Cheating Ourselves: Embezzlement Bedevils LGBT Non-Profits
Even in the midst of an ongoing recession, LGBT organizations continue to rake in donations. With so much at stake and emotions running high, people are throwing their dollars behind organizations leading fights on various fronts. The emergence of out-gay multi-millionaire like Chris Hughes has certainly helped.
Unfortunately, where there’s money, there’s also the potential for abuse. In recent years, gay organizations have been the victim of embezzling. Those who were supposed to be superintending the purse were instead using the money to pay for lavish lifestyles that ranged from Caribbean vacations to pricey dog walkers.
On Monday, the former director of the Bronx Community Pride Center in New York City, Lisa Winters, was sentenced to at least two years behind bars for embezzling more than $338,000. Court documents show that she used the money for vacations with her partner, $15,000 to a dog walker, and thousands on fine restaurants and shopping trips. The center was forced to close last June after 16 years serving a diverse population in desperate need of its services.
A Depressingly Long List of Embezzlement
Winters’ case is the most recent, if the largest such, incident of embezzlement at LGBT and AIDS organizations. Here’s a depressing litany of such cases of LGBT people preying on their own:
• A few months ago, a federal investigation found that a former employee at the Nebraska AIDS Project may have embezzled $60,000 of federal grant money.
• In 2011, the former executive director of Boston Living Center, an AIDS service organization, pleaded guilty to embezzling more than $125,000. Only a merger saved the organization from disappearing altogether.
• Also in 2011, the volunteer treasurer and board member at the Billy DeFrank LGBT Community Center in San Jose, Calif., was caught embezzling $40,000.
• In 2009, the former executive director of Philadelphia’s largest black LGBT organization was found to have embezzled $138,000 in government-allocated funds.
• In 2011, the former executive director of Verbena Health, a Seattle health clinic and health center that catered largely to lesbians, was convicted after having gambled away $500,000 in Las Vegas. The clinic was forced to close its doors.
• From 2007 to 2008, the head of People of Color in Crisis, an AIDS service group in Brooklyn, N.Y., spent $80,000 on items that included gym memberships. POCC was forced to close in 2008.
Why They Do It
Greed, or a desperation to pay off personal debts, obviously motivates people to such extreme behavior. They could be motivated by personal issues such as a drug habit, a sick child, gambling debts, or a need to satisfy a demanding spouse.
"For some reason, they have a gap in their ethical framework, see an opportunity and take it," said Marc Owens, former director of the Exempt Organizations Division of the IRS. In his 10 years there, he saw widespread nonprofit embezzlement, which cost organizations an average of 6 percent of their revenue each year.
"It could be everything from a person stealing money in order to buy food for somebody, to someone stealing money because they want to buy a new car or take a trip,"Owens said. "It’s as much based on opportunity as it is on anything else."