Community NOT Satisfied With Reasons Why MLK Multi Service Center Must Close. Questions Raised About REAL Financial Condition And Crisis

JUST ADDED! Announcement of after school program changes. The community was stunned this week by the sudden announcement that the Martin Luther King Multi Service Center, a fixture in the Butler-Tarkington neighborhood for 42 years, is being placed on “hiatus” for “sixty days to 120 days” because of a financial crisis. There had been rumors of financial problems at the Center for several months.  But on Tuesday the MLK Center’s current Executive Director told a meeting of community leaders that the Center would “close” on February 28^th and that she and her four other employees would be out of a job and programs of the Center would end. The firestorm of reaction from African-American and other civic leaders was swift, a mixture of shock and anger. Reacting to the growing firestorm of concern and criticism, the Board Chair of the MLK Multi Service Center, Dr. Kimberly Sterling tried to “set the record straight” in a live interview on WTLC-AM1310 Afternoons with Amos program. Dr. Sterling said that beginning on Monday, March 4^th, the MLK Center would start a “hiatus so that the board could address an immediate financial crisis.” Dr. Sterling acknowledged the community’s concern and sensitivity and said that the “hiatus could be 60 days or 120 days”.  The Board chair said that the organization had been running in the red. The major funder of the MLK Center has been the United Way.  Though in the interview Sterling said that other funders had been reluctant to assist the Center because of its on going financial concerns and situation. Sterling said that the “United Way has come along side us” and said that they would be paying “for a consultant” to help the board set up a turnaround plan for the Center. But under repeated questioning, Sterling couldn’t specificly say exactly what the serious financial condition of the Center is.  Sterling acknowledged that the MLK Centers does own their building, the former Triple-A building at 40 West 40^th Street. But admitted that the organization has a bank line of credit with the building as collateral. Sterling said that the Center’s board made the decision “at the end of January” to shut down for a hiatus, but hadn’t wanted to make a public announcement until they could fully announce plans on how the Center’s programming and services, including after school programs and senior citizens programs, could be absorbed by other organizations. Asked directly whether the Center’s few employees were be fired or laid off, Sterling indicated that this was a layoff. In the interview there was a lot of information that wasn’t forthcoming, including detailed plans for how the MLK Center’s programs would be handled and by whom.  There was also confusion in the interview about whether the Center’s building would be open for limited events during the hiatus period. The lack of financial specifics was disturbing.  Host Amos Brown repeatedly asked whether more recent financial information about the Center’s finances would be released. Late Wednesday, the Recorder received a the title page of the MLK Center’s 2012 IRS Form 990 tax return, which is a public document. The return covers the fiscal year July 1, 2012 to June 30, 2013. The Center’s tax return doesn’t paint a picture of an organization in seemingly severe financial crisis.  For the 12 months ending June 30, 2013, the MLK Center reported revenues of $538,099 up 107,561 or 25.0%.  And expenses of $503,108, down 168,135 or 28.3% from the previous fiscal year. The Center’s deficit increased 37.0% from $163,682 to $224,256. One surprise in the financial information was that in their last fiscal year ending June 30, the Center had program service revenues of $215,122 compared to just $11,869 and $17,797 the previous two fiscal years. Listeners raised serious questions and skepticism about the role of the United Way in the MLK Center crisis. In a statement, the United Way responded saying: “United Way is working diligently with the board of Martin Luther King Community Center and other community partners to meet the needs of the community through quality services and programs that have sustainable business models. We are confident that under the board leadership, and with the support and expertise of other community leaders, these efforts will be productive.” UPDATE: On Thursday, Feb 20th, MLK Center announced that they would partner with Kaleidoscope Youth Center to provide both after school programs and summer camps. The Center also stopped using the work “hiatus” and now refers to their changes as a “restructuring”. Unfortunately, the radio interview on Afternoons with Amos and the sharp change in how the changes are being portrayed by MLK Center leadership is raising more community questions than answers. The Martin Luther King Multi Service Center is going to have been much more forthcoming, especially in providing financial data from the past seven months to show how their financial condition deteriorate so much to require a step no major Indianapolis nonprofit has taken for some time. Click to Read the Full 20111 and Page One of the 2012 IRS Tax Returns for the MLK Center. 2011 Form 990 tax return MLK Center 2012 Form 990 Tax Return MLK Center   Click Arrow to Hear Amos’ Interview with MLK Center Board President and the strong negative community reaction. Runs 58 Minutes ©2014 WTLC/Radio One.