Designated Gifts Lead To Fundraiser Layoffs

June 20, 2017       Mark Hrywna      

Two of the nation’s largest United Way affiliates and the organization responsible for raising three-quarters of the funds to operate New York’s Central Park were among the nonprofits that laid off employees amid cost-cutting efforts in recent months.

United Way of Metropolitan Chicago (UWMC) laid off 20 percent of its staff in a restructuring of the organization. Greater Twin Cities United Way cut 5 percent of staff after a spike in donor-designated gifts handcuffed how money could be spent, and the Central Park Conservancy trimmed its workforce by about 7 percent after a year in which expenses outpaced revenue by almost $19 million.

Of the UWMC’s 108 employees, 22 were reportedly laid off, but the creation of new positions and reorganization eventually will bring the total number of employees to 91.

“At this juncture in the organization’s history we have identified that there is an opportunity to transform the organization by employing contemporary communication, fundraising, technology and operational strategies,” President and CEO Wendy Duboe said via the statement. “As a result we have restructured our operations to leverage these new strategies and to maximize our commitment to building stronger communities in the broader Chicago region,” she said.

UWMC finalized a new community impact plan called “Stronger Neighborhoods for a Stronger Chicago Region” after surpassing the goals of its Live United 2020 impact plan, according to DuBoe. Impact plans for United Way align around education, income and health.

United Way of Metropolitan Chicago ranked 11th last year among more than 1,200 United Way affiliates in terms of total support, with more than $53.5 million.

According to its Internal Revenue Service (IRS) Form 990 for the fiscal year ending June 2016, the Chicago affiliate reported revenue of $51.658 million but expenses of $52.755 million — a deficit of $1 million. That compares with $1.9 million on the positive side for 2015 and $2.2 million for 2014. Net assets were reported as $18.1 million last year.

To help reduce annual operating expenses by about 7 percent, the Central Park Conservancy cut its workforce by 30 positions. A spokeswoman declined to comment on individual positions or personnel matters but said the conservancy had 398 employees before the reduction in force (RIF) took place on May 18, reducing its workforce by about 7.5 percent.

“We believe these changes will position the conservancy to continue improving our effectiveness as stewards of the park while serving its over 42 million annual visitors,” President/CEO and Central Park Administrator Douglas Blonsky said via a statement.

Revenue to the conservancy spiked to $68 million in 2015, including $45 million in “all other contributions,” as reported on its annual federal Form 990. Those categories declined to $49 million and $28 million, respectively, for the fiscal year ending June 2016. Project revenue, which was $2.3 million in 2015, was reported as only $36,000 last year and overall expenses outpaced revenues by $18.8 million.

The Central Park Conservancy raises 75 percent of the funds needed to operate Central Park, which has 42 million visitors annually. The 35-year-old organization last year launched Forever Green, a 10-year, $300-million campaign to support the restoration and preservation of the park’s woodlands, playgrounds and historically and architecturally significant structures. A $25-million cornerstone gift was pledged by the Thompson Family Foundation and $112 million had been raised at the time of the announcement in July. In 2012, the conservancy received a $100 million gift from hedge fund manager John Paulson.

Greater Twin Cities United Way actually exceeded its fundraising goal by $2.2 million last year, raising $87.6 million, but laid off nine employees in April. An increase in donor-designated contributions for specific organizations created a $6-million shortfall in funding for United-Way directed initiatives. The shortfall also led to an 11-percent reduction in expenses and a freeze on executive pay, according to President and CEO Sarah Caruso.

Twin Cities reported $96.6 million in 2015, its centennial year, down almost 4 percent from $100.3 million in 2014.

As part of a 9-percent reduction in regional program support, United Way’s community-needs experts looked at “programs that are not yet showing the results they expected for the level of funding available, as well as programs where grants were well above the levels at which United Way funds most of its other programs.” All other grants were reduced by 5 percent, according to a press release from the Greater Twin Cities United Way.

The Minneapolis, Minn.-based Pohlad Family Foundation reportedly invited 40 nonprofits with cuts of 40 percent or more in United Way funding, including several domestic violence shelters, to apply for $1 million in emergency grants.

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