Bruce Murphy
Murphy’s Law

The New Non-Profit Kingpins

As SDC declines, groups like Community Advocates and Next Door are on the rise.

By - Dec 3rd, 2013 12:34 pm
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When a young Joe Volk started working with Community Advocates in 1980, it was a tiny agency helping the homeless with a budget of about $22,000. By last year it had grown into a $16 million organization with a broad umbrella of programs, all overseen by executive director Volk, with most of that growth coming in just the last six years. Community Advocates is now a major player in town.

Its rise has come during the same period that the Social Development Commission or SDC has gone through a near meltdown. It stands as a horror story of how a non-profit can fall apart.

Founded in 1963, SDC was established as Mayor Henry Maier’s way of handling (or some said ignoring) poverty and quickly became the dominant non-profit in town, winning countless federal grants and subcontracting the money to various smaller non-profits. It was the largest anti-poverty social service agency in the state. For 45 years SDC ran the largest Head Start program in the county, serving 3,000 children a year. It was also a major player in the state’s Wisconsin Works or W-2 program.

As far back as the mid-1990s, SDC began to have periodic management problems and board squabbles, but its sheer size and funding clout seemed to carry it along anyway. But in the last two years its problems have begun to catch up to it.

For a couple years, SDC has had vacancies and turnover on its board of directors. Board members had been dissatisfied for some time with the leadership of its longtime CEO Deborah Blanks, who finally retired last January.

Jan Stenlund came in as acting CEO but made it clear she would not serve for long. The board then hired lawyer Hannah Dugan as interim CEO in March. But she resigned after just three months, saying she disagreed with the board’s decision to try to appeal the federal government’s decision to deny a Head Start grant to SDC.

Even as the agency was playing musical chairs with its CEOs, its board members were regularly quitting. “After only two months on the board, Magda G. Peck, founding dean of the Zilber School of Public Health at the University of Wisconsin-Milwaukee, resigned,” reported Georgia Pabst of the Milwaukee Journal Sentinel, who’s done a good job of covering SDC’s problems. Peck had said she “sensed an underlying lack of trust among board members” and “a lack of transparency” and “accountability. ”

Gerard Randall

Gerard Randall

In June, Gerard Randall was elected head of the board, becoming the fifth board chair in a year. Randall has been embroiled in considerable controversy over the years, as I’ve previously written.

Randall soon announced that a search was underway for an interim and permanent CEO. But since then nothing has happened on that end, essentially leaving Randall in charge. He has held a number of closed door sessions with board members, while he “refuses to answer any questions posed by the Milwaukee Journal Sentinel concerning the commission, its plans or prospects,” Pabst has reported.

Adding to all this turmoil was the evaporation of SDC funding. After state officials and reports criticized SDC’s work as one of the local administrators of W-2, it was denied funding, a loss of nearly $11 million a year. Next it lost its annual Head Start contract, some $22 million in funding, after federal officials had cited concerns about the health and safety of children served by SDC and problems with its record-keeping and management.

As a result, the organization’s budget has shrunk to about $16 million, down from $50 million in 2012, and the number of employees has dropped from 400 to about 150. How the mighty have fallen.

Instead the Head Start money for Milwaukee went to such groups as Next Door Foundation, the Council for the Spanish Speaking and Milwaukee Public Schools.

Next Door Foundation had already been growing. Its annual federal tax forms show its budget grew by 33 percent since 2008, rising from $7.2 million in 2008 to $9.6 million in 2012. The Head Start grant it received, of $6.9 million, will jack up its annual budget by 78 percent.

As Milwaukee Neighborhood News Service has reported, Next Door has purchased a new facility for its Head Start program, and aims to serve more than 1,000 students. Next Door will also launch an innovative, home-based Head Start program, the first of its kind to target 3- and 4-year-olds in Milwaukee. As part of the program, “bilingual, ‘culturally matched’ staff members will make weekly 90-minute visits to children’s homes 36 weeks a year, leaving materials and instruction for the family,” Next Door’s executive director Carol Keintz explained.

Meanwhile, Community Advocates had taken over another SDC program. About three years ago SDC transferred its Family Support Center for homeless families, located at 31st and Mitchell, to Community Advocates and sold the agency the building for $550,000.

