NAACP's cash woes continue

June 28, 1995|By James Bock | James Bock,Sun Staff Writer

Despite a change in leadership, the NAACP raised nearly $500,000 less from outside sources in the first five months of 1995 compared with the same period last year.

The civil rights group had raised less than $2.2 million from such sources through last month. Corporate donations were down by almost $600,000, foundation giving was up by $140,000 and receipts from direct-mail solicitations were unchanged.

The fund-raising results were made public as part of a lawsuit filed last week in New York by the Gilbert Jonas Co. against the National Association for the Advancement of Colored People. The NAACP is based in Baltimore and chartered in New York state.

Mr. Jonas, the civil rights group's chief fund-raiser from 1965 until he was dismissed last month, has sued the NAACP for $394,822.42 in unpaid fees and expenses.

Most of the NAACP's support comes from its more than 400,000 members. But the fund-raising results show that the 86-year-old organization is still suffering from a year of mostly bad news about alleged financial mismanagement.

"There is no question but that overall external fund raising has been hurt severely over the past year or so," said Earl T. Shinhoster, the NAACP's acting executive director. "The continuing controversy and steady negative drumbeat of publicity had a chilling effect on fund raising generally."

But Mr. Shinhoster said contributions from the NAACP's network of 2,200 units helped keep the organization afloat late last year. He said he hoped that the NAACP could become more financially independent by developing its "natural constituency -- those who benefited from the cause and work of the NAACP."

The organization faces a $3.8 million deficit and is "unable to meet financial obligations arising in the ordinary course of business due to significant cash shortfalls," according to a document circulated at an NAACP board meeting in Baltimore last month.

The NAACP's financial crisis, which became public more than a year ago, helped trigger then-Executive Director Benjamin F. Chavis Jr.'s firing in August and Chairman William F. Gibson's defeat in a February board election.

Chairwoman Myrlie B. Evers-Williams, who defeated Dr. Gibson by one vote, has pledged to revitalize the NAACP and restore the organization's fiscal health. Nearly two dozen employees were recently given layoff notices, cutting the already depleted staff by almost a third.

Many of this year's big gifts to the NAACP were made at Mrs. Evers-Williams' May 14 "inauguration" in Washington. Carl T. Rowan, a syndicated newspaper columnist who led the campaign to oust Dr. Gibson, helped organize the event and raise the money. Donations included $372,500 from the Freedom Forum, $100,000 from the Gannett Foundation and $50,000 from Nissan Motor Corp. USA.

Mr. Shinhoster said Mrs. Evers-Williams' election "established a new climate" for NAACP fund raising, particularly because she made an overhaul of the group's finances her top priority. But he said: "We still have some residual challenges to be overcome from last year. Coming out of a $3.8 million deficit does not happen overnight."

The Jonas suit outlines a pattern of reckless spending by the NAACP under Dr. Chavis and Dr. Gibson -- and an inability to rectify financial problems even after both men had lost their positions of power.

The former NAACP leaders "were like runaway trains: fiscally out of control," Mr. Jonas said in an affidavit. He said the NAACP far overspent its budget in both 1993 and 1994, despite repeated warnings from him and others that the financial situation was grave.

Mr. Jonas said he warned Dr. Chavis in writing about the growing debt as early as February 1994 and phoned Dr. Gibson with the same message in March 1994.

The two men "simply assumed an ostrich posture and buried their collective heads," Mr. Jonas said. "The NAACP was . . . on a collision course with financial disaster."

Ironically, the NAACP's failure to pay bills kept it from raising money it needed to reduce the debt. Subcontractors that provided the Jonas Co. with mailing lists, printing and other services refused to work as their bills went unpaid for months.

Fund-raising mailings were delayed because the NAACP did not provide money for postage. Last year's large Christmas appeal went out Dec. 12, almost a month late, according to the lawsuit. For 1994, the Jonas Co. raised only $6.1 million, short of the $6.9 million target set by his contract and down from $7.3 million raised the year before.

In late 1994, the Ford Foundation, traditionally a large contributor, helped install a team of Washington lawyers and accountants to come up with a financial recovery plan.

But Dr. Gibson and the NAACP board's executive committee rejected permanent staff cuts recommended by the team, and the deficit remained untamed, according to the Jonas affidavit. Now, six months later, similar cuts are being made.

Mr. Jonas contends that the NAACP paid past-due airline and hotel bills while ignoring his pleas for payment, even though his fund raising generated needed income. The fund-raiser's 1994 contract called for his company to collect about $845,000 in fees.

After Mrs. Evers-Williams' election, the NAACP "teased me with expectations of payment," said Mr. Jonas, who closed his New York office this month. Mr. Shinhoster would not comment on Mr. Jonas' allegations, but NAACP officials have said they expect to work out a schedule to pay Mr. Jonas what he is owed.

Mr. Jonas says he raised $110 million for the NAACP from 1965 to 1994.

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