United Way faces $180,000 shortfall

Nonprofits work to recover funds

By KATHERYN HOUGHTON

Daily Inter Lake

After a series of business turnovers and closures in the Flathead Valley last year, the United Way agency serving Northwest Montana experienced a $180,000 shortfall. Nonprofit organizations that rely on those dollars are working to fill in the gaps.

United Way’s most significant role is fundraising for other nonprofit agencies. In recent years, the United Way of Flathead, Lake, Lincoln, Glacier and Sanders counties has doled anywhere from $250,000 to $280,000 annually to local nonprofits, according to its IRS 990 forms.

In 2014 — the most recent 990 form available — United Way plugged more than $560,000 into the community through its grants and assistance to nonprofits, and services it offers such as a senior grocery delivery program.

United Way’s 17 member agencies count on a chunk of that allotment each month. In July 2016, the payments stopped coming.

“We are feeling it, bigtime,” said Kari Gabriel with Flathead CARE. “I’m sure all the nonprofits are in the same place.”

Flathead CARE, which combats teen substance use, has relied on United Way for nearly two decades. Scott Warnell, the nonprofit’s board chair, said United Way’s contribution has accounted for roughly 15 percent of Flathead CARE’s budget.

He said in recent years, funding from United Way has been “hit or miss, just due to them not receiving the allocations they expected.

“When the money stopped in July, we didn’t know if United Way was trying to catch up, or what,” he said. “It was more like September that we got official word that we won’t get allocations until they get things figured out.”

LOSS OF FUNDS

Sherry Stevens, the executive director for the local United Way, said the payment halt was triggered by multiple major contributing businesses that either closed or changed hands in 2016 — including its largest supporter, Plum Creek Timber Co.

“We knew we were going to have a big shift here — we had no idea how much,” Stevens said.

More than 90 percent of United Way’s funding comes from its initiative called The Workplace Giving Campaign, where employees of Northwest Montana companies promise a certain amount of their paycheck to United Way each month.

More than 40 percent of those dollars came from Plum Creek, which matched its employees contributions.

Last year, that company was sold to Weyerhaeuser Co. Within the same year, Weyerhaeuser ­— one of Columbia Falls’ largest employers — announced it was closing its lumber and plywood mills in Columbia Falls.

Stevens said when the valley’s economy takes a hit, so do the nonprofits that work to stabilize the impact.

“We didn’t announce the payments were going to stop because we didn’t know. We were just waiting to see if money was going to come in,” she said.

In 2015, the campaign brought in $680,555. In 2016, that number fell to $500,212.

Weyerhaeuser spokesman Tom Ray said the company still gives its employees the option to set aside part of their paycheck for United Way. Instead of matching those dollars, Ray said Weyerhaeuser has a policy of donating money to nonprofits based on the hours employees spend volunteering for an organization.

“It’s a way to support our employees [being] involved and target our contributions to things that they value and want to support,” he said.

Stevens said that while the drop in contributions has been a challenge, it’s given United Way a chance to change how it promises money to nonprofits.

In the past, United Way told agencies how much it hoped to hand out if it had a successful campaign.

“We made commitments that sometimes we couldn’t keep,” she said.

Now, the agency will campaign first, then dole out the funds.

Stevens said United Way will also no longer promise funding coming from large national companies such as Wal-Mart until it has the money in hand. She said the lag time in receiving the money from third-party venders, paired with the high turnover rate at national companies, meant that money wouldn’t always arrive. So from now on, if employees at those national companies sign up to set aside part of their paycheck each month, United Way will wait to include that in its campaign until the following year.

“It will be more solid for our nonprofits, but in the transition of us deciding to no longer put this on the books this year, it’s caused a huge loss,” she said.

Stevens estimated that loss at $70,000.

“This is so hard because we know how much the United Way member agencies depend on the United Way dollars,” she said.

IMPACT ON NONPROFITS

For a 40-year-old program that connects seniors with volunteer opportunities, the halt in funding meant it closed its doors early.

The Flathead County Commissioners voted in January to end the county’s Retired and Senior Volunteer Program after the program struggled under growing federal requirements and a shrinking pot of dollars that supported the office’s administration costs.

Lisa Sheppard with the Agency on Aging said it had expected roughly $12,000 from United Way, but received just a little more than $1,000.

“Not having any guarantee of when or if that money might come, it’s not the reason we ultimately decided to end RSVP, but it was the catalyst,” Sheppard said. “If we had been a different type of entity, it’s hard to imagine how difficult it would be.”

Gabriel said the $10,000 Flathead CARE expected from United Way over the last year meant continued support for its one full-time and one part-time employee, and programs for kids. She said the part-time youth coordinator position was left vacant in March, but the nonprofit can’t afford to hire a replacement with its drop in funding.

“So it’s just me,” she said. “We’ve had to go into savings at this point. We’re creative. I don’t buy a thing I don’t need and we’ve been asking for more assistance from our communities and corporate sponsors.”

Jesse Mahugh from Big Brothers Big Sisters said in the last several years, United Way typically has sent the nonprofit around $12,000 a year.

“It’s definitely a hit, but I think we live in a generous community... And I see a lot of nonprofit leaders sharing ideas and collaborating,” he said. “We feel optimistic.”

IMPACT ON UNITED WAY

Nationally, United Way saw donations drop by 4 percent to $3.7 billion in 2015. That’s according to The Chronicle of Philanthropy, which publishes an annual list of the United States nonprofits that raise the most money from private sources. Brian Gallagher, president of United Way Worldwide, told the Chronicle the decline reflects corporate consolidation and wage stagnation, undercutting the charity’s bedrock workplace-giving programs.

Stevens said the recent dip in funding has led the local United Way to cut 33 percent of its budget as well as one full-time and two part-time positions.

“Anytime this happens, we take as much of the hit as possible,” Stevens said.

She said the last time the nonprofit had to freeze payments was in 2009 when Columbia Falls Aluminum Co. stopped operating. At the time, the company and its employees contributed 55 percent of its workplace campaign.

“The loss was huge,” she said. “For us, for the company, for the people who worked there, it was hard for everyone.”

She said as the community recovered, United Way’s funds returned.

“The people who worked at CFAC are now working at other businesses and they’ve continued to be donors to the United Way,” she said. “Just like then, we just want to be there as much as we can for the limited resources that we’ve had to help those in need in our valley.”

This month, United Way sent out announcements preparing for its Citizens Review, where community volunteers meet with the leaders of programs United Way supports. After the nonprofits present their mission and needs, the panel of community volunteers will determine how much money each agency will receive.

The registration deadline to serve on a panel is Thursday, June 22. The event then takes place from June 27 through June 29.

Stevens said she hopes monthly payments to nonprofits will kick off again by the end of July, almost a year after the money stopped.

“This has been a United Way that has successfully come back. We have successfully recovered from the economy, we have successfully recovered from other businesses that have closed or changed ownership,” she said. “We have a community that has been there for us. And we’ll continue to be there for it.”

To volunteer for the Citizens Review, call (406)752-7266 or email info@unitedwaycares.org.

Reporter Katheryn Houghton may be reached at 758-4436 or khoughton@dailyinterlake.comc