Bay Windows - Local News, October 7, 1999
Peter Cassels, Bay Windows staff

Some agencies, such as Boston's AIDS Action Committee, have had to cut back staff. Those remaining are finding themselves doing more work, including that once performed by volunteers. Others face additional challenges, like trying to turn around a negative image caused by past "sins," such as allegations of financial mismanagement. AIDS Project Rhode Island is one example. The Providence-based agency serves more than 650 clients, up from 550 in 1998, an increase of more than 18 percent.

The Project, as it's known, provides a variety of services, including a hotline, prevention education, a wellness program, emergency assistance, case management and a referral service. With income of $1,017,135 in the 1998 fiscal year ending June 30, it experienced a deficit of more than $122,000. The 1999 fiscal year, which ended March 31 after the board of directors switched to an April - March cycle, resulted in a turnaround, with revenues of $1,105,085, a shortfall of just under $300.

The change is dramatic, considering that two years ago the Project's accountants said the agency was technically insolvent and some clients and supporters thought it would have to close or merge with another agency. The Project continues to deal with that and misconceptions, some brought on by the agency itself, among segments of Rhode Island's gay community that it's hiding financial problems, turning away clients and mismanaging resources.

Michael Gerhardt was hired as executive director in the spring of 1998 to effect change. With an MBA from Harvard, he's a former president of HMO Rhode Island, now called Coordinated Health Partners, a subsidiary of Blue Cross Blue Shield of Rhode Island. Early this year, he was joined by Joan Segerson as development director. Possessing demonstrated fund-raising expertise, Segerson is a former associate development director at the Providence Public Library and is charged with increasing funding from private and corporate foundations and coming up with new ways to increase contributions.

Gerhardt told Bay Windows during an interview that he believes the negative image comes from old information that continues to haunt the agency. "It's true that on paper, we were insolvent before I came on board," he explains. "But there was never any danger that the Project would not be able to continue serving its clients."

Its 1999 audited financial statement shows that $348,121, or 52 percent of total program services expenses, went for staff salaries and benefits, payroll taxes, and professional fees. Management and general expenses, such as office rent, and resource development, defined as costs of raising funds, used another $402,342, or 36 percent of its total budget.

Major drains on the Project's budget are bank loans and capitalized leases for office equipment and computer software. It has a line of credit of $150,000, and used $130,000 during fiscal year 1999. Proceeds from its annual major fundraiser, the Walk for Life, reduced that to zero in the current fiscal year. There are also two term loans, one for $80,000 and another for more than $12,000. The line of credit and the loans each carries interest rates of one percent above the prime rate. To reduce its debt financing, it made payments of $144,000 on its obligations in fiscal year 1999, will make an equal payment in its current fiscal year, then payments of $14,000 each in 2001 and 2002, and a $10,667 payment in 2003. Others totaling $40,000 will be made in subsequent fiscal years. Its payments on capitalized leases through fiscal year 2002 will total more than $23,000.

"The loans are a burden," Gerhardt acknowledges. "We'd be in much better financial shape without them." Some funds were used to renovate offices at its former site on Chestnut Street. It moved to its current location on West Exchange Street four years ago. "The best we can do is pay it off. We're very aggressive about financing programs, but you can only go back to the well so often." It has sought funding for a new phone system, and buying instead of leasing its copier, but thus far has not found any takers.

Philip Kane, prevention education coordinator, is its oldest staff member. Starting as a volunteer in 1986, he joined the staff in August 1987, when the executive director was the only other employee. He says the staff peaked around 1990 with 22. "Then, the money wasn't available to maintain a staffing level that high and there were a number of cutbacks," he says. The current staff totals 14.

At the behest of the board of directors and accountants, Gerhardt has initiated a plan to cut costs and increase efficiency. He says he hopes to finish the 2000 fiscal year with a surplus. Because it's tough to get day volunteers, the staff has had to take on some of their duties. While volunteers usually are there to answer the phones, "sometimes the staff people answer the phones, sometimes I do. We haven't had to resort to hiring anyone yet."

The Project is working with the Rhode Island Volunteer Center to recruit more volunteers. "The biggest problem we find is functions that require lots of them, for example fully staffing the hotline, which operates from 9 a.m. to 9 p.m. six days a week. Sometimes staff answers those calls. We also work at getting volunteers to perform some of the office functions, like staffing the front desk and assisting with mailings, but we do those things, too." It has terminated its janitorial service. "We do that ourselves now," Gerhardt says.

Of accusations that the Project turns away clients, Gerhardt responds: "We have a legacy in the community of mismanaging federal Ryan White funds. If you don't manage those budgeted funds very carefully, for example spending too much too soon, the bucket's empty near the end of the year."

One problem, he says, is managing clients' COBRA health insurance payments. "Now we only enroll people we know we can serve," Gerhardt explains. "We track that very carefully. We only add people when we're very sure [we have the funds]. There is not a waiting list for COBRA or for dental insurance. We manage that reasonably well. There is a waiting list for emergency assistance. We can only do so much per month with our Ryan White grant, which permits access to emergency assistance only once in a 12-month period. We put clients on a waiting list if we don't have funds left during a particular month. In the old days, this wasn't carefully tracked. We now do it much better and can be much more realistic with clients."

Sometimes, the community had accused the Project of favoritism. "Some people thought some clients were preferred," Gerhardt continues. "That's not true now and I'm not sure why there is still that attitude."

People with HIV have particular needs and may have very high expectations, according to the executive director. "I see people walk through the door [with] a set of expectations. 'You're going to take care of all my needs,' they think. Unfortunately, no agency can meet all needs for every individual. The typical à reaction is, 'You're excluding me for some particular reason.'"

Of rumors about merging with another agency, Kane says: "That's sometimes an option. Certainly over the course of maybe five years or so, you may have heard different things being discussed from time to time." He does recall sitting in on informal meetings with AIDS Care Ocean State (ACOS), but no formal discussions ever took place, he says.

"We talk about options all the time," Gerhardt says. "As of today, the policy of the board of directors is to not merge with anyone." Overlap between the Project and [ACOS] is not large, he explains. "We both do case management and emergency relief. They do housing. We do very little housing. They're health oriented, we are not. We [administer] dental and COBRA insurance. They don't."

Until recently, there's been a lack of cooperation between the agencies, but within the last year the two have worked to build areas of common interest. Both are founding signatories of the AIDS Service Delivery Network, created to better coordinate services among the various agencies. "We've had joint meetings with [ACOS] on case management," Gerhardt mentions. "They do street outreach. Our guy who handles gay outreach communicates with them all the time. We've seen a distinct improvement in the cooperative environment, which can only be good for our clients."

One reason the Project may have earned the mistrust of segments of the community is that some contend the agency fudges reports of dollars it takes in and how it spends those funds. The Project reported it earned $280,000 from its 1999 Walk for Life in June. Total cash contributions, including pledges from people participating in the walk and corporate grants totaled $208,000. The remaining $72,000 were in-kind donations, something Gerhardt acknowledges is difficult to value. "CVS gave us limited cash but a fair amount of product to distribute, such as mouth wash and toothbrushes," he explains. Free media promotion also is included under the category. To some, it's an example of how the Project plays with figures, but its quarterly newsletter on the walk did separate cash from in-kind donations.
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