United Way Plans Cuts of 30% to 59 Agencies

United Way of Ventura County will cut grants to dozens of charities and service organizations by 30% in a new effort to help wipe out a $1.2-million deficit.

The cut--effective immediately and lasting through the next fiscal year--will mean $300,000 less for 59 agencies receiving United Way support next year. The cut enlarges a 7.5% funding decrease imposed in September.

“Certainly, it’s a significant impact to us,” said Ann Sobel, executive director of the American Red Cross of Ventura County, which will lose $75,000 in United Way funding.

But she expressed support for the group’s efforts to balance its budget. “We stand behind the United Way to fix the problem and we intend to support them,” Sobel said.

The deficit accumulated over about four years because the organization banked on thousands of dollars in unpaid pledges and allocated money before the results of fund-raising campaigns were known, said Sheryl Solomon, the county United Way’s new president.

“It wasn’t because of money being spent here or there; it was because [United Way] didn’t actually know how much money it was going to have to allocate, and it over-calculated,” Solomon said. “United Way really gave away more money than it had available.”

Financial problems first came to light in September when United Way board members, facing what was thought to be a $650,000 deficit, cut five of 18 staff positions, eliminated an employee retirement plan, and cut medical and dental benefits by 8%.

United Way officials also decided to scale back grants to beneficiaries by 7.5% through the end of the fiscal year in June. They said they would return the amount cut if they met this year’s fund-raising goal of $5.7 million.

But the problems only got worse when a February audit suggested that even with those staff-cutting moves, the organization was headed for a $1.2-million deficit by the end of the fiscal year.

Not only would the 7.5% deferral have to become permanent, officials decided, but projections showed that the $5.7-million fund-raising goal would likely come up short by $400,000 to $600,000.

Solomon, a former member of the St. Louis United Way who for nine years served on United Way of America’s National Corporate Leadership Advisory Council, was hired in February.

Since then, she has been instituting new strategies to eliminate the deficit over the next three years.

For one, she is instituting new accounting models to more accurately project fund-raising proceeds.

She also plans to shorten United Way’s fund-raising season to four months from September through December in an effort to more aggressively track and publicize the annual campaign. The fund-raising season has traditionally run from September through May.

Solomon said the agency will also do a better job of researching and setting realistic fund-raising goals.

United Way plans to eliminate the entire deficit by the year 2001, scaling back allocations by $200,000 next fiscal year and $400,000 in each of the following two years, Solomon said.

“My comfort level is that this organization is fully committed to taking the steps necessary to get back on firm financial ground,” she said.

In short, she said, the agency’s plan is to spend less, allocate less and raise more.

Abe Oliveras, executive director of the Oxnard and Port Hueneme Boys & Girls clubs, said his agency projects a $65,000 loss in United Way funding in the coming year.

The organization’s executive board is still deciding how it will make up the shortfall, he said.

Still, Oliveras believes that United Way and its new president are on the right track, and said he hopes that the financial problems do not result in a charitable backlash against United Way.

“Instead of losing confidence in the United Way, we really should get behind it because so many agencies that deliver quality programs depend on it,” Oliveras said. “In our case, kids are affected.”