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How to Lower the Misery Index : People need to give to charities; charities need to maintain the public's trust

August 30, 1992

The misery index is on the rise in what is shaping up to be a year of disasters, natural and man-made. Floods, earthquakes, hurricanes, riots, job losses and homelessness are putting unprecedented demands on relief efforts. Hard-pressed local, state and federal governments are unable to provide all the necessary aid so private relief efforts are more important than ever before.

But United Way of America, one of the nation's oldest charities, faces a distracting task: shoring up trust and donations as fall fund-raising campaigns begin. The group is struggling to restore its credibility and recover from a scandal earlier this year that forced the resignation of the agency's former president, William Aramony. He left amid disclosures of his lavish spending on limousines and international flights on the Concorde. He also allowed millions of dollars of the charity's money to be loaned to affiliated companies in which he and others had financial interests.

Now the task of rebuilding the United Way goes to Elaine L. Chao, who will leave her job as director of the Peace Corps. She faces the tough job of restoring confidence in the national arm of United Way, an umbrella group financed by 2,100 local chapters.

In the first five months of this year, its national revenues plunged 42% after many local chapters withheld their dues in protest of Aramony's exorbitant spending and $369,000 salary. Most chapters have since resumed their support and United Way has adopted new bylaws to give member groups more voice in decision-making. The 39-year-old Chao, an immigrant from Taiwan, will earn annual salary of $195,000, a little more than half as much as Aramony.

She was sought out by United Way after critics charged that the agency's search did not include enough women and minorities. A Harvard Business School graduate, Chao is well-connected in Washington, having served as a White House fellow and a former deputy secretary of transportation. Those credentials should serve her well, but the real test will be out in the field, where Chao will have to earn the trust of local chapters of United Way, and the public.

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