The Urban League of Portland's financial ground, volatile after a scandal rocked the 54-year-old agency, could get even shakier early next year.
Multnomah County, which funds about one-third of the League's $3 million-plus annual budget, confirmed that it will commit no money to the League until it sees a financial audit of the agency's books. The audit is set to be completed late next month. That means the Urban League cannot submit requests for proposals--due by Dec. 31--to fund family-service and youth programs it traditionally oversees.
Many county contracts awarded to the league expire in June. The group could lose around $450,000 in county program funds.
The league may also lose support from two large nonprofit donors. The private nonprofit group Work Systems Inc., which gives the group around $500,000 yearly, canceled its Urban League contract in September. The United Way of Columbia-Williamette also pulled $129,000 in remaining donations earmarked for 1999.
The good news is that county-funded services to the needy won't be disrupted. The county will likely award several of the first-half 2000 contracts to the partnership of Volunteers of America, which now manages the league's finances and consults on human-resource issues, and to Self Enhancement Inc.
Still, the loss of public and nonprofit-donated funds could wreak havoc on the league's operations. Margaret Carter, the league's new interim executive director, said that to deal with the lost monies, the league will beef up its search for additional corporate and philanthropic support. She and board members plan a slew of corporate donor meetings over the next few weeks.
"In the meantime, we're going to have to be lean and mean" in terms of operations, she said. "We are also learning how to make do with the dollars we do have available to us" from league dinners and other fund-raisers.
Corporate donors contacted by The Business Journal said, if approached, they'd at least consider the league's requests. None said they would completely reject the notion of further support.
"We've been a member of the Urban League for a number of years, and it's my expectation that we'll continue to be supporters," said Jim Gersbach, a spokesperson for Kaiser Permanente, which gave more than $10,000 to the group in 1997-98.
"We have no plans to walk away from our commitments to the Urban League," said John Mangan, assistant vice president of public affairs for Standard Insurance. Standard was a "gold" member in 1997-98, meaning it gave between $5,000 and $9,999.
Carter already has secured a $60,000 grant from GTE to help update its antiquated computer equipment.
The United Way money, said Michael Schultz, the group's assistant vice president for community relations, is in an escrow account until the league is audited. Besides the county's audit, the league's board of directors commissioned financial and management audits.
A United Way funding committee will review the audits before determining if the agency will again finance Urban League programs, Schultz said.
On the other hand, Thomas Aschenbrener, president of the Northwest Health Foundation, said his group will continue to financially support the League.
"This is an organization we want to work with as they successfully meet the very important mission they have in our community," said Aschenbrener, whose group gave the Urban League $65,000 in 1999.
Moral support is growing as well: Carter has collected several letters of support from such area leaders as City Commissioner James Francesconi and local activist Tom Kelly. She also met two weeks ago with U.S. Sen. Gordon Smith, a colleague from her state legislature days.
Jo Ann Bowman, a staff assistant to County Chair Beverly Stein, said the county had hoped for audited financial information by year's end. Auditors, though, reported that the league's books were in such bad shape that they would need an extra four to six weeks to finish their report.
Lolenzo Poe, director of the county's Community and Family Services Department, said the money "was pulled until the Urban League could successfully compete for it," meaning at least until after the county audits the league's books.
VOA and SEI assumed oversight of most of the Urban League's programs in September after a county financial review uncovered 70 agency irregularities.
For at least the next six months, Multnomah County will oversee the league's services for senior citizens and disabled persons. The programs are budgeted at $220,000 annually, said Eddie Campbell, Stein's communications director.
After ordering the audit, the county, which must review third-party dispersal of taxpayer funds, refused to pay more than $250,000 it owed on its 1999 funding agreement.
Carter, a seven-term state representative, took the Urban League's helm on Nov. 22, nearly two months after CEO Lawrence Dark resigned.
The league has operated without a full-time chief operating officer since April; since December 1998, it has provided none of the records Multnomah County requires for periodic review.
Kay Toran, Volunteers of America's CEO, said her group came on board at the behest of Dark, who, before resigning, drew on the two groups' "long-standing collaborative relationship."
Carter and Toran said they don't expect the audits will show any malfeasance, just blatant mismanagement.
"I think if (the auditors) had found any malfeasance, they would have reported it by now," said Carter. "But none of us can say what happened until the auditors are done."
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