Is This a Nation Trend in Charity Funding?

by Gary Snyder

In my community, the United Way readjusted its funding priorities much to the dismay of several large agencies. Since I was on the board of an agency, I am privy to the bad taste that the process left. Aside from the effects on the agencies, many volunteers that were rather large supporters of the United Way and were board members of affected agencies could not support the process.

I guess the process elsewhere has lead to similar results.

In York County, Pa. one agency, Habitat for Humanity, expected to receive grants from the fund, and its board was "highly upset" and offended to be omitted, according to Executive Director Debbie Krout-Althoff. The agency took the unusual step of issuing a press release, under the heading "Breaking News," to highlight the perceived snub.

The release caught United Way Executive Director Bob Woods off guard. He said Habitat, a new partner agency in 2010, isn't eligible until next year for Community Fund donations, which are distributed through three-year cycles. However, a report in The York Dispatch from 2010 on the new partnership quotes Woods as saying Habitat could receive Community Funds in 2011-12, but noted it would have to submit a proposal, competing with 77 programs under then-34 partner agencies. Woods said, "... It doesn't do anyone any good to air this out in the public."

In Dayton Ohio, the Area Chapter of the American Red Cross faces a 76 percent reduction in funding from the United Way of Greater Dayton in the next fiscal year. About 18 percent of the local chapter’s $3.7 million in revenue last year came from the United Way. Tom Fodor, CEO of the local chapter, said he was shocked by the United Way’s decision to cut his group’s funding so deeply. “Nobody anticipates a 76 percent cut,” he said.

Fodor said the Red Cross was aware that the United Way’s funding priorities had changed and his group tried to tailor its application to reflect the shift in focus. The shift in the formula has left the American Red Cross with a big hole in its budget. During the past three fiscal years, the Red Cross has seen its funding from United Way steadily fall from $751,800 to $657,000, and now tumble to $156,500.

The Red Cross has started to consider the ramifications of the funding cuts, but the organization plans to appeal the funding decision. Fodor said Red Cross will see the appeal process through before deciding how to cope with the loss in revenue.

It seems that in all three cases communications were the problem. Although the shifting priorities are meant to address some very acute problems, the process left a hole in the transmission.  

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)