NEW YORK — Covenant House, the nation's leading youth charity, is in a financial free fall spurred by a severe drop in donations.
In New York, six key programs are threatened with the budget ax, including those for HIV-infected youths and for single mothers. And cornerstone programs, such as Under 21--which serves 220 youngsters who walk in off the street in New York each night--and Rights of Passage, could face budget gaps and massive layoffs, spokesman George Wirt said.
At its 17 shelters nationwide, Covenant House has trimmed back and could close one or two, including a new home in Washington.
But in Los Angeles, the shelter program has not suffered a drop in financial support, said Anne Donahue, who directs Covenant House California's $2.8-million-a-year program, which includes a 20-bed shelter at 5333 Sunset Blvd., outreach vans counseling youth on the streets and additional bed space for 30 to 40 teen-agers. "We're a new program and have been growing rapidly because of the tremendous need here," she said Wednesday. "Our Southern California donors have remained tremendously supportive. Just to be prudent, because there is an air of uncertainty, we will be slowing down the pace of growth. But we hope to continue all the programs we are presently running."
In New York, however, Ralph Pfeiffer, chairman of the $86-million charity, was less optimistic Tuesday, saying of Covenant House's donation drop: "People have to understand how much these cuts could hurt. The question is whether people will believe us and vote with their dollars."
Pfeiffer would not comment on the actual budget shortfall. But internal sources estimate it is about $100,000 a day. The drop is perilous since the group has few cash reserves and relies on individual donors for 90% of its funding.
As recently as two weeks ago, Covenant House had claimed donations were ahead of last year's figures.
The human consequences could be dire. The slide in donations, the most severe since scandal rocked the charity in December, could cripple its programs and force thousands of children into the streets, say counselors and officials with other private agencies.
For years, they note, Covenant House has absorbed thousands of children discharged from government institutions or counseling. There are no alternatives for these adolescents. "There are 299 beds for kids in crisis in (New York), and 200 of those are at Covenant House," said Margo Hirsch, executive director of the Empire State Coalition of Youth and Family Services. "Any cutback will severely hurt the city.
"It's Covenant House or the street," she added, noting city shelter programs are not geared for youths between 18 and 21.
Nor are the charity's internal problems at an end. While emphasizing their loyalty to Covenant House's ideals, counselors and social workers--angered by low wages, high job turnover, and revelations of large salaries and loans for corporate executives--are organizing a union drive.
In addition, the workers say Covenant House officials failed to promote black and Latino workers. The charity's revamped national board numbers one black and one Latino among its 17 members, they note.
"They pay us just over poverty level," said one veteran staffer active in the union campaign. "Too much here is based on favoritism."
The fiscal problems took root in four months of unceasing turmoil. Allegations ran from financial malfeasance, favoritism, sexual misdoings, and, finally, problems of violence and intimidation within the various centers.
The charges often met with hot denials at Covenant House, and scathing criticisms of those counselors and youths who spoke out.
In recent months, however, Covenant House has moved to address its problems.