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Homeless missions' finances examined
By ADAM C. SMITH
© St. Petersburg Times, published May 4, 2000
The state attorney general has opened an investigation into homeless missions in St. Petersburg and Tampa that have taken in nearly $2-million in donations to help the Tampa Bay needy, but provided only modest assistance.
"I'm getting a lot of information indicating that these people may not be thinking mainly about the homeless," Bill Navas, assistant attorney general with the economic crimes unit in Tampa, said of the St. Petersburg City Mission and Tampa City Mission. "We're looking at whether what they say they're doing is actually what they're doing. Their numbers don't make sense."
The investigation follows several St. Petersburg Times articles about the missions' fundraising practices, and a lawsuit by the Illinois attorney general against a sister mission in Chicago with an identical fundraising campaign.
Illinois authorities contend that the Chicago City Mission's fundraising is fraudulent because little of the money raised actually goes to feeding the homeless.
The 3-year-old Tampa and St. Petersburg missions are owned by a non-profit umbrella group, City Mission Network International in Los Angeles, and their fundraising campaigns are especially prominent around Thanksgiving and Christmas.
They send out hundreds of thousands of direct mail solicitations and pay for ads in the Times and Tampa Tribune featuring sad old men hunched over plates of food. The ads say full holiday meals cost only $1.57, so contributions of only $15.70 will feed 10 homeless and hungry people and $150.70 will serve 100.
The campaign works well. State records show the two missions have reported raising at least $1.95-million over the past 21/2 years.
Other long-established social service groups, such as Metropolitan Ministries in Tampa and the St. Petersburg Free Clinic, for years have questioned what the donations are paying for, since both the city missions keep such a low profile except during fundraising seasons.
The St. Petersburg City Mission, for instance, has raised more than $750,000 over the past two years, but has no homeless shelter or soup kitchen. The mission estimates that through public feedings and distributed food boxes, it still provided nearly 40,000 meals last year, though its former chef, Elmo Earls, says that's vastly exaggerated.
The Tampa Bay missions provide bare bones budget summaries to state and county authorities, but the Attorney General's Office noted in an investigatory report that the missions appear to count overhead expenses as part of their direct assistance to the poor.
Looking at St. Petersburg City Mission's 1997 report, for example, an investigator concluded that about 3 percent of the mission's $670,000 in expenses went directly to helping the needy.
The Attorney General's Office has subpoenaed assorted financial and fundraising records from the two Tampa Bay missions, which have requested and received three extensions for providing the material.
Bill Davenport, a St. Petersburg attorney representing the missions, declined to comment, and mission administrators in California did not return calls Wednesday.
But Lew Hagerman, a volunteer and member of a local advisory board for the St. Petersburg mission, said the St. Petersburg mission at least temporarily is being folded into the Tampa mission. Eventually, he said, mission officials still hope to find property in St. Petersburg or Pinellas County to operate a mission acceptable to zoning officials.
Two years ago, the mission bought a restaurant on Fifth Avenue N off of 34th Street for $180,000, but the mission never opened the facility and instead put it back on the market. Hagerman said he earned a commission of roughly $3,500 from that sale and will receive another commission when it sells again, but that has nothing to do with his role as a mission adviser.
He's also confident the Attorney General's Office will find nothing amiss.
"I've seen no squandering of money. I've seen no one walking around with diamond rings," Hagerman said. "I've seen a meager, well-run ministry."
Both missions are run by City Mission Network International, an organization with more than $30-million in assets. Its heart is the massive Los Angeles Mission, which has been called "mission of stars" because it frequently attracts celebrity volunteers, from Kirk Douglas to David Schwimmer.
While respected in Hollywood, City Mission Network has generated internal complaints about its fundraising and accounting practices, particularly over expansion missions in Tampa Bay and other cities.
The network's chief financial officer, Bruce Ward, resigned after three months in 1997, saying he could not tolerate the organization's practices.
Ward provided the Times with his resignation letter, which cited "creative accounting," nepotism, conflicts of interest, false claims in fundraising campaigns and concerns that the mission could be vulnerable to civil and criminal penalties if it didn't change its ways.
Ward expressed particular concerns about what he saw as unrealistic fundraising budget for the St. Petersburg mission. He noted that the idea for buying an existing mission in St. Petersburg came from a national advertising company, which was owed $127,000 from that mission and stood to recoup its debt if purchased by Los Angeles. Money raised in St. Petersburg, he noted, was expected to help fund mission expansion elsewhere.
The Los Angeles organization for 10 years was a member of the the Evangelical Council for Financial Accountability, a respected organization that requires strict financial accountability standards.
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