United Way shifts its giving strategy

In an effort to increase accountability and better target its charitable dollars, the United Way of Massachusetts Bay and Merrimack Valley will redirect about $3.6 million from the amount it provides traditional charities to new programs.

The organization will emphasize improving early childhood education, after-school programs, combating homelessness, and providing job training as it distributes $100 million in grants over the next three years. It also will demand proof that agencies which receive funds are meeting their goals.

"We've made some revolutionary changes in how we invest the money," said United Way chief executive Milton Little Jr . "All of the United Ways are following this notion of community impact, which is a transition in the United Way's philosophy."

Across the country, regional chapters of the United Way, an umbrella group that organizes workplace campaigns to raise money for a broad spectrum of nonprofits, have been shifting strategy to increase their effectiveness in their local communities.

The local United Way has a $34 million budget for fiscal 2008, which begins July 1. Under the new system, the United Way has set aside $1.7 million for a fund modeled after the venture capital business. The money will go to fund innovative programs designed by local charities.

The agency has allocated $1 million in venture grants for 16 Bay State charities so far. One of them, the Charles River Public Internet Center, provides free computer access in Waltham. Executive director Judith Webster said she will use its money to build an Internet site designed to provide social service information to people living in dozens of communities in Greater Boston. Another organization, the Community Economic Development Assistance Corp. in Boston, will get a grant to train people who operate job training programs.

"The venture fund pot allows us to invest in organizations that are new for us," said Little. "If they work, then we'll embrace them." If they don't, he said, "then we'll try something out."

Sandra Miniutti, spokeswoman for Charity Navigator, a New Jersey organization that tracks the performance of US charities, said that United Way groups around the United States "are becoming much more focused in their giving." Miniutti said that high-profile scandals, including the 2004 theft conviction of the group's Washington, D.C., chief executive, have angered many donors and led them to demand results. "Donors are increasingly saying I gave you $100," said Miniutti. "What have you accomplished?"

The United Way will also expand a program in which the agency establishes new charities of its own to meet specific needs. The agency already sponsors a program for young women called Today's Girls Tomorrow's Leaders, and an after-school program for science education, Dream In Science.

Apart from $4.2 million already allocated for these programs, the United Way this year will shift an additional $1.9 million from its general fund to launch new initiatives targeting youth violence and homelessness.

As a result of the new policies, the United Way's general fund will be reduced by $3.6 million. This will mean cuts in the funds granted to the agency's traditional aid recipients. The cuts will be spread among the approximately 200 community agencies receiving United Way support.

"Everybody gets a hit in order to carve out the money for those new funding areas," Little said.

Catholic Charities of the Archdiocese of Boston will take a $227,000 hit, according to J. Bryan Hehir, president of the charity. Hehir said he was well aware of United Way's plan to shift its giving strategy, but was unprepared for the size of the cut. "I didn't have any idea of it until they talked to me today," he said.

Last year, Catholic Charities received $1.4 million from the United Way. Of this, about $300,000 came from donors who asked specifically that their money should go to Catholic Charities. The other $1.1 million came from the United Way general fund.

But for fiscal 2008, Hehir has been told to expect $873,000 from this fund, plus whatever targeted donations come in.

Hehir worried that the funding cut would affect his agency's program to provide emergency food aid and money to poor families. "So we'll have to go out and raise resources for that area," he said. But Hehir added that he still considers the United Way "a good partner to collaborate with. We're grateful for what we've gotten from them and what we will get from them."

Little said the United Way has long disbursed money with little effort to test whether it was doing any good.

Under the new plan, all those who receive funding will have to meet specific performance benchmarks. For instance, an agency that seeks to reduce homelessness would have to show a reduction in the number of homeless families in their community.

"There are going to be some very precise goals that are contained . . . There's got to be some real focused, research-based activities."

Hiawatha Bray can be reached at bray@globe.com.