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Nonprofits that serve D.C.’s at-risk and low-income youth first learned of the collapse of the DC Children and Youth Investment Trust Corp, which is responsible for issuing millions in city grants, through a Washington Post story.
“This was a disaster,” Judy Estey of Dance Place told a D.C. Council committee on Thursday. “How can you take away this major source of funding without any warning?”
The long troubled DC Trust, as it’s known, will begin the process to dissolve in May and will be closed by the end of September, according to a message from its board. Earlier this week, The Post detailed a long list of more recent mismanagement claims:
In a series of revelations that began in January, the board learned that former executive director Ed Davies and senior financial officer Earl Hamilton had used taxpayer funds to pay tens of thousands of dollars’ worth of credit-card charges, including some for personal use. Some of the expenses charged by Davies included meals and travel costs for his family members.
Davies, who resigned in January on the same day that board members discovered the credit-card expenses, said in an interview that he was being made “the fall guy for years and years of mismanagement that predated me.”
Nonprofits received a short message from the Trust regarding the Post story on Tuesday. Two days after the story was published, just after noon on Thursday, nonprofits received a longer explanation from the Trust’s board about its end.
“The Board of Directors of the DC Trust is deeply saddened to inform you that the DC Trust is facing significant financial challenges at this time due to mismanagement by former leadership over a period of several years,” the message signed by board Chair Marie Johns and Interim Executive Director Angela Jones Hackley said. “Please know that as soon as the board became aware of the problems, swift action was taken and a plan was mapped out to address the issues. The board has had a series of meetings to discuss the situation in more detail, and is working steadfast towards solutions. Unfortunately, the financial picture is so dire that the board voted to develop a plan for dissolution.”
Leaders from several nonprofits that serve D.C. youth spoke out at a Council budget hearing yesterday about the issues they’ve had with the Trust and its board, which includes Deputy Mayor for Health and Human Services Brenda Donald. This included late grant payments and communication issues.
“I’m here because of my sadness and anger [about] its fate,” Deborah Shore, executive director of Sasha Bruce Youthwork, said, adding that the real victims are the parents and children who trusted that these programs would be funded—a “remarkable and sustained breach of trust.” Shore highlighted a question that will be on D.C. officials’ minds in the coming months: Can an intermediary organization successfully manage these vital grants?
Abdur-Rahim Muhammad of the Hung Tao Choy Mei Leadership Institute said the problem was not with the Trust itself, but with its board. “I think the board should have been dissolved,” he said, adding that it “failed miserably” in allowing the situation to “get to this point.”
“If you’re going to sit on the board of the Trust and just throw up your hands and say, ‘I can’t fix things,'” Muhammad said, “why did you” take the job?
The Trust on Wednesday issued a request for proposals for Summer Strong DC grants, with completed proposals due by May 25, 2016; announcements will begin on June 20. The grants max out at between $54,000 and $72,000 per organization.
“Is it realistic these grants are even going to be made?” Blythe Patenaude of the Take Charge Juvenile Diversion Program asked Councilmember Yvette Alexander, who heads the Committee on Health and Human Services. Alexander in turn said she would ensure that the grants were made.
Donald called the Trust’s new leadership “excellent,” but said the “structural deficit is too big to overcome.” She added that the board determined that the Trust should administer the upcoming summer funding. “We’ve heard the concerns of grantees about the timing. We’re going to work with the Trust to streamline… the applications so they can be approved on a rolling basis,” she said.
When asked why nonprofits learned about the Trust’s fate from the Post, the deputy mayor said officials had asked the paper to hold its story; she said it was “unfortunate” that the Post went forward.
D.C. officials will be working with “clearer eyes about what the relationship should be” between the government, organizations like the Trust, and the youth development nonprofits it works with, Donald said. All parties will be involved in determining what comes next.
Alexander plans to hold a hearing on the Trust’s dissolution before the Council goes on recess.