Former IAHF director defends his tenure
As the Island Affordable Housing Fund (IAHF) has disclosed more and more about its finances and donations in recent weeks, Patrick Manning, the former executive director, has become the subject of speculation and insinuation about his three-year tenure at the fund. In a conversation with The Times on December 5, Mr. Manning responded in general terms to the current controversy.
In his conversation with The Times, he made no apologies for his three years as the fund's top executive, and he did not accept responsibility for the current problems.
In late October, two days before November rents were due, the fund notified the Dukes County Regional Housing Authority that it could not make a promised payment to fund rent subsidies for the authority's rental assistance programs. That left 45 tenants and their landlords in four towns short on their rents. The fund made the subsidy payments in full on November 17, but has said it cannot promise subsidy payments beyond November. The four towns have stepped in with various funding sources to cover December and January subsidies, but there is no funding yet identified for the rental assistance program for February through June. Other high profile projects, including the Bradley Square affordable housing development in Oak Bluffs, are in jeopardy.
A fast start
Mr. Manning arrived in February of 2007, following a 12-year political career in New York. In general, the volunteer board of directors, including 13 financial industry leaders, building industry leaders, and housing advocates, were happy with Mr. Manning's work.
"Things were okay while I was there," Mr. Manning said. "People have to remember, during the time I was there, the fund worked overtime, a lot of people worked overtime to make sure people were housed."
But in hindsight, Bob Wheeler, co-chairman of the fund's directors, said things were not "okay" toward the end of Mr. Manning's tenure.
"He was responsible for preparation of the budget," Mr. Wheeler said. "You would take a look at his budget, and everything was fine. Well, everything wasn't fine. If there's anything we did wrong, it was not to probe him harder than we did. He resigned the end of July, and I spent the month of August trying to pick up the pieces. It was in early September, when I was looking at the numbers, and I said we've got some issues. We may not be able to support the rental assistance program like we've supported it in the past. I think we could have kept a lot closer rein on Pat. But we're a volunteer board, and Pat had two successful fundraisers for us."
At a December 2 forum, sponsored by the fund to clear the air and explain the organization's fundraising, board member Kimberly Angell said a confluence of events created the current difficulty. "Our fundraiser from the summer was down, the economy tanked, so our overall donations were down, and we had the sudden departure of our executive director," Ms. Angell said. She added that if any one of those things had not happened, the fund could have met its obligations. "It was the three together," she said.
Some critics have pointed to Mr. Manning's sudden departure two months before revelations about the financial difficulties as an indication that his parting was somewhat less than amicable. He says that is not the case. "It was a set of circumstances having to do with my personal life," Mr. Manning said. He said he had to return to New York to take care of his oldest son. "That's what precipitated having to leave so abruptly. It would be unfortunate if anybody made anything of it other than that. My family comes first."
Mr. Wheeler echoed that view. "There was nothing sinister about it. It was a family-related personal issue."
Mr. Manning's salary has become a point of criticism as the fund's financial difficulties have caused second guessing and finger pointing among housing advocates. Mr. Manning was paid a base salary of $75,000. He also received five percent of funds raised over $1 million. That amounted to substantial bonuses over the three years Mr. Manning headed the fund. The organization manages financing on a fiscal year beginning May 1, not a calendar year. Mr. Manning worked part of fiscal 2007, and based on his $75,000 base salary, was paid $17,308. He was also paid an additional $7,000 in what was termed a "signing bonus/moving expense."
For fiscal 2008, his first full year as executive director, Mr. Manning earned $75,865 in base salary, and $25,500 as a partial payment for the bonus he was due for money raised over $1 million. In fiscal 2009 he earned $78,750 in base salary, and $52,293 in incentive bonuses. Part of that year's bonus was attributed to the previous year. In fiscal 2010, the current fiscal year, Mr. Manning was paid $32,721 in base salary for working part of the year. He received $14,668 in incentive bonus. He worked through August of this year.
