WENATCHEE — Four United Way of North Central Washington partner agencies will receive a total of about $62,000 this year in grants, a 72% drop from the amount distributed last year.
For the past two years, the charity fundraising organization provided $225,000 to about a dozen nonprofits whose missions ranged from housing for the homeless to providing enrichment programs and social services. The four agencies receiving grants this year all have programs focused on feeding the hungry.
The change, according to United Way CEO Charity Bergman, is due to a shift in focus designed to make a bigger impact.
“United Way is examining the need and capacity in the community and re-establishing priorities,” she said. “United Way has historically funded far fewer agencies than are in need of support. We are looking to rectify that in future funding cycles.”
United Way also has less money to distribute. Community donations dropped during the leadership and organizational transition of the past two years, compounding what had been a downward trend before that, she said.
Total contributions for the 2018-19 fiscal year are in the $307,000 range, $240,000 less than the previous year — a 76% drop. Bergman said reducing disbursements this year will help build capacity for larger grants to nonprofits next year. The organization is gearing up for a focused fundraising campaign and is looking for outside funds to cover overhead costs, which will make more of local contributions available in the future, she said.
The agency’s finances have been in the spotlight since early 2018 with an announcement that it had lost track of how much money it had on hand to give out to partner agencies and an accountant had been called in to complete a full audit.
One of the issues, board members said at the time, was grant awards had been made based on pledges rather than cash in hand and that was no longer going to happen.
Tax returns now available for that time period show the nonprofit spent about $500,000 more than it received in revenues from April 2016 through June 2018 and had been dipping into its reserve account for six of the previous seven years.
Some of the financial details show:
- Community donations are down. In 2016, United Way received $812,607, which dropped to $703,495 in 2017 and $540,000 in 2018. This year, according to Bergman, the donations are estimated in the $307,000 range.
- Disbursements to partner agencies remained relatively consistent until this year. Agencies received $225,000 total in both 2017 and 2018.
- Salary costs increased from $146,671 in 2015 to $215,893 in 2016 and $259,827 in 2017. Some of the increase was from picking up the costs of staff who had been hired with grant funds. The tax returns show two staff members on board in 2014, five in 2015 and six in 2016. In 2017, IRS Form 990 lists nine staff members, which includes several interim employees.
- Management and general expenses increased over time, from $87,329 in 2014/15 to $246,000 in 2017/18 fiscal year. The plan is to reduce those in the future with the help of outside grants.
- The organization’s net assets dropped from $921,649 in 2014/15 to $398,156 in 2016/17. Its fund balance dropped from $822,000 in 2013/14 to $308,606 as of June 30, 2019.
Bergman, who was hired in August 2018 as CEO of the renamed United Way of North Central Washington (a change from United Way of Chelan and Douglas Counties), said funding decisions this year are part of the restructured “United Way 2.0.”
The idea is to focus on basic survival needs — food, drink, shelter and clothing — giving funds to organizations that reach those who need it most, determined by participating nonprofits.
The four groups receiving funds this year are Mobile Meals, Small Miracles, Community Action Council and Lilac Services for the Blind.
Bergman said July 25 that she expects the total distribution to the four groups to be about $62,000 of the estimated $307,000 in pledged donations for the year. The amount each will receive is close to what they received last year, she said. The rest of the funds will go to pay fundraising expenses and into the coffers for next year.
The other United Way partner organizations that historically have applied for and received grants will go without — at least for the coming year.
“We could have taken the easy path and funded everyone, but it’s not sustainable,” Bergman said. “We had to make the tough decisions.”
It will get better, she said.
Carrie Gavin was hired in October to help with grant writing, among other things, helping look for funds to cover operating overhead and other collaborative efforts. Austin Begay joined in January to work on fundraising.
The plan is to bring back the “ambassador” and “loaned executive” programs in which community leaders make the rounds talking about the United Way, Bergman said. The names of those individuals have not yet been announced.
Once funds are available, community organizations will be able to apply for funds throughout the year, rather than just once a year, she said.
A study by United Way Worldwide shows the number of donors contributing during the campaign year dropped significantly during the recession, cut by more than half from 2008 to 2012. The number did not increase as the economy recovered and continued to drop through 2017.
The hope is to work on reversing that trend, Bergman said.