The United Way Blackhawk region has barred the YMCA of Northern Rock County from access to United Way funding because of questions about the validity of information the Y provided in grant applications, a United Way official said.
The United Way in December denied the YMCA’s eligibility for a two-year grant cycle of the Community Grant process, United Way Blackhawk Region President and CEO Mary Fanning-Penny said this week.
The announcement comes as the YMCA of Northern Rock County faces mounting scrutiny among some of its members and former board members over transparency of its governance and financial matters and upheaval and division among its board of directors.
The December decision followed the United Way denying the Y’s applications in 2016 for $52,000 in grants and in 2017 for $65,000 in grants.
The 2017 denial questions “inconsistencies and discrepancies” in financial information the Y provided the United Way along with “potentially misrepresented information” the United Way turned up in the Y’s application, according to a November 2017 letter from the United Way to the Y obtained by The Gazette.
Fanning-Penny characterized problems her agency spotted in the Y’s 2017 grant application as being “atypical” compared to the dozens of other grant requests her agency has seen in recent years.
At the time, the Y was seeking funding for its Janesville and Milton preschool and day camp, youth member and youth scholarship programs, according to the United Way’s denial letter.
Fanning-Penny in an interview with The Gazette confirmed the contents of the 2017 letter, including that the United Way’s grant review panel had discovered the Y apparently had “omitted” $320,000 of revenue in its grant application.
Fanning-Penny said the Y in its 2017 application also claimed its CEO and executive director was someone other than Tom Den Boer, even though Den Boer was listed in IRS tax filings at the time as the Y’s CEO and the Y reported paying Den Boer a salary of $270,000 plus a $25,000 management fee the prior year.
Den Boer continues to act as the Y’s CEO, according to the agency’s most recent tax documents.
Fanning-Penny said a representative of the Y met with the United Way’s Community Impact Council, the agency’s grant panel, to discuss the 2017 application. She said the Y’s representative repeatedly affirmed Den Boer’s role at the YMCA was limited to management of the YMCA of Northern Rock County Foundation, a charitable arm of the Y.
Fanning-Penny said the United Way’s interview with the Y lasted 90 minutes—about three times longer than typical. The outcome and the outcome of subsequent crosschecks later, Fanning-Penny said, did not satisfy the panel’s concerns over discrepancies it had unearthed in the Y’s application.
The Y appealed the United Way’s decision to deny its 2016 grant request. Fanning-Penny and the United Way’s panel “unanimously” denied the Y’s appeal, Fanning-Penny said. She did not provide The Gazette reasons why that grant was denied.
It’s not clear whether the Y appealed the denial of its 2017 application.
In 2013, 2014, and 2015, the United Way awarded the YMCA of Northern Rock County a combined total of $48,000 in grants, according to the United Way’s IRS 990 tax filings.
Overall, the Y in 2016 reported it collected $375,000 in “contributions and grants” from private donors or other sources and $693,000 in 2017, according to the Y’s tax filings.
Fanning-Penny compared her grant panel’s findings in 2017 with the dozens of local nonprofits’ grant applications the United Way has considered in recent years.
She indicated that problems with the Y’s application were unusual, particularly for an agency that had been a recipient of multiple United Way grants in the past.
“When you consider the United Way’s investment in our community, more than $2.3 million in more than 60 health and human service programs, I would characterize these findings as being atypical,” Fanning-Penny said.
The Y’s board could not immediately be reached for comment on the grant denials, but a former Y board member, Jeff LaBrozzi, said he’d sought an explanation from the board in 2017 after a grant was denied because of “inconsistencies” in the application.
LaBrozzi is one of three board members who said they were terminated within the last two years by former Y board president Jason Engledow without a board vote on their dismissal.
The United Way’s 2018 barring of the Y from funding makes the Y completely ineligible to apply for local United Way grants over a two-year grant cycle running from mid-2019 to mid-2021.
Fanning-Penny said the United Way has transitioned over the past few years from the annual awarding of grants to a two-year cycle. She said the United Way made that decision because it allows the United Way’s grant panel, a volunteer group of local finance professionals, more time to run a six-part vetting process that Fanning-Penny called “increasingly competitive.”
Her agency’s grant panel “takes stewardship very seriously,” Fanning-Penny said.
Fanning-Penny said she could not share specific details of the United Way’s 2018 decision to deny the Y eligibility for its next grant cycle because the United Way does not allow public review of detailed financial information or application materials submitted by its clients.
But in an email, Fanning-Penny provided the following explanation for the denial:
The United Way “reserves the right to deny application from an applicant/prospective partner for funding for any reason the Community Impact Council and/or board of directors agrees upon, including but not limited to falsification of information contained in a current or any previous application, omission of information from a current or any previous application, demonstrated non-compliance or a reluctance to comply with requests for information, etc.
“The validity of the information contained (in) the application was questioned. After full review and careful consideration, the Council voted unanimously to deny the YMCA of Northern Rock County’s admission eligibility application.”