Donors were not made aware of the fundraising incentive arrangement. For the purpose of figuring Mr. Manning's compensation, Community Preservation Act money, public funds donated by Island towns, was added to the money raised from private donors and foundations. Fund board members insist that Mr. Manning's bonus was paid only from private donations, not public funds. Ewell Hopkins, the new executive director, who began work in September, does not receive any percentage of donations as salary.
In hindsight, the incentive salary arrangement was a mistake, said Mr. Wheeler. "He (Mr. Manning) proposed we set up compensation based on results, and we thought that made sense," Mr. Wheeler said. "We certainly should not have paid Pat like we did. What we did was an honest mistake."
The Association of Fundraising Professionals (AFP) frowns on incentive-based compensation. In a position paper intended to guide fundraising executives on ethics, the association writes, "AFP believes that individuals serving a charity for compensation must first accept the principle that the charitable purpose, not self-gain, is paramount. If [that] principle is violated, the mission and long-term interest of the charity may become secondary to the worker's personal interest and self-gain."
Mr. Manning has also been criticized by fund board members and housing advocates outside the organization for making financial commitments without approval of the board. The fund has not been able to keep some of those commitments.
"Commitments to Bridge Housing, commitments to Habitat For Humanity, that he didn't bring before the board of directors," Mr. Wheeler said. "Things he did to the medical benefits programs that were never approved by board."
Some have also questioned the fund's purchase of land as part of the effort to develop affordable housing. The fund was established in 1998 to raise money and distribute it to other organizations that would develop or provide affordable housing according to certain criteria. Board members say the fund purchased land at a discounted price to develop 10 homes on Jenney Way in Edgartown. Nine houses have gone to families who qualified based on their income and won lotteries that gave them the right to purchase the homes.
A tenth home, to be sold as a market rate home, remains on the market, unsold, more than a year after the development was finished. Mr. Manning tried, unsuccessfully, to sell the house last summer through a $1,000 per ticket raffle. The fund continues to carry the mortgage on that home, a situation board members called a drag on fundraising.
Also weighing on the fund's efforts is the purchase of land at the corner of Masonic Avenue and Dukes County Avenue in Oak Bluffs, the site of the planned Bradley Square affordable housing development. Mr. Manning was instrumental in purchasing that parcel for $905,000. The fund is carrying a mortgage of approximately $700,000, and has committed itself to raise $1.3 million to make up the gap between what the project will cost to build and the purchase price future homeowners can afford to pay.
"I don't want to play Monday morning quarterback," Mr. Manning said. "I still think it's a terrific project. It's easy to look at it now without having any idea there was going to be a global financial meltdown."
At the December 2 forum, board members were bullish on the future of the Fund. "I think that people will understand that we provide a vital service to the community," Mr. Wheeler said. "We have spent $2.5 million in rental assistance housing in the last ten years. If we're not around, some pretty vital things stop. I'm positive we have the right guy to replace Pat. He's passionate about what he's doing and the mission of the fund."
Others are not so confident.
"The town has been able to pick up two or three months," said Ernie Mendenhall, a member of the West Tisbury affordable housing committee. But he said he is worried about the rental assistance program for the rest of the fiscal year.
"It's clear the problem has not been solved for those five months," Mr. Mendenhall said.
There remains a gap in trust between the fund and the organizations it serves. At the forum, Richard Skidmore spoke as Aquinnah's representative to the Dukes County Housing Authority board. He proposed a memorandum of understanding he had crafted that would put into writing the fund's commitment to the rental assistance program. He challenged the fund's directors, seated at the front of the room, to take a standing vote on whether to accept it or not.
Mr. Hopkins attempted to head off the conflict by saying the board favored conclusion of a memorandum, but needed time to study the one Mr. Skidmore had written, but Mr. Skidmore persisted, again asking for a standing vote. This time, the entire board responded in unison, shaking their heads no and saying the proposed memorandum needed more work.