City Desk

One Barry Lesson: How Not To Run A Nonprofit

Maroin Barry

"I am a different kind of council member. I ran to get resources, to uplift people of Ward 8 to do everything I can to empower them."–Councilmember Marion S. Barry Jr. on the dais yesterday in response to Robert Bennett's testimony.

By resources, Barry means the thousands of dollars in city funds he funneled to a set of fishy nonprofits. By "people of Ward 8," Barry means his campaign supporters and love interest.

As the Bennett Report lays out in detail, Barry's nonprofits enriched few outside of his inner circle. At best, they provide a blueprint for how nonprofits should not be run.

Blueprint after the jump!

Bennett's investigation did some serious digging into the financial records of the six nonprofits—Clean and Green, Inc., Clean and Sober, Inc., Education Council, Inc., Health Council Inc., Workforce Development Council, Inc., and the Youth Leadership Council, Inc.—conceived by Barry. They found:

*60 percent of the six nonprofits' budget went to administrative salaries.

*8.65 percent went to the fiscal agents.

*$23,885 was spent on office supplies and telephones

*$3,091 was spent on postage.

*$35,376 was spent on marketing and promotion materials.

*$13,589  was spent on catering.

*14.1 percent of the total budgets fell under "miscellaneous."

So what's the takeaway?

Only really bad nonprofits devote 60 percent of their budget to salaries. And despite all this money spent on food and promotions, hardly anyone we talked to in Ward 8 over the summer had heard of these nonprofits.

In response to a Freedom of Information Act Request, Washington City Paper obtained documents on the day-to-day business of the nonprofits. The documents provide some insight into just how these organizations function and how wide a net they cast.

One meeting of the Ward 8 Health Council is indicative of the groups' outreach problems. According to a memo detailing the minutes of  the Jan. 16, 2009, Health Council meeting, interested parties lamented its poor attendance. During one discussion, individuals "agreed to make a concerted effort to get at least 25 citizens to the table" for its February meeting.

Those listed on the Ward 8 Health Council's contact list included a woman who had quit the organization and former Barry girlfriend Donna Watts-Brighthaupt.

Among the food expenses on behalf of the Ward 8 Health Council: an invoice for $250.00 for "juices," "veg. soup" and "weightloss + nutrition juices." It is unclear from the invoice whether this cost included more than just juices and soup.

In April 2009, the Ward 8 Health Council spent $1,238.75 for T-shirts and brochures.

The Bennett Report states the operations of the nonprofits were managed mainly out of Barry's constituent services office. At best, the work of some of the nonprofits went incomplete. The agendas of some of the nonprofits were typed up on Barry letterhead—evidence, perhaps, that the nonprofit managers were serious about keeping expenses low.

The Bennett findings zeroed in on the woman Barry tapped to oversee the nonprofits—Brenda Richardson. She raked in more than $100,000 for work that the report characterizes as follows: "Ms. Richardson was in charge of quality control for the councils, selected various vendors utilized by the councils, and regularly reported to Council Member Barry regarding the councils."

The Bennett team found a very legal way of saying that Richardson was overpaid:

"Ms. Richardson submitted invoices for payment to the councils reflecting that she worked fewer hours than she was committed to work, but she was nonetheless paid the full amounts under the contract for the pertinent pay period."

Richardson was supposed to work 20 hours per week for each council. But according to the invoices she submitted, she worked 10 hours per week. Yet her paychecks overlooked the invoices, paying her for the full 20 hours per week. Richardson held this arrangement with three of the nonprofit organizations, meaning that she was compensated for 60 hours of work per week, or one-and-a-half employees. "These invoices were not questioned by the fiscal agents or the agencies monitoring each grant," the report states.

In his deposition, Barry called Richardson his "accountability officer."

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Comments

  1. #1

    "Only really bad nonprofits devote 60 percent of their budget to salaries."

    That's quite a negative and misleading statement.
    My agency provides residential and in-home supports to people with disabilities and our largest single cost is the staff who provide the direct services. Salaries account for at least half our budget. Our staff start off in the range of $11-14/hour, so they are hardly getting rich.

    Maybe you meant to say that "Only really bad nonprofits devote 60 percent of their budget to *administrative* salaries"? There's quite a difference. If you could clarify this, I would appreciate it.

  2. #2

    Possible Walmart on RI Ave, NE?

    http://www.riwalmart.blogspot.com/

  3. #3

    'John', I'm sorry to burst your bubble, it's not going to happen here because WalMart would have to play the DC SHAKE-DOWN GAME, and WalMart will not do that!

  4. #4

    Cherkis: Kris desrves a response to comment #1.

  5. #5

    TH-
    Jason's first reference to this in the above post seems to be the clarification Kris was seeking:*60 percent of the six nonprofits' budget went to administrative salaries.

  6. #6

    Drez: Yeah, but then he says "Only really bad nonprofits devote 60 percent of their budgets to salaries". While he probably meant to write "administrative salaries", he didn't. Sally just asked him to clarify the point. I can see why hard working legit nonprofits (eg,neighborhood legal services) that provide real services might take issue with Jason's statement, and it's easy for him to correct.

  7. #7

    I agree with Kris. The compensation overhead for an organization depends largely on what services it provides and the amount of staff time it takes to deliver those services. For instance a counseling service relies heavily on time that constituents spend with the counselors. So more overhead goes to pay for counselors' time, but this is a direct benefit to the constituent. On the opposite end of the spectrum, an organization might provide food, and spend a greater percentage of its money on food rather than staff time, since food is the primary benefit. A careless and not well-researched comment by the author.

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