Arthritis Foundation’s Atlanta Headquarters Makes Budget Cuts, Lays Off 17 Workers

Blaming the economic slowdown, the Arthritis Foundation has laid off 17 employees at its Atlanta headquarters and made budget cuts of nearly 40 percent in some program areas.

The layoffs, announced December 3, reduce the size of the headquarters staff by 9 percent, according to Dennis Bowman, a spokesman for the charity. The organization had 194 full-time employees there, he added. In addition, 25 unfilled positions were eliminated from the foundation’s budget.

While the cuts affect all areas of the charity’s operation, Mr. Bowman said, hardest hit are the public-awareness, staff-training, and professional-development programs. Spending on public-service announcements, media relations, and other public-awareness activities have been cut by 39 percent, he added.

Funds for scientific research also may be cut — or at least delayed. Mr. Bowman said the Arthritis Foundation’s board won’t make that decision until after the end of the year, once it has final figures on 2002 contributions. Like most charities, the organization receives a large share of its donations during December.

The cutbacks come after the charity dipped into its endowment to pay for a series of new initiatives in 2001, cutting its net assets by $7.4-million. That additional spending continued in 2002, although Mr. Bowman couldn’t say how much the group’s asset base was reduced this year because it doesn’t have its final financial figures yet.

“Over the past couple of years we’d actually done a planned spend-down of our reserves in order to fund a strategic plan that we’d implemented,” Mr. Bowman said. The money was spent on a range of programs. But at least one area where the extra spending failed to produce anticipated results was in fund raising.

“Our fund raising was a victim of timing,” he said. The organization invested more money (Mr. Bowman said he could not say how much) into direct-mail fund-raising efforts, which didn’t produce the additional revenue the group had anticipated.

“We made investments in a variety of fund-raising activities,” Mr. Bowman said. “Unfortunately those investments occurred at the same time as a downfall in the economy and the events of September 11.” He added that the group’s leaders still believe the direct-mail effort is worth the added expense, and expect contributions to bounce back next year.

He said that the timing of the Arthritis Foundation’s economic problems is particularly unfortunate, given a recent announcement by the federal government that 70 million Americans suffer from arthritis. “At the same time we’re unfortunately hit with having to be more financially restricted, the need has gotten larger,” Mr. Bowman said. He added, “We believe we have a solid plan for a strong turnaround.”