United Way cutting back as donations shrink

Key companies are running more than $8 million short of last year's United Way giving levels, and United Way officials are scrambling to cut expenses and budgets.

Also, in a bid to restore public confidence in the battered agency, officials announced that future meetings of the United Way of Central Carolinas' board of directors will be open to the public.

Interim CEO Mac Everett said in an interview Wednesday that the agency's top 100 accounts, which comprise about 85 percent of its total collections, are running about 19 percent below last year's pledges and donations. If that projection holds true, the agency will collect $8.6 million less than last year from those sources.

Everett said the agency isn't planning layoffs among its workforce of almost 100, but is cutting costs in hopes of cushioning any budget cuts to the more than 90 area charities that depend on United Way.

The agency has as frozen an unspecified number of vacant positions, and is looking to cut costs for travel, conferences and training, Everett said. Last year it set aside more than $1 million for special grants, but this year the grant money will be given to the charities.

United Way raised a record $45.3 million last year, but this year's campaign has been hobbled by public anger over former CEO Gloria Pace King's $2 million retirement package and by the banking crisis that has hit major donors such as Bank of America and Wachovia. Everett said the economic woes are crippling fund-raising efforts.

“People are so uncertain,” he said, “uncertain about their jobs, about what's happening in Charlotte, about what's happening in the global economic news. It's just hard (for them) to make commitments.”

Everett also said that United Way will begin forcing its own in-house programs to undergo the same kind of rigorous evaluations that member charities must submit to before receiving United Way money. Those internal programs, which receive about $3 million, include a call center that connects residents with professionals for help with financial counseling or housing needs.

Board chairman Carlos Evans said that United Way will also cushion cuts to charities by using a portion of a $12 million reserve fund.

“That's what that money is for, exactly the kind of event we are living through right now,” he said. “We think we're going to have probably three years of tough (fundraising drives). We are all going to have to share the pain.”

He added that a task force appointed by the board continues to look into what went wrong with the setting of King's pay package. The board has been criticized for not being open enough to sharing internal documents that might explain why the board approved the package, only to later decide it was too lucrative.

Evans said that, “effective immediately,” board meetings will be open to the public. The board will also post minutes of meetings on the agency's Web site. He grew emotional as he defended board members whom some have criticized as too lackadaisical in oversight of the agency.

“Nothing could be further from the truth,” he said. “They are hard-working people. They try to do the right thing.”

He acknowledged one “breakdown” by the board – its failure to properly vet King's compensation before it was approved. He said the error won't happen again. “I'm in the process of fixing it, and it will be fixed.”

Co-chairmen of the committee to find King's replacement are expected to be named next week.

Staff writers Cindy Montgomery and Michael Gordon contributed.
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