, United Way officials said, because increasing amounts of the money went to nonmembers, and not all donors made good on their pledges each year.

The organization is trying to reverse both trends.

"It's something we need to work on," said J. Pierce Blanchard, local United Way chairman of the board.

They will do so without Keith Benson, the chief professional officer, who resigned July 16 "to pursue other career opportunities," according to a three-paragraph statement from United Way.

The Augusta Chronicle called Mr. Benson July 16 at the United Way office and four times at his home between Monday and Friday, leaving messages each time. He did not return the calls.

Although Mr. Benson's departure was not related to the organization's financial situation, the organization is looking for a replacement who will work to address it, Mr. Blanchard said.

A balancing act

The United Way raises money for charities that agree to coordinate their fund raising and adhere to strict accounting guidelines.

In recent years, the organization also has allowed donors to give money to charities that are not members -- a practice called designated giving.

Balancing United Way's mission to raise money for its members and its desire to serve donors by helping them give to whatever charities they want is a challenge, United Way officials said.

It's like walking a tightrope, said Ron Schoeffler, executive director of the Senior Citizens Council of Greater Augusta. Money that is going to nonmember agencies is going to do good work, but it is also money that member agencies aren't getting, he said.

Local United Way officials acknowledge that the organization's first obligation is to support its 22 members.

"It's our prime directive," United Way spokesman Chris Naylor said.

More than half the money raised by the local United Way goes to member agencies -- charities such as the American Red Cross, Augusta Training Shop for the Handicapped and the Friendship Community Center.

But the slice of the pie that members are getting is shrinking.

From 1995 to 1998, monetary pledges to the organization went up from about $2.9 million to $3.9 million. Ideally, if contributions went up $1 million, allocations to member agencies should have gone up $1 million, Mr. Naylor said.

Instead, allocations to member agencies increased by less than one fourth of that, $245,085. Money that went to nonmember agencies increased by $345,298.

The rest of the $1 million was either not collected or went toward operating costs and the organization's reserve fund, which is used to make up for shortfalls in lean years.

Jerry Dixon, president of the Family Y, said the trend is frustrating.

"I think the way we communicate about how much of these dollars actually stays in the community needs to be better," Mr. Dixon said. "Everyone can point fingers and blame the United Way and the staff, but (the trend) really mirrors the community."

Donors -- not the United Way -- are making the decisions, he said.

But some agency heads said United Way should shoulder some of the responsibility. The organization should be promoting its agencies, they said.

Jerry Noland, executive director of the Boys & Girls Clubs, believes that the practice of allowing donors to designate gifts "absolutely defeats the purpose of the United Way."

Many people remember what happened to United Way of America in the early 1990s, Mr. Noland said. The national organization's president, William Aramony, was convicted of conspiracy, fraud and filing false tax returns.

That's why many donors are designating their gifts, he said.

Other United Ways

United Way of America research shows increasing numbers of donors are designating gifts nationally. Designated giving went from 11.6 percent of the total raised in 1990 to 17.6 percent in 1995, the latest year reported.

In Savannah, the gap is widening, but not as much.

"Our board has understood this as an issue and responded," said Michael Williams, president and chief professional officer of Savannah's United Way.

This year, the United Way in Savannah raised more than $6.5 million.

Its designated contributions, about 9 percent of pledges in 1998, came from a federal campaign and fund-raising efforts coordinated through hospitals that allowed donors to contribute to certain nonmember agencies.

Augusta's designated contributions were more than 20 percent of pledges in 1998.

In Columbus, as in Augusta, contributions to the local United Way have gone up about $1 million since 1994. This year, the organization raised more than $5 million, with less than 1 percent going to nonmember agencies.

Other United Way organizations decline designated gifts entirely.

"We really ask people not to," said Dee Stanford, interim president of the United Way of Aiken County. This year, Aiken reported $2.7 million in pledges.

Designated gifts may make the number of dollars pledged look good, Ms. Stanford said, but they do not reflect the amount of money that stays in the community.

Athens, which reported $1.65 million in pledges, also declines designated gifts to nonmember agencies.

"We don't do that here," said Rubienlen Norris, president and chief professional officer in Athens. "Our campaigns are for our member agencies."

Closing the gap

Officials of the United Way of the CSRA say they are closing the gap.

To curb designated giving, the organization has eliminated "affiliate agencies," local charities that were not members but allowed to get money through designated gifts. This year, the affiliates had to either become members or leave the United Way family.

United Way will continue to collect designated gifts, but not solicit them, local campaign Chairman Pete Brodie said. From now on, the organization will only market its member agencies.

The local organization also plans to address the growing number of pledges not collected.

For example, pledge amounts went from $2.9 million in 1995 to $3.1 million in 1996. The amounts collected those years were $2,733,970 and $2,774,511.

Much of the money that United Way gets is deducted directly from paychecks. Pledges often are not collected because employees who promise a certain amount, change or lose their jobs before they make good on all of it.

Because the local United Way does not track who is making good on pledges and does not know how much of the designated pledges are collected, it sends all designated dollars pledged to non-United Way agencies whether they are collected or not.

United Way charges a 20 percent fee of the designated donation to cover administrative costs and to compensate for uncollected pledges. But if uncollected pledges are more than what the organization gets in fees, the difference would have to be made up from the reserve fund.

The local United Way is trying to develop a system that would track who is making good on pledges and only send the amount of money that is collected, not what is promised, Mr. Blanchard said.

In the past, the way the campaign results were reported may have created a false impression of what was going to member agencies, Mr. Blanchard acknowledged. He promises to report future results more clearly.

"We've got to do a better job," Mr. Blanchard said.

The next local United Way campaign begins Sept. 7.

Frank Witsil can be reached at (706) 823-3352.