The United Way of the Bay Area dealt Jewish social agencies a severe and unexpected blow last week by slashing $370,000 from their budgets.

The only Jewish group in the five-county area to receive money for the 1996-97 fiscal year was the S.F.-based Jewish Family and Children's Services — $88,748 to spread among three programs.

Last year, the United Way gave $458,000 to more than a dozen Jewish agencies in Marin, San Francisco, Alameda, Contra Costa and San Mateo counties.

In 1990, that figure was $900,000.

Many local Jewish leaders were stunned by the plummet in funding, which was announced May 15 after the United Way regional board took a final vote on grants as part of a massive internal overhaul.

The "federation has been a good and loyal member of the United Way system for generations. It's difficult for me to understand that in the estimation of the United Way, [we] are worth zero," said Ami Nahshon, executive director of the Jewish Federation of the Greater East Bay.

"This is very disturbing," added Wayne Feinstein, executive vice president of the S.F.-based Jewish Community Federation.

Among the programs that had counted on a piece of the $17.6 million United Way central fund were physical rehabilitation for the elderly at the Jewish Home for the Aged in San Francisco, day care for Alzheimer's patients at the Contra Costa Jewish Community Center, and after-school care for children at the Berkeley Richmond JCC.

The plunge in funding came after United Way's three-year process of reorganizing its grant policy.

Until now, the organization had handed out money from its central fund to a list of 289 longtime beneficiaries that included many Jewish agencies. Under the new plan, any charity can apply for money. As a result, many smaller, grassroots groups received funding for the first time, and competition for United Way funds stiffened.

Several Jewish agency heads were unsure how they would replace the lost funding but were considering increases in fund-raising and fees or cutbacks in services and staff.

"We desperately need community members to come forward," Nahshon said.

Last year, the Jewish Family and Children's Services of the East Bay received $53,000 to offset the cost of counseling for low-income people, and another $7,000 to subsidize the resettlement of emigres from the former Soviet Union.

That income is gone. "It's certainly a major setback," said Ted Feldman, executive director of JFCS of the East Bay. "I think it's appalling that these basic social services…are just cut so precipitously."

The agency is already facing a $100,000 deficit in its $400,000 operating budget for counseling services, Feldman said. Staff reductions are likely.

Anne Wilson, United Way of the Bay Area's executive vice president, said she understands the frustration of agencies that didn't make the cut.

"I would say that in such a competitive, open process there was bound to be dramatic shifts," she said. "What's difficult is that there are organizations with whom we've had longstanding relationships that competed on equal footing with organizations with whom we had no history."

Not everyone in the Jewish community was unhappy with the outcome.

"Regardless of whether or not we benefited from it, we supported the restructuring," said Anita Friedman, executive director of the S.F.-based JFCS — the only Bay Area Jewish agency to receive funding. "Sometimes you have to look beyond self-interest."

The JFCS will spread its $88,748 worth of grants among three programs: $13,748 to educate San Mateo County parents about child-rearing, $50,000 to aid seniors still living in their homes in San Francisco and Marin County, and $25,000 to teach emigres in San Francisco about AIDS.

Rita Semel, former head of the S.F.-based Jewish Community Relations Council and a member of the United Way's San Francisco board, supports the change.

"It's an attempt to respond to the needs of a changing San Francisco," said Semel, who is also serving on a newly formed Council of Jewish Federations' national task force on United Way funding.

She suggested Jews take a broad, long-term perspective.

United Way's San Francisco board, for example, focused on six areas: aging, youth, families, violence, homelessness and AIDS.

"If we solve those problems, it can't help but be good for the Jewish community," Semel said. "The long-term health and well-being of the Jewish community is dependent on the health and well-being of the entire community."

The United Way of the Bay Area is Northern California's largest nonprofit funder of community services.

Jewish groups weren't the only longstanding beneficiaries of United Way dollars to lose out under the new policy. The Girl Scouts, American Red Cross, Urban League, Salvation Army and Catholic Charities lost hundreds of thousands of dollars of support.

Of the 251 recipients announced last week, 107 were newly funded by the United Way. Recipients include such groups as the Alameda County Food Bank, Filipinos for Affirmative Action, Marin Interfaith Outreach, San Francisco Suicide Prevention and Haight Ashbury Free Clinics.

The new granting system puts the Bay Area on the cutting edge of United Ways across the country. That's exactly what many Jewish agencies nationwide fear.

According to a report issued last fall by the Council of Jewish Federations, United Way funding across the country dropped from $50 million to $38 million for Jewish agencies between 1990 and 1994 — a 21 percent decline.

Jewish agencies in California actually skewed the picture, reporting decreases between 39 percent and 54 percent.

A CJF national task force on the subject met for the first time last week.

"There is a perception that the Jewish community is overfunded and doesn't need United Way funding," said Leslie Robin, a CJF community planning consultant who is overseeing the task force.

In reality, she said, Jewish agencies do need help in serving newly arrived immigrants and the poor.

At the same time, there has been a local and national trend toward so-called donor designation, in which United Way givers specify which agency receives their money.

Until the 1970s, donors could only write checks to the central fund that was then divvied up by the United Way.

In the Bay Area this year, $23.2 million, or 57 percent of the total donations, was designated for specific charities.

Until now, Jewish agencies haven't been major recipients of donor-designated money. Last year, the East Bay Jewish agencies received $43,500 this way. And Jewish agencies in Marin, San Francisco and San Mateo counties received $105,000.

The new funding process also created a few snafus along the way.

At least one Jewish agency, the Jewish Community Center of San Francisco, was disqualified early in the process because it requested $139,000 to subsidize child care — more than the maximum a group was allowed to request in a single proposal.

According to Wilson, when United Way volunteers were faced with 1,700 requests for money last fall, they simply had to toss out the couple of dozen requests that were incomplete or inaccurate.

But Zev Hymowitz, JCC of S.F. executive director, said he couldn't believe a technicality killed off the proposal. He wondered why no one from United Way called to let them know there was a problem, considering the many years the two agencies had worked together.

"That's inexcusable," he said.

Other problems occured as well.

The JCF's Feinstein was particularly unhappy about the rejection of a $46,000 joint proposal with the East Bay federation to regionalize Jewish Community Information and Referral, a telephone service based in San Francisco.

United Way leaders had "actively encouraged" the two federations to collaborate on the proposal, Feinstein said.

Wilson called this rejection "regrettable."

"I am very aware of it because I was part of the encouragement," she said.

Said Feinstein: "We spent countless hours we wouldn't have otherwise…There is a feeling that we wasted a lot of time and energy. We could have spent that time on our annual campaign."