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Unitus board chair discusses reasons behind closure
Posted by Kristi Heim
Seattle nonprofit Unitus' operating cost of between $600,000 and $700,000 a month was a factor in the board's decision to shutter operations, said Joseph Grenny, Unitus board chairman.
The abrupt announcement two weeks ago stunned employees and supporters, and has prompted some donors to question the decision.
Grenny said the decision was made by a unanimous vote of the five- member board of directors in Utah days before the announcement, but the discussion about changing direction had gone on for more than a year.
Next month the board will announce more specifically what its plans for the new direction will be, Grenny said.
When it was clear that Unitus would be pursuing a different strategy, the board asked, "Do we need an organization that has this kind of expense rate to pursue those options?" Grenny said. "To continue on for months and slowly drip that out would be fiscally irresponsible."
Unitus supports 22 microfinance institutions and plans to "quickly wind down any ongoing engagements in a prudent manner that prioritizes the best interests of their clients," Grenny said.
KEN LAMBERT/SEATTLE TIMES
As for foundations and individuals that have funded its work, such as the Omidyar Foundation, "the board takes its stewardship very seriously to ensure those funds are deployed for their original purpose -- philanthropic purposes that help the poor gain economic self-reliance," Grenny said. On its latest financial report, Unitus had about $11 million in net assets.
"We will have conversations with Omidyar and every one of our significant supporters about what funds are remaining and what those will use to accomplish," he said.
Today is the last day of work for most of Unitus' 45 employees; about a dozen will remain through end of August and a few through the end of the year.
SKS Microfinance, one of the earliest lenders to the poor that Unitus backed, plans its initial public offering in India in the next weeks.
Unitus Equity Fund, the for-profit arm of the Seattle organization, has a stake in SKS, which could end up benefiting Unitus.
Grenny called the SKS IPO "a validation of what we set out to do," in accelerating the amount of capital devoted to microfinance.
"The willingness to stop when something is accomplished isn't done much in the nonprofit field... organizations that don't contribute much continue on," he said. "Painful as it is, we're trying to do the right thing by the donors' intentions."
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