Part two: 'A dysfunctional family'

Member agencies cite mistrust, friction

Sarah Prall / Staff
Paul Sessler of Jewish Family & Children's Service cleans house for Bette Mingus under a program that helps disabled adults remain in their homes. United Way cut funding for the program by 37 percent, and fewer clients are served as a result.

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"Basic communications have broken down." Rick Myers United Way board member

"Our working relationship with the United Way has always been very positive." Ellen Hargis Volunteer Center of Tucson

Charities hit by funding cuts look to United Way for answers

Many of Tucson's United Way member agencies are upset by what they see as a stream of misinformation emanating from United Way headquarters.

Tensions between agencies and United Way President Ed Parker have reached such a point that incoming campaign Chairman Rick Myers recently likened the situation to a "dysfunctional family."

"Basic communications have broken down," said Myers, a local IBM executive. Myers is one of several United Way board members now trying to assess the relationship damage and attempt a reconciliation. "In the last two months, I've become much more aware of how deep some of these feelings go."

A May 30 letter sent by a member agencies group to United Way's board said, "There is a serious lack of honest communication between United Way staff" and its member charities.

"There is a growing distrust of United Way by member agency executives, their boards and the community at large," said the letter from the Association of United Way Agency Executives, a group made up of the heads of local United Way member agencies.

The internal friction comes to light amid a three-month Star investigation of the United Way, which has been reluctant to reveal many of its business practices - practices that increasingly are in conflict with its stated purpose.

Agencies are upset that while United Way told the public about its record-breaking fund-raising results, it wasn't saying how much money was leaving town or reporting that most agencies have seen annual cuts in traditional United Way support.

The result, agencies say, is that the public isn't getting a clear picture of where money goes or what's happened to some of the social programs that United Way donations used to support.

"I think the community in general is truly being misled," said Janet Marcotte, executive director of the YWCA of Tucson. Marcotte was a United Way board member and volunteer before she became the head of a member agency.

"The United Way's consistent message has been that if you give to the United Way, you'll be building a better community.

"If you look at their marketing strategies, you don't see them mentioning that donations went to the NRA (Foundation) or to a food bank in California," Marcotte said.

She said United Way has for years enjoyed "sacred cow status" in Tucson, making it an entity that few were willing to question or criticize.

That's no longer the case.

At a May meeting of the member agencies group, where participants were specifically invited to discuss concerns about the United Way, 40 of 69 agency leaders showed up, said Rita Weatherholt, president of the executives association and the agencies' representative on the United Way board.

"Two-thirds or more" of member agencies have indicated concern that United Way was not being honest with them or the public, said Weatherholt, who is also executive director of Information and Referral Services, a United Way agency.

Many agencies are particularly upset that in recent years, United Way's annual reports have sometimes misstated the amount of money they received, making it appear that more money went to local agencies than was actually the case. In 1999, the discrepancy totaled $1.9 million.

For example, while United Way has raised record amounts of donations in each of the last two years, it also has slashed the amount of money it allocates to agencies after both of those banner campaigns.

This year the cuts averaged 10 percent, and the year before they were 15 percent, according to United Way documents.

As a result, many agencies say they've had to strike out on their own in search of replacement donors, while cutting back on services such as mental health counseling for the needy and home help for the elderly.

Member agencies are those that have qualified for United Way affiliation by meeting certain standards and providing approved services. A United Way volunteer committee screens the members' requests for aid and divides up the pool of unrestricted cash that donors give directly to United Way.

Parker said the recent cutbacks aren't United Way's fault. They occur because more donors now earmark gifts to charities of their choice, rather than letting United Way decide where the money should go.

The growth of donor choice has left United Way with a dwindling pool of the traditional money it doled out to agencies, Parker said. That pool, known as the general fund, was about $1.5 million this year - roughly one-tenth of all the money raised in the local United Way campaign.

