Housing Complex

Gospel Rescue Ministries Files For Bankruptcy To Keep Its Buildings

It's rough out there for nonprofits these days, and Gospel Rescue Ministries—a faith-based homeless shelter and treatment center that's operated downtown since 1906—is having as hard a time as any. Although its main source of income is contracts with the District government, its donor base has shrunk. It was forced to cut staff, if not services, in order to bring expenses in line with revenue.

In late April, OBA Bank started to foreclose on the Mission-style building on 5th Street NW that it's occupied since the 1930s, as well as two residential treatment facilities the non-profit owns, one at 512 I St. NW and another at 1733 T St. SE.

The buildings are scheduled to be sold at auction tomorrow morning. But David VanDuzer, a Virginia-based architect who chairs the charity's board, says the sale won't happen: They're filing for Chapter 11 bankruptcy instead, while they secure new financing with an out-of-town lender.

"We've had a terrible time," VanDuzer says. "Private grants were a big source of our income, and they're just not there right now."

Tax returns from the most recent year available show that the organization took in $3.4 million in 2009, which had been an increase from previous years, but giving has tapered off, VanDuzer says—though he's confident that the non-profit will be able to regroup and continue operating long into the future.

  • RT

    They must have really levered up those buildings during the boom time, and now can't pay their debt service. And the buildings are probably not worth much more than the mortgage, which precludes sale as a way of bailing themelves out. Interesting that SOME, Martha's Table, and Central Union Mission have been raking it in, comparatively.

  • HW

    The bigger story here is that GRM has been collecting money from DC Government maintenance contracts, sending homeless people out to fulfil the maintenance contracts, and NOT PAYING THEM. AND, the government is aware of this.

    GRM has been playing a 'shell game' for a long time.

  • HW

    GRM has been mismanaged for years and has survived on the backs of homeless men they claim to be serving. It's beyond disgraceful.

  • Curt Ashburn

    David VanDuzer continues to lie and otherwise obfuscate the truth about the gross mismanagement of finances and the disgraceful mistreatment of the homeless men and women whom GRM claims to care about under the banner of the Gospel of Jesus Christ since Michael Cortese was hired as the executive director some five years ago. This once honorable and faithful organization is not in decline because of the economy. It is in decline because of the moral bankruptcy of its leadership.

    Contrary to what Mr. VanDuzer claims, private grants were not "a big source" of income in 2009. Something on the order of 86% of the $3.4 million in revenues that year were from government contracts, not private donors. Mr. VanDuzer and the board of directors were warned over two years ago that the executive director of the program, Michael Cortese, was "driving GRM into the ground both financially and spiritually." They chose to ignore those warnings and now they continue to lie to cover up gross incompetence and a complete absence of basic human decency in caring for the vulnerable and hurting human beings who walk through their doors.

    This is a tragic story that begs for investigative reporting. Not an easy task, however, since the employees have been warned not to talk to anyone about GRM. Someone should ask the city why it would allow GRM to sell The Fulton House of Hope at 6th and I Streets, NW to pay off debt when that building was given to GRM free of charge in the mid 1990's to serve as the only one-year residential drug treatment program for women in the city. What a shame if that building goes to the highest bidder to pay for the mismanagement of a highly paid executive director while the women in the program, who are already damaged and beaten down, get thrown out into the street.

    In the end, God knows their deeds and the sad truth is that the board of directors and Michael Cortese should be filing for the bankruptcy of their souls and begging God to forgive them for how they treated "the least of these" (Gospel of Matthew chapter 25).

  • http://YAHOO.COM Jwms@YAHOO.COM

    It is a sad day at Gospel Resue Ministies I pray for them because their souls will not not sit right with God after they who claim to be god fearing people have the adacity to lie to the very people they claim to help. I agree Micheal Cortese is a big phony. He has been lying to the clients and employeees since day one.Peoples lives are at stake and they've been sold a dream that will never happen. Because a real person of God would not put his flock out to die and that's what going to happen.

  • LG

    May God bless Mr. Asburn for the Gospel of Truth. He lay it out by the words of our Lord the truth of those souls the bankruptcy of GRM. He right for begging for investigative reporting. God bless you Coach.

