The International Humanities Center closed its offices, took down its Web page and informed its clients by email that it has ceased operation. The center served as an umbrella organization for small nonprofit groups, handling their donations and performing administrative duties.
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Directors from two of the groups said the executive director of the center told them only $10,000 was left in the accounts his organization held when there should have been $1 million.
A tally of potential losses compiled by directors of 40 of the groups comes to $877,000.
Several of the groups said they can no longer pay their staffs or bills. Some have explained the situation to donors on their websites.
The California attorney general's office is investigating, and directors of several groups said they had been interviewed by the office or had been asked for information.
"The more time goes on, the more I lose hope we'll ever see any of that money again," said Dylan Rose Schneider of Peaceful Uprising, a collective that fights global warming.
The groups were mostly small nonprofits that said they turned to the Humanities Center, as what is known as a fiscal sponsor, because they don't have the staffing to handle donations and related paperwork. For a small fee, the center's website had said, it handled such tasks for its clients.
Steve Sugarman, the center's executive director, said in an email to some of the groups that he was filled with "deep regret" over going out of business and hoped it caused no lasting harm. He assured them in the email that all funds had been properly spent, though it is not clear what he was referring to because a fiscal sponsor is not supposed to spend its clients' money on its own operations.
A consultant for the center told some of the groups in a letter that their donations were used to pay legal fees and other bills, including $12,000 a month for offices in Pacific Palisades, as well as back taxes and penalties to the IRS.
"Many of us realized that this was a dangerous way to run a business but were repeatedly assured by Steve (in writing) that all misappropriated funds would soon be replaced," consultant David DelGrosso told directors.
Sugarman did not return emails and his phone was not accepting calls.
via Nonprofits fear money in center's care vanished - latimes.com.