Dr. Chavis blamed much of the deficit on two setbacks: an old $680,000 judgment that the NAACP was ordered to pay this year after a legal appeal failed, and mounting losses in the televised NAACP Image Awards. He said that program, run by the NAACP board, lost $600,000 this year alone and will be scrapped unless he can make it pay for itself.
Only about $210,000 of the $2 million Lewis Foundation pledge has been delivered so far, he said, and that money was earmarked to create an NAACP endowment, not to cover expenses.
The NAACP leader has dismissed 10 staff members out of 150 and says more cuts are coming -- although he says that the reductions are due to a long-planned reorganization, not the deficit.
"What the delegates to the convention expect me to do is give truthful disclosure about where the NAACP is financially, and I intend to do that," he said. "The financial condition of the NAACP won't be an issue at the convention."
However, some critics want to know why NAACP revenues aren't booming if, as Dr. Chavis maintains, the group's membership has soared by 160,000 (to 650,000) since he took office.
The NAACP's answer is that the new members have largely been youth -- who pay as little as $3 annual dues, less than the cost of processing their applications. But that response doesn't convince those who suspect that Dr. Chavis' membership claims are inflated.
"My sources tell me he doesn't know how to count, that he is citing renewals as new members," said Michael Meyers, an NAACP dissident who heads the New York Civil Rights Coalition. "I don't think it's credible."
Mr. Meyers contends that the NAACP "has been hijacked by black extremists," including Dr. Chavis, and "become an adjunct of the Nation of Islam, as opposed to being its chief critic."
That view of the Chavis-Farrakhan relationship isn't widely shared in the NAACP.
But there is concern about whether a financially distressed NAACP can afford to alienate old allies. (The NAACP's main fund-raiser, Gilbert Jonas, says corporate and foundation support hasn't slipped yet.)
Carl O. Snowden, an Annapolis civil rights activist and NAACP life member, said the organization's money problems may force Dr. Chavis to trim his sails.
"Maintaining a progressive organization with mainstream dollars: It's almost a contradiction in terms," he said.
"The NAACP as an organization is trying to walk down two different roads -- to unify the black community and at the same time to make a linkage with corporate America. Chavis is not finding equilibrium, and I'm not sure he can."