The La Plata County Humane Society Thrift Store has come under fire publicly this spring by critics who say management decisions have left the store with declining sales and fewer volunteers.
Members of leadership argue the changes were necessary to make the organization more efficient, and as a result, profits were up in 2014, even though sales were down.
The Humane Society’s shelter serves about 3,000 animals a year from across the region; it is the thrift store that covers most of the shelter’s operational costs.
Longtime volunteers publicly raised the alarm early this year after Karen Streeter, former director of the Humane Society Thrift Store, made changes in management and inventory.
Volunteers point to declining sales in 2014 and several months in 2015 as cause for concern.
But Sue Spielman, president of the Humane Society Board, argues that while sales were down in 2014, the management was cutting expenses, and in 2014, the store bested profit margins for the previous year. Financial documents show both arguments are rooted in truth.
Streeter’s management style also created an environment where people didn’t feel valued or needed, volunteers said. In 2014, there were 33 volunteers who donated about 5,400 hours, Spielman said in a presentation. There were 17 active volunteers this year, according to the current director. Before Streeter left the store this spring, she banned four volunteers from returning to the thrift store – three of them were banned for disagreeing with management, according to emails and interviews.
However, Streeter said she was hired to correct problems in the store, especially with inventory management, that had developed over a long period of time. The changes were not accepted by some volunteers, and she had to ask them to leave.
“If a person was unable to comply, there were consequences to their choices,” she said.
Lawsuit filed
One banned volunteer, Edith Balceris, decided to run for a board position in February because she was concerned with mismanagement and declining sales. But a nominating committee decided not to place her on the ballot because she didn’t understand the role of the board of directors, Spielman said. Balceris filed a lawsuit in La Plata County Combined Courts claiming she was wrongfully barred from running.
“If you think something is right, you have to stand up for it,” she said.
Balceris’ lawyer argued that her disqualification was against the nonprofit’s bylaws.
In the end, the Humane Society agreed to place Balceris on the ballot and rescheduled its annual meeting and board election from May 9 to July 25.
The board didn’t agree with Balceris’ argument, but it capitulated to avoid spending Humane Society money on a potentially costly lawsuit, Spielman said.
Management style
After Streeter left the Humane Society, board members praised her work for cleaning up the thrift-store warehouse, which was overflowing with donations. For example, 200 to 300 containers of donations had to be thrown away because they sat outside so long, Streeter said.
However, several volunteers who left of their own accord said the atmosphere at the organization changed drastically under Streeter.
Before Streeter’s changes, members of the board say volunteers were allowed to set aside the best donations and purchase them at half price. When that policy changed, it upset volunteers, said Wendy Haugen, board secretary.
“They didn’t have their bounty,” she said.
Volunteers were asked to work in other areas to correct this habit so that donations could be sold at their greatest possible value, Streeter said.
But some people who left on their own accord said they weren’t given meaningful alternative work.
“The atmosphere was not good at all, and it was damaging,” said Irene Short, who took a break from volunteering after 12 years.
Another volunteer, Sandra Lochte left the store on her own accord after 17 years because she said she didn’t feel needed.
“They wanted us to be little robots,” she said.
There were other volunteers and staff members who had been complaining before the changes, Streeter said.
“We had happy volunteers ... It was an environment that was productive,” she said.
Financial status
While there is debate about the Humane Society’s financial direction, it is clear that with $1.9 million in the bank, the nonprofit is not in trouble.
“I don’t know what history generated such a large cash balance, but they are in no financial jeopardy at this point,” said Sidny Zink, a certified public accountant not associated with the nonprofit, who was asked by the Herald to look at the financial documents to provide an outside perspective.
The 10-year sales trend for the Humane Society shows that 2012 was the high point for the nonprofit; since, it has seen annual declines in sales.
However, by cutting expenses, profits for the entire organization increased to about $238,000 in 2014 from about $185,000 in 2013, Spielman said.
“The first step in getting the store on track was getting expenses under control,” she said.
The organization also budgeted for lower revenues in 2015 than it saw in 2014, because the thrift store doesn’t do as well in a healthier economy, said Bret Koster, the treasurer for the board.
“We’ve got to have something to shoot at that’s realistic,” Koster said.
Sales at the Methodist Thrift Shop have not seen declines in the same time period, said Sofia Madeen, assistant manager.
But volunteers argue problems with falling revenue were tied to inventory, pricing and customer service – not market forces.
Under Streeter, the thrift store stopped accepting a broad array of items and cut back on the times the store would accept donations, Balceris said.
“There just was not that feeling this was a fun place, a nice place, a reasonable place, as far as prices,” she said.
But the board said changes in inventory management were necessary to clean up the store’s warehouse. In particular, they praised her success in eliminating a plastic-bag mountain of donations that was two stories tall.
More recently, volunteers have raised concerns about the Humane Society spending about $85,600 from savings through April to cover expenses. They want to see savings go to help build a new adoption center, as planned.
“What you’re supposed to be doing is building that $1.9 (million), not taking it down because the thrift store can’t pay the bills,” said Gail Beach, a volunteer who was banned earlier this year.
Spielman says the spending was necessary to fix some wiring, concrete steps, the crematorium and the heating and cooling system.
“It is not unusual for the organization to be negative cash flow at the beginning of the year,” she said.
Moving forward
Keith Dunning, who was hired to replace Streeter in mid-May, said he could not address what had happened before he was promoted to director, but he already has made changes in hopes of increasing sales and donations. The store now is accepting a greater variety of donations more often. He also hopes lowering prices will spur more interest in the store.
“We have a pretty loyal customer base; I just want to expand that,” he said.
Former volunteers said they have high hopes Dunning will improve sales, as well.
“He’s on the right track,” Beach said.
mshinn@durangoherald.com
