Last week the HIV/AIDS charity Academy of Friends finally met with representatives from the nonprofits that were due to receive their checks from the 2010 and 2011 galas. And, as was feared, officials reported that the agency has run out of money. There will be no payments to the beneficiaries, which have been waiting for more than a year for their funds. This heartbreaking news, coming just before the commemoration of the 30th anniversary of the AIDS epidemic, is a cautionary tale for the third-party charity fundraising model used by AOF and others, as well as for the HIV/AIDS groups that were counting on their share of more than $100,000 critical to serving their clients.
No one wins in this situation, which might be one of the more spectacular flameouts to hit the LGBT community in quite some time. Like cowering animals, the board members of AOF have sneaked away, hoping to go quietly into the night, wishing that no one will notice. And to demonstrate the depth of the board's denial, AOF's website continues to promote the organization as if nothing has happened.
They are wrong.
The implosion of AOF should worry LGBTs and people living with HIV/AIDS. It should also cause concern in philanthropic circles and will have an effect on other, legitimate charities as they seek to secure sponsorships for their fundraising events.
We are angry that the AOF board has chosen not to respond to requests for comment to the community and that they have so far failed to take responsibility for what can only be described as gross financial mismanagement. It was painfully apparent to anyone who had been following this story for nearly a year that the likelihood that the beneficiaries would receive their full payment was miniscule. Last year, AOF forestalled the inevitable when it announced that the 2010 groups would be invited back for 2011 and that they would be excused from the usual obligation of providing hours of volunteer service in return. Ultimately, the problem was AOF's flashy Oscar gala neither raised enough money from sponsors nor sold enough tickets to make up the money owed.
About two months ago we urged AOF to cancel its 2012 gala, focus on their financial problems, and replace its board of directors. With the recent revelation that AOF doesn't have the money to honor the contracts it signed with beneficiary organizations, we now call on the group to close its doors.
As for the organizations that won't be receiving their money: we empathize and know that the dollars are sorely needed. But it's unfortunate that all except one charity were complicit in giving cover to AOF by staying on for the 2011 event, thus adding legitimacy to the organization and the gala. The groups should have cut their losses last year and spent these past months working on other ways to raise the funds to replace those that they had to know they risked not receiving. The leaders of these nonprofits should have spoken up for their clients and demanded answers from AOF, rather than passively standing on the sidelines and waiting for academy officials to make a move. Apparently, they thought – incorrectly – that if they publicly raised questions, AOF would retaliate by cutting off their funds. In the end, of course, it's now clear that AOF had no funds to withhold.
While it was a great party in its heyday, the Oscar gala has become just another sad chapter of mismanaged charities. Hopefully, nonprofit executives have learned a lesson and will aggressively question any future fund-sharing scheme and make sure the money is in the bank.