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December 2008
Restoring Confidence
By Ellison Clary

     Regaining public confidence is where Carlos Evans sees United Way of Central Carolinas (UW) by this time next year. The UW board chairman believes it’s on track to realize that vision.

     “We will be a leaner agency,” Evans says as he reels off a list of priorities. “We’ll be more efficient, we’ll be less about programming and more about maximizing dollars going to agencies, and there will be more transparency.”

     Meanwhile, Mac Everett wrestles with a double whammy spawned by an executive pay controversy and a tanking economy. The interim UW president and chief executive is trying to raise as much money as possible to address burgeoning health and human services needs.

     Both Everett and Evans are determined to succeed.

     Neither imagined their predicament before the late-summer revelation that Gloria Pace King, former UW CEO, had negotiated a $2 million pension package with her board’s Executive Committee.

     A Governance Review Panel, chaired by Bob Sink of the Robinson Bradshaw & Hinson law firm, is reviewing how the Executive Committee came to approve the pay and pension package with scant knowledge of the full board. The panel's report is anticipated on December 14.

     In addition to a faltering economy, public outcry about compensation issues, including King’s $290,000 a year salary, crippled fundraising for the United Way. UW funds support 91 health and human services agencies in Mecklenburg, Cabarrus, Union and Anson counties as well as the Mooresville-Lake Norman area.

     King has been relieved of her duties and United Way chairman Graham Denton has resigned. Evans, scheduled to take the helm in January 2009, assumed board leadership early.

     Everett, retired leader of Corporate and Community Affairs for Wachovia, agreed to serve as interim president and CEO. He started working a week before his official September 1 employment date.

     Scaling a mountain of adversity, Everett is quick to address a sticking point to some—his own $20,000-a-month salary.

     “This is not a volunteer job, this is a full-time job,” says Everett, 62, who remains general chairman of the Wachovia Championship, Charlotte’s stop on the PGA tour, and is involved in a number of other community initiatives.

      “I committed $20,000 to the United Way campaign this year,” he says. “It’s my pledge. Not because it’s a month’s salary but because I believe in the United Way and have a passion for the United Way. I’m not uncomfortable that I’m getting paid to do this job.”

He has plenty of other concerns.

     Though the United Way raised a record $45.3 million for 2007, an economy whose vital signs consistently tracked downward was making that amount look unattainable even before the unrest about King’s compensation.

     Leadership decided this year’s campaign would have no goal. That proved prescient when Wachovia sought a buyer to avoid failure and Wells Fargo won the bidding war to acquire one of Charlotte’s crown jewel headquarters companies.

 

More Dollars a Big Need

     When the drive should have ended in mid-November, pledges were nowhere near last year’s level. Much more than public anger about the compensation package, Everett blames the sour economy.

     “The economic environment in which we operate today is unlike anything I’ve seen in my 30 years in Charlotte,” says Everett. “It’s the general economic condition, but more specifically, it’s the challenges that the financial services industry faces and the fact that this economy in Charlotte is driven so much by two large financial services organizations.”

     Charlotte’s economy isn’t as diverse as some believe, he says, and adds that 37 percent of last year’s United Way contributions came from Bank of America and Wachovia.

     So Everett leads a continuing fundraising effort, even though the official deadline has passed. It’s a difficult undertaking.

     “People are being very conservative in how they allocate their dollars now; that goes for what they’re spending on their needs everyday, but also in their charitable contributions,” Everett says.

     Economic uncertainty also feeds mushrooming community needs, making UW dollars more critical. Everett cites much longer lines outside Charlotte’s Crisis Assistance Ministry, which serves the working poor who face financial emergencies.

     To help ease the shortfall, Everett has reduced the United Way operating budget by $1.7 million by cutting all non-essential spending. He has scuttled programs such as leadership development, and has scaled back events such as kickoffs and celebrations. He is reallocating some of a $1.4 million special grants budget back into the pool of funds for member agencies. And he’s deliberating about how much of the United Way’s $12 million reserve fund can be used to help make up for the campaign shortfall.

     “We’re getting great support from the agency leaders,” Everett says. “We’ve focused on the agencies as our customers.”

      Some people have said they will give directly to the agencies, Everett acknowledges, but adds that United Way distribution is extremely efficient.

      “Many of the people who come to the United Way agencies for help have multi-dimensional needs, so they need not just one agency but a number of agencies,” he explains. The United Way funds each of those agencies, he says.

