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Humane society financial crisis

State probing allegations; board blames stock market

By Fred Kelly
May 19, 2004

Leaders of the city's largest animal welfare organization said today they could rescue the group from the brink of bankruptcy as concerned residents complained of massive financial mismanagement.

"We have a survival plan," said Monty Korte, outgoing president of the Humane Society of Indianapolis, speaking at the group's annual board of directors meeting.

Leaders acknowledge draining multi-million-dollar trust funds and borrowing money to keep the society's doors opens. But they denied accusations that they have mismanaged money, alienated the public and made such drastic cuts that thousands of unwanted animals are now at-risk.

New officers
The Humane Society of Indianapolis announced today the names of new officers for its board of directors and new members:
• Officers: The new officers are President Brent Bolick, Vice President of Development Jane Root, Secretary Eric Halvorson and Treasurer Bill Guthrie.
• Members: The new members of the board of directors are Kathleen Burns, Devin Lollis, Kristen Mulholland, Jill Parris, Debra Peek, Phil Schaefer, Lisa Stone and Marie Truesdell.

"How do we know that our money is doing any good?" asked Maria Cohen, a society donor.

In a related development, Indiana's attorney general announced today that his office is looking into allegations that the society mishandled an endowment known as Mary Powell Crume Benevolent Public Trust. It is valued at $3.4 million.

Humane Society officials said they were unaware of the probe. About 100 people crammed into the organization's offices at 7929 Michigan Road for the board meeting.

The Humane Society is by far Indianapolis largest and most well-known animal welfare organization. Last year, it found homes for more than 5,000 unwanted animals.

However, with its assets steadily declining since 2000, the organization has plunged into a financial crisis. The society has experienced operating deficits totaling $3.6 million from 2000 to 2002. Despite dipping into its reserves, officials last year laid off 12 workers -- a fifth of its staff -- and cut services.

An endowment, called the Humane Society Charitable Trust, has been depleted. In 2000, it had a value of $4.2 million. Two remaining trust funds, once valued at $11 million, have lost $6 million in the last three years.

Humane Society leaders blame the financial freefall on a weak stock market, which they say has dropped the value of the organization's investments. The society has put up what remains in those trusts as collateral to borrow money to stay afloat, Korte said.

Leaders also note that an economic recession has led people to donate less. Direct public support for the Humane Society fell from more than $1.1 million in 1998 to $520,000 in 2002.

An annual budget report shows the Humane Society received $2.6 million in donations and other income in 2003, but spent nearly $2.9 million.

A group called Move to Act has filed documents in Marion County Superior Court demanding that the Humane Society show how it has used the Mary Powell Crume Benevolent Public Trust. A hearing is scheduled for Tuesday.

The trust has been mismanaged, said Paul Ponticello, adviser to the group of society critics formed last fall. He said the Humane Society should have to publicly account for how it has come to the verge of bankruptcy.

"It all comes down to credibility," Ponticello said.

Humane Society officials agreed to meet with the advocacy group, but charged that it was making false allegations and distorting the facts.

The society has been under intense scrutiny since 2001 when a series in The Indianapolis Star revealed that the organization and the city shelter killed more unwanted animals than other groups in many U.S. cities.

Call Star reporter Fred Kelly at (317) 444-6491.

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