The decision by the United Way of Greater Philadelphia & Southern New Jersey to narrow its grant-making focus to fight "intergenerational poverty" means that more than half of the 233 nonprofits that receive United Way money will now come up empty-handed in the fiscal year that begins in July.
The change, adopted after a nearly two-year review of what role the local United Way should play in the region, has not gone over well with some agencies that now have to fill holes in their budgets, particularly because United Way money could be used for paying electric bills and other general expenses.
"I think it's a worthy idea that they want to end intergenerational poverty. Who on earth can argue with that kind of a lofty goal?" said Abbie R. Newman, executive director of Mission Kids Child Advocacy Center in East Norriton, which works with child sexual-abuse victims.
But Newman said child sex abuse is an underlying cause of poverty and should not be left out. "Individuals who've suffered childhood sex abuse and have not been treated have a higher likelihood of not doing well in school," she said. "They have a higher likelihood of not meeting their potential."
At stake is the distribution of an estimated $28.1 million that United Way expects to raise from donors for its "impact fund," which is separate from the money donated through the United Way to specific charities. Applications are due Monday, and decisions are expected by mid-May.
United Way officials acknowledged that abuse and poverty are interrelated, but they said that work does not align with the group's new grant-making framework, which is designed to concentrate the United Way's energies because it was spreading itself too thin after a series of mergers that expanded its reach from Pottstown to Cape May.
"We needed to deepen our impact," said Mike DiCandilo, United Way's interim president and chief executive.
At the extreme, United Way was providing financial support to 57 different types of activities, from early reading to mental health. It has slashed its list to eight areas of interest: school readiness, grade-level reading, connections to schools for at-risk youth, education and job training, living wages, asset building, family stability, and advocacy.
In addition, United Way set three regionwide goals to be achieved by 2030. They are to increase the number of children who read at grade level by the end of the third grade from 60 to 90 percent, boost the number of youth 15 to 25 by 50,000 who are engaged in school and then pursuing further education or employment, and to ensure that 300,000 additional people are living above 200 percent of the federal poverty level. For a family of four this year, the poverty level is $25,100.
The shift follows the merger five years ago of the former United Way of Southeastern Pennsylvania with six United Way chapters in South Jersey and one in part of Delaware County, plus the addition of North Penn United Way last year. Since the big merger in fiscal 2013, United Way's employee count has fallen to 100 from 147, partly through attrition, but also through the elimination of management layers.
United Way's interest in fighting poverty extends well beyond Philadelphia, which is notorious for having the highest poverty rate of the 10 largest U.S. cities at 25.7 percent in 2016's census estimate, to include pockets throughout the region, including Atlantic City, Browns Mills, Chester, and Norristown.
The change in strategy has shaken the nonprofit sector.
"Whenever anybody changes their funding focus, whether it's a private foundation or an individual donor or an institution like United Way, there are always organizations that are left behind, that aren't going to be recipients anymore," said Eileen R. Heisman, president and CEO of National Philanthropic Trust, a Jenkintown nonprofit that manages donor-advised funds and provides other services in the philanthropic sector.
When that happens, those entities have to ask themselves: "Are we going to go out and raise money to fill the gap? Are we still going to be able to exist in the same way?" Heisman said.
Interfaith Homeless Outreach Council, a small Camden group, is among those that do not qualify under United Way's new approach, executive director Ruth Morganroth said. It used its current $6,000-plus annual grant to provide counseling for its clients, mostly men aged 40 to 60.
"We're obviously going to have to look for other funding to cover counseling, which for us is going to mean trying to work on our own fund-raising," said Morganroth, whose agency typically has an annual budget of $125,000 to $140,000.
Senior services is an area that has been hit hard by United Way's shift.
Surrey Services for Seniors, in Devon, has already seen its United Way funding fall from $160,000 last year to $120,000 this year. It will go to zero in the coming fiscal year, CEO Robert Madonna said. The group has a $4.5 million annual budget.
Madonna said it would have been helpful if United Way had more gradually reduced the funding. "I laid off a marketing person last week, a $50,000 employee. I couldn't wait until next year. I had to do it now," he said.
More than 300 organizations were prequalified to apply for grants but don't know what to expect.
The ARC of Cumberland County has been receiving about $30,000 a year that it uses for supplemental job training for individuals with developmental disabilities, executive director Jackie Steiner said.
"We are in the process of applying for additional funding, but we have no idea how that's all going to play out," Steiner said. "They have been a tremendous, tremendous partner to us."
Kate McGeever, executive director of Delaware County Literacy Council, said her organization is part of the job-training pathway because it provides adult education that helps individuals get jobs. That seems to fit under the new United Way rubric, but even so, the organization is presenting itself in a new way.