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Gaming Guru

Jennifer Robison
 

Harrah's Pulls Out of United Way Drive

12 September 2005

When its fundraising effort kicks off Sept. 22, the United Way of Southern Nevada will be missing a key donor.

Harrah's Entertainment is pulling out of the United Way's 2005-06 giving campaign to focus its charitable activities on company workers struggling in the aftermath of Hurricane Katrina.

Last year, Harrah's and recent acquisition Caesars Entertainment gave a combined $545,000 to the United Way of Southern Nevada, which took in a total of $10.4 million.

"Because we have 7,500 impacted employees in Louisiana and Mississippi, we've asked all of our employees and vendors to focus all of their giving into the Harrah's Employee Recovery Fund so we can give directly," Harrah's Senior Vice President Jan Jones said Friday.

"We're big supporters of the United Way, and we believe in the services they provide. But for this year, when we have that many employees in immediate need, we think it's more appropriate to redirect our efforts to getting them aid, health care, support and re-employment," she said.

The employee fund, seeded with $1 million from Harrah's, has taken in more than $2 million, Jones said. That tally includes six-figure donations from several vendors and "hundreds of thousands of dollars" from employees, she said.

David Strow, a Harrah's spokesman, declined to name the vendors who have contributed to the fund because they have not authorized disclosure.

Dan Goulet, president and chief executive officer of the United Way of Southern Nevada, said Harrah's executives notified him Tuesday of their intent to shift their philanthropy to the company's employees. But he added that Harrah's representatives told him they would reinstate their United Way giving "right after the first of the year."

However, when asked Friday whether Harrah's plans to contribute after the first of the year, Jones said she hasn't "even thought that far ahead."

The decision by Harrah's is a blow -- albeit possibly temporary -- to the United Way, which has lost several major gaming contributors in recent years.

When Harrah's purchased Caesars Entertainment earlier this year, Caesars' corporate giving was folded into the efforts of Harrah's. Thus, any hurricane-related pullback by Harrah's also applies to United Way funds from Caesars.

United Way officials declined to give separate donation numbers for Harrah's and Caesars.

In 2002, MGM Mirage established the Voice Foundation to collect and distribute charitable contributions from its employees. Before the Voice Foundation opened, all of MGM Mirage's employee donations -- just under $2 million a year -- were directed to the United Way.

And with MGM Mirage's acquisition of Mandalay Resort Group in April, Mandalay's contributions to the United Way -- $125,000 last year -- will shift to the Voice Foundation as well, though MGM Mirage spokesman Alan Feldman said Mandalay workers could opt to commit all their Voice funds to the United Way.

The move by Harrah's comes less than three months after a Nevada Gaming Control Board member questioned the company's commitment to corporate philanthropy.

At a June control board hearing examining the Harrah's-Caesars deal, member Bobby Siller expressed concern about charitable activities at Harrah's.

"I would like to see, and I'm sure that's part of the strategy of the company, to be more of a good corporate citizen and give back to the community in all respects," Siller said. "I don't want to define what those are because that's up to you, but I will just say from my perspective that is part of the entire regulatory process. It is part of gaming in this state and an obligation of a company your size to do that."

Bill Thompson, a gaming professor at the University of Nevada, Las Vegas, said the decision for Harrah's to pull back from the United Way this year "maybe makes Bobby Siller's words carry a little more meaning."

But Thompson also said criticism of Harrah's for redirecting its corporate giving wasn't fair.

"Harrah's is a good corporate citizen, but they have priorities," Thompson said. "They can't give to every charity. They should maybe sit down with the (Gaming Control Board) and explain their choices, explain their philosophy and explain that what they're doing is temporary.

"At the moment, the gulf crisis is a priority for their company and probably for America as well. Harrah's is going to take care of their employees. I applaud them for that," he said.

Jones acknowledged the control board was critical of corporate giving at Harrah's, but added that Harrah's was "probably one of the single largest charitable givers in the past year." She cited contributions of nearly $1 million to a center for low-income seniors and $400,000 to the YMCA as two key local gifts last year. The company is also "the single-largest sponsor" of Meals on Wheels and the Alzheimer's Association, she said.

"Sometimes, people forget we are a nationwide company," she said. "We're not saying Nevada is not very important, because it is. But we not only give significant money in Nevada, we give significant money in every state" Harrah's operates in.

For agencies that receive money from the United Way, though, even a temporary shortfall could hurt.

The Salvation Army has an annual budget of $16 million and receives $300,000 a year from the United Way, said spokesman Charles Desiderio.

Maj. William Raihl, Clark County coordinator for the Salvation Army, said the nonprofit is still feeling the effects of MGM Mirage's pullout from the United Way three years ago.

"Our concern is that if another large corporation pulls out, that could further affect the amount of dollars we receive from the United Way," Raihl said. "Hopefully, it won't, but if there are fewer dollars to allocate, then that means fewer dollars to the agencies. It hurts us at a time when costs are increasing and the demand for services is increasing. It makes it a lot more difficult to accomplish our mission."

But MGM Mirage's Feldman said local charities can benefit when casino companies establish independent, employee-driven giving programs.

MGM Mirage's employees contributed $3.4 million to charity in 2004 -- up from just under $2 million in 2001, the year before the launch of the Voice Foundation. Plus, the former administrative expenses of the United Way are now absorbed by MGM Mirage so that 100 percent of the Voice Foundation's funds go to those in need, Feldman said.

"In dollar amounts, our donations to the United Way went down, but total dollars going to charities in the community went up," he said.

Feldman added that many of the company's employees still direct funds to the United Way, and MGM Mirage executives help the agency develop its community-needs assessment each year.

Some of Feldman's points were considerations in the suspension of United Way contributions from Harrah's.

Jones said: "If we can give our employees' contributions directly to their colleagues with no administration or overhead, why wouldn't we do that? If we raised $2 million, why give $300,000 to administration when we can give it to direct aid?"

Those concerns about administrative costs, though, are the only similarity between the Harrah's Employee Recovery Fund and the Voice Foundation.

Jones stressed that Harrah's has no plans "at this time" for a permanent employee-giving program separate from the company's annual United Way campaign.

"This is simply a reaction to Hurricane Katrina and how we thought we could best use our resources," she said. "Our employees are concerned about their colleagues. It's not an either-or. It's a priority. You're going to help those you work side by side with first. It doesn't mean you don't care. It's just that sometimes, you have to make hard choices."

Harrah's Pulls Out of United Way Drive is republished from Online.CasinoCity.com.