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Little comfort in nonprofit shakeup

Michael Schwartz October 4, 2010 9

A shakeup at the top of a local nonprofit is causing a commotion among its supporters.

The drama began when the founder and former chief executive of Richmond-based Comfort Zone Camp ceded some of her power in February. She sought to regain control in September and was denied by the organization’s board of directors. Now she’s leaving the organization altogether, and a debate has erupted on Facebook about why she was ousted and what it all means for Comfort Zone’s future.

The story was made public last week when Comfort Zone’s board sent out a letter that vaguely explained the reasoning but didn’t offer anything too specific about the board’s decision not to reinstate founder Lynne Hughes as CEO.

Lynn Hughes

“On September 27, 2010, the Board of Directors faced an excruciatingly difficult decision regarding the leadership of Comfort Zone Camp, and the future stability and growth of the organization,” the letter began.

Comfort Zone was founded in 1999 by Hughes as a small bereavement camp to help children cope with losses. It has grown into a multimillion-dollar operation with locations across the country.

But that growth has brought some problems.

“In February 2010, the Board was made aware of significant management issues, which called into question the organization’s ability to sustain its mission,” the board’s letter stated.

See the board’s full explanation here.

At that time, Hughes and the board agreed that she would step down as CEO. Hughes stayed on as president and founder, and a new CEO was hired.

But that didn’t last long. A few months later, according to the board’s letter, Hughes wanted to regain full control of the organization, including over the financials, and the power to hire and fire employees.

The board didn’t agree and offered her the position of visionary, spokesperson and strategist. She declined, making it clear that she would leave the organization if her demands weren’t met.

The board, which is made up of an impressive roster of business executives, stood firm.

“The board voted unanimously that this solution – putting Lynne in the CEO role – would not be in the best interest of the organization,” the letter stated.

Hughes will no longer be an employee of Comfort Zone after Oct. 8.

The debate is now online. A Facebook discussion page is filled with emotional reactions from campers’ parents, volunteers and others. The responses include anger toward the board, with some users renouncing their financial support for the organization and others pleading that supporters keep their eye on the organization’s mission to serve the children, not its CEO.

Rick Long, chairman of the Comfort Zone board, told Richmond BizSense on Friday that the organization was prepared to deal with some backlash for its decision.

“Obviously when you change out CEO and the founder leaves, it’s a big deal,” Long said.

Comfort Zone said Friday that Hughes was not available. There was no response to an email sent to Hughes.

“In a situation like this, there’s always going to be multiple sides to the story,” Long said.

“This was a very thoughtful, deliberate process,” Long said. “There are some pretty seasoned executives on that board. We didn’t take it lightly.”

Long said the board was also aware that there might be some financial backers who decide to no longer donate to the group because of the shakeup.

“Inevitably, they’ll be some people that have given in the past that won’t give in the future,” Long said.

One of the biggest supporters has been New York Life, which gave a three-year, $3 million grant to Comfort Zone. Long said they are now in the third year of that deal.

“Anytime you take on that responsibility, it’s not just to do what the CEO wants, it a fiduciary duty,” Long said. “There are a lot of people that have given a lot of money to this organization.”

Matt Paxton, a local businessman and five-year volunteer at Comfort Zone, said that although the organization wouldn’t exist without Hughes, there is more to Comfort Zone that just her.

“Although Lynne [and family] were a huge part of the camp, I think it’s a disservice to the thousands of volunteers, campers and employees of CZC to act like the place will fall apart just because one person is leaving,” said Paxton.

“If the camp’s goal is to support grieving children around the country, than they made the right call and the board should be commended for making a difficult decision.”

Comfort Zone has grown quickly since being founded in 1999. In 2006, Comfort Zone had $2.1 million in revenue and $892,000 in expenses, according to IRS tax forms. Hughes was paid $75,000 that year.

By 2008, revenue was up to $3.2 million, and expenses were up to $1.6 million. Hughes was paid $105,000 that year.

Michael Schwartz is a BizSense reporter. Please send news tips to Michael@richmondbizsense.com.

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9 Comments »

  1. Cathy Dyer October 4, 2010 at 9:08 am - Reply

    There is much more to the story than what is being told. I have been promised the 2009 financials since April and keep getting put off. My church is a large supporter but I have a responsibility to the members to make sure organizations that we support are being financially repsonsible – the lack of financials from 2009 as of October speaks volumes. Lynne had stepped back to concentrate on the fundraising side and when she saw how the finances were being handled she was very concerned. Unfortunately for the children that need CZC this board has made a devastating decision.

  2. Tommy Wonkowski October 4, 2010 at 11:07 am - Reply

    The whole issue here appears to be typical greed. The organization has grown and her salary started to grow quickly. I have worked in the private sector of mental-health and this happens all the time in private practice. A person founds a practice then when the dollars start flying in greed sets in. Don’t know the lady but if she is true to the mission of the organization she can succed elsewhere in a similar role.

