Washington Blade - September 27, 2002
Lou Chibbaro Jr.

A spokesperson for the D.C. Department of Health said the department's HIV/AIDS Administration, which funds most of the city's AIDS programs, is not slated for any cuts "at this time."

But AIDS activists noted that Williams has called for a $14 million reduction in city Medicaid benefits and a $7 million cut in the city's Interim Disability Assistance program, both of which provide assistance to low-income people with HIV and AIDS. The D.C. Council must OK the proposed cuts before the budget is sent to Congress next week for final approval.

Activists said the city budget cuts come at a time when some local AIDS service organizations have faced or expect to face a shortfall in income as a result of several different developments that appear to be converging on them like the "perfect storm." The Whitman-Walker Clinic, the D.C. area's largest private AIDS service provider, has been hit the hardest, according to Cornelius Baker, the clinic's executive director.

"We are facing a very serious challenge," Baker said.

He noted that Virginia and Maryland state governments are also dealing with budget deficits next year, a development that could lead to state funding cuts for Whitman-Walker's offices in Northern Virginia and suburban Maryland.

In a two-page memo to its board members, the clinic said it expects to have a budget deficit of $292,606 for fiscal year 2002 and a deficit of $344,880 for the 15-month period ending Dec. 31, 2002.

Whitman-Walker communications director Michael Cover said the clinic has adjusted its spending and programs as its projected income failed to materialize. Although no major cutbacks in programs or services are planned at the present time, Cover said, "We are going to have to retrench to make sure we do all we need to do address the needs of our clients."

The nation's lingering recession has prompted some of the most loyal corporate donors and private foundations to reduce their annual contributions to WWC and other AIDS groups, officials with the groups said, because corporate and foundation income is tied to the fate of the stock market, which has been in decline. At the same time, Baker said, Whitman-Walker's income from the city's annual AIDS ride dropped from about $1.6 million in 2001 to just $250,000 this year.

The drop in funds from the AIDS ride followed negative publicity surrounding the for-profit company Pallotta TeamWorks, which produced the ride for the past seven years. Whitman-Walker and Food & Friends, another D.C. area AIDS service group, have since severed their ties to the Pallotta firm.

Food & Friends is organizing the ride next year as a strictly non-profit operation; but Whitman-Walker decided not to participate, saying it would make up the lost revenue from the ride through corporate and large private donor programs.

United Way fallout

Baker and Cover said they were hopeful that income from foundations and corporations would pick up next year, but they acknowledged times could be rough over the next several months. The two said they were also hopeful that both large and small private contributors, which gave less over the past year following the emotion-wrenching developments surrounding the Sept. 11 terrorist attacks, would return to their normal giving patterns.

Meanwhile, Whitman-Walker and at least a half dozen other local AIDS organizations are worried about the possible fallout from a financial scandal that caused a staff shake-up at the United Way of the National Capital Area. Revelations that a top executive reaped an enormous salary and benefits from funds contributed by United Way donors - and allegations that the group's board failed to take action to curtail improper financial practices - could discourage the public from contributing this year during the United Way's fall campaign, observers have said.

Whitman-Walker and groups such as Metro Teen AIDS, Us Helping Us, Food & Friends, and the Sexual Minority Youth Assistance League, which provides AIDS prevention services for gay youth, rely on the United Way to help them raise funds for a significant portion of their annual operating budgets.

Arthur Padilla, SMYAL's executive director, said some AIDS service providers are predicting a combined drop in income of as much as 50 percent due to reduced contributions from both the United Way and foundations and corporate donors.

"If there's a lack of confidence in the United Way, donors can still contribute directly to us," Padilla said. However, he noted that donors would have to arrange for their own monthly donations or payroll deductions - details that United Way provides through its longstanding arrangement with government and private employers.

"I see hard times ahead for all of us," said Ron Simmons, executive director of Us Helping Us, which provides services to African-American gay men with HIV.

Simmons said he fears a U.S. war against Iraq would cause further disruptions in fundraising efforts for AIDS service organizations.

In a memo to Whitman-Walker board members, clinic officials said the group's finances are being adversely affected by both the nation's "slow economic recovery" and the poor results from the AIDS ride.

"Finally, our expectation is most sensitive in relation to the annual AIDS Walk, to be held in October," the memo said. "Failure of this event to meet projection will seriously affect our budget deficit and cash situation."

Lou Chibbaro Jr. can be reached at lchibbaro@washblade.com.

FOR MORE INFO AIDS Walk Washington 2002 Saturday, Oct. 5, 9:30 a.m. Freedom Plaza 202-332-WALK www.aidswalkwashington.org

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