Concerns linger following resignation of United Way's longtime executive director

As leaders of many nonprofits would relay, transparency and reputation are the key pillars on which their outward-facing organizations are built. Without those elements in place, vital community relations may dwindle and, subsequently, donor funding may diminish.

In recent months, the Daily Inter Lake has made dozens of attempts to make contact with the leaders of the Northwest Montana United Way in an effort to ask questions related to such pillars - namely the organization’s transparency practices and others related to allegations of mismanagement directed at former United Way Executive Director Sherry Stevens.

The allegations, brought forward mainly by employees from agencies affiliated with United Way and former volunteers and employees of the organization, include claims of financial mishandling, consistent failures on Stevens’ part to provide agencies with funding and financial information and others that allege she kept the organization’s board of directors at arm’s length from operations and concerns from its member agencies, among others.

However, both Stevens and the United Way Board of Directors, who are tasked with holding the executive director accountable, have in the last three months largely failed to make contact with the Daily Inter Lake regarding such claims. In addition, reporters have tried numerous times to request copies of the most recent tax filings for the organization and its associated Gateway Community Center in Kalispell, which was purchased by United Way a few years ago and houses multiple of the valley’s nonprofit organizations.

A list of board members for both United Way and the Westside CCC also were requested but not provided.

Stevens returned one phone call in early October that went to a reporter’s voicemail, and eventually, on Dec. 3, the Daily Inter Lake made contact with the United Way Board Chair Carol Nelson. Tax forms from 2018 for Northwest Montana United Way and the Gateway Community Center - filed as Westside CCC - were eventually provided by Kim More, legal counsel for Stevens and United Way.

But as of Friday, a list of the board members still had not been provided.

And when asked if the board had been made aware of the allegations against Stevens in recent years and if they had undergone any measures to address those allegations, Nelson replied, “We are now working towards the positive future of the United Way. We are looking forward to continue to serve our community as best we can. The United Way has been strong in our community through the years and we are proud of all the accomplishments.”

The Daily Inter Lake also attempted multiple times to bring concerns regarding lack of communication to United Way Worldwide. After multiple email exchanges detailing how Stevens and the board were essentially unreachable, an employee with the national branch eventually told a reporter she should “contact Kim More with any follow up questions regarding this issue at the local level,” and maintained that United Way branches act independently from the national United Way.

SINCE FIRST attempting to make contact with local leadership in late September and into early October, several events have unfolded involving United Way that may offer insight into the allegations.

The first occurred in early October, when Stevens and the organization were sued for the second time in 18 months. The founders of Two Bears Family Center in Kalispell alleged, among other things, that Stevens terminated United Way’s fiscal oversight of their organization in an “abrupt and unreasonable manner” and ousted them from their space at the Gateway Community Center without substantial warning, prompting a disruption in their services.

Susan Hay Patrick, chief executive officer of the United Way in Missoula County, says it is “highly unusual” for two lawsuits to have been brought against the organization in such a short amount of time. Patrick says the Missoula branch has been in operation for more than 90 years and has never once been sued.

Despite the Daily Inter Lake’s attempts to have questions answered prior to the official start date of the lawsuit, More relayed in an email that members of the board “have been advised by their legal counsel to not comment on the pending litigation [with Two Bears Family Center], any issues that may impact the litigation, or the allegations asserted by the Plaintiffs against the United Way and executive director. This includes any allegations regarding mismanagement, the purported mishandling funds and financial transparency as these allegations involve the pending litigation. The board member[s] have been advised to direct those individuals seeking comment on those issues to me.”

The second event occurred about a month and a half later when, amid the ongoing lawsuit, Stevens announced her resignation from her long-standing position as executive director in a paid advertisement in the Daily Inter Lake on Dec. 1.

In the advertisement, she thanked the community and said she has been “honored to work with so many dedicated and thoughtful volunteers who care deeply about our community,” but she also made it known that her time with United Way and its affiliated agencies wasn’t quite finished.

“I am committed to ensuring there is a smooth transition process by serving as an independent contractor along side a volunteer transition team,” Stevens wrote. No further details regarding what the position will entail were provided in the advertisement, but according to the Montana Secretary of State’s Office, Stevens recently registered a new business, Living Hope Consulting Services LLC. Records list Stevens as the agent and say the business was created for “consulting, grant writing and nonprofit support.”

