Char­lotte-area United Way cuts fund­ing

The Charlotte Observer (Sunday) - - Encore - BY JOE MARUSAK AND MARK PRICE [email protected]­lot­teob­server.com [email protected]­lot­teob­server.com Joe Marusak: 704-358-5067, @jmarusak

THE CUTS COME AS DO­NA­TIONS TO THE UNITED WAY CON­TINUE TO FALL. DE­SPITE AN IM­PROV­ING ECON­OMY, REV­ENUES SLID 8 PER­CENT LAST YEAR.

After a decade of re­ly­ing on its sav­ings, Char­lotte-based United Way of Cen­tral Caroli­nas is end­ing that prac­tice and cut­ting its con­tri­bu­tions to area non­prof­its by 25 per­cent, agency of­fi­cials an­nounced. The cuts come as do­na­tions to the United Way con­tinue to fall. De­spite an im­prov­ing econ­omy, rev­enues slid 8 per­cent last year, and the agency pre­dicts the same de­cline this year. The de­cline re­flects a na­tional trend, as com­pa­nies have opened up their char­i­ta­ble giv­ing beyond the United Way, the Char­lotte agency says. United Way says the cuts to its 73 non­profit part­ners are needed for it to stay fi­nan­cially healthy and con­tinue to serve hun­dreds of thou­sands of res­i­dents. The agency also will trim $1 mil­lion from its op­er­at­ing ex­penses, of­fi­cials said. Non-prof­its that re­ceive United Way grants op­er­ate home­less shel­ters, run chil­dren’s pro­grams, as­sist peo­ple who have dis­abil­i­ties and pro­vide free med­i­cal care to work­ing fam­i­lies un­able to af­ford health in­sur­ance. United Way of Cen­tral Caroli­nas, how­ever, has re­lied on its fund bal­ance for the last decade to “bridge the gap” be­tween what its an­nual cam­paign raises and what it gives its non­profit part­ners, Laura Clark, the United Way’s pres­i­dent and chief ex­ec­u­tive of­fi­cer, said in a let­ter to the agen­cies on Feb. 4. “That’s not a sus­tain­able prac­tice,” Clark wrote. While “still an in­cred­i­ble amount,” the United Way’s $26 mil­lion in rev­enues last fis­cal year fell 8 per­cent from the pre­vi­ous year, Clark told the Observer. The agency projects an­other 8 per­cent drop in rev­enues this year. United Way of­fi­cials met in­di­vid­u­ally with of­fi­cials from each non­profit to de­liver the news, Clark told the Observer in an in­ter­view. The 25 per­cent “across-the-board” cut will oc­cur over 18 months, she said. The cut to­tals about $4.5 mil­lion, she said. The United Way will still dis­trib­ute $13.5 mil­lion to area non­prof­its this year. Ad­di­tional money will go to two other pro­grams — Unite Char­lotte and United Neighborhoods — and also to or­ga­ni­za­tions specif­i­cally des­ig­nated by donors. The Unite Char­lotte and United Neighborhoods ini­tia­tives will con­tinue to re­ceive a com­bined to­tal of $1.5 mil­lion over the 18 months, of­fi­cials said. Launched in 2017, United Neighborhoods helps fam­i­lies in eco­nom­i­cally dis­ad­van­taged Char­lotte neighborhoods be­come more fi­nan­cially sta­ble and their chil­dren bet­ter pre­pared for school, among other ini­tia­tives. Started in re­sponse to Char­lotte’s civic un­rest in late 2016, Unite Char­lotte funds so­cial jus­tice ini­tia­tives that ad­dress racial eq­uity, poverty, civil rights and ac­cess and in­clu­sion, ac­cord­ing to Unite Char­lotte’s web­site page.

‘COM­PET­ING FOR DONORS’

Among the non­prof­its that will feel the cuts is the Sal­va­tion Army, which ex­pects to lose $250,000 from the Cen­ter of Hope shel­ter for women and chil­dren and the Boys & Girls Clubs. Deronda Metz, di­rec­tor of the Cen­ter of Hope, says non­prof­its will face tough choices if the money can’t be found from other sources. “I worry we (non­prof­its) could end up com­pet­ing for donors, which is why I think the United Way cam­paign is still the best ap­proach for the com­mu­nity,” Metz said. “One thing I will say is that we are not go­ing to turn peo­ple away (at the shel­ter) due to lost fund­ing. We are go­ing to try and do ev­ery­thing but that, which means the level of ser­vice we of­fer might be less. We could lose staff.” An­other char­ity tak­ing a cut is Cri­sis As­sis­tance Min­istry, which of­fers emer­gency help to peo­ple fac­ing evic­tions or dis­con­nec­tion of their util­i­ties. Carol Hardi­son of Cri­sis As­sis­tance Min­istry says her non­profit will lose about $108,000 over 18 months from the United Way cuts. “We see 100 fam­i­lies a day and they are the face of Char­lotte’s af­ford­able hous­ing cri­sis,” said Hardi­son. “More than 90 per­cent of the dol­lars we get goes to pro­grams, not staffing, so this will di­rectly im­pact ba­sic needs of peo­ple. This is a time in our com­mu­nity of sky­rock­et­ing rents. When peo­ple get their leases re­newed, they are see­ing $200 and $300 in­creases. Add into that the loss of a pay­check, like we saw dur­ing the ( par­tial) gov­ern­ment shut­down, and they end up evicted.”

DE­CLINE SINCE THE RE­CES­SION

Giv­ing has fallen since the 2008 re­ces­sion, of­fi­cials said. Be­sides the changes in cor­po­rate giv­ing, peo­ple have had a wider ar­ray of do­na­tion op­tions since then, in­clud­ing Go Fund Me and other on­line sites, United Way of­fi­cials told the Observer. “Health and hu­man ser­vices giv­ing is down across the coun­try,” Clark told the Observer. Clark, a Char­lotte na­tive, be­came pres­i­dent and CEO of United Way of Cen­tral Caroli­nas in Septem­ber. “Five short months later, I am more en­er­gized than ever about the fu­ture we are cre­at­ing,” she wrote to the non­prof­its on Mon­day. In 2018, after con­sult­ing the com­mu­nity, the United Way shifted its fund­ing fo­cus to ad­dress “the lack of eco­nomic mo­bil­ity” in Char­lotte and the re­gion, Clark wrote. Now, the agency is mov­ing to­ward a more sus­tain­able busi­ness model, where the money it gives to its non-prof­its re­flects “ac­tual funds raised — in­stead of re­ly­ing on re­serve fund­ing and rev­enue pro­jec­tions,” Clark wrote. “Our de­ci­sion to make these changes was ex­tremely dif­fi­cult,” Clark wrote. “We are do­ing so now while we are still in a healthy fi­nan­cial po­si­tion, so we can fo­cus on our com­mu­nity’s fu­ture.” “I don’t want peo­ple to think the United Way is go­ing out of busi­ness, be­cause it’s not,” Clark told the Observer. “Once we get through this tran­si­tion, our fu­ture is healthy and bright. But we’ve got to get through this tran­si­tion.”

Laura Clark

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