Investigation: Homeless families nonprofit climbing back from money troubles – TCPalm

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Diana Grossi(Photo: ELLIOTT JONES/TREASURE COAST NEWSPAPERS)Buy Photo

INDIAN RIVER COUNTY For Peter Gatchelland his autistic 10-year-old son, theHope for Families Center has been a godsend.

After the two moved to Florida, they stayedin 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 isstruggling throughdeep financial troubles and resulting two leadership changes.

A months-long Press Journal investigation found the privately supported centeroverspentby $772,984 last year. That money paid forprograms and staff, after donations declined.

The centerhad to use some of its$2 million in reserves to make up shortfalls, the investigation found.The $2 million includes $1 million froman anonymous donation.

Since then, there's been cutbacks, layoffsand leadership changes, as the center tries to easeits financial stress. There's a new financial advisory board.

There's beenno indication offinancial 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 theUnited Way of Indian River County, which considers the agency's role tantamountto 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'schief executive officer. "The center is a really important agencythat helps homeless families.

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

Through the years, Van Meleraised 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 homelessfrom the Treasure Coast.

The centerhelps homeless families achieve self-sufficiency by helping them geteducation, jobs and permanent housing. Itsresidents mustabide 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 inOctober about its financial troubles, itsfocus expanded into areas above itsoriginal 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 joinedthe seven-member Board of Directorsas chairman in January 2016 and also becamethe center's executive director,It was clear that the center had overextended itself, he said.

Bradford said helooked into the centersfinancial 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 toldformer Executive Director Mary Ellen Maguire, who was paid $75,000 annually, resignedafter three years.

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

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

Board Vice President Robi Robinsonresigned at the beginning of 2016along with four others includingChairman 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 saidshe left after learning Maguirehad been using the financial reserves to pay operating expenses, without the boards knowledge. I was taken aback, disappointed.

Boardrules at the time didnt prohibit the use of financial reserves without the boards knowledge.

The boardreacted to that by passing a rule requiringboard members be informed when financial reserves are used,Robinson said.

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

Last year there was what Bradford describedas 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 centers annual dinner in November brought in$71,000 after expenses,Bradford said. Another one is planned during the spring.

To shave expenses, the centercut stafffrom 33 to 19, reducing employee costs by about $200,000.

Under Bradford itadopted a new approach to increasing income: creating in-house sources of money that would also create jobs for clients. Itopened 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 storeearned $10,000 during the first two weeks of operation. Its first store, A Second Chance Thrift Store, is in the 400 block ofOld Dixie Highway.

Bradfordtalked 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 Bradfordsapproach over his objections. Bradford resigned.

"The budget wasnt getting balanced," said Dr. William Cooney, a physicianwho 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 tofinancially 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 agencys operations and governance largely rests with the agencys 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 dont know where they stand."

Kint said he's interestedin helping the center meet with potential donors; and Van Mele isback to help with building trust with donors.

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

Itplans to resume a relationshipwith 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.

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Investigation: Homeless families nonprofit climbing back from money troubles - TCPalm

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