The Child Welfare League of America has taken drastic steps to stay alive as competition and the economy have driven membership down by nearly 60 percent, but its ultimate survival will rest in a federal agency’s decision about its pension plan.
CWLA, a 91-year-old membership and advocacy organization made up of public and private agencies, applied five months ago for a “distress termination” of its defined pension plan, which CEO Christine James-Brown said was designed for a once-larger organization and now cost “close to $1 million per year” to maintain.
“We had been increasingly unable to make the payments,” James-Brown said, “and it was at a point where we had to negotiate [payment] waivers to stay in compliance.”
The plan is insured by the federal Pension Benefit Guaranty Corporation, which protects the retirement incomes of more than 44 million American workers in more than 27,500 private-sector defined benefit pension plans.
If a pension plan insured by PBGC is terminated, the agency takes over as a trustee to pay at least some of the benefits owed to pensioners. But in order to terminate, CWLA must prove to PBGC that the plan is its primary burden, and that it could not move forward without termination.
Problems with the pension plan loomed before the recession, James-Brown said. When she joined CWLA from United Way International in 2007, “there were two issues our auditors said if we did not resolve, we’d be in major trouble.
“The first was, bring expenses down to align with the revenue. The second was…the defined pension plan. It was significantly underfunded and ignored for a long time.”
The downsizing at CWLA began under James-Brown’s predecessor, Shay Bilchik, who went on to start the Center for Juvenile Justice Reform after his departure in 2006. Under Bilchik, the staff shrunk from 130 employees to 90.
James-Brown initiated a fresh round of layoffs almost immediately, dropping the staff total to 60 at the beginning of 2008. Since then, more layoffs and departures have brought the total down to 28.
But a massive reduction in staff size – along with some maneuvering to move the organization from an expensive 10-year lease in Virginia to a more modest suite in downtown Washington – has coincided with a decline in revenue from membership. CWLA counted 1,120 members under Bilchik, a figure that had dipped to 750 by 2008 and now stands at 478.
In 2006, as Bilchik prepared to depart, current and former members suggested to Youth Today reporter Patrick Boyle that CWLA had become too focused on Beltway advocacy and not focused enough on member services. The perceived priority shift had driven some members to leave CWLA for the Alliance for Children and Families, a Milwaukee-based organization that has historically eschewed advocacy work for membership development and services.
James-Brown, who said she views CWLA’s core commitment to do “advocacy on behalf of children and families,” attributes recent membership decline in funding at the state level for child welfare service providers.
“We lost 9 percent of membership last year, the lion share because of money concerns,” James-Brown said. “And when we lose members, we lose revenue. As distressed as I am, these members are choosing between dues and serving children and families.”
A merger with the Alliance has been quietly discussed in the past, but stalled. The Alliance’s former CEO Peter Goldberg, who passed away this summer, did not view advocacy as a focal point for the organization, although the organization does have a small Beltway presence led by Patrick Lester. The Alliance also does not represent public agencies.
Any prospect for a merger of the groups will depend on the views of Goldberg’s successor, Susan Dreyfus, who will join the Alliance in January. Dreyfus has been secretary of the Washington Department of Social and Health Services since 2008, and led Wisconsin’s child welfare agency from 1996 to 2002.
The fate of CWLA’s pension termination request will also be a factor. James-Brown said she expects a decision to be made within months.