 

Admitting Mistakes, Taking Action

     Everett sums up his modus operandi: “I don’t know anything to do when you lose somebody’s trust except to stand up and admit that mistakes were made, apologize for those mistakes and tell people what you’re going to do to fix them,” he says. “And more important than telling them is to take some action.”

      Evans has an action plan to achieve his vision by this time next year.

      The 57-year-old executive vice president is in charge of Wholesale Banking at Wachovia. He moved to Charlotte in 1991 with a Bank of America predecessor.

    “There should be no secrets,” Evans says, referring to United Way governance. UW audited financials and tax returns have long been posted on its Web site. He’s opened all UW board meetings, and minutes of committee and board sessions alike appear on the Web site, as well.

     That should eliminate what led to board members being unable to explain the former CEO’s compensation package. The details were embedded in the budget the full board approved, as was the outline of King’s Supplemental Executive Retirement Fund. The Executive Committee of the United Way approved those matters, but didn’t share them with the board.

    “The mistake that was made was not discussing the issue of her compensation in the full board setting,” Evans says as he zeroes in on instituting more accountability. “If it had been exposed to a broad enough group, the Executive Committee would have learned that this was a level of compensation that our community just couldn’t get comfortable with.”

    The Executive Committee members have apologized after acknowledging their mistake, Evans says, adding, “Exactly how that occurred will be a function of what Bob Sink reports.”

    Sink says his committee of seven members that he handpicked with an eye for varied outlooks has logged hundreds of hours. “We’ve had professionals come in from consulting organizations, trying to give us a good perspective on what the best practices are for non-profit governance,” he says.

    “I don’t think the public will be surprised at anything we say,” Sink continues. “I hope they’ll find the recommendations consistent with their own thoughts.”

 

A Call to Action

    After the Sink committee’s report, Evans plans an offsite retreat for the United Way board. The focus will be a long-term view of how the agency should operate.

     One concern is how much programming the United Way should do. There has been media criticism of $4 million the agency spent last year on four internal programs. That funding means that close to 25 cents of every dollar goes to internal programs aimed at community benefit as well as to fundraising and general administration costs.

     Evans says there is no effort to hide those expenses, but he hopes the board will seriously consider which community service-oriented internal programs are necessary, and whether they should be as large as they are.

     “Those programs take dollars that could otherwise go to the agencies,” he says simply.

Leaders at the United Way member agencies applaud the idea of putting those internal programs through the same rigorous process they experience as they justify funding, he adds.

      Board membership, now at 60, probably will shrink, although Evans adds that number includes all former chairs, and they are not expected to attend meetings. “The working group of members is a much smaller number,” he says, “but I think Bob Sink will say, from a sheer governance point of view, it’s too big.”

     A search committee will seek a permanent chief executive, and Evans has ideas about its direction. He hopes it will consider the possibility that a committed area person might take the job for a relatively modest salary just to benefit the community.

     “I don’t want to inhibit anyone from other United Ways,” he says of possible candidates, “because we’re going to look across the board. But I think there’s a real question about what do we need at this point in time.”

     The board’s strategic planning will drive what kind of person the new executive should be, he adds.

      For the next executive, he says, “I think we’ll pay a competitive salary, but it will be less than what we’ve been used to paying.”

      The new executive will take over a United Way that, by many standards, compares well with its counterparts nationally, Evans says. Under King, the UW grew from $17.5 million raised in 1993 to $45 million in 2007.

      The United Way model remains relevant and necessary, Evans adds.

      Without the United Way, the millions of dollars necessary to meet community needs just would not get raised, he asserts. Individual agencies would beef up development staffs, adding to their operating costs while being less effective.

      “Companies like Wachovia, Bank of America and Goodrich couldn’t let 91 agencies run in-house employee campaigns,” he says with a head shake.

      Yet Evans quickly reiterates his commitment to change, calling it necessary to restore the community respect that the United Way deserves.

      So for late 2009, when Evans is winding up his chairmanship, here’s what he sees: “The United Way will be in a position where people trust it, where they feel good about where their contributions are invested and they feel good about the outcomes resulting from the dollars they give.”

      Jane McIntyre, chair of the area’s Council of Agency Executives, feels there is reason to believe in Evans’ vision. McIntyre is chief executive of the YWCA of Central Carolinas.

      “I do think that when trust is lost, it has to be earned,” she says. “It does not happen overnight. It will take some time.

      “But it will be restored,” she adds. “I am  confident about that.

 

 

 

 

Ellison Clary is a Charlotte-based freelance writer.
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