Over the last eight weeks, we have felt the support and prayers of so many people who have reached out to us. Thank you for that – we have been grateful beyond words. The Love Wins Community Engagement Center continues to be open and serving our community, those experiencing homelessness. We are grateful for new staff and dedicated volunteers who are so welcoming and caring every day, who help us create a safe place to be for those who have no place.
Now to address the recent upheaval:
Our Process. Following the April 17, 2017 public allegations made by then-employees Rev. Michael Raburn and Rev. Laura Foley, the Love Wins Community Engagement Center (LWCEC) Board of Directors in concert with the Love Wins Ministries (LWM) Board engaged in an extensive investigation. We have collectively spent well over 450 hours since April 17 in this process. We have consulted with outside experts as needed.
We are disappointed that the concerns raised by the disgruntled former employees were never brought to the members of the LWCEC or LWM Boards. The LWCEC Board routinely meets at the LWCEC, and all of us are available by phone and email to staff. We are confused as to why these allegations were made in the hurtful and frankly unprofessional manner they were, and in a way that jeopardized the ongoing mission of the LWCEC and relationships the LWCEC has with other community organizations.
Organizational Structure. To clarify: LWM is organized and legally established as a church, not a 501(c)(3) entity. The IRS does not require a church to have 501(c)(3) status in order for donations to the church to be tax-deductible, and the Board of LWM decided long before the LWCEC was a dream such status was not necessary for LWM.
As to LWCEC, the process of applying for that 501(c)(3) status was done by submitting a Form 1023 to the IRS. That application was received by the IRS on or before May 18, 2017. Meanwhile, the LWCEC has been operating since its inception as a mission program of Love Wins Ministries, the church. Anyone who has donated to the work of LWCEC has done so by donating to LWM, the church. Then the income that makes up LWCEC’s operating revenue is given by the church to LWCEC.
April 18, 2017 Statement. The LWCEC Board made a statement on April 18, immediately after the statement made by Revs. Foley and Raburn, incorrectly asserting that a “staff member” was responsible for failure to pay withholding taxes. We were wrong. The failure to pay withholding taxes was not her fault. The fault lies with the executive director of the LWCEC, Rev. Hollowell. The Board is very sorry for its mistake, and hopes she will accept our sincerest apology.
Current and Former Staff and Contractor Grievances. LWCEC Board members have offered to meet with numerous former employees and former independent contractors of Love Wins Ministries and the Love Wins Community Engagement Center. The Board has met with or otherwise heard from nearly a dozen former employees of both organizations. Others declined to meet or to comment. Several former employees do not have fond memories of working with Rev. Hollowell. At the same time, current LWCEC volunteers and staff are very happy to be contributing to the work of LWCEC.
Rev. Raburn and Rev. Foley claimed that Rev. Hollowell was “not an ethical steward of monetary gifts” and “may have misappropriated thousands of dollars of donated funds.” They gave the LWCEC Board copies of LWM bank statements with numerous transactions marked to indicate what these former employees alleged to be examples of unethical behavior or misappropriation. They did not provide any explanation of how they got these bank statements from LWM. Neither Raburn nor Foley had access to nor were they entrusted with the bank statements as part of their work with the LWCEC, a separate organization from LWM.
Nevertheless, the LWCEC Board Officers in concert with the LWM Treasurer conducted a thorough internal financial audit with counsel from an outside CPA and outside legal counsel. The Officers examined all questioned transactions for 70% of the period in question and randomly sampled questioned transactions for the other 30% of the 13-month period in question. We found the following:
- As to the claim that, withholding taxes had not been paid; in fact, withholding taxes were delinquent in part, but were completely caught up by May 12, 2017. New procedures have been installed to ensure this does not happen again.
- The Board found no evidence of “unethical stewardship” or “misappropriation of funds.” However, one instance was found in which Rev. Hollowell used the Love Wins Ministries debit card instead of his personal card to purchase coffee while on vacation. We determined this was a simple mistake. He has subsequently reimbursed LWM the $7.98.
