Will United Way merger help or hurt?

Warren County organization to vote Thursday on combining with Butler County group.

Potential, pitfalls of United Way merger

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By Ed Richter, Staff Writer Updated 8:14 AM Monday, February 1, 2010

LEBANON — For members like Gerald Russell, creating one United Way organization takes the passion people have for Warren County out of the agency.

More than 200 Warren County United Way voting members will vote Thursday, Feb. 4, on a proposed merger of the organizations in Warren and Butler counties. Butler County has already agreed to the merger.

“For years people have stood behind the organization with their giving because it’s what we do in Warren County. When you take the heart out, I don’t see this happening,” Russell said.

Leaders from both volunteer organizations say the merger is needed to reduce administrative costs and burdens to programs and agencies that operate across both counties and to eliminate redundancies. They say it will add greater potential for corporate support because there is a single organization to work with.

The proposed merger will help solve problems that don’t stop at a county border, said Bruce Jewett, Butler County’s board president.

Those against the proposed merger in Warren County challenge how it could happen without a business plan, say it’s happening too fast and question if agencies will receive the same representation after creating the new organization.

The two organizations provided funding to more than 100 programs last year and have 59 partner agencies, with contribution campaigns of $2.45 million in Butler County and $2.4 million in Warren County.

IRS 990 tax filings for both organizations show each has had to dip into their cash reserves since 2005 to continue the same level of allocations and services for their agencies. Revenues have increased each year, but the contribution campaigns have stayed nearly level in the past five years.

Alan Schussheim, a Warren County United Way board member, says nothing can be guaranteed, but added he believes the bylaws created for the proposed merger leave Warren County in a good position.

“There’s too much at stake with our agencies and the people they provide for. Why would we ever do something to compromise this?” Schussheim said.

United Way merger foes want more time

Opponents of Warren County United Way merging with Butler County say there has not been enough discussion or planning to make an informed vote after a meeting on Thursday, Jan. 28.

After three years of talks fell through last summer to create a regional United Way with Greater Cincinnati (which includes Middletown and Trenton), Butler County, Warren County and Dayton, board members from Warren and Butler counties started the discussion on the possible merger.

Not all members of the Warren County United Way were involved in this discussion. And that lack of communication concerns them.

One thing remains clear throughout the discussions: Both United Ways are seeing a stagnation in contributions and an increase in expenses that has been felt in similar organizations across the country.

Since August 2005, there have been 35 United Way mergers in the United States, according to Jenny Palazio, membership accountability director for United Way Worldwide based in Alexandria, Va. If the Butler/Warren merger is approved, it would be the eighth merger of United Ways in Ohio since 2004.

Palazio said United Way Worldwide does not push for mergers, but the organization is supportive “when the right circumstances exist in the community.”

The IRS 990 filings available for both organizations show each has had to dip into their cash reserves from 2005-2008 to continue the same level of allocations and services for their agencies. Revenues have slightly increased each year, but the contribution campaigns have stayed nearly level in the past five years.

In 2005, the Butler County United Way had revenues of $2.34 million and expenses, which include allocations and services, of $2.35 million, leaving a deficit of $12,619. In 2008, revenues were $2.36 million and total expenses were $2.56 million, leaving a deficit of $199,448.

Warren’s total revenues in 2005 were $1.89 million and expenses were $2.3 million, leaving a deficit of $454,019, according to their IRS report. Things improved in 2008 as it reported $2.18 million in revenues and $2.3 million in expenses, leaving a deficit of $146,648.

According to merger information documents, Warren has a reserve balance of $296,000 or about two months of allocations. Butler has $365,000, or about two months of allocations as well as an additional board-designated reserve of $414,000.

A vote for the proposed merger “is for a new, energized United Way” that would be the most relevant force in Butler and Warren counties, said Tom Clark, a Warren board member who has been on the merger team.

Steve Hathaway, another Warren board and merger team member, said there “is such a great potential that is tapped and untapped and not to do this would be to maintain the status quo.”

Original talks about the proposed merger were conducted by the exploratory committee of Karen Mueller, Robert Sommers and Bruce Jewett from Butler County, and Doug Magoto, Hathaway and Clark of Warren County. That resulted in the development of a merger proposal that had a quick timeline to be completed before Jan. 1.

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Proposed provisions in United Way merger

- Preservation of Warren County’s identity.

- Equal board representation from both counties to Jan. 1, 2016, with seven members from each county.

- The first board chairman will come from Warren County. That will be Doug Magoto.

- The other board members for the new organization would include: Karen Mueller, Robert Sommers, A. Christian Worrell III, Shelly Wallpe, Eric Slaton, Andrew Nastoff and Jewett, all from Butler County; Lisa Marek, Chris Breitenbach, Kalonji Martin, Allen Schussheim, Steve Hathaway, Clark and Doug Magoto, all from Warren County.

- Maureen Noe would serve as interim president/interim CEO of the new organization.

- Donations raised through each of the organizations’ 2009 campaigns are not subject to the merger.

- The proposed merger contract and new bylaws will require a two-thirds supermajority for any major corporate actions, such as a future merger.

- The certificate of merger has to be filed with the Ohio Secretary of State’s Office by Feb. 15. The merger agreement will terminate automatically if the filing deadline is not met.

Source: United Way officials

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