United Way Official Resigns Over Spending

A director of United Way of Ventura County has resigned after blasting the nonprofit group for hiking administrative salaries and spending “frivolously” on new equipment and a training trip to Miami, while funneling too little money to the community programs that the agency was created to serve.

“I would say the United Way is out of control,” said Vince Ordonez, a member of the United Way board of directors until he resigned this week. “The president has too much authority on how he is spending this money, and no one is overseeing him.”

Ordonez, a top administrator of the county court system, maintained that United Way spends nearly one-fourth of its donations on administration-related overhead that never leaves the United Way office. It directs only 59% of its $5.1 million in annual collections to the 62 social and poverty agencies that are its members in this county, he said. Another 18% goes to other community agencies elsewhere.

Ordonez said Wednesday that from now on, he will make charity contributions directly to favored organizations and not to United Way to ensure that the full amount is spent on the needy.

United Way officials said that Ordonez’s figures on the agency’s administrative costs are way off, and that only about 11%, or $610,000, of the money collected from companies and individuals goes for administration.

“He’s just wrong,” said United Way President Ernest Thurmond, who directs the agency’s day-to-day operations. Ordonez erred when considering funds for fixed assets and reserves, and money to run United Way’s own community social programs as in-house overhead or administrative costs, Thurmond said.

And Thurmond said Ordonez stands alone among United Way directors in second guessing an operating budget increase of 18% to $967,000 this fiscal year, and in challenging the salary increases granted to a few staff members.

“I guess Vince has a difference of opinion with the other 35 board members,” Thurmond said. “You’ve got some people in the world who think that nonprofits should operate out of a 10-by-10 [foot] broom closet with a pocket calculator. But I don’t feel that we’re second-class citizens just because we work for a nonprofit.”

A budget increase was necessary for the fiscal year that began July 1 because past skimping on employee and equipment costs helped cause contributions to drop about $200,000 last year to $5.1 million, he said.

“What we’re doing is some future investment spending,” he said, noting that a substantial part of this year’s budget increase pays for hiring a fund-raiser to concentrate on large donors. “We’ve cut our budget every year for the last three years.”

But in a letter Ordonez said he circulated to the news media out of frustration with United Way administrators, he chides officials for increasing the agency’s budget but not also hiking its contributions to member agencies. Those remain steady at about $3 million this fiscal year.

“There is no justification to increasing the United Way budget when direct services cannot be increased,” he wrote. “I was under the impression that donations were solicited from the residents and corporations in Ventura County with the primary purpose of FIRST meeting the needs of the young, homeless, hungry, AIDS patients, elderly, the sick, etc.--not the administration.”

Ordonez specifically criticized the agency for:

* Considering implementation of a bonus system that could hike wages for some employees greatly, depending on how much they can increase community contributions to United Way. For example, Thurmond’s salary could jump from $70,000 to $103,000 with incentives.

“Donors are not donating their hard-earned dollars with the intent of putting more in the pockets of an administrative branch,” Ordonez said.

* Increasing the wages of some of United Way’s employees by as much as 20% over the last few months, allegedly hiking them to levels above those paid at the much larger San Francisco United Way.

* Purchasing four expensive laptop computers for the office and allotting $50,000 for a communications system to link them. Cellular telephones and pagers were also purchased for employees.

* Spending about $10,000 on a June training session in Miami for nine employees. “How many children could attend summer camp for $10,000?” Ordonez asks in his letter.

* Failing to include more Latinos in the United Way operation either as employees or directors.

* Raking off 15% of contributions as a handling fee even when contributors earmark a contribution for a specific agency.

United Way officials said Ordonez’s assertions are riddled with inaccuracies.

For example, Thurmond said the cost of sending nine employees on the Miami trip--which he defended as necessary for staff education and training--was $7,200 to the local United Way after reimbursements from the national organization.

In addition, Thurmond said 100% of money donated through United Way in the name of a specific community group, such as the Boys & Girls Club, goes to that agency if it is a United Way member. If it is not, an administrative charge is added, he said.

Latinos make up four of the agency’s 17 employees. But a total of eight workers are minorities and that is good work force diversity, Thurmond said. Only three of the 36 board members were Latinos--before Ordonez’s resignation--because Latino board candidates often turn down requests to serve, Thurmond said.

Francisco Dominguez, executive director of El Concilio de Condado de Ventura, a community organization that receives much of its funding from United Way, said he is concerned that United Way does not have enough Latino representation at decision-making and staff levels.

“I would also like to see more Latinos represented, and I’ve talked to Ernie [Thurmond] about that,” Dominguez said.

As for Ordonez’s complaints about wage increases, Thurmond said his employees are anything but overpaid, making an average of about $36,000 a year. That is below the norm for nonprofit agencies of similar size, he said.

Just six of his agency’s employees have received pay increases since he took his job a year ago--three when they were promoted and three because they were grossly underpaid, Thurmond said. The campaign director who received a 22% increase to $33,000 a year is still paid well below the median for comparable employees at other United Ways of about the same size, he said.

For this fiscal year, only $13,000 is included in the United Way budget for salary increases, and those will be based on merit, he said.

According to Thurmond, a new pay system that would include bonuses is only a concept and has not been approved by directors.

United Way board Chairman John Katch, a regional manager for Southern California Edison, said he considered Ordonez’s comments “way out of line.”

“Frankly, a lot of what he says isn’t accurate,” Katch said. “I’m not saying there is not some element of truth, but he has shaded everything.”

Because of illness, Ordonez missed several budget meetings earlier this year, Katch said. “He hasn’t been part of some of these discussions, and I’m not sure if he understands what’s going on.”

Times correspondent Scott Hadly contributed to this story.