United Way Shifts Funds to Local Use

Seeking to address the widening gap between rich and poor, board members of the United Way of Greater Los Angeles agreed Wednesday to shift a portion of the agency’s charitable giving from large national groups to smaller community groups serving the working poor.

The organization will shift as much as $5 million a year in discretionary funds away from such large institutions as the American Cancer Society, American Heart Assn., Cedars-Sinai Medical Center and Childrens Hospital of Los Angeles beginning in July, the start of the 2000-01 fiscal year, United Way officials said. In Orange County, a similar shift was made about six months ago.

In Los Angeles County, officials said they plan to give the money to agencies that promote learning, help move the working poor up the economic ladder and provide health care in medically underserved communities.

“If we’re going to bridge the gap between rich and poor, we need to address the root issues of poverty,” said Dominic Ng, chief executive of EastWest Bancorp and head of the United Way task force that recommended the change.

Ng said United Way has yet to select specific agencies, but the groups will be required to show that they are helping people reach the middle class. “About 30% of the county lives in poverty,” he said. “And 30% of Los Angelenos lack adequate literary skills.”

Craig Dutra, senior vice president for United Way of Orange County, said: “We’re both striving to deal with alarming trends in terms of the gap that exists between an economy that’s going great and a significant portion of the community that’s getting left behind. We’re asking ourselves what we can do . . . to help people’s quality of life.”

Orange County’s community investment fund remains the same, Dutra said. What was called priority-issue funding is now known as targeted community investments, focusing on four areas: developing children and youth, increasing social and financial independence, strengthening families and promoting health.

The shift reflects two years of research, Dutra said, into how best to use Orange County United Way’s donations, which totaled about $21.5 million for 1999 and went to support 98 organizations.

“While our median family income went up markedly during 1990s, the number of people in Orange County who are living in poverty increased,” he said. “There’s a huge poverty gap in Orange County.”

In Los Angeles County, the change will affect about 10% of the local United Way’s annual budget, said Los Angeles County United Way President Joe Haggerty. The Los Angeles office is one of only a few of the charitable group’s 1,400 branches nationwide that is adopting the new strategy, he said.

Haggerty described the 15 charities that will lose funding as “good and strong. We know they will carry on successfully.” Speaking at the Pediatric and Medical Family Clinic, which serves the poor of downtown Los Angeles, Haggerty said, “Our concern is about people without medical insurance--people who come to clinics like this one, not Cedars-Sinai.”

The agency distributes about $49 million annually to 250 charities in Los Angeles County, with 90% of the donations coming from payroll deductions. Of the total, $24 million is designated for specific organizations by donors. The other $25 million is distributed at the discretion of the United Way board, Haggerty said.

Officials at the organizations scheduled to lose funding were surprised by the decision.

At the American Cancer Society, which will lose about $700,000, Regional Executive Director Abigail Roddie-Hamlin said her agency reaches the same people United Way is seeking to help. “Cancer doesn’t discriminate based on economics,” she said. “We offer many free and low-cost programs where others don’t.”

Wednesday’s biggest loser was the American Heart Assn., which will lose $805,727. “It’s premature to comment,” said spokeswoman Lisa Jones Barker.

United Way officials said the American Heart Assn. will still receive $70,724 in the coming fiscal year, an amount specified by individual donors.

Others praised the United Way’s decision.

“I applaud the United Way for shifting its funds to be more meaningful in Los Angeles,” said Arturo Vargas, executive director of National Assn. of Latino Elected and Appointed Officials.