  3. Pat Perdue October 4, 2010 at 11:13 am - Reply

    Is it really even remotely feasible to think 10 or 12 (successful business) individuals who chose to serve on a non profit board in their own community, would be conspiring to cover up financial wrongdoing? I think not. Sounds like changes needed to be made and they gave Ms Hughes a graceful way to remain involved, which she turned down.
    I just read the facebook comments, of note: people who are supporting Ms Hughes are making accusatory remarks about the board, people supporting the idea of supporting the mission make no accusations towards Ms Hughes. The camper’s remarks are eloquent and well thought out. My reaction…. support the organization that helped these kids/campers become the remarkable people they have proved themselves to be, and ignore the “adults” who are crying foul.
    It takes a village, not just one person. I haven’t donated to this camp before, I may now, I hope others will too.

  4. Eric Perkins October 4, 2010 at 11:30 am - Reply

    This sounds like a good example of why effective corporate governance and documentation are so important, particularly for volunteer-driven nonprofit organizations, to provide clear guidance on how to navigate these difficult situations when they arise. In many respects, the process is as important as the ultimate decision.

  5. Sherri October 4, 2010 at 12:36 pm - Reply

    I don’t know Pat Perdue, but I agree completely with him/her.

    And to Cathy, you suggest that the “lack of financials… speaks volumes.” — I’m not so sure about that. Often times, nonprofits do not file their IRS informational returns (forms 990) until well into the following year. The IRS allows two 90-day extensions automatically – which would put the filing deadline in October or November. A large number of nonprofits do this. You can check with GuideStar or the IRS itself on the validity of this statement. The lack of 2009 financial information is not unusual and should not be taken as anything alarming.

  6. Paul October 4, 2010 at 1:51 pm - Reply

    I agree Sherri – I think Cathy is causing an alarm for no reason. It does seem that the supporters of the organization are responding much more maturely than the supporters of the Founder. It seems many nonprofits reach a point where they essentially outgrow the Founders’ skill sets. In those cases, if the Founder does not get out of the way, it is the Board’s duty to look out for the best interest of the organization and for the mission of the nonprofit. This is not strange for a nonprofit. And in the end, probably better for the organization. Sad to see so many adults respond so inappropriately via Facebook. Isn’t this camp supposed to be a place for kids to learn how to cope with life challenges? What type of examples are these overly emotional adults setting?

  7. Bob Wake October 4, 2010 at 2:37 pm - Reply

    This incident is an another tragic example of Founders Syndrome that affects many organizations; both Non profit and For Profit. Lynn founded this non profit with a mission and vision to help grieving kids through his/her terrible loss;an admirable and noble achievement. Lynn is a charismatic leader. Her charisma and enthusiasm over time blurred the line between the mission of the organization and the founder. Some financial donors and volunteers were swept up in the emotional attachment to the Founder and help reinforce the notion that Camp Comfort is Lynn. The string on Facebook highlights the loss of perspective.
    While I would not characterize her actions as greedy, Lynn, emboldened by the support and success of the organization, lost perspective and began to believe that she is Camp Comfort and should make all decisions without the oversight of a Board that she assembled. Hiring family members, six figure salaries for Lynne and her family and an autocratic management style are but a few of the issues that caused the board to justifiably create a strategy to introduce a professional management team while having Lynne do what she does best..
    Kudos to this board for making an exceedingly difficult, gut wrenching decision. Good governance and oversight are the fiduciary responsibility of a board. The volunteer board members accepted their positions to use their skills, resources and gifts to promote the mission of Comfort Zone Camp. In this case, the founder’s agenda expanded beyond the mission. Camp Comfort clearly highlights a founder who is highly capable and whose ego and need for control created a series of conflicts. The Board had few choices resulting in this weeks announcement. While very sad, The mission of the organization, children who have suffered a loss,supported by countless dedicated volunteers are Comfort Zone Camp.

  8. Patience Brewster October 7, 2010 at 11:41 am - Reply

    I was very disappointed in the board. They have been not forthcoming about the decision to fire Lynne. Honesty and accountability has been demanded, and the response is to shut the doors and bolt them, hoping the commotion will blow over.

    Over the years, we’ve seen good, strong foundations taken over and turned into corporate feeder-funds, generating and funnelling money to the backers. These former foundations are now ’5k walk for x’, ‘Run for that’, income generators. The honorable mission disappeared in the mist, replaced by gaudy advertisements and catchy placards, and the mission was hijacked as a tool to raise funds. I’m afraid we are watching this conversion now in Richmond.

    Lynne dedicated years to help children. The volunteers and counselors are the best people in the world – working and caring for grieving children. What greater gift can be given, than to help the children?

    Lynne, I’m waiting for you to collect your thoughts and start again. I (and some more friends) will support your new venture, and this time procedures have to be put in place to prevent another corporate take-over.

    Patience

  9. Bess Ryan March 16, 2012 at 3:04 pm - Reply

    We’ll miss you, Lynne! I didn’t find out you left until today, so, yeah, this sucks.

    And CZC should TOTALLY get more support, and more publicity. I am the only kid out of the 900-something students at my school who has ever been to CZC, but I’m not the only one who has ever lost a parent. That camp could help a lot of people.

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