By that time, Community Advocates had been in an expansion mode that went back years. In 2007 it merged with the Milwaukee Women’s Center, which is now operated under the Community Advocates umbrella. In 2009, the organization similarly absorbed Horizons, a women’s drug and alcohol treatment center. In 2010, Community Advocates took over the management of a homeless program that had been run by the Red Cross. In 2010, Community Advocates brought into the fold Justice 2000, a group that works on criminal justice issues (including diversion of lesser offenders out of the traditional courthouse process).

Perhaps the most notable addition, in 2008 Volk approached David Riemer, a former aide and policy advisor to Mayor John Norquist and Gov. Jim Doyle, to head up a new program at Community Advocates, the Public Policy Institute. The idea of a non-profit community group doing research on public issues is quite original. The notion, says Volk, is to find public policy solutions “to issues that effect people who are coming through our door.”

But why all the expansion and absorption of so many other programs and agencies? Volk says it came down to one issue: “We are very mission driven. What we’re seeing is poor people who come in through the door have relatively complicated needs.”

“There have been some growing pains,” Volk says. “Our biggest challenge was keeping the culture of the organization, what was a culture of keeping things relatively simple, without having five sign offs and other complications for those we serve.”

In absorbing so many other programs, Community Advocates has lived up to a goal long pointed to by local foundations, the Greater Milwaukee Committee and other groups: they have argued Milwaukee has too many non-profits and that they should seek mergers and consolidations.

But they haven’t put their money where their mouth is, says Volk: “These kinds of mergers cost money, for accountants and lawyers to handle the consolidation, and for other costs. But ironically, these same groups that have called for this to happen rarely step up to fund this.”

Short Takes

-Much as with Race to the Top funding for schools, where the administration of President Barack Obama tried to leverage education reform with that money, leaders of the federal Head Start program have also called for more accountability and improvements in the program. Thus, for the first time in history, local agencies across the country seeking Head Start funding had to competitively bid for the program. That was death for SDC.

-Gerard Randall has become the man you can depend on to explain nothing. Just as he refused to explain anything about the funding he gets from Milwaukee Public Schools, so he has refused to disclose any details about SDC, a tax-exempt organization that taxpayers in essence subsidize. In both cases, you have to ask why the organizations tolerate this.

-It’s typical for executive directors to jack up their salary proportionately as their organization’s budget has jumped. But while Community Advocate’s budget tripled, rising from $5.2 million in 2007 to about $16 million in 2012, Joe Volk’s total compensation of $130,000 barely increased, rising to $137,000. “At some point,” says Volk, “how much money do I need?”

Update December 10: Questions have been raised about Joe Volk’s leadership, as you’ll note in the comments section below. I later addressed these issues in the second item of this column.

Categories: Murphy's Law

7 thoughts on “Murphy’s Law: The New Non-Profit Kingpins”

  1. Phyllis says:

    Are you….serious? Did you do any fact-checking at all before publishing this? Did you happen to ask Volk how many of those programs he “absorbed” still exist? Did he mention the ones who saw the writing on the wall and left voluntarily (Justice 2000)? Did you search the Journal Sentinel for Community Advocates-related news like this one about their HUD audit (http://www.jsonline.com/news/milwaukee/hud-audit-questions-milwaukee-nonprofits-account-of-spending-b99105047z1-224947592.html) or this one, about Milwaukee County canceling its contract with CA to run the north side crisis resource center? There are many excellent nonprofit leaders in Milwaukee…how on earth could you have decided that Joe Volk is among them? Or did his PR guy make that call for you?

  2. Phyllis says:

    Oh, and why was David Riemer removed as director of the Public Policy Institute? And why does this article imply that he’s still at the helm? Did you do any fact checking at all?

  3. cb says:

    Your use of the word “kingpin” in quite interesting, and very apt for the way Joe runs that organization. To follow up on Phyllis’ comment, most of the programs that Community Advocates “absorbed” have been shuttered whether due to the simple absorbtion of funds to improve CA’s bottom line, the inefficacy of the programs or poor accounting – either way resulting in grants not being renewed, or some programs simply getting fed up with Joe’s cowboy mentality and leaving to recreate their original organization and do something other than merely fulfill the requirements of a contract.

    Community Advocates, in fact, advocates for very litte outside of itself. CA has essentially just become a subcontractor for other programs, resulting in little advocacy besides the continuation of those programs for their own sake. (While I realize that it is naive to think that money is not the first priority of a non-profit, I feel that it is the tenor with which this plays out that is telling of the agency. Community Advocates has shifted from having the view of “we have this money to serve clients” to “we have to serve clients to keep the money flowing”.

