The East Akron Community House is in desperate financial trouble. There is no question the agency has been a mainstay, providing services in a part of town that needs all the help it can get. The troubles came to a head during the past year. The board of trustees this week asked the Akron City Council for $357,254.57 in emergency funds to pay off a $305,706 bank note on the agency’s building. The bank is suing, and there are several other bills to pay.
The building is a huge physical asset in the neighborhood, but securing it is not the nonprofit corporation’s only urgent problem. It is under investigation by the Ohio attorney general. The letter appealing for city funds concedes the agency lost major funding sources amounting to $900,000 in the past year, more than 80 percent of its revenues. Bob Kulinski, the director of United Way of Summit County, which was a major source of funds, summed up the situation in a news article Wednesday: “They have no revenue, no program staff, no executive staff. … ”
In other words, EACH is not in a position to provide services. As things stand, no responsible program funders would consider it a good risk. Thus, any plan to revive EACH must be substantive enough to justify putting good money after bad. In spite of the trustees’ assurance that they have a plan to put the agency back on track, Mayor Don Plusquellic and Council President Garry Moneypenny are right to be cautious about committing public funds until the state’s investigation is completed and the findings provide some independent perspective on what went wrong.
Meanwhile, the council and the mayor must perform their own due diligence in considering the request for funds. They must insist not only on a coherent plan for financial stability and efficiency but also on a reconstituted board and executive staff with a proven ability to run successful agencies.
On the basis of its name and past accomplishments alone, EACH, indeed, would be worth the rescue. For the city, the larger priority is to ensure there is a network of programs better structured to serve East Akron. There is good reason, then, to move quickly — but not to prop up a mismanaged agency for the short term.
Unfortunately, what little has been made public so far about the recovery plan lacks clarity. For instance, the board’s letter asking for public funds notes that it plans to seek federal funds, including grants from President Obama’s new initiative, My Brother’s Keeper, when that becomes available. Yet, as quoted in the news account Wednesday, the board president seemed to suggest the agency will head in a different direction, “looking for programs that are self-sustaining” and “away from the major structure of government-funded programs” and grants.
If that is the case, the council would want to examine the board’s proposals for self-sustaining funding strategies — clear indications, for instance, on how the board would identify or develop a large enough donor base or a clientele able to support fee-for-service programs. If the board isn’t forthcoming in this way, it will forfeit any consideration of help to survive.