LOS ANGELES -- The United Way is changing the way it does business, putting more money into communities and small projects that are calculated to improve people's day-to-day lives.
Once satisfied with channeling billions of dollars each year into big mainstream charities such as the American Cancer Society, United Way chapters across the nation are shifting their focus to local organizations that are working to reduce crime and improve health and education in poor, ethnic neighborhoods.
The changes reflect a revolution of sorts in the way Americans donate to charity. A new generation of pragmatic donors want their money put to work in their own communities, and they expect to see tangible results.
To keep up with the changes, United Way is attempting to transform itself from an organization that collects and redistributes donations to one that collaborates with local communities to attack social problems.
Betty Beene, president of United Way of America, one of America's oldest and best-known charities, said the idea is to invest in communities ''in ways that brought about change in the quality of life that was beyond the capacity of any single agency to achieve.''
More than 400 of United Way's 1,400 local chapters are expected to shift at least some money to new projects this year. Others are expected to follow.
In Los Angeles, that has meant taking about $4 million away from traditional recipients and giving the money to new, community-based nonprofit organizations that focus on needs in minority neighborhoods.
Other cities, including Atlanta, San Francisco and Indianapolis, are reallocating money to focus on projects that will help ease crime and improve life for the poor.
''What we realized was we weren't able to be responsive to the changing issues in our communities because we were locked into (giving money) to certain agencies,'' said Sheila Hill-Fajors, president of United Way of the Bay Area in San Francisco. ''We needed to be focused on neighborhoods and the people who were most fragile in our communities.''
The new approach has created a windfall for some small activist organizations operating in poor and minority neighborhoods.
For those who are losing United Way funding, the shift is creating a crisis. The Los Angeles chapter of the American Cancer Society will lose about $700,000, one-tenth of its 2000-01 budget. Children's Hospital of Los Angeles will lose $620,000.
''You don't lose that amount of money without it being a blow and since all of our money is raised from private donations, we are going to have a challenge to make up what amounts to about $700,000,'' said Jane Cohen, director of marketing at the Cancer Society's regional office.
Typical of the new recipients is Success by 6, a program for preschoolers and their parents that is taking hold in Los Angeles and other cities. In Los Angeles, Success by 6 this year will receive $250,000 from the United Way to improve family literacy, day care and prenatal care for mothers in two minority neighborhoods.
''We're going to start programs that we were thinking about but didn't have the money to do,'' said Lila Gurgis, Success by Six coordinator in Highland Park, a mostly Hispanic neighborhood.
Americans, enriched by the long economic expansion, are giving away more money than ever. Americans contributed $174.5 billion last year to charity, an 11 percent increase over 1997, according to Giving USA, an annual report on philanthropy. Numbers for 1999 donations are not complete, but the total is expected to exceed that of 1998.
United Way also is collecting more money, with contributions reaching $3.5 billion in 1998, up 4.7 percent from the year before.
The changes at United Way began in the early 1990s. Fund raising had been damaged by a financial scandal that ended with the ouster in 1992 of United Way President William Aramony.
For decades, United Way had thrived by working with big corporations to gather money from their employees. That also was changing by the early 1990s. More corporations were giving their employees alternatives to United Way. The agency, in turn, was collecting more money from smaller, minority-run businesses that wanted to see money spent in their neighborhoods.
In 1998, United Way began encouraging local chapters to direct more money and attention to local needs.
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