Living Hope Consulting Services was formed on Nov. 27 - four days before Stevens formally announced her resignation. According to Nelson, the board was not made aware of Stevens’ new consulting firm until they were informed of her resignation on Nov. 26. But Nelson added that Stevens is currently “providing answers to our transition questions. She is not on our payroll and we have no contract signed with her.”

To date, the board has not issued a public statement regarding Stevens’ stepping down, her new role as an independent contractor, the ongoing lawsuit or operations at United Way as they currently stand.

STAKEHOLDERS IN the Flathead Valley and elsewhere say one of the most unusual practices by the United Way in Kalispell is its failure to make a list of board members and tax documents public on its website.

“We all legally have boards of directors and they are charged with fiduciary oversight, that is oversight of the management and governance of the United Way,” Patrick said. “These board members are the face of your organization and are informed ambassadors of the community. They build relationships that benefit us and have a pulse on everything in the community so we obviously want people to know who these members are.”

There are nine United Way branches in Montana that all operate independently from one another. Northwest Montana United Way is one of two that does not have 990 tax documents or a board of directors readily displayed on its website, with the other branch being the United Way of Hill County in Havre.

Officials in Havre provided documents within days after reporters requested them - such is not the case with Northwest Montana United Way, despite a 2018 tax filing for Westside CCC stating “public disclosure documents, such as governing documents, conflict of interest policy, and financial statements are made available to the public upon specific request.” In one instance, a United Way employee told the Daily Inter Lake she “did not know who the board members were” and “could not provide that information.”

Nelson claims the names of members were not provided because “a long time ago the board and United Way voted not to make the names of board members public,” but said she did not know why or how that decision was reached. However, she said at a board meeting on Wednesday, members decided to reverse that decision and put a member list online “soon.”

“We don’t mean to be hiding anything, in fact we are all proud to be board members. We are trying to change things and be more transparent,” Nelson said. She also said the most recent tax documents would be made available for easy review. That information had not yet been put online as of Friday.

Multiple leaders with nonprofit organizations that are member agencies of United Way allege that getting ahold of board members in recent years has been a huge challenge and is a communication avenue that has been pursued after Stevens has failed to provide requested information herself.

“I think it is common knowledge that there is a complete lack of transparency as to who serves on the board,” said Hilary Shaw, executive director of Abbie Shelter in Kalispell, a member agency of United Way. “Every single thing you need from the United Way, you have to go through Sherry for.”

Many sources allege Stevens has particularly in the past five years micromanaged all aspects of operations at United Way. One former employee, who preferred to remain unnamed, claimed employees and volunteers in the office were “scared to change the toilet paper roll without asking first” and were allegedly told they “shouldn’t go to the board for anything.” The former employee also said the doors to the United Way office in the Gateway Community Center would remain locked during regular business hours if Stevens was not in the office - a situation Daily Inter Lake employees and others have been able to attest to on more occasion that one.

ISSUES WITH the board not being readily available only scratch the surface of problems that have risen in recent years, and according to sources, poor communication and a lack of transparency appear to remain at the root of the issues.

Because of this, Stevens’ new title as independent contractor has given many in the community pause - namely those in charge of United Way’s member agencies that have, until recently, leaned on the organization as a reliable funding outlet.

Typically, agency members are invited on an annual basis to discuss various future funding needs with a Citizens Review Panel that determined whether or not to grant those funding requests with monies accumulated by United Way. But in recent years, officials say there has been a decline in what is provided and in 2019, multiple agencies report they have not received any money at all and have been offered no explanation as to why or where that funding may have gone otherwise.

Jamie Quinn, executive director of the Flathead Food Bank, said her organization is one of those. According to Quinn, Stevens relayed in 2018 that the panel was excited to provide the food bank with her requested $10,000 that was to go toward paying the salary of a much-needed volunteer coordinator.

“That money was supposed to come to us sometime this year, but here we are with three weeks left in 2019 and we haven’t received a penny,” Quinn said. “Not once was it communicated to us that we wouldn’t receive that money.”

Shaw echoed similar concerns.

She said years ago, the panel would consistently award the shelter upwards of $40,000 to support their mission in various ways.

“That amount eventually dropped to $15,000 and then dropped more. In 2019, we have not received any and we received less than 10% of what we have received in former years in 2017 and 2018,” Shaw explained. “We don’t know if we will see any money this year. Nothing has been communicated to us or explained.”

Last year, in response to similar concerns from member agencies over funding, Stevens told the Inter Lake that changes in the way donors give to United Way, along with the financial pressure of maintaining Gateway Community Center were ongoing challenges.

