From the desk of Joselyn Harris, SDHDF Board President
To our community members,
Those of you who know me, you know that I try to be as “no-nonsense” as possible in my words and actions, and I intend to operate that way now. It took longer than we had anticipated procuring the comprehensive forensic analysis that we want to provide the community, and we are happy to be releasing it today. Now our priority is to engage in transparency, take appropriate responsibility and move forward thoughtfully.
San Diego Human Dignity Foundation, for the last two or more years, attempted to perform in a manner far beyond its capacity, and this resulted in poor financial management choices. We overcommitted to staffing, events, sponsorships and grants and, when we did not procure sufficient revenue from these investments, we found the foundation in a difficult decision: should we press forward with an ambitious growth plan or cut our losses? Too often, we followed the path of moving forward, in the hopes that there would be a pay-off from the broader giving and exposure that the foundation was receiving. Unfortunately, that day did not come.
Through decisions made to hire additional staff, contract out services for PR, consultant and graphics services, and produce more lavish events, while maintaining a robust giving schedule, SDHDF burned through readily available funds too quickly. This led to a need for operating expense funds that were no longer there, and the decision to borrow from two funds that belonged to the foundation, the Flick Fund and The Sunshine Brooks Fund, as well as one additional donor-advised fund (name withheld until permission given by the fund-holder). In addition, we continued to honor the intention of Sunshine Brooks to fund programs and projects that served the HIV community, through both grants and sponsorships. While some of this spending was covered by our own grant funding and funding partnership procurement, we dipped too far into the Sunshine Brooks Fund, both for HIV programs and the survival of our foundation. In the broader LGBT community, investments in projects such as purchasing the Diversionary Theatre/Lambda Archives building, leveraged against our existing funds, engaging in a capital campaign for the building, and funding the expansion project for Auntie Helen’s Community Thrift, while well-intentioned, put our financial footing in jeopardy.
In October 2016, we began the process of having our financial management reviewed by an independent forensic analyst, unsure of what the outcomes would be. While we are happy to report that no theft occurred, we have to accept responsibility that the board did not provide sufficient comprehensive oversite to the transactions being made. As SDHDF board chair, I am disappointed that this mismanagement occurred, and both myself and my fellow board members have implemented a much stricter review process for all fund activity, and are committed to creating structures that allow a better understanding of our financials, through exhaustive study, and aligning all of our giving to a calendar year, instead of multiple annual grant cycles.
As well as initiating the forensic analysis in October 2016, the board made an internal review of our 2017 proposed budget draft, making significant reductions to SDHDF expenditures. We are also “right-sizing” the foundation; as of April 1st, we will have reduced our staff from five full time employees, to two full time employees, and one contracted staff person, as needed for special projects. Our focus will be on building our board, engaging our community to insure that we are aligned with their priorities, rebuilding funds that will benefit the community, and engaging in responsible philanthropy, which is the mission of the foundation. Our hope is that you will actively engage in holding us accountable, and that we may earn back the trust of our LGBT community, as a foundation that truly cares about our shared future.
About the report: Please be aware that there are limits to what SDHDF may publish, without the written consent of the fund-holders, whose funds were reviewed for the purpose of this report. All fund-holders have been contacted, asking for their permission to un-redact their information and, as we receive approvals, we will upload the updated form, which may be found at this link. Additionally, any questions and comments may be confidentially submitted to our board through this form.