Late last December, Jamie Fountain, then the treasurer for the San Francisco LGBT Pride Celebration Committee's board of directors, admitted some mistakes in an email to the Bay Area Reporter. He essentially acknowledged that longtime board members were incapable of overseeing the organization's finances.
Nobody on the board "understood how to read financial reports, and could not independently evaluate the reports which said cash flow was tight but Pride would be okay," Fountain said in response to an email from the B.A.R. asking why the board had allowed debt at the organization to pile up. The city controller's office had released an assessment earlier that month reporting that Pride was $225,000 in debt.
Former Pride Executive Director Amy Andre, who left the agency in November after just over a year on the job, had said she had an MBA, Fountain noted, though he didn't mention Andre by name.
"We relied on staff's interpreting financial conditions and assurances that fundraising efforts and new hires would perform, and we just needed to give it some time," Fountain said. "We gave it too much time." One former Pride staffer disputed Fountain's comments.
In light of recent fiscal troubles at several LGBT-related nonprofits it has become apparent that some boards have practiced poor oversight and planning of the agencies they were tasked with monitoring. Some are moving to ensure their board members have more fiscal knowledge.
Catherine Moller Spaulding, city performance deputy director in the controller's office, expressed some sympathy for board members, who typically are volunteers.
"These are good people who mean well and do a lot of good for their communities, but oftentimes people are not aware of what the board's role should be, and how to engage," Spaulding said in a recent interview. She added the controller's office has had "really great response" when it has worked with others on educating people.
Spaulding, who herself is on the board of the theater CounterPulse, said she and other controller's office staffers would like to think that through their work, which includes trainings, they're spreading the word about "what good board governance is."
She said there's been "a lot of interest in our training," and they're doing two sessions a year now.
Payoffs of oversight
Despite the recent recession and sluggish economy, which has hampered fundraising for many charitable organizations, Folsom Street Events, which produces the famous Folsom Street Fair, Up Your Alley fair, and associated parties, appears to have remained strong. In November 2010, the organization presented checks totaling $326,161 to beneficiaries, and Executive Director Demetri Moshoyannis has said everyone received full payment.
That stands in contrast to SF Pride, where several community partners complained last year that they had been shortchanged. Pride interim Executive Director Brendan Behan said this week that the agencies would be paid off before the upcoming festivities this weekend.
One likely factor in Folsom Street's success is the amount of attention the group's board has paid to financial matters.
In an interview last year, Moshoyannis said having experienced board members who know how to read a budget "carefully and wisely is a really important thing." He also said, "At Folsom Street Events, we meet twice a month every month, and during fair season we meet weekly in July and September," and those meetings include "thinking about how can we further reduce expenses" and bring in more income.
Folsom Street Events board Treasurer Thomas Pscheidt has been on the panel for 11 years. In an interview last week, he said Folsom's board is "a working board," and each member's responsible for something, whether it's coordinating volunteers or overseeing recycling efforts.
"It might have been true 15 years ago that the board was a big club," said Pscheidt. "... It was an honor to be on the board of directors, and you could run around saying, 'I'm important.'" But now, when people with that attitude "discover they have to work, they fall out at a certain point," he said.
Moshoyannis said last week that people are required to be associates before they become board members, and "the process of grooming associates into board members can take a year to three years, sometimes, until they feel they're ready and we feel they're ready."
Working to improve
In late January, the board of Lyon-Martin Health Services, which provides care to women and transgender people, came close to abandoning almost 2,500 patients. Facing more than $500,000 in debt, the clinic's board had announced it would shut down the nonprofit in days, despite not having made plans for where patients would go.
Asked at the time if the board had thought it could just close the clinic and be done with it, board Treasurer Peter Balon said, "Yeah, we did, actually. We just didn't know about all the rules."
As of last week, the only person who had been on Lyon-Martin's board in late January and still remained was Balon, the treasurer.
Stacy Pike Long, who's been a patient of the clinic for about three years, was elected to the board in April. She's filling one of the consumer slots on the board and also chairs the nominations committee.
"I think having boards that don't consist of anyone that's actually using the services of the organization is really, really ridiculous," Long said. "It results in decisions that basically don't prioritize the needs of the people that the clinic was meant to serve."
Asked if she thought that's what happened at Lyon-Martin, Long said, "It's complicated. Now that I have a little more information, I don't necessarily think that's what happened" and the board had done "what they could." However, she said, "I do think they could have done a lot better in terms of not letting it get to that point in the first place."
Long said she didn't have any financial oversight background, other than being self-employed, and joining the panel is "scary." However, she said she's "working really hard to get folks on the board" who do have experience overseeing finances.
At SF Pride, Lisa Williams and Joshua Smith are the only two remaining board members from last summer. People with more financial skills have joined the oversight body, including Bill Hemenger, who has 20 years of experience in the private sector and who last year ran unsuccessfully for the San Francisco Board of Supervisors.
Behan, who was named interim director in April and had previously served as deputy executive director for several years, said that the board is now updated more frequently on the organization's finances. In an interview last week, he also said staff have "been seeking advice from CPAs in the community to help advise them about how we can better revise our own internal reporting mechanisms, to help the board get both the big picture and the granular picture about our finances," down to expenses such as copier paper.
"We're very optimistic. It's going to be a great Pride this year," Hemenger said recently.