  • HW

    Thank you Curt Ashburn for speaking the plain truth.

  • TF

    The real story is the mis-use of goverment funds & contracts. The suffering of the employee's from not being paid for several months, the employee's that never had unemployment compensation taken out of their checks, the health insurance fee's that employee had taken out of their check's that never were paid to the company. They mishandled so much and abused so many staff and families that their own prayer's were answered.......

    There should be futher investigation's into the Gospel Rescue Ministries finacial record's and more employee's need to step up and let the truth set them free.

  • HW

    TF you are absolutely right: The abuse goes very deep and has affected many people -- Mostly homeless people who have been demeaned by the tactics of GRM management. Those who feel they have no voice, because they have no place else to go.

  • CW

    It is sad how so many people who came to the mission to rebuild their lives and learn a new way of living have been mistreated and now possibly be abandoned. The real sad part is it was all done "in the name of Jesus" I knew that God was not in this because it was tooooo much confusion and God is a God of order. I believe that money was mismanaged in fact I was there when the money was being mismanaged. The fake escrow accounts that was supposed to be holding the trainees money was not there when time came to get there hard earned money that they worked for and saved it was not available. Someone needs to go through that Organization with a magnifying glass and uncover the mismanged funds and find out what happened to the money. Now that you cowards have decided to take the easy way out and file bankruptcy, what happens to the homeless men and women that are there. Who will pay the workers the back monies that is owed. GRM what about the false promises you have made to everyone. What about alllllllllllll the vendors you owe. I just wonder if you that are responsible for this downfall will step up to the plate and admit your wrongs and seek forgiveness. This applies to you who are no longer their too. May God have mercy on your souls!

  • Sherm 111

    I am saddened by the news of GRM, not only am I a former employee but also an alumni of the Transforming Lives Ministry and remain active in its support. It would be easy for me to kick a dog when its down but I remember when in September 2006 they opened there doors for me, a broken down soul. Through Gods grace and mercy and with a lot of encouragement from the treatment team I am now a believer in the Lord Jesus Christ and his wonders, my God how he is blessing me. A lot of good has come out of that building and I truly believe that the work is not over. Its just like a lawn,"if you want your grass to grow you got to get rid of the weeds". So forgive me if I am not on the bashing wagon, I just think you get more done with prayer!

  • HW

    Sherm: You're one of the fortunate ones who trived despite what was going on around you. The problem is that the "weeds" are running the organization.

  • Sherm 111

    HW you are right. My problem was is that I loved my job at one time and the people I helped. My concern is for the people whom are left behind not the weeds!

  • http://yahoo.com CM

    Too bad the board at GRM thought that it was time the mission stopped helping people and become a big business. Under the leadership of Mike Cortesse they have launched failed business investments one after another wasting money that should have been reinvested in the program. Its obivous that the only way GRM will survive is go back to helping everyone that comes through the door of 810 5th street. I graduated in 2005 and I can truly say they saved my life and I have not looked back since I walked through their front door.

  • http://www.rwwdc.org Patty Brosmer

    Please, please, please follow up on this story!

  • diana 717

    I say pray...everyone is acting so high and mighty righteous...if you know or think there is a problem then instead of trash talking and gossiping...PRAY FOR CHANGE, PRAY FOR THOSE PEOPLE YOU FILL SO SORRY FOR...truthfully as i just read thru these comments non of them were very Christ like...minus Sherm111..so on that note i'm pray for all of you and this situation because that is a what
    God really requires from us to WATCH AND PRAY. GOD BLESS

  • jody

    To: Diana 77 You can't get on a high horse with people who get angry over the mismanagement, corruption & greed that has taken over an organization that was of good purpose, intent & deeds for many years. It is Christ like to be angered by injustice, abuse of the vulnerable and unrighteous behavior. Why do you seek to limit what is Christ like? Jesus was no always a smiling robot He was human. A lot of things displeased Him. People are human wrong doers should not be tolerated. Btw, when Christ returns He will return as a warrior & King----not a meek lamb.

  • Dissapointed

    I've volunteered at GRM for long time and saw things go down hill regarding management in recent years. It's so bad you can't even get someone to call you back when you try to donate money or to set up a time to come in and volunteer. It's a shame.

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