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Charlotte's United Way this morning approved a recession-damaged spending plan that cuts grants to local charities by more than a third, slicing away millions of much-needed budget dollars even as community needs skyrocket.
United Way officials, who had $7.5 million fewer dollars to give to their 90-plus agencies this year, say the economy left them little choice but to chop grants by 35 percent overall. With collections plummeting compared to the previous year, even emergency programs battling the recession's fallout took budget cuts of 20 percent.
“We're in crisis mode,” said United Way board chairman Carlos Evans. “We had to do some draconian things just to preserve what we were able to preserve.”
More than 200 volunteers made the decisions; the United Way's board approved the plan in a closed meeting this morning, and then broke the bad news to each of the 90-plus local charities the organization supports.
Reaction was swift, and emotional.
Crisis Assistance Ministries, a critical needs charity that helps with rent and utilities, lost 22 percent of its money at a time when lines at the door are 48 percent longer. Director Carol Hardison said the loss will be made up in part by relying more on volunteers to handle growing crowds of needy people.
“There's an air of sadness out there among agencies,” she said. “When this amount of money is taken out of the human-services safety net, the impact has a ripple effect. …It will take months to feel the impact, and it will take many more months and years to recover.”
The spending cuts were precipitated by troubles with last year's fund drive, which was plagued by the recession, a banking crisis and by outcry over former CEO Gloria Pace King's lucrative pay. She was fired Sept. 30, and is suing the board for wrongful termination.
The drive raised $30 million, compared to $45 million the previous year.
The cuts come as social need is skyrocketing.
Mecklenburg food stamp requests have jumped 39 percent in roughly the past two years. Calls and referrals for homeless services shot up 85 percent over the past year. And agencies that meet more critical needs say requests for help are up 20 percent to 40 percent.
United Way officials say with fewer dollars on hand, they tried to focus on programs satisfying such needs as food, clothing and shelter. They noted that the proportion of dollars going to such front-line crisis programs went up by 6.4 percent over the previous year, while money for programs at the other end of the spectrum went down by 7 percent.
Even so, crisis programs received 20 percent less than they did the previous year. Those offering indirect services for long-term problems received 43 percent less.
The United Way's effort was limited by its own structure. Less than a quarter of the programs it underwrites help people meet life's basic needs. More than half help with longer-term issues.
So in order to shift dollars to critical areas, volunteers had to take money from an array of well-respected programs offering enrichment for children, care for senior citizens and mental health treatment.
The Boy Scouts of America Mecklenburg Council's outreach program suffered a $358,000 cut, or more than 60 percent. The Girl Scouts Hornet's Nest Council's outreach program took a $178,000 cut – 52 percent.
Meanwhile, the Salvation Army's Center of Hope shelter received a nearly 5 percent increase, to $824,000, making it the only United Way-supported program that didn't take a budget cut.
However, two of its other programs got large cuts, because they don't fall in the critical needs category: The Boys & Girls Clubs lost 45 percent of its allocation; the Senior Citizens program, 50 percent.
“It's a bittersweet day,” said Maj. Todd Hawks of the Salvation Army. “Obviously, we feel good about the response to the Center of Hope. At same time, we're losing six figures from the Boys & Girls Club where we have 2,100 kids from very low-income neighborhoods. We are going to have to close down some clubs. What will become of those children, I don't know.”
Similar crisis agencies such as Charlotte Emergency Housing and the Uptown Shelter's emergency shelter program took small cuts.
“We're not saying all those (other) agencies aren't wonderful agencies,” Evans said. They are, and they do great work…There's a lot of pain here for very good people.”
He and other officials said the crisis will likely force a re-examination of how nonprofits – including the United Way – define their roles. Some agencies will need to merge, Evans said, noting that the United Way can't force any to do so.
He pointed to other conversations that have been going on among the community's business and philanthropic leaders, many of whom are concerned about the gap between the needs and the reach of the city's hobbled United Way.
Among those leaders, talk has turned to creation of a rescue fund that would finance studies and technical help for charities seeking to re-make themselves or merge.
