The local United Way said yesterday that its current fundraising campaign in the private sector has netted less than a third of the previous year's total and that it is cutting its workforce by 40 percent to slash costs and restructure the organization.
In a short staff meeting at the group's downtown headquarters, interim chief Robert Egger said the fall campaign among private employers, which was extended past its traditional closing date of early December, has $13 million in pledges. That compares with more than $45 million by late 2001.
Donations to the United Way of the National Capital Area have plummeted since allegations of financial impropriety surfaced last year. The result has been not only cutbacks for the organization itself, but also lean times for area nonprofit groups that depend on it for funding. Many are already weakened by rising demand for their services and falling revenue.
Other organizations have stepped in to run the workplace campaigns formerly handled by the United Way, but so far, they have been unable to match its fundraising clout.
The results are better for the annual fundraising drive in the area's federal workforce, which the local United Way runs separately from its private-sector campaign. So far, the Combined Federal Campaign has raised about $45 million and is likely to nearly match the previous campaign's $50 million, officials said yesterday.
In all, Egger said yesterday, the United Way, which provides the CFC with donor forms, publicity and fund distribution, expects to raise $60 million from both campaigns this year, compared with about $95 million last year.
"The fact that [the CFC] came in at that level is just amazing," said Egger, who was brought in to reshape the organization after the ouster of chief executive Norman O. Taylor.
Although United Way officials touted the good news about the CFC fundraising, that success does little to help the organization recover from a year of financial turmoil and scandal. United Way receives a flat fee of about $2 million to run the federal campaign, no matter how much money it raises.
The CFC has not gone untouched by the United Way scandal. The United Way has paid $1 million to local agencies that had not received CFC pledges they were due, and officials said yesterday that they will pay an additional $1 million owed to 1,000 nonprofit groups.
Officials said the job cutbacks announced yesterday -- which include 28 layoffs and resignations of two senior managers -- will allow them to slice costs by $2 million a year. Egger said the cuts were across the board.
In the organization's private-sector fundraising drive, much of the loss is the result of large corporations -- the backbone of the annual campaign -- deserting the organization after repeated revelations about its finances, according to corporations and United Way sources.
Internal financial reports from United Way show that major corporations and their employees have pledged only about $4.5 million since the fall, compared with about $20 million in 2001. Law firms have raised less than half the $2.5 million pledged in 2001.
United Way funding is "significant to our organization," said Linda Wimpey, executive director of FACETS, a nonprofit group that provides emergency food, shelter and counseling to needy families in Fairfax County. Wimpey said her organization can ill afford to lose the $40,000 it receives annually from the United Way.
"It's money that we will have to try to find someplace else," she said.
Yesterday's announcements are the latest chapter in an 18-month saga that started when a United Way employee was fired after she said she warned top managers of financial mismanagement.
Later, the United Way pushed out three board members and terminated its director of communications after they, too, raised questions about financial operations of the organization, one of the largest United Way affiliates in the country.
A Washington Post investigation found that the organization had, among other things, exaggerated its fundraising claims, taken more money for overhead costs from some contributions than it claimed and made a $1 million pension payment to its then-chief, Oral Suer, two years before he retired. That prompted the appointment of a task force, headed by former transportation secretary Rodney E. Slater, that recommended wholesale changes at the agency.
Taylor, who replaced Suer in 2001, was ousted, and Egger, founder of the D.C. Central Kitchen, was brought in to make the task force's recommended changes.
In the cutbacks announced yesterday, most of the employees in the organization's eight regional offices were laid off. United Way officials said they plan to keep the offices open with smaller staffs by finding donated office space for them.
One worker in her mid-fifties, who was let go yesterday, said she had planned to stay with United Way until her retirement because of its reputation as a solid organization.
"Whoever thought the United Way would go through something like this?" she said.