- As regards some of the other questioned transactions, some appeared to be reasonable concerns. For example, Rev. Hollowell uses a taxi from time to time to go from Love Wins to a work-related meeting when his wife needs the family car. While most organizations reimburse for work miles driven, LWM does not. Instead, therefore, Love Wins Ministries covers the cost of taxis as needed. This has always been LWM’s practice. While some may disagree with this practice, it is not illegal.
- Some former employees also raised questions about Rev. Hollowell’s out-of-town travel. Rev. Hollowell speaks all over the country — nine events in 2016. Love Wins Ministries values engaging in dialog on issues of homelessness and housing vulnerability, and these speaking engagements serve that value. In addition, they enlarge the church’s potential donor base. Thus, covering such travel costs is an appropriate practice. Each out-of- town travel episode was examined, and confirmed to be appropriate, and related expenses were deemed reasonable.
- Foley and Raburn flagged numerous restaurant meals as questionable. We do not understand why. Some of these meals were off-site meetings. Many, if not all of these meetings, were attended by one or both of the reverends. Some of these meetings were actually staff meetings. These expenditures were routine.
- The former employees questioned three payments made to Duke Progress Energy. From time to time, Love Wins Ministries pays to keep the power on for housing insecure families. These transactions were examined and deemed appropriate.
- By the same token, to prevent homelessness, Love Wins sometimes assists with rent to forestall eviction, or pays for a few motel nights under special circumstances, such as if one is discharged from hospital with no home to go to during further recovery. Again, no evidence of anything other than appropriate financial assistance was uncovered.
These practices were not a secret from staff of LWCEC. Rather, they were a routine part of the work of LWM. It is puzzling that these routine expenditures drew such concern from the former staff. The audit revealed that some finance-related systems, including the petty cash systems for both LWCEC and LWM, need to be improved. Steps for improvement have been identified.
Rev. Hollowell. We have seen instances where policies could be improved, to be sure, but we have found no evidence of financial wrongdoing. Instead, we find that repeatedly, Rev. Hollowell attempted to do too much by himself. Rev. Hollowell is a gifted preacher and storyteller and his vision for the healing power of community is contagious. He’s something of a prophet, speaking hard truths no matter how receptive folks are to them, and no matter what the cost to him, personally. That gift is a double-edged sword and it is an important calling.
Rev. Hollowell, however, is not a great manager. He has failed to delegate work to competent staff, failed to maintain sufficient staffing levels, and the organization has suffered as a result. As executive director of Love Wins Community Engagement Center and the pastor of Love Wins Ministries, ultimately, every shortcoming is going to be his responsibility – the buck stops there. As the Boards of LWM and LWCEC, we recognize the need to increase oversight to ensure that these lessons learned result in changes.
Conclusions. As a result of what we have learned, the following steps will be taken:
- Just as the LWCEC has done since April 24, the Center will remain open a minimum of four hours per day, with paid staff and volunteers under the leadership and the supervision of the Boards.
- Financial management and reporting will be improved. A member of the CEC board will meet with Reverend Hollowell monthly regarding finances.
- Employee and volunteer relations will be enhanced through strengthened policies and Board supervision. A member of the board will be assigned as a staff liaison.
Prior to this upheaval, the LWCEC was open for 36 hours a week. Our greatest sorrow has been that the LWCEC has reduced its hours to 20 hours a week. Our greatest solace has been that our community, both housed and unhoused, has continued to show up and make this thing work now that we have reopened, even if we can no longer provide services eight hours a day.
Thank you so much for your interest in our community. Those of you who have provided faithful financial support have made it possible for the Love Wins Ministries and the Love Wins Community Engagement Center to continue serving this vulnerable community. And during this season of stress and change, your gifts are still greatly needed.
Love Wins Community Engagement Center
Sarah Jessica Farber
Love Wins Ministries