Denise Brown, the leader of a local nonprofit, took a trip downtown last week to deliver her parent organization a check for $318,514.01. It was money that the United Way of Oak Park, River Forest and Forest Park had owed the Chicago branch for five years but had just recently gotten around to paying.
The obligation arose after the local United Way merged with the Chicago branch, United Way of Metropolitan Chicago, back in 2004.
But the IOU didn’t become a priority until the past couple years, with the economy worsening and cash becoming harder to come by, said Barbara Watkins, president of the local United Way’s board of directors.
“They didn’t want there to be any disruption or hardship to any of our agencies, which there would have been if they hadn’t been in a position to do that for us,” she said of the money from the Chicago office.
United Way of Oak Park, 1048 Pleasant St., is a nonprofit that raises money and distributes funds to about 40 different organizations in the region. Those include the local homeless-help organization West Suburban PADS, child-fostering agency Hephzibah Children’s Association and the West Cook YMCA.
On an average year, the United Way raises about $800,000, and 87 percent of that is distributed to the organizations it helps in the area, said Denise Brown, chief professional officer.
About five years ago, the United Way of Suburban Chicago – a network of 57 different smaller offices throughout Cook, Lake and DuPage counties – decided to merge with the Chicago office to help save costs and simplify operations. Fifty-seven suburban United Way offices were pared down to just 13. That number has decreased further in subsequent mergers down to seven offices, according to Watkins.
The United Way of Oak Park was one of the few stand-alone branches that survived the merger, which was finalized on Jan. 1, 2004. Since then, it has been able to save costs on things such as outside accounting and legal services, streamlining those functions through the metropolitan office.
“From our standpoint there was lots of emotion attached to this conversion because people were used to it being 57 separate offices in the old days,” said David Martin, board member for the local United Way since 2002 and past board president. “But I think, dramatically, our board feels that that conversion and how things run today are a very good thing for United Way and for the village.”
As part of the merger, the Chicago United Way forwarded $318,514 to the Oak Park branch over a six-month period to help the organization meet its obligations to the agencies it serves. The United Way was always aware of the IOU to the Chicago office, but repayment didn’t become urgent until 2008 and 2009, with the economy in bad shape.
According to Laura Thrall, president and CEO of the United Way of Metropolitan Chicago, a number of branches of the organization carry “inter-company balances.” Typically, the smaller United Ways raise their funds and then funnel them to the Chicago office, which then distributes them to the agencies.
In the midst of recession, fundraising dollars haven’t flowed into United Way branches as quickly, but obligations still exist to make the payments, she said.
“It all balances out at the end of the year,” said Thrall. “We try not to keep a running inter-company balance, but with Oak Park it just continued get larger and larger. It’s certainly not unusual.”
The local United Way has been working over the past couple of years, trying to hammer down the exact amount owed to the Chicago office. Back in the spring, United Way started digging into the matter, check by check. And in October, the local United Way’s board started deliberating to figure out how to pay back the Chicago office.
There was never a question of whether United Way of Oak Park was going to repay the money, Watkins said. But the board debated whether it should repay it in one lump sum or in installments.
The board decided to pay it off all at once, as that was the option that would have no impact on the local agencies that United Way serves. Last week, on Dec. 16, Brown hand-delivered a check for $318,514.01 to the United Way of Metropolitan Chicago.
The local United Way was able to pull the payment from a Community Chest endowment, which was started when the organization sold its Oak Park office building at 1042 Pleasant in 2006 – for $999,999, according to county records. Community Chest is a charity organization that existed for 75 years but became affiliated with United Way in the early 1990s, according to Martin.
Community Chest stopped raising funds about six years ago, and exists today as two different endowments. The chest broke off from United Way of Oak Park in 2003 before the merger with the Chicago office, as the organization wanted the endowments to benefit the Oak Park area, Martin said. Both The United Way and Community Chest have the same board of directors and staff, but are separate legal entities.
The United Way will lose interest – between $10,000 and $15,000 a year – it would have earned from the endowment, Martin said. But they felt it was worth it to avoid having to decrease funding to their agencies.
“We really felt that, given the difficult times everyone is in, those reductions at this point were not the best option,” Martin said.