News Article Details

Investigation - Homeless nonprofit climbing back from troubles

Stuart News - 2/26/2017

"We have nowhere the amount of beds (housing spaces) needed in

the county. The center is a really important agency that helps homeless families."

Michael Kint, the United Way of Indian River County's chief executive officer

INDIAN RIVER COUNTY – For Peter Gatchell and his autistic 10-year-old son, the Hope for Families Center has been a godsend.

After the two moved to Florida, they stayed in friends' homes and hotels for a while, until they spent their savings while Gatchell looked for work. An Indian River County school psychologist told them about the Hope for Families Center for helping the homeless.

"There is no laying around here," Gatchell, 57, said after emptying a large garbage can at the center. "We have a computer room to look for work."

But the Hope for Families Center – the largest family shelter serving Indian River, St. Lucie, Martin and Okeechobee counties – is struggling through deep financial troubles and resulting two leadership changes.

A months-long Press Journal investigation found the privately supported center overspent by $772,984 last year. That money paid for programs and staff, after donations declined.

The center had to use some of its $2 million in reserves to make up shortfalls, the investigation found. The $2 million includes $1 million from an anonymous donation.

Since then, there's been cutbacks, layoffs and leadership changes, as the center tries to ease its financial stress. There's a new financial advisory board.

There's been no indication of financial improprieties, according to Board of Directors members. There is no criminal investigation into the organization, Sheriff's Office officials said.

The center's success is crucial for the United Way of Indian River County, which considers the agency's role tantamount to combating homelessness.

"We have nowhere the amount of beds (housing spaces) needed in the county," said Michael Kint, the United Way of Indian River County's chief executive officer. "The center is a really important agency that helps homeless families."

WHAT HAPPENED?

Retired attorney Richard Van Mele, 82, of Vero Beach, established the Homeless Family Center, Inc. in 1998 and served on its board until he retired in 2014. The name changed to Hope for Families Center in 2015.

Through the years, Van Mele raised almost $5 million for the center, which typically houses and helps feed 65 to 70 homeless adults and children at a time, some for months, in a 21-room building off Fourth Street. During 2016 it housed a total 250 homeless from the Treasure Coast.

The center helps homeless families achieve self-sufficiency by helping them get education, jobs and permanent housing. Its residents must abide by rules, including setting aside much of their money for getting into their own housing. They get help finding jobs and the residents help out with such things as fixing cars.

After Van Mele left, he said the center got into problems "by taking on programs that were too costly, too much."

That included education programs for children and health programs already available elsewhere. "It was a duplication of services," he said.

According to a prepared statement the center released in October about its financial troubles, its focus expanded into areas above its original mission.

"Education programs, worker training programs, summer camp programs were added," according to the statement. "While these programs were well intentioned, they added much expense ... and staff, making the center more difficult to manage."

By the time former volunteer mentor Paul Bradford joined the seven-member Board of Directors as chairman in January 2016 and also became the center's executive director, "It was clear that the center had overextended itself," he said.

Bradford said he looked into the center's financial records and learned spending outpaced revenue.

He began advocating for change.

Donors were briefed on the problems during meetings at Riverside Theatre in March 2016, when they were told former Executive Director Mary Ellen Maguire, who was paid $75,000 annually, resigned after three years.

"Our goal was truly to become a campus of learning, including partnership with Indian River State College and Barry University," Maguire said during an interview late last year.

She said she was hopeful donations would increase because they often fluctuated from year to year.

Board Vice President Robi Robinson resigned at the beginning of 2016 along with four others including Chairman Thomas Mackie. It was a time for new leadership, led by Bradford, the new chairman. Mackie declined comment. Some others who left couldn't be reached.

Robinson said she left after learning Maguire "had been using the financial reserves to pay operating expenses, without the board's knowledge. I was taken aback, disappointed."

Board rules at the time didn't prohibit the use of financial reserves without the board's knowledge.

