Amid allegations of gross financial mismanagement and worse, the San Diego Human Dignity Foundation (SDHDF) has announced that longtime board member, Roderick Reinhart will replace John Brown as interim executive director of the foundation effective immediately.
Tuesday, Brown posted a message on Facebook confirming his departure, “Earlier this month I notified the board that I made the difficult decision to leave SDHDF,” the message read. “The board has decided it is best if I leave sooner than later and I respect that.
“While I am excited about what the future holds for myself and Cody, I am proud of my tenure with SDHDF and feel blessed to have worked with such a wonderful staff and with so many fantastic community organizations.”
The SDHDF announcement, issued Tuesday, follows a press release issued at the end of last week in which SDHDF said that it had hired an independent certified public accountant to conduct a “thorough and careful review” of the organization’s financial matters at the behest of members of the organization’s board of directors and its Finance Committee, who are concerned about “irregularities” and possibly missing funds in the region of nearly three quarters of a million dollars.
The Finance Committee’s and the board’s questions are related to two charitable funds managed by the foundation. San Diego LGBT Weekly has learned from a source in a position to understand most financial and many other details about SDHDF, its community programs and its funds that one of those funds, the Sunshine Brooks Permanent Fund, had decreased in value by about $740,000 between July 31, 2015 and July 31, 2016.
The Sunshine Brooks Fund had been transferred from the AIDS Foundation to the San Diego Human Dignity Foundation as an endowed fund. An endowed fund means that principal cannot be spent without the approval of the board of directors, and the board would have had to find that an emergency or urgency existed before approving the dispensing of monies from the principal endowment.
LGBT Weekly’s source confirmed that the foundation’s directors, i.e., members of the board, did not recall making that finding despite senior staff, i.e., former executive director John Brown, insisting that the board had approved all the dispensing of funds.
According to LGBT Weekly’s source there was no record in the minutes that the board had ever specifically approved any dispersal of principal of the Sunshine Brooks Permanent Fund.
When asked about SDHDF finances, John Brown told LGBT Weekly by phone Wednesday, “I have every confidence that everything is going to work out just fine and I am confident that the finances of SDHDF have always been and will continue to be really well managed. Whenever there is a change in leadership people speculate but I think things are well in hand.”
The Sunshine Brooks Fund’s original endowment was about $2.3 million. Yet in just that one-year period from 2015-16, the fund’s annual financial report revealed that the fund had decreased by no less than $740,000.
Conservatively, anticipated interest and/or investment-return revenue for a fund such as the Sunshine Brooks Fund would be about $40,000 per million per year, according to multiple industry sources. By that measure, a $2.3 million fund should earn a little more than $80,000 during a year.
“[A loss of] $740,000 was just wildly excessive,” LGBT Weekly’s source said.
In a written statement issued to the media, SDHDF President Joselyn Harris said, “The board of directors regards its responsibility to protect the foundation’s operating income and assets seriously. Therefore, we are imposing strict cost cutting measures which include placing on hold some foundation projects to address a shortfall in fundraising income.”
In light of its current financial issues, the usually well-attended and highly anticipated Aston-Brooks Annual Gala, previously slated for Dec. 10 has been postponed indefinitely.
The appointment of Reinhart has been met with approval by many leaders in the LGBT community.
“As a long term supporter of the SDHDF, I am pleased to learn that Roderick Reinhart has been named interim executive director,” said Bill Kelly, a well-known LGBT community leader.
Longtime SDHDF supporter David Huskey, husband of an SDHDF founder Dr. Bill Beck said, “Through the years I have stayed in close contact with SDHDF and its activities. I am pleased to learn of this decision and am sure this is a very positive move for the organization. I have known Roderick for 15 years and count him as a close friend and an accomplished non-profit professional.”
It is now up to the appointed accountant to determine exactly what happened to those funds and what the foundations alternatives are.
“The money is gone – they may be able to recover some of it from insurance,” an insider told LGBT Weekly. “There may have been a transfer of some of those funds to other places in their accounting like bank accounts, so some of that may be able to be pulled back. But you are not going to get $740,000 back.”
This is a developing story. Check for updates at LGBTweekly.com.
