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Waste, money woes bedevil Light of Life
Thursday, July 19, 2001 By Steve Levin and Tom Barnes, Post-Gazette Staff Writers
Light of Life Ministries, one of Pittsburgh's most prominent missions for the homeless and needy, may need to be rescued itself. State Attorney General Mike Fisher is investigating the fund-raising practices of the family-run nonprofit agency, which has an annual budget of $5.7 million and a staff of 80.
And several former employees have told the Pittsburgh Post-Gazette and KDKA-TV that shoddy management has caused Light of Life severe financial problems.
A joint PG/KD investigation found inadequate oversight of programs, exaggerated meal-distribution numbers and a tendency to fire employees who questioned fiscal practices.
Two former upper-level managers allege the mission has done such a poor job of managing its money that it faces a $500,000 deficit by September and may be unable to meet its August payroll.
They also object to an arrangement in which a California fund-raising company gets up to 46 cents of every dollar donated to Light of Life.
Duane Gartland, the executive director of Light of Life who's worked there for 30 years, and board Vice President Russell Davis counter that the mission faces no financial crisis and that the complaints are from disgruntled ex-employees.
But the complaints have come from a variety of current and former employees -- secretaries, accountants, a human resources director and job-training instructors -- as well as from clients.
Many of those interviewed by the Post-Gazette and KDKA-TV asked not to be identified, saying they feared retribution.
Two who were willing to put their names to their complaints were Jerry Wrzosek, the former director of development and coordinator of volunteer services fired in June, and controller Bobby Burke, who resigned July 12. They are the latest of five top-level managers who have left in the past two years.
On June 5, they gave Gartland, Davis and board President Tunch Ilkin, the former Steelers lineman, a cash-flow analysis of the mission.
Light of Life real estate holdings
These are the six properties in Allegheny and Washington counties owned by Light of Life Ministries, a rescue mission and social service agency that provides housing, food, clothing and programs for homeless and needy people.
Legal actions involving Light of Life
The analysis said Light of Life faced an average deficit of more than $174,000 a month from June through September, or a total of about $700,000. Revenue from existing contracts plus a line of credit would reduce the deficit to about $508,000.
Wrzosek's and Burke's findings followed a warning in February by Maher Duessel, the mission's accounting firm.
Maher Duessel's review of finances for the fiscal year ending June 30, 2000, said that "without proper internal control, Light of Life cannot ensure that all revenue that is received/earned is recorded, all revenue that is earned is billed and that assets are safeguarded from misappropriation."
Deficit denied
Gartland said donations are typically slow during summer months. In past years, Light of Life has used a standing $300,000 line of credit from PNC Bank to cover such shortages.
"Any ministry sees a shortfall during the summer," he said. "We have been in this situation before. We have never had a year when things go smoothly."
Nevertheless, Wrzosek and Burke recommended that the mission restructure its $1.17 million direct-mail contract with Russ Reid Co., a California consulting firm; jettison a $91,000-a-year Portland, Ore., radio consultant; and eliminate the $60,000-a-year position of development director.
They also recommended cutting back on the $22,800 annual cell phone bill, reducing legal expenses and laying off some employees.
Until 1998, the mission's finances were in "fairly good shape," according to a former Light of Life accountant who asked not to be identified because he still works in the nonprofit field.
That year, the mission borrowed $1.4 million to buy and renovate its new headquarters at 1111 Penn Ave., Downtown.
And its annual capital campaign raised only a quarter of the hoped-for $4 million.
Adding to the burden, Gartland had quadruple-bypass surgery that year and was away from the office for weeks. He said his absence contributed to the disappointing capital campaign.
In a companion report titled "Stewardship," Wrzosek and Burke asked, "Are we good stewards of the gifts the Lord has bestowed upon us?"
"The current budget process has been compromised by some illogical decisions and Duane's micromanaging," the report said.
And, they contended, Light of Life had "let incompetency prevail until we were almost in ruin."
Wrzosek was fired three weeks later. He said Gartland called the stewardship report an "ungodly document" and characterized it as "insubordination and treason."
Gartland, however, contends that Wrzosek quit after saying he could no longer work for him.
Davis, the board vice president, said he was "surprised" by Burke's and Wrzosek's forecast of a deficit.
He said he, Gartland and Ilkin wanted to know whether the two men had found any fraud, corruption or legal violations.
"They said that there wasn't," Davis said. "We have listened to the issues they are dealing with and the concerns they have. We take their concerns seriously."
The board has been careful of "not overstepping our bounds. We don't want to micromanage the staff," he said.
Managing, he said, was Gartland's responsibility, adding, Gartland "is a better minister than administrator."
Wrzosek and Burke said that while the mission's financial sloppiness may not be illegal, it violated donors' trust. About three-quarters of Light of Life's donations come from individuals.
"In our experience and in the things we've been able to uncover ... the donors clearly are not getting their money's worth," Wrzosek said. "Their [donated] clothing, their gifts of furniture -- there's so much waste. There's so much negligence."
"The hypocrisy, the fraud that's being perpetrated there leaves a bad taste in your mouth as a God-fearing Christian," Burke said.
Asked this week about Burke's criticism, Ilkin said, "I think the world of Bobby, but he was only here a short time [six months]."
The attorney general's investigation has been under way since at least June 29, 2000, when special investigator Michelle M. Sinibaldi of Fisher's office sent Gartland a letter.
"Light of Life Ministries may be conducting solicitations in violation of Pennsylvania's Solicitations of Funds for Charitable Purposes Act," the letter stated.
Sinibaldi asked for records from 1997 through 2000 of the mission's directors, officers and employees, board meeting minutes and unaudited financial statements, a compilation of all accounts containing mission assets and a list of all donated vehicles and an accounting of what was done with them.
