Reduced support from funders played key role in Neighborhood Interfaith Movement’s closure

Unforeseen cuts from two of the Neighborhood Interfaith Movement’s main sources of support doomed the agency, which closed its doors Nov. 29.

“That changed it,” said board Chairman John Wright in a phone interview.

Wright, who has been on NIM’s board for five years, wouldn’t name the funders who reduced support.

“This is not about pointing fingers at any funding source or the like,” he said.

But a source with close ties to the organization told NewsWorks that the funders who reduced support were the William Penn Foundation and United Way, two organizations with longstanding relationships with NIM.

Between the two of them, William Penn and United Way had been providing a significant chunk of NIM’s roughly $2 million annual budget.

NIM, formerly known as the Northwest Interfaith Movement, described its mission as promoting “vibrant, healthy neighborhoods in Philadelphia by uniting faith, business, civic and community partners with neighbors to advocate for social justice and to serve people in need.”

The nonprofit, founded in 1969 and long considered an anchor institution in the Northwest, filed for bankruptcy on Nov. 29. The same day, the organization ceased operations and closed its office in Mount Airy, leaving 14 full- and part-time employees jobless.

In July 2011, NIM employed 27 people.

Where the money went

In 2010, the William Penn Foundation awarded NIM $650,000 to support its work with early childhood providers. The grant was for 14 months.

A similar grant was awarded in November 2011 in the amount of $615,000. The 12-month grant was paid out in full the following month.

That grant ran out last month. No grant of a similar size or focus was awarded by William Penn before NIM filed for bankruptcy.

In July 2011, United Way awarded NIM with a three-year grant worth nearly $90,000. The grant was for general operations.

At the same time, United Way handed NIM a one-year grant worth $230,000 to support work at 20 childcare centers.

In July 2012, United Way awarded NIM a much smaller (just under $99,000) one-year grant for similar work worth just under $99,000. The grant was awarded to support work at eight childcare centers.

Typically, nonprofits use a percentage of such awards to help cover their overhead costs, including some salaries. So the shrinking of these big-ticket foundation grants eroded NIM’s resources to cover its basic costs.

‘ Hold down the fort’

For nearly an entire year, starting in September 2011, NIM was in a state of transition. George Stern left NIM that month after helming the organization for almost a decade.

In the months leading up to NIM’s closure, the organization stood on increasingly shaky financial ground.

By mid-summer, the organization was operating with a $100,000-plus deficit, a figure Wright attributes, in part, to a dearth of individual contributions over a four-year period beginning in 2008.

The economic recession, he said, had a real impact in that regard.

“It’s not what sank the ship itself, but we still weren’t covering our expenses fully,” said Wright.

Board members, however, were optimistic that firmer footing could be found once a new executive director was in place, said Wright.

Their goal during the interim period was to “hold down the fort,” he said, adding that such as limited ambition may not have been attractive to potential contributors.

New director, tough duty

In July, Jane Maloney was hired as NIM’s next executive director. Her first day on the job was Sept. 10.

Wright said Maloney, who moved from Chicago to take the job, knew she would be taking over an organization with a budget hole to fill.

“The hope was that we could carry on long enough to get Jane aboard and then rebuild,” said Wright.

Maloney referred interview requests to Wright.

Wright said the organization considered reaching out to the larger community for help, but ultimately decided that the “magnitude” of its problems was too big to fix.

“All the whirlwinds sort of came at the same time,” he said. “In comparison to any fundraising that NIM had done in recent months, it was unfathomable that we could raise the amount required in the time required.”

Winding down

In the weeks since the bankruptcy filing, Wright said the focus has been on trying to satisfy existing liabilities, including money owed to employees, creditors and covering rent.

Wright said none of the 14 full- and part-time staffers were paid for the last four days of what would be the organization’s final pay period.

NIM has started reaching out to “funding sources” to see if it can secure any support to enable the organization to properly wind down.

This month, The William Penn Foundation awarded NIM a $68,000 grant to that end.

“This has been one of the most wrenching experiences of my career. I hate it,” said Wright.