Other United Way organizations around the country have also seen increases in donor designations. But some, including Valley of the Sun United Way in Phoenix, have protected their general funds by restricting out-of-town giving.

Parker said Tucson's United Way has tried to soften the blow by finding new sources of money to steer toward member charities, such as grants and other gifts from wealthy philanthropists. Some member agencies also get donor choice money, which has helped offset cutbacks, he said.

United Way records show that of its 69 member agencies, 43 ended up with less money overall and 26 got more last year than in 1999.

One agency director said her bottom line only looked better on paper because of a financial shell game played by United Way.

Susan Rubin, executive director of Jewish Family & Children's Service, a member agency that runs programs such as home care for the disabled elderly, said her agency put $30,000 into a United Way philanthropic fund last year in hopes of finding matching donor money through United Way. United Way found $2,500 and added it in, bringing the total to $32,500.

At the end of the year, Rubin said, United Way handed over the $32,500 and recorded the entire amount as money that United Way had given to her agency, when in fact it was largely the other way around.

"They counted the money we gave them as part of the total support that they gave us," Rubin said.

Rubin said traditional United Way support for her agency, which serves people of any faith, has declined by 21 percent since 1997.

One program, a homemaker service that helps older disabled adults stay in their homes, was cut 37 percent and now serves fewer clients as a result. Another program offering mental health counseling for the needy now has an eight-month waiting list as a result of the cuts, Rubin said.

Some agency leaders say money isn't even the main point in their disputes with United Way.

They say what they really want are accountability and straight answers - something they said they can't seem to get from Parker.

"We've tried to get answers, and we don't get the answers that we're looking for," said Gail Gurney, executive director of the Girl Scouts Sahuaro Council, which gets United Way money to run an enrichment program for girls.

"The situation didn't get this bad overnight," Gurney said. "This is a problem that's been brewing for years."

Parker said he's given the agencies answers "over and over and over again," but some don't seem to grasp the many changing trends United Way is up against.

Corporate restructuring and increased competition from a growing number of nonprofits are things that United Way has no control over, he said.

"I have a lot of respect for the agencies. I understand their frustrations," Parker said.

"I think a great deal of time is spent trying to preserve the past instead of accepting that the past is probably not going to be there for us anymore, and we need to discover new ways to try something different."

Weatherholt, head of the agency executives group, said Parker's suggestion that agencies aren't facing reality is insulting because those agency leaders see the same changing trends when they do their own fund raising.

"These are not stupid people. We know that life is changing," said Weatherholt, who stressed that it "pains" her to talk publicly about United Way's problems.

"This isn't just about the member agencies. There are community issues here that go way beyond that. It's about what the public perceives and what the public is being told about where the money goes and who benefits," she said.

Not every member agency is unhappy with United Way.

Ellen Hargis of the Volunteer Center of Tucson said she's had nothing but good experiences with the organization.

"Our working relationship with the United Way has always been very positive," Hargis said.

W. Mark Clark of CODAC Behavioral Health Services Inc. said that from his perspective, Tucson's United Way deserves a lot of credit because it has been a leader in providing funding for mental health programs.

In early June, member agencies got a letter from United Way saying that a special committee was being formed to "consider the benefit and relevance of the partner and member agency concepts" - a missive that touched off fears United Way is now planning to do away with member agencies altogether.

Asked if that was the case, Parker told a reporter he can't say right now because he won't know until the review is done.

United Way's board of directors, which oversees the organization's operations, voted on June 28 to set up a special committee to examine agency concerns.

"We want to address these issues as quickly as possible," said board member Neal Eckel, a Tucson lawyer who has volunteered to serve on the committee.

Myers, the board member who will soon serve as United Way's new campaign chairman, said he hopes to "be part of a process of healing."

"I don't think there's anything broken here that can't be fixed with good people working together," he said.

* Contact Carol Ann Alaimo at 573-4138 or at caalaimo@azstarnet.com.

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