United Way change results in dramatic funding shifts

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BY ERIN ANDERSEN / Lincoln Journal Star

The ARC is losing 64 percent of its United Way funding for 2008-09.

The Salvation Army and Madonna Rehabilitation Hospital each are losing nearly 50 percent of their United Way allocations.

Fresh Start, Lighthouse and some other organizations dedicated to children’s services will see their United Way funding nearly double this coming fiscal year.

And some nonprofits, like the Lincoln Literacy Council, CenterPointe and Lutheran Family Services, are no longer eligible for United Way general funds — at least until 2011 when they can reapply.

These dramatic shifts are because the United Way of Lincoln and Lancaster County changed the way it allocates its general donations.

It now targets the majority of its money toward programs aimed at helping children find success in school, said Robin Mahoney, the United Way’s director of fund distribution and community planning.

Every one of the more than 40 agencies the United Way supports saw at least a 10 percent change in funding, she said.

Mahoney acknowledges the shift is painful for agencies on the losing end.

“It’s not that we wouldn’t fund them. We would have funded a lot more had we had the dollars,” she said.

The United Way received nearly $3.8 million in funding requests for the 2008-09 fiscal year. But, it only collected $2.14 million in undesignated donations, she said.

The remaining $3.5 in contributions were earmarked by donors to go to specific nonprofit agencies. And as this option of designating donations becomes more popular, the amount of undesignated dollars has remained relatively flat, Mahoney said.

This prompted the United Way to look at where its money goes, and how it is distributed.

In May 2007, the United Way board of directors approved a switch to a two-year funding cycle with “zero” or “outcome” based funding — meaning every requesting agency starts at zero, regardless of how many years it has received United Way funds.

In addition, the United Way decided that 67 percent of its money should be earmarked for programs that directly affect children and their ability to do well in school.  The remaining 33 percent supports crisis programs that provide food, shelter and safety for victims and community preparedness.

As part of the new application process, organizations had to provide a 24-month history showing the success of the program for which they sought funding.

 Which is why the Lincoln Literacy Council lost general funds. Historically, the literacy council has served adults. Early in 2007 it started a family literacy program, designed to promote literacy among toddlers and preschoolers of immigrant and refugee families. It started too late to qualify for funding under the new 24-month history requirement.

Although Literacy Council Executive Director Clayton Naff is disappointed over losing the money, he did not criticize the United Way.

“I think the United Way was very fair in the process,” Naff said. “They told us what they were doing. They followed that very closely.

“The only regret I have is that we couldn’t go back in time and start our children’s program early enough to meet their technical criteria,” Naff said.

Nonprofits were notified of the changes last June, Mahoney said.

The process to decide who receives the money is comprehensive. Eighty community volunteers review the applications, rate them, clarify questions, divide them into funding categories and rank them for funding. Their recommendations then go to the United Way Board of Directors for final approval.

The board made its decisions on May 22. Notification was sent to the agencies on May 23. They will get their money on July 1.

Despite advanced warning, ARC Executive Director Teri Roberts was surprised by the $64,990 cut to the organization’s individual and family services support program for people with developmental disabilities.

“We really didn’t expect this drastic of a change,” she said. “We have been funded at $102,000 to $120,000 for several years.”

United Way money makes up more than half of the budget for the support services program. This year’s allocation is $37,000.

Now ARC is scrambling to find alternative sources to keep the program going at its current level.

“We were stretched to the limit even before this shortfall,” Roberts said.

City Impact was a winner under the new allocation method. Several years ago it was not selected for United Way funding. But this year it will receive $50,000 for its Impact Learning Center, an after-school literacy program for children in first through fifth grades. The United Way allocation will make up 20 percent of the learning center’s budget.

The Clyde Malone Center is getting a substantial increase in United Way funding for its after-school program. In 2007, it received $6,557 from the United Way. This year it will receive $65,000.

Malone Center executive director T.J. McDowell sees it as a testament to the program’s success. He said the United Way funding is “critical to the quality and future of our program.”

Major Robert Boone of The Salvation Army also sees United Way funding as crucial, and that’s why he is frustrated by the $40,000 cut in funding for its at-risk youth development program. And he disagreed with the United Way’s new funding formula.

Still, he vowed this funding cut will not hurt The Salvation Army’s programs.

“We can’t cut back. And we never have,” Boone said.

Reach Erin Andersen at 473-7217 or eandersen@journalstar.com.