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Tuesday, 13 July 2010 18:11

Evergreen holds assets too tightly, officials say

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Board members of Smoky Mountain Center, a state mental health agency for the 15 western counties, have questioned whether its partner nonprofit foundation does enough to benefit mental health and substance abuse services in the region.

Tom McDevitt, the director of the Evergreen Foundation, has kept a tight hold on the nonprofit’s purse strings. Rather than putting money toward the cause of mental health and substance abuse, McDevitt has instead focused on growing a nest egg to the tune of $20 million.

The nonprofit makes $1 million a year on average through investments and on rent from an expansive inventory of office buildings leased to those in the mental health and substance abuse fields in the seven western counties.

But Evergreen gave out only a single grant of $50,000 to benefit mental health services in the 2008-2009 fiscal year.

This upset board members of Smoky Mountain Center, who see needs going unmet while Evergreen’s coffers grow.

“A percentage of the money that Evergreen takes in each year after expenses should be returned back to the seven far west counties,” said Ronnie Beale, board member of Smoky Mountain Center and a Macon County commissioner.

Concern that Evergreen is hording its assets has led Smoky Mountain Center to attempt to regain control over the nonprofit (see related article).

County commissioners in the seven western counties unanimously endorsed supporting Smoky Mountain Center’s position.

“You’re really not helping your entity if you’re just sitting there with a pot of money,” said Haywood County Commissioner Bill Upton.

Smoky Mountain Center made rounds to each board of county commissioners seeking support. The counties all passed a resolution that hints at legal action if Evergreen won’t play ball.

“I’m doing this for the people that have mental illnesses in Haywood County, since this may free up some of the money that may benefit them,” Haywood County Commissioner Kirk Kirkpatrick said when voting on the resolution.


Where Evergreen

got its money

Evergreen owes its wealth in the first place to Smoky Mountain Center. Smoky Mountain Center funneled state and county tax dollars to the nonprofit over the years, allowing it to amass an inventory of 25 rental properties across seven counties, which is now a major source of revenue.

The real estate holdings include offices for mental health counselors and psychologists, group homes for people with disabilities, the Balsam Mountain Center outpatient clinic — and even the office headquarters for Smoky Mountain Center.

While the buildings were purchased or built with state tax dollars, Evergreen pockets the money it makes on rent. Evergreen even makes Smoky Mountain Center fork over $140,000 in rent a year for its offices — offices built with money from Smoky Mountain Center in the first place.

If Smoky Mountain Center was relieved from paying rent, it could spend that money helping people with mental health and substance abuse problems, said Brian Ingraham, director of Smoky Mountain Center.

But that was never the deal, McDevitt said.

“What the foundation is in the business of doing, and what is was contracted to do, was to build that building and then turn around and rent it,” McDevitt said.

When Evergreen was created in 1977, state agencies couldn’t buy and sell property. Evergreen was created expressly to manage an inventory of office buildings for Smoky Mountain Center’s therapists, psychologists and counselors. And that’s exactly what it’s done, McDevitt said.

As a charity, Evergreen gives mental health service providers discounted rent, which is an incentive to those in the field to locate here, according to McDevitt.

Smoky Mountain Center hired a private CPA firm to track just how much money Evergreen has gotten in state and county tax dollars. From 1977 to 2009, $13.7 million in public funds were funneled to Evergreen through Smoky Mountain Center. Another $4.2 million in state money has been paid to Evergreen by Smoky Mountain Center on rent for buildings.


Step up the giving

This year, under pressure to ramp up its grant making, Evergreen has given out $357,000 in grants. McDevitt said the foundation’s assets finally grew enough that it could part with some of its money without jeopardizing its long-term capital.

“The board said we did not need to accumulate money just for the sake of accumulating money,” McDevitt said.

But it still fell short of what Smoky Mountain Center wants to see.

Despite a $2 million state budget cut that forced Smoky Mountain to cut services to mental health patients, Evergreen only gave Smoky Mountain Center $200,000 to offset the cuts, when its deep pockets could have afforded more to help the center through the crisis, according to Ingraham. The budget cuts have been restored this year.

And when Smoky Mountain Center needed to expand the parking lot at the substance abuse and mental health outpatient clinic in Balsam, Evergreen agreed to foot 75 percent of the bill, even though it owns the building and collects rent on it.

Smoky Mountain Center would like something more concrete than a verbal pledge from Evergreen that it will start allocating more money to mental health. Beale wants a formula that guarantees a certain percentage of annual revenue will be put toward grants.

“Most foundations have giving guidelines they have the grant process it is usually a pretty established process so of course that is what we want to see,” said Shelley Foreman, community relations coordinator at SMC.

But Evergreen’s foray into grant making won’t happen instantly, McDevitt said.

“You don’t go from being an organization that builds buildings and rents them for less than fair market value to making $800,000 in grants over night,” McDevitt said.

Other grants by Evergreen this year included $80,000 to Haywood Vocational Opportunities for pilot program tracking developmentally disabled people from employment to retirement; $10,000 to REACH for workshop series to educate parents at risk of abuse; $20,000 to Meridian Psychological Services to develop volunteer network; and $15,000 to put on training workshop for substance abuse counselors.

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