Giving Rises at Local United Way, Bucking Nationwide Declines

By LAURENCE DARMIENTO
Staff Reporter

As United Way campaigns struggle nationwide due to the soft economy, Los Angeles is somewhat bucking the trend, with both corporations and the area's richest residents giving more.

But United Way officials warn that the slight increase comes as the more than 200 local social service agencies it supports brace for large state cuts.

If the current level of giving holds up, L.A. would reach $69 million, about $1 million higher than its goal and $3 million higher than the previous year. Nationwide, the United Way could see a drop of as much as 4 percent when all the campaigns conclude in late June.

L.A.'s small increase, however, would be a drop in the bucket compared with the cuts the agencies are facing as the governor grapples with a mammoth budget deficit. "There is no way we can make up for the government cuts," said Joseph Haggerty, president of the United Way of Greater Los Angeles.

Local United Way officials say they knew it could be a tough fundraising year, especially since 2002's figures were inflated by about $1 million in post-Sept. 11, 2001 giving. Long-time campaign contributor Arthur Andersen went out business, while the hotel and tourism markets have seen sharp declines.

"Nobody expects an Arthur Andersen to be here one day and gone the next," said campaign co-chair Greg Stubblefield, an executive director of Enterprise Rent-A-Car Co.

Campaigns in Atlanta, Dallas and Chicago are off from 11.1 percent, to 17.8 percent. Nationally, the United Way projects the 2002-2003 campaign could be down as much as 4 percent compared with last year, when $3.95 billion was raised.

It's the same story in the Bay Area, where officials of that United Way campaign are bracing for a 23 percent drop in contributions from a year earlier.

"We are still reeling from the dot-com implosion. The impact was not just one year," said Chris Boyle, chief marketing officer for the United Way of the Bay Area.

Fearing a drop-off here as well, the local campaign countered by pushing existing corporate contributors to give more while reaching out to more of the region's middle market companies.

The Los Angeles office of accounting firm Deloitte & Touche LLP, for example, contributed $15,000 more than last year when it raised $662,000. "We knew we have many people who will be impacted because corporations will be giving less," said community relations manager David Porges.

Corporations have contributed $7.7 million to the campaign this year, up 3 percent compared with the like period a year earlier. However, contributions from employees, many of whom have seen little or no raises, total just $28.6 million, off nearly 4 percent compared to last year. (Some corporations simply match their employees' contributions while others make separate corporate donations.)

United Way officials were able to make up that falloff by targeting the city's wealthiest residents, as well as affluent up-and-comers, such as new partners at law firms.

It's an effort that started a decade ago but intensified this year under the direction of campaign co-chair Donald Tang, a senior managing director at Bear, Stearns Co. Inc., who himself gave more than $1 million. "It's an extraordinary situation that requires an extraordinary consideration," he said.

The campaign so far has garnered $10.7 million in individual contributions, up 37 percent from last year, when $7.8 million was raised by this time. Many of the major contributors have not been identified, but includes a gift from investor John Anderson, who donated $1 million last year and agreed this year to donate $4 million over four years.



Not enough

But it doesn't make up for the kind of state budget cuts in the offing. Just last month, Gov. Gray Davis signed into law $3.3 billion in cuts, and he must still grapple with closing a $28 billion budget deficit for the 2003-2004 fiscal year.

One of United Way's clients, All Peoples Christian Center, expects to lose about a quarter of its $1 million annual budget, largely as a result of a loss in state funding for a program aimed at reducing teen pregnancy and raising high school graduation rates.

"We have seen a 10 to 15 percent increase in requests for our food distribution program over the past six months," said Saundra Bryant, executive director of the center, which expects to lay off six out of 33 staff members this summer due to state budget cuts.

The center, located just south of downtown, also offers day care, after-school and gang-prevention programs, in addition to its food bank and other services. It serves about 6,500 persons annually.

The Didi Hirsch Community Mental Health Center is another United Way client trying to cope with expected budget cuts.

The Culver City agency is one of the largest private mental health agencies in the county, with 385 employees at 11 locations serving 43,000 children and adults. The agency, which has a $21 million budget this year, already absorbed $500,000 in county and state funding cuts last year.

"We have had to raise the bar and limit our service to people with very, very serious mental health and substance abuse problems as it is," said Chief Executive Kita Curry.

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