According to Quinn, Shaw and others, a Citizens Review Panel was not held in 2019. Therefore, member agencies have not had the opportunity to present their future 2020 funding needs for their organizations. And the panel review process is just one way in which affiliated agencies can receive money through United Way. Sources say other funding avenues the organization has a hand in securing for the local nonprofits have likely been impacted by a similar alleged lack of action on leadership’s part.

As just one example, every year a trustworthy entity must conduct an “average point time count” of all of the homeless individuals in a given community as a requirement of the federal government’s Housing and Urban Development (HUD) program.

United Way has been tasked with performing the count - a significant undertaking that involves going around to schools, organizations, businesses and elsewhere to count the homeless. And according to Tracy Diaz, executive director of Community Action Partnership of Northwest Montana, there is a lot riding on providing an accurate count.

“If the count is not done correctly, it impacts our ability to apply for money,” Diaz said. “Whoever counts must do it in a very comprehensive manner and then their surveys go to the state and the state then has a reliable number on how many people are homeless in an area. And that number acts as a benchmark for how much funding is available for us to apply for.”

Once a count is in and it is determined how much money will be allocated to a specific area or county, local organizations can then apply for funding through the government’s Emergency Food and Shelter Program. Under the program, organizations offering services that fight homelessness, particularly in rural areas, are eligible to apply - a process that, locally, is done through Northwest Montana United Way, which then distributes the money accordingly.

But Diaz said when she first accepted her position at Community Action Partners years ago, she approached Stevens about how to locally apply for that funding and for months was unable to obtain answers to her questions.

“When I would ask about it, it was difficult to get a clear understanding about the process,” Diaz said. “When I finally did hear back, I was told the money had been designated for other organizations and I was told to apply for other financial opportunities, but we don’t provide the types of services in those funding areas.”

Community Action Partners offers services to alleviate poverty in Flathead, Lake, Lincoln and Sanders counties - a mission Diaz said should have made them an obvious candidate for funding through the program that aims to tackle food and housing issues.

“And if nonprofits like ours aren’t receiving the money and others claim they aren’t either, well who is?” Diaz said.

The count for HUD, which again determines what funds can be given, is done every January. And with that deadline fast-approaching, Diaz and others say they are unsure if Stevens is still performing the count despite stepping down from her position, or if one is going to be performed at all.

“Sherry said she will be a consultant, but what does that mean?” Diaz questioned. “Is she training a new person to do this task or is she still the one who will represent our community and get a count? We haven’t heard any word and it’s basically January.”

MOVING FORWARD, one pressing question is what will happen with the agencies that currently rely on United Way as their fiscal agent? Occasionally, when aspiring nonprofit organizations are working to gain a tax-exempt status, United Way will provide financial assistance and oversight until those entities are off and running. Such was the case with Two Bears Family Center LLC, the founders of which entered into a verbal agreement with Stevens last year that the organization would temporarily act as the center’s fiscal agent. But a termination of that agreement in September, and other instances leading up to that termination, prompted the agency to sue.

Stevens had claimed the family center organization was in poor financial standing and was operating at a deficit. But the center’s founders claim in the lawsuit they didn’t believe that was possible and had asked Stevens multiple times to provide documentation backing such claims. That evidence was never provided, according to the center’s founders, but at a recent court hearing, Stevens produced a document from United Way’s accountant showing the center was in fact operating in the negative. Nelson has described the decision to terminate the relationship with Two Bears Family Center as a “business decision.”

The Two Bears center is just one agency for which United Way has, or continues to, provide fiscal oversight. But Nelson and others were unable to provide details as to what may happen with those relationships.

According to one source who wished to remain anonymous, some of the organizations have received notice that, in light of Stevens stepping down, United Way will no longer be able to serve as their fiscal agent. It is currently unclear if Stevens and her new consulting firm will be fulfilling that role instead of United Way.

Nelson said she is unable to provide information regarding what is happening with the agencies because of ongoing litigation with Two Bears Family Center LLC. Questions from the Daily Inter Lake’s publisher have been submitted to United Way Worldwide regarding the national branch’s oversight of its organizations and what all that entails, as well as the allegations made against Stevens.

Nelson expressed interest in meeting with the Daily Inter Lake in the near future to answer various questions and provide “more clarity as to where United Way is headed.”

Reporter Kianna Gardner can be reached at 758-4407 or kgardner@dailyinterlake.com