The board reacted to that by passing a rule requiring board members be informed when financial reserves are used, Robinson said.

CHANGES

The current budget has been scaled back to $1.23 million, compared to last year's which, proposed to be $1.59 million, was $1.86 million by year's end.

Last year there was what Bradford described as a $70,000 emergency renovation of the center, which he said had bed bugs and air conditioner problems. New beds, flooring and air conditioners were installed. Buildings were painted and refreshed. It was paid for with some of its financial reserves.

They're in the process of reorganizing and refocusing staff to better meet the needs of residents.

The center's annual dinner in November brought in $71,000 after expenses, Bradford said. Another one is planned during the spring.

To shave expenses, the center cut staff from 33 to 19, reducing employee costs by about $200,000.

Under Bradford it adopted a new approach to increasing income: creating in-house sources of money that would also create jobs for clients. It opened a second thrift store, A Second Chance Furniture and Apparel Boutique, in the 1300 block of U.S. 1 in Vero Beach, to help bolster income. The store earned $10,000 during the first two weeks of operation. Its first store, A Second Chance Thrift Store, is in the 400 block of Old Dixie Highway.

Bradford talked of setting up a moving business that never materialized.

But by the end of 2016, it became apparent trying to set up new businesses to increase income was not going to work.

In late December, the board rejected Bradford's approach over his objections. Bradford resigned.

"The budget wasn't getting balanced," said Dr. William Cooney, a physician who took over as board chairman.

The board in January hired Executive Director Diana Grossi, a former executive director of a state education agency in Illinois.

"We have to go back to the traditional model (turning to sources of grants and donations)," Cooney said.

The United Way, which decided not to financially support the Hope for Families Center in 2016 when it asked for $58,000, is open to reconsidering its decision this year, Kint said.

"There are annual reports and registrations that a nonprofit agency needs to file, but the responsibility for an agency's operations and governance largely rests with the agency's board of directors and members," Kint said. "They (the center) are committed to getting the agency back on a sound financial footing with a balanced budget, but I just don't know where they stand."

Kint said he's interested in helping the center meet with potential donors; and Van Mele is back to help with building trust with donors.

And, Cooney said, the center's remaining financial reserves are helping offset a drop in income. It has $900,000 in investment accounts, plus a $300,000 line of credit.

It plans to resume a relationship with the Treasure Coast Homeless Coalition, a Vero Beach-based organization that is a conduit for federal and state money for the homeless, Cooney said.

Recently the center announced it has an ambitious goal of raising $500,000 this year. Part of that is having an open house for the community on March 18 and fundraising event starting March 20.

Annual contributions, donations

2009-10: $737,077

2010-11: $740,856

2011-12: $937,030

2012-13: $827,030

2013-14: $713,882

2014-15: $1,232,000

2015-16: $374,437

Source: Federal income tax returns and center records.

Open house

What: Tours of the Hope For Families Center facilities

When: Noon to 3 p.m.March 18

Where: 720 Fourth St., Vero Beach

Who: Open to the public

Information: 772-567-5537

Fundraiser

What: Vero's Top Chef Challenge, a fundraiser for Hope for Families Center

When: March 20

Where: Bent Pine Golf Club

Cost: $85 per person for qualifying round; $185 per person for finale that includes 5-course dinner.

About: The ninth annual two-part event begins with qualifying 6 to 8 p.m.March 20. Judges and attendees taste appetizers and vote on who goes on to the next event, the Top Chef Challenge Finale at 6 p.m.April 3. Among the chefs are Chris Birely from Osceola Bistro, Jason Alfonso from 121 Tapas on the Water, Eddie Hunter from the Cuisine Machine and Cassandra Lynne from A Fraiche Note Catering.

Information: For tickets or more information, call 772-567-5537 or visit www.hopeforfamiliescenter.org

"We have nowhere the amount of beds (housing spaces) needed in

the county. The center is a really important agency that helps homeless families."

Michael Kint, the United Way of Indian River County's chief executive officer

 
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