Several members of the board of directors of Equality Forum recently resigned, some of whom contend the organization is headed in the wrong financial direction.
Former board treasurer Louis Thomas and members Jeff Aldi and Greg Lowe stepped down last month, and member Colleen Rooney and former chair Kevin Ray resigned in the spring.
Both Rooney and Lowe said they left the board for “personal and professional” reasons, and Ray told PGN he had to step down about two months before his term would have ended for medical reasons.
Board members Dr. Mark McClurg and Chris Higgins said their terms expired this summer.
Stephenie Yeung, who had been serving as interim chair after Ray’s departure, told PGN that at a meeting this week, the board elected Debra Blair as chair, Yeung as vice president and Daryl Evans as secretary. Yeung said the new board treasurer is still awaiting approval.
Thomas and Aldi both submitted resignation letters July 21, obtained by PGN, that detailed their dissatisfaction with the financial management of the organization.
Both Thomas and Aldi said the budget the organization is looking to implement this fall does not make enough allowances for what is expected to be a more-than $200,000 reduction in state funding.
According to executive director Malcolm Lazin, Equality Forum recently laid off three employees and hired a part-time financial consultant, and brought on two volunteers and is interviewing a third.
But both Thomas and Aldi contended the organization needs to cut back on more than employment costs.
According to Equality Forum’s 2007 tax return, the organization had a total revenue of $796,042 that year and total expenses that amounted to $823,149. The organization’s net assets at the beginning of the year were $212,257, leaving a fund balance of $185,150 at the end of the fiscal year.
“Going forward given the economic situation, it was clear that we did not have a lot of money coming in,” Thomas told PGN. “I wanted to pursue a very drastic, radical restructuring that would reduce costs, including layoffs and also substantial reduction in programming. That was not adopted or pursued by the board and, going throughout the year, there were a series of votes that made it clear to me that what I would prefer to happen in terms of programming changes and cuts and just general organization was probably not going to happen. So I was inclined to say that the board needed someone else to be its financial officer.”
However, Lazin said the organization has responded appropriately, cutting staff and operational expenses, but has not adjusted currently planned programming.
“We have reduced our spending immediately after we learned about the city totally revoking our [Marketing, Planning and Community Festival Funding] grant. Last year it was $115,000, this year it was zero.
“We immediately started to reduce our expenses accordingly,” Lazin added. “Our fiscal year begins July 1. So for the coming fiscal year, we reduced our expenses by 30 percent. That’s part of the reason for laying off three employees. The remaining employees, myself and Chip [Alfred, communications director], have reduced our salaries. We have reduced any number of other expenses in order to operate as conservatively as possible — as fiscally responsible as possible.”
Lazin added that the board was considering ways to reduce next year’s budget, including moving the location of SundayOut.
“The board is looking at next year’s Equality Forum and ways in which we can reduce expenses,” he said. “Our board will look at a variety of locations in addition to Old City in which to hold next year’s SundayOut. And those other locations would be where we would not need police services or city services.”
Lazin said the new board might consider charging a registration fee for Equality Forum events, but was not interested in moving the May event to June to coincide with PrideFest.
Yeung said Equality Forum’s recent financial challenges are being repeated in many nonprofits in today’s economic climate but are being addressed as democratically as possible.
“With the downturn in the economy — and there have been some difficulties with funding from government agencies and unexpected charges and things like that — it’s put a lot of financial strain on the organization. It has been difficult,” she said. “We’ve had to cut a lot of expenses and have some layoffs and that sort of thing, which is not uncommon in this economy. There have certainly been disagreements about particular matters, but everything comes to a vote, and the majority of the board has voted for provisions that reduce costs.”
Thomas noted in his resignation letter that attempts to reduce programming spending were “routinely ignored and dismissed” and that he was particularly concerned by expenses associated with the organization’s annual GLBT History Month celebration.
Thomas said that GLBT History Month is the only program activity that Equality Forum works on between June-October, and although executive director Lazin, approved a cut in spending for this year’s events — from $47,000 to $35,000 — the money the organization puts out to stay in operation during those months exceeds any expected profit. Last year’s program brought in about $45,000.
Thomas estimated, however, that it takes about $30,000 a month to keep the office running and the salaries paid for four employees.
According to the tax return, Lazin had an annual salary of $100,380, with an additional $20,500 in employee benefit and deferred compensation plans.
Both Thomas and Aldi raised concerns that the organization should not spend needlessly before it reduces its debt.
Aldi said he could not “in good conscience allow the organization to engage in any spending other than a reasonable salary for the executive director to allow him to fulfill his responsibilities as they relate to securing the remaining state grant monies.”
The organization is still awaiting the receipt of four state grants, which Lazin said are expected in the next couple of weeks.
“No further expenditures should occur related to GLBT History Month, [Equality Forum] 2010 or any other initiative until current debts have been paid down to a reasonable and manageable level,” Aldi added.
Equality Forum operates its office out of a condominium at 1420 Locust St., Suite 300, for which they have a mortgage of $130,000, according to the former board members, held by Lazin.
The group also has a $125,000 line of credit from Citibank and received a $65,000 loan from Lazin, who is considering contributing another $60,000 if needed.
Both Thomas and Aldi criticized Lazin’s existing loan and offer of additional funds. Thomas called the loan “particularly troubling,” as it “limits the board’s ability to govern the [executive director] and the organization.”
According to the Washington Blade, in 2000, Lazin loaned Millennium Productions, LLC, $400,000 to assist with the production of that year’s March on Washington. Following the event, the company, of which Lazin was a former board member, returned that money, along with a $100,000 fee that Lazin said he donated to LGBT and HIV/AIDS organizations. Millennium Productions failed to pay many of its vendors, however, and a settlement in U.S. Bankruptcy Court resulted in Lazin being ordered to return $207,000 of that money to the bankruptcy estate.