Nonprofit groups step up search for funds

When Ronald Reagan took office, the head of United Neighborhood Houses in New York City consciously planned to scale down his operations, knowing that the new President planned to cut back government programs for human services.

''We laid off a few people in 1980,'' says Joseph E. Jenkins, executive director of UNH, the umbrella organization for the city's settlement houses, which were begun nearly a century ago to help poor immigrants. Since 1980, other employees have left on their own and not been replaced. As programs have lost funding, there hasn't been a major impact on UNH's basic organization, he says.

But cutbacks in federal spending have left agencies like UNH a little frustrated as they seek to secure their future.

While the federal government continues to tighten its fiscal belt, many nonprofit, community-based organizations have had to adapt and find new ways to fund their good works. As President Reagan called for more support for such programs from the corporate community, many agencies turned their attention to businesses, as well as to foundations and individuals.

The search for support hasn't always been easy. Mr. Jenkins recalls a benefit concert held for his organization this year.

''We solicited some 4,000 businesses in the metropolitan area,'' Jenkins says. ''Seven made contributions, all less than $5,000.'' He exhorts businesses to be more forthcoming in their support, and not to be content with in-company fund drives.

At the same time, businesses - which often employ professionals to direct corporate philanthropy - admit they are becoming more selective in their support for nonprofit groups.

''We have to maximize the resources we have,'' says Mary Quinn, manager of the Avon Foundation, the charitable arm of Avon Products, Inc. Last year the foundation provided some $5 million in financial support for community-based organizations. Avon gave $125,000 worth of clothing to UNH in 1982.

''Our budget has continually risen, except in 1982-83,'' says Ms. Quinn. ''But we never have enough, and we have to make very hard choices.''

There are 35 settlement houses in New York serving 400,000 people a year. Although many clients are low-income minority people, the houses offer services to anyone in the neighborhoods served. On any given night at the Grand Street Settlement House on Manhattan's Lower East Side, there may be a group of a few dozen Jewish seniors in one room, while black and Hispanic teens play basketball in the gym.

In addition to money distributed by UNH, each settlement house has grants and contracts from government agencies. Lawrence Mandell, executive director of Grand Street, points out that 80 percent of his funding comes from government sources and is earmarked for very specific purposes.

''Our experience is that government money limits you on who you can serve and how,'' he says. For example, an employment program may be specifically for people who have been out of work for a certain number of months. ''It is terribly important to have private funding for flexibility. It allows us to serve anybody.''

The funds administered by UNH have shrunk from over $5 million in 1979 to less than $2 million in the last annual report. This means taking a close look at fund-raising methods and approaches that are more tailored to satisfy corporate sponsors. The Greater New York Fund, an arm of the United Way, helps finance UNH and has given it a grant to help strengthen its fund-raising capacity.

Jenkins says the heyday of large government spending programs is over.

''I believe a deal has been struck to reduce the federal deficit, and we're just in the beginning stage of that process. I would not see a Democratic president changing things drastically,'' he says. The lean budgets could mean 35 settlement houses would be reduced to 20, with satellite services in some neighborhoods.

But Jenkins is not discouraged. He hopes to see more businesses become involved in supplementing educational programs, ''which ultimately affects their work force,'' he says.

Some observers are concerned that too many nonprofit groups will go under as tighter financial times and more stringent standards by corporate donors are demanded. Not all agencies can be expected to run like a business, says a staffer at one nonprofit group. Ms. Quinn of Avon says the trend may be to let some agencies disappear, but her foundation seeks to help the community-based organizations that are struggling.

''We try to assist them in staying alive,'' she says.

When Jenkins gets frustrated over financial matters, he says he takes heart at the number of times he has seen people successfully help others. He recalls a few years ago when Sen. Edward Kennedy (D) of Massachusetts was visiting New York, and a Secret Service agent said hello to Jenkins.

''It was a young man who had been in an 'alternatives to detention' program for youths,'' he says. ''And now he was working for the US Treasury.''