United Way will use its reserves to ease funding shortfall

By Sharon Salyer

Herald Reporter

A swift and dramatic response is needed to help close a $900,000 shortfall and prevent cuts in funding of 19 percent to more than 50 social service agencies, Snohomish County United Way officials said Tuesday.

The call for assistance was paired with unusual action by the United Way board itself. It approved draining $300,000 from its reserve fund — one-third of the fund’s total — to reduce projected funding cuts to nonprofit agencies from 25 to 19 percent during the first six months of this year.

"When you look at what people were doing after Sept. 11, civic organizations were doing special fund-raisers and car washes," said Brent Stewart, president of United Way of Snohomish County.

"If we can get the community focused on our local crisis … with people needing help here … we have a much better opportunity of closing" that $900,000 gap, Stewart said.

While each United Way chapter sets its own policies, the local United Way board has generally held 8 percent to 12 percent of the money raised each year in a financial reserve fund, Stewart said. Stewart said maintaining a reserve account is "good fiscal management."

This marks the first time the board has authorized dropping the reserve below 8 percent of the money raised in the annual fund drive, United Way spokesman Mark Todd said.

With the $10 million raised in this year’s campaign so far, this would generally mean a reserve of at least $800,000, he said. The board agreed to reduce the reserve to 6 percent "because of the crisis situation we’re in," Stewart said, referring to the impact the pending budget cuts would have on the county’s social services.

The reserve money is being used as a kind of financial life jacket for area nonprofits. Instead of facing funding cutbacks next week as originally planned, all the reserve money will be distributed between now and the end of February. This will give social service groups about a month to deal with what is now projected to be a 19 percent budget cut, which will start in March.

"It’s less of a blow," said Rebecca Roby, Snohomish County regional director for YWCA Pathways for Women. "It at least gives a little time to do planning."

"It takes our panic out of program cuts," agreed Gilbert Saparto, chief executive for Volunteers of America.

The traditional end to the United Way’s annual fund drive is Feb. 27. Rather than a closing event, this year it will be a "rallying call," Stewart said, adding, "We need to do all we can do to bring in additional dollars between now and March 31," the end of the agency’s budget year.

"We’re going back and asking some of our best donors if they can give again in recognition that this is a serious situation, unlike any year we’ve experienced here in some time," Stewart said.

Among the organizations funded by United Way are those providing child care, help for developmentally delayed and at-risk youths, teen programs, counseling for youths and adults, and help for seniors.

"I think the average person in the community is not aware of the dramatic impact that the shortfall to the United Way fund drive will have," said Al Boren, vice president for planning and development for the YMCA of Snohomish County.

"There will be many agencies hit hard in a variety of ways that most people and donors haven’t thought about," he said. "You start losing those, and you start losing some of the fabric of your community."

The projected United Way cuts come at a critical time because many social service agencies also are facing additional cuts from the Legislature, Roby said.

These same groups could be hit with a third level of reductions, she said. Many federal and state funding sources request local matching funds. "As the local match goes down, we might be at risk for losing additional dollars we raised that way," she said.

The potential of these combined cuts "has everybody holding their breath about how to negotiate it," Roby said. "These are very rough waters."

If the 19 percent United Way cuts stand, Volunteers of America, one of the largest social service agencies in Snohomish County, would be forced to slash about $132,000 between now and June, Saparto said.

As a result, Saparto said, the agency’s summer camp for low-income and at-risk kids, which began in 1935, might be forced to close this year.

You can call Herald Writer Sharon Salyer at 425-339-3486

or send e-mail to salyer@heraldnet.com.