After financial troubles, foundation behind Diversity Thrift on track for recovery
Last year, the Gay Community Foundation of Richmond, the organization behind Diversity Thrift, put their building on the market to recoup money amid a budget shortfall. Earlier this month, they announced they would be staying. What happened?
Most know Diversity Thrift–the Scott’s Addition store packed with used clothes, furniture, and oodles of knick knacks. But few know about the organization behind the thrift store: the Gay Community Foundation of Richmond (GCFR). And even fewer know about the organization’s recent financial straits.
For the past few years, the GCFR had been losing money. So much so, that in December 2011 their Board of Directors voted to sell the 47,000 square foot building that housed both the Gay Community Center and Diversity Thrift. Not only that, but the organization’s once liquid grant fund, which has awarded over $750,000 to area nonprofits since 1999, had all but dried up.
Now, less than a year later, the GCFR is on sound financial ground. Much of the credit goes to a reinvigorated Board and a veteran nonprofit consultant with long ties to the city.
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Started by Jon Klein in 1999, the mission of Gay Community Foundation of Richmond is to “contribute to a vibrant Central Virginia community that shares our values of diversity, inclusion, individual dignity, equality, and civic engagement.” This has meant a breadth of community engagement: from concerts and lectures to simply renting space for local groups free of charge. It also meant awarding grants to area nonprofits.1
Current Board Chair, Beth Marschak, said the GCFR is “very different from a lot of other nonprofits and community centers” operating across the country. “We have a very different model.” Whereas other organizations rely on grants and donations, the GCFR has two businesses to fund its operations: Diversity Thrift and bingo events. However, these businesses, like any other, are at the whims of a declining economy.
Marschak became a board member in Fall 2010, but said that GCFR “revenue was dramatically dropping” back in 2009. According to tax filings made to the IRS (PDF), in 2009 the GCFR reported a loss of $40,615. In 2010, the foundation reported a loss of $19,867.
Financial strains compounded when the GCFR, which awarded grants to nonprofits, was unable to secure grants themselves. Needing money, the Board voted in December 2011 to put a “for sale” sign on the front door of their building.
An email sent by the GCFR after the decision read:
“After months of study, wrestling with the issues, and thoughtful consideration of the alternatives, the Board voted to put the building up for sale.
“We are in the process of developing a business plan for Diversity Thrift which will help determine how much space we will need at the new location and the best ways to maximize revenues.
The arrival of a new interim executive director, however, would herald a change of fortune.
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Bill Harrison, 58, has lived in Richmond since the 1970’s. He has worked at the Fan Free Clinic, helped bring a portion of the AIDS Quilt to VCU, and served as the public information officer at the Virginia Department of Health. For 17 years, he worked at the American Red Cross as the regional director of public and government affairs. In February, shortly after taking an early retirement from the Red Cross, he was tapped by the GCFR to serve as interim executive director after his predecessor, Jay Squires, was forced out by the Board.
When he came on, Harrison said monthly utilities for the 47,000 square foot Gay Community Center averaged $5,000. One day, while walking the area of the building that processes Diversity Thrift donations, he noticed a large rear door, one that remained open throughout the day. He said the simple act of closing the door has made utility bills “drop dramatically.” But if only saving money were as easy as closing just one door. Harrison and the Board have also cut operations to save money.
A tale of two Diversities
A satellite Diversity Thrift location, DT2, opened in The Fan in November 2010. It closed in September. Despite public assumptions to the contrary, Harrison said that the store “never lost money,” but was thought to be a lot of operational investment with minimal gain (donations would still cycle through the larger Diversity Thrift store and the location did not reach new Diversity Thrift shoppers).
Harrison would prefer another Diversity Thrift location to open outside city limits.
For instance, there were the regular concerts and lectures hosted by the GCFR. According to Harrison, these events would draw sparse crowds, typically between 15-20 attendees. From a financial standpoint, said Harrison, these types of events weren’t worth it.
While these and other changes began to save the GCFR money, the Gay Community Center building remained on the market. But Harrison and the Board realized that selling the property wouldn’t be as helpful as previously thought.
After arriving, Harrison said he discovered there was “no plan” to relocate should the building be sold. At nearly 15,000 square feet, Diversity Thrift is “busting at the seams” with merchandise. Even if the Community Center was sold, said Harrison, finding a suitable replacement location would likely prove expensive.
There were also attributes of the location that made the property hard to part with. Namely, a digital billboard owned by GCFR that pulls in $35,000 for the foundation annually. Moving would forfeit that sizable income. For these reasons, said Harrison, “It did not make sense to sell the building.”
With prudent financial management in place, and $12,000 recently raised in donations, GCFR has paid off debts and refinanced its mortgage. As a result, GCFR’s Board of Directors (which added four new members in July) voted this month to take the Gay Community Center off the market.
Finances have improved so much, that GCFR has earmarked $15,000 in grants to be given to local nonprofits by the end of this year. “It’s a good beginning,” said Harrison. “Next year, I hope to have a lot more.” Harrison has also pledged an increase in operational transparency.
Hoping to embolden its founding mission to go back into the community, GCFR has begun what it’s termed a community needs assessment. Lasting several months, it comprises surveys and focus groups meant to better understand the needs of the community GCFR wants to enrich. As someone who has weathered its uncertain financial times, Beth Marschak is optimistic about GCFR’s future.
“There are a lot of different directions to take,” she said. “It’s an exciting time.”
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- According to its IRS filings, the GCFR awarded $51,300 to regional nonprofits in 2010. ↩
photo by RVADrewsPix
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fun place to shop – good people. glad to hear it’s turned the corner – not surprised Bill has been able to turn it around. sorry to see the Main St location go, though.
This is wonderful news. Congrats to the GCFR!