    One point in this article is correct: that being that Joe does not need any more money. For someone who own as many rental properties as he (perhaps he thinks he is creating affordable housing…) he really doesn’t need the income. Most executive directors make far less than he does, but then, most are also not so self-aggrandizing as to retitle themselves “CEO” of a non-profit.

    Community Advocates is basically the Wal-Mart of social services in that they try to meet the minimum requirement for every service and attempting to drive out all who they view as “competition” to their goal. In doing so, their actions call into question both the “Community” and “Advocates” portions of their name. Alas, their propaganda machine is strong and influences many, yourself included.

    By the way, David Reimer was removed as Director of PPI because he actually wanted to accomplish something meaninful, not just keep milking the cash cow.

  4. Phyllis says:

    Here’s the link to the article about the north side community resource center: http://www.jsonline.com/news/milwaukee/county-cancels-contract-for-north-side-crisis-center-b9943029z1-213225101.html

  5. Lydia says:

    I can’t say I know a lot about the inner workings of CA but I do know a LOT of people who work, or rather worked there. I must say that the line “with most of that growth coming in just the last six years” seems to be about as inaccurate as can be. Mr. Volk may have a lot of people convinced of the greatness of CA, enough to get loads of funding pouring in, but as far as the services that are being provided, I believe those have been significantly REDUCED over the past six years.

  6. Frank says:

    Phyllis, you’re my hero, but you can also add the $3.3 million county contract he lost to Justice Point, a brand new start-up non-profit run by a former executive director of Justice 2000. From what I understand, as part of the partnership agreement, the directors of Justice 2000 were to be allowed access to the budget, and where the money was going. After being denied multiple times, Justice 2000 leadership broke away from Community Advocates and created Justice Point. Within a year they had secured most of the County Pretrial budget. Additionally, during that process, Joe Volk has pretty much burned every bridge with the County, where a lot of his funding could potentially come from.

    As he loses these contracts, people are being fired constantly. After purchasing this brand new building for more than they could afford, most of the office space sits empty, yet employees are continually let go. I’ve also heard that the employees have not received a raise since July 2012 and are not expecting to receive one in 2014. Did I mention the insurance benefits? Take a look at how those have changed over the past 3 years.

    I simply cannot believe that he’s considered a “kingpin” of the non-profit world. He’s a shady thug who uses his connections in the city’s government to boost his ego and maintain his status. He does very little to help the indigent in Milwaukee, not to mention his employees.

  7. Beatrice says:

    Bruce, thank you for the update. It paints a more realistic picture of what is really happening with Community Advocates.
    I completely agree with Phyllis and Frank. As someone who is witnessing the downfall of Community Advocates firsthand, I can tell you that those who are being most affected are the over-worked and underpaid hardworking staff. With the numerous layoffs that have been happening, staff size has shrunk and employees have to work harder to try to provide the same quality of service to clients. They haven’t seen a raise since 2012 and aren’t likely to see one until maybe 2015. Higher medical insurance premiums and $5000 deductibles have forced some staff with ongoing medical issues, into severe debt, and some into bankruptcy.
    Yet after being asked at a recent staff meeting if there would be any hope of receiving a salary increase in 2014, interim CEO Andi Elliott apologized and say no. She then clarified that she didn’t want to apologize for not being able to provide raises because “that would mean that we’re doing something wrong.”
    Community Advocates Board Chair, Pamela Klein, assured staff that Joe Volk’s resignation was not forced by the board and stated that the board “is very happy with how the agency is being run.”
    How much funding has Community Advocates lost in recent years? And no one is at fault? The $3.3 million in County Pre-trial contracts were lost because of Joe Volk’s shady business practices. The $850,000 Northside Crisis Resource Center contract was terminated because of inefficiencies yet there was no accountability from Joe Volk or the board. Community Advocates purchased and renovated a new building that they couldn’t afford then harassed staff, making $30,000/year repeatedly with e-mails asking for contributions to the capital campaign to pay for that building. And does anyone know what is happening with the building on Fond du Lac which Community Advocates previously occupied? I believe they still own that building and it’s sitting idle. They’ve hired a Director of Philanthropy who can’t raise any money because the agency has had repeated negative headlines. How is this agency going to move forward without being accountable for the decisions that have put it in this predicament in the first place?
    As children, weren’t we told that the reason that we study history is so that we learn from it and don’t repeat the same mistakes?
    Hopefully now that Joe Volk will be out of the picture, the board will hire a more fiscally responsible CEO and Community Advocates will live on to see better days.

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