By Jessica Williams, The Lens staff writer |
After The Lens reported on a troubled education nonprofit that lost the bulk of its federal funding, its embattled leader, Kyshun Webster, said that he, not the governmental service agency AmeriCorps, severed the financial ties.
And when critics pointed to Webster’s generous salary and executive allowance as a justification for the federal pullout, he defended his income, saying that it was comparable to the industry average.
But federal documents obtained today by The Lens and a close reading of the study Webster used to defend his salary prove him wrong on both counts.
Operation REACH, a national educational nonprofit with local roots, and its founder and chief executive officer have come under fire recently, with former employees saying that Webster’s spending and lack of financial know-how put the organization in its now precarious financial state. Webster contends that employees’ claims are false, and that his salary falls in line with the average of leaders at comparably sized nonprofits. He also claims that he made a strategic decision to end the organization’s federal funding.
Operation REACH is far from the financial position it was in at its peak last year. The organization served more than 10,000 students in three different states, and had upwards of 300 employees. Webster enjoyed a salary of $130,000 annually, plus thousands more in an executive allowance.
However, as of early this year, Webster is getting little to nothing in pay. The organization is no longer funded by the Corporation for National and Community Service, the governmental outfit in charge of AmeriCorps that largely paid for Operation REACH’s Atlanta and Birmingham offices. As a result, both offices are now closed and more than 280 employees are gone. The nonprofit is under investigation by the office of inspector general for that federal agency.
Operation REACH’s board chairman, Loyola University professor Ted Quant, has said that the organization was “tremendously dependent” on the AmeriCorps grants. But Quant and Webster both initially were steadfast in their claim that they, not AmeriCorps, severed ties, citing the uncertainty of the AmeriCorps program’s future and the long lag in reimbursements from Washington.
But an Oct. 6 letter from the Georgia organization that oversaw AmeriCorps’ work, obtained by The Lens, says otherwise:
The Georgia Commission for Service and Volunteerism “is terminating the Operation REACH, Inc. AmeriCorps grant in Georgia due to questions raised about the financial capacity of the organization to manage an AmeriCorps grant,” the letter reads.
Commission Executive Director John Turner wrote that the termination would be effective Dec. 5., 2011.
The letter strongly advised Operation REACH to close the AmeriCorps program in Georgia immediately.
Neither representatives from the office of inspector general nor from the Corporation for National and Community Service would say whether the inspector general’s probe was related to the organization’s finances. But an Oct. 5 letter from the Georgia Commission revealed more about the probe’s intent. A day before they terminated the grant entirely, the commission suspended grant money, writing that an inspector general’s audit of Operation REACH “has raised some serious questions about the financial operations” of the organization’s programs.
Presented with the content of the letters today, Quant said he doesn’t doubt that AmeriCorps yanked the funding: “If they said they pulled the money, they pulled the money,” he said.
Reached by phone, Webster did not immediately comment on the letters.
Additionally, after The Lens began investigating the organization’s finances, Quant and Webster presented a reporter with a 2010 study by Charity Navigator that showed the average income, including extra allowances, of the leaders of mid- to large-sized nonprofits. They said that Webster’s $130,000 salary fell below the average for mid-sized charities, or below $157,056. The same study was also touted in a press release that went out late Friday as a response to The Lens’ story.
The study also defined a mid-size nonprofit as an organization with expenses upwards of $3.5 million a year. Operation REACH’s 2010 federal filing lists expenses just under $3 million, making it a small nonprofit by the study’s classification. This means that the average for a CEO such as Webster rises just above $95,000. Webster’s $130,000 salary, plus the thousands in executive allowance that he spent in 2010, went noticeably above that.
When The Lens pointed this out to Quant, he said that he’d have to go back and review the study for further clarification.
The Lens’ initial story on Operation REACH’s finances and allegations by former employees has caused a stir among even more of the organization’s former employees, and parents at the organization’s for-profit daycare, the Knowledge Garden.
Several parents contacted The Lens to express their thanks for the story, and the former program director of the organization’s Atlanta office, Darrell Grant, said that the original story inspired him to come forward about the organization’s financial issues.
Grant said he believes the loss of money was directly related to Operation REACH’s inability to use AmeriCorps money appropriately. Grant disputes Webster’s claim that the lag-time in public grant fund reimbursements was a main reason for the organization’s retrenchment:
“The funding was reimbursed from the state commission and it would go directly to New Orleans. New Orleans was supposed to funnel that money to the appropriate program. But we would never see that money” in Georgia, Grant said.
Grant said that when he left Operation REACH in November 2011, costs incurred by the New Orleans operation had been reimbursed but many costs from the Atlanta office were still unpaid.
Quant confirmed that the Alabama partner in AmeriCorps programs usually lagged in grant reimbursements, but that the Georgia commission was timely.
Grant, who’s now starting up his own nonprofit in Georgia, also took issue with Webster’s dismissal of all gripes against him as simply attacks by angry former employees.
“For him to blame someone else as a disgruntled employee…right is right,” Grant said. “And someone needs to shine a light on that.”