"We have given them everything they wanted," said Gartland, adding he hadn't heard anything more about the investigation.
The attorney general's office refused to comment on the investigation.
Fund-raising questioned
Wrzosek and Burke said the quickest way to fix the mission's financial woes would be to restructure its relationship with Russ Reid Co. The firm is known nationally for its work with nonprofit groups and has been raising money for Light of Life since 1987.
Nearly a fifth of the mission's 2001-2002 budget of $5.7 million is earmarked for Russ Reid.
Burke said he objected to Russ Reid keeping as much as 46 cents out of every $1 collected from Light of Life donors, most of whom are "mom and pop" contributors rather than foundations or corporations. Russ Reid raises about $2 million a year, with 54 percent of that going to the mission.
There is no universal standard for what professional fund-raisers should be paid. Experts say that direct-mail fund raising conducted by professional solicitors can be an expensive proposition.
A 1996 study in North Carolina, for example, showed charities there paid professional fund-raisers anywhere from 8 cents to 95 cents on the dollar.
Burke and Wrzosek continue to believe that Light of Life could handle fund raising in-house at a third of the cost of Russ Reid. They were not the first mission administrators to suggest dumping Russ Reid.
Former business manager Kevin Green asked in a May 2000 letter to Gartland: "Are these people the only game in town? ... Can we really afford this much?"
Gartland said that prior to 1987, Light of Life did its own direct-mail fund raising.
"We have been there and we couldn't do it -- we failed," he said.
Russ Reid's work with dozens of other missions enabled it to offer clients lower printing and production costs, Gartland said.
Davis, however, in a break with Gartland, said the mission should look into returning the project to its staff.
Jobs program sputters
About 25 percent of Light of Life's total revenue comes from county and federal grants and fees for client programs. The programs range from overnight shelter for transients, to a residential program for nonviolent offenders, to job-skills training. Many former clients of the mission vouch for the positive impact on their lives.
But Liz Tafel, a nine-year employee at Light of Life who in May quit as human resources director, said much more could be accomplished.
"I quit because the purposes of the mission weren't being fulfilled," Tafel said. "Attention wasn't being paid to taking care of the people we were there to care for -- the homeless."
Tafel, Wrzosek and Burke said most mission programs suffer from poor organization, instructor turnover and too few students.
The largest current grant is a two-year, $675,000 federal outlay for a program called Employment Plus, which provides job training and life skills to men and women.
In his proposal for the grant, Gartland envisioned 120 people being trained in one of three areas: culinary arts, building trades and computer skills. There would be five classes a week, counseling sessions, remedial help and, ultimately, job placement.
Since Employment Plus began in March 2000, only 12 people have graduated, all in either culinary arts or computer skills. Eight of the graduates found jobs.
The mission's cook, Lorenzo Johnson, teaches the culinary arts class; recently, the women's computer class lost three of its four clients.
Gartland blames the low numbers and uneven programs on start-up snafus.
"Most programs need an extended period of time to be effective," he said.
He also blamed the clients.
"We have problems with their work ethic," he said. "[They] have addiction problems. Some fall back into problems. We knew it would be tough going on this. We aren't discouraged by the numbers."
A federal audit of the grant, which runs through March, is scheduled for later this year.
Meal statistics doubted
Light of Life's signature program involves meals for the homeless. Virtually every mission publication touts the number of meals served, including the large Thanksgiving dinner.
Wrzosek, however, alleges that those numbers are inflated. For example, Light of Life literature claims 3,000 meals were served last Thanksgiving; Wrzosek said he used a counter to record 950 meals.
And the summer newsletter, "The Light," said 18,747 meals were served in January. Divided by 31 days, that equals 605 meals a day.
But on another page, the newsletter says it serves 400 meals daily. The 200-meal difference, multiplied over a 31-day period, comes to a 6,200-meal monthly discrepancy. Over a year's time, that figure would be 74,400.
Gartland said the number of meals served "is suspect only in the mind of Jerry Wrzosek."
Giving away the store?
Duane Gartland is undisputed head of the mission. Six other family members also work at Light of Life, including his younger brothers Dean, the assistant executive director, and Dennis, who runs the thrift shop. Both have been employees for years.
The thrift shop, at 913 Western Ave., North Side, is a jumble of donated clothes, furniture and other household items. In the back of the building, scores of unopened trash bags full of clothes wait for sorting.
When truckloads of donations arrive, some employees say, the best items go into a padlocked room.
Two former thrift shop employees who asked not to be identified said antique collectors often came to the store to buy those special pieces and that sales records were not kept.
"I don't know that that is true," Duane Gartland said. "There is a lot of theft at the thrift store -- from customers. Someone walked out with a TV the other day."
Davis, the board vice president, added, "We do have inventory concern at the thrift store. We have so many donations that come in, and it's difficult to take care of them."
The former employees also said bags of clothes were often thrown away or sold for rags without being inventoried or put on display because there were no employees to sort them.
"The pure abuse of donations -- it was just staggering how much stuff was literally thrown away," said a former mission client who worked at the thrift shop.
Dennis Gartland agreed that the mission takes in a lot of clothes for which there is no storage space. But he denied that any clothing was thrown away or sold for rags, and said any surplus was sent to other missions, including ones in New Castle and Erie.
Duane Gartland said that despite the criticism, Light of Life will continue to provide its services and "minister to the least" of society.
"There will always be people who have something negative to say. Some people like what you do and some don't.
"We do the best job that we can. Are we perfect? No."
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10 East North Ave.: A shelter serving meals and providing chapel services for homeless men.