Trouble at CHA's charity arm

Financial stress and planning problems are forcing the Chicago Housing Authority to reconsider the role of Windows of Opportunity, its 19-year-old affiliated nonprofit.

The nonprofit ran a deficit during three of the most recent four years for which financial reports were available. There have been three executive directors in the last five years, and two CHA commissioners criticized the nonprofit for lacking a "strategic plan."

The organization also has violated a federal law requiring nonprofits to make their tax returns immediately available for public inspection.

Because of the fiscal problems, some past donors are reconsidering their support. McCormick Foundation has not invited Windows of Opportunity to reapply since its last grant in 2007.

"Our concerns with them have to do with management instability, a lot of turnover, and financial," says Catherine Brown, the foundation's senior director of the communities program. "We saw financial problems on their audits or (tax returns)."

Crystal Brown-Black, executive director of Windows of Opportunity, declined repeated interview requests for this story.

"Her board is not in agreement that they need any publicity right now," says CHA Press Secretary Derek Hill. "She's not trying to avoid doing a story."

The housing agency also declined to comment.

"Derek is not going to delve into a charitable agency that we help out and violate their board of directors' call," Hill says.

Windows of Opportunity provides a host of services to CHA residents. It offers college scholarships, exposes children to classical music, combats hunger, funds Little League teams and has trained residents to manage their own buildings.

The CHA started the nonprofit in 1989 to give corporations and foundations a way to make tax-deductible donations to the housing agency, says Robert Whitfield, attorney for the Central Advisory Council, which represents all public housing residents. The goal was for Windows to become self-sufficient, which did not happen.

But Whitfield pointed to other worthwhile returns, like the goodwill created by a Windows of Opportunity program that cast Chicago Police Department officers as Boy Scout troop leaders at CHA  facilities.

"That's not something you can evaluate strictly on what it costs," he says.

But some costs can be counted, and in three of the four years for which records were available, Windows of Opportunity spent more than it received.

In 2003, Windows brought in $690,192 and spent $838,942. The following year, revenues were $718,730, and expenses were $833,966, according to tax returns.

In 2005, the agency ran a deficit of more than $60,000.

In 2006, the agency earned $636,217 and spent $560,255, according to tax records. That surplus came in the same year that the CHA donated at least $215,000 to Windows.

No financial information was available for 2007 because Windows filed an extension with the Internal Revenue Service.

Raising money is always difficult, and Windows of Opportunity's staff worked hard to do it, says Maria Hibbs, a former member of the nonprofit's board. But financial weakness has cost Windows of Opportunity some donors.

"In general, it was never a particularly strong organization," says Nikki Will Stein, executive director of Polk Bros. Foundation.

Polk Bros. made grants to Windows in 1994 and 2004. The foundation looks for organizations that can specify how the donation improved people's lives, Stein says, and Windows "did not have the time or the resources to put to the reporting requirements that we would require."

Progress reports are a reasonable request from a funder, says Hibbs, who is now executive director at The Partnership for New Communities, a grant-making entity. Foundations also prefer to see nonprofits getting donations from multiple sources rather than relying on a single, critical donor for the bulk of their budget.
   
“You want to see them diversify,” she says. “It’s healthier for the organization.”

Private foundations are not Windows of Opportunity's only dissatisfied donors. The CHA board voted 7-2 in May to award Windows a $216,000 contract, the same as it had done in 2007.

The split vote was unusual for a board that passes most measures unanimously. Commissioners Carlos Ponce and Bridget O'Keefe voted against it.

O'Keefe said that while she believed in the nonprofit's mission, she did not think Windows of Opportunity had "a plan in place to adequately move the mission forward."

The board also added accountability standards to the contract, saying the nonprofit must make quarterly reports outlining efforts to improve fundraising, fiscal management and board development.

If Windows of Opportunity fails to meet CHA's criteria, the agency may withhold funding.

In addition to financial problems, Windows has run afoul of IRS rules requiring nonprofits to make their tax returns immediately available for inspection.

After repeated attempts to make an appointment with Brown-Black, a Chi-Town Daily News reporter requested the tax returns in person on June 10. After waiting for an hour in the CHA's lobby, an assistant at Windows of Opportunity told the reporter that she was not authorized to hand over the tax returns.

Brown-Black later promised to provide tax returns by June 13. But it wasn't until June 16 that the Daily News actually received Windows' financial information.

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