In case you missed it, what follows is the story of what became an internationally acclaimed nonprofit that, while it's chapters still thrive, the "mother ship" has failed. Based on this a a read-through a number of other articles about this situation, paid and volunteer leadership failings contributed to the rise and fall. Yes, both. There are lessons to be considered about oversight, planning, evaluation and policy setting. Accountability or the lack there of (ensconced in oversight, evaluation and policy setting) was clearly limited. Architecture for Humanity represents the optimal in outcomes and the worst in efficiency, at least from a management and governance framework.
From Fast Company:
Last week, news broke that Architecture for Humanity, the design nonprofit founded in 1999 by Cameron Sinclair and Kate Stohr to bring better architecture to those in need, had shuttered its San Francisco headquarters, and would be filing for bankruptcy.
The announcement came from a story in the San Francisco Chronicle on Friday, surprising even those running the biggest of Architecture for Humanity's almost 60 chapters across the world. While the volunteers who ran Architecture for Humanity chapters knew that not all was right in the organization (as one volunteer described it, "people were disappearing" from headquarters), many didn't find out about the fact that the global nonprofit they were volunteering for had shut its doors, potentially sidelining the projects they had been working on and jeopardizing funds they had raised, until it had been reported in the media—weeks after the full-time staff had been let go. In a way, Architecture for Humanity's public unraveling mirrors the deeper problems that ultimately contributed to its demise: disorganization, an inability to adapt, and simmering tension between the parent organization and its army of volunteers.
Architecture for Humanity operated several field offices abroad in addition to its 59 volunteer-run chapters, which could be started by anyone as long as they had a few dues-paying members and at least one architect on board. Its field offices, in places such as Port-au-Prince, Haiti, oversaw the nonprofit's disaster rebuilding efforts and were financially supported and staffed by Architecture for Humanity. The subsidiary chapters, scattered throughout the U.S. and internationally, pursued local projects in their community, and were dependent on Architecture for Humanity's institutional support and brand recognition, but didn't receive monetary support.
"The chapters had known for some time that there were financial issues with headquarters," says Tom Veed, a member of the board of directors for Architecture for Humanity Chicago. But the Architecture for Humanity board, which as of Tuesday afternoon still had not released any kind of statement, did not notify chapter members of the plan to file for bankruptcy. (The board's chairman confirmed the news to the New York Times on Saturday.) Veed—whose chapter is made up of more than 800 volunteers—found out via an emailed statement from Sinclair, who stepped down as the organization's executive director in October 2013.* (Stohr, his co-founder and wife, left earlier that year.)
The group's challenges were apparent long before this. As Architect magazine noted in a profile of Architecture for Humanity in 2011:
It's doubtful that even [Cameron] Sinclair knows exactly what all Architecture for Humanity does. At a glance, the organization coordinates architects in regions where their services are scarce or distressed. Architecture for Humanity promotes a broad network of young professionals through its design fellowship program and chapter organizations. Through this outreach network—and the requests for proposals it fields for clients as well as collaborations with other for-profit and nonprofit firms—Architecture for Humanity marshals architectural services for communities struck by conflict, natural disasters, and deficits in resources. And that’s just for starters.
In the 12 years since the organization took root, in 1999, in a 300-square-foot New York apartment shared by Sinclair and Kate Stohr, Architecture for Humanity has grown. Its San Francisco office employs 36 full-time staffers and manages a small army of volunteers—teams that work to alleviate poverty, build community, and address climate change among at-risk populations. The organization has 17 staffers in Haiti alone. Yet it also declines 70 percent of the projects it is pitched—it just can’t get to them.
Architecture for Humanity grew rapidly in the past few years. From 2009 to 2013, it went from $2 million in annual revenue to $12 million, according to a strategic plan for the organization posted online by Cameron Sinclair in the fall of 2013. That plan reveals that even then, Architecture for Humanity had several weaknesses, including that "autonomous chapters are under-supported, under-leveraged," and a "lack of consistent funding streams." The plan warned that "lack of focus could spread resources too thin." Last week, Matt Charney, the chairman of Architecture for Humanity's board, admitted to the New York Times that there were several cost overruns on projects. Some remain unfinished, like a school in the Philippines and rebuilding projects in parts of New Jersey damaged by Hurricane Sandy and in tornado-ravaged regions of Oklahoma. A community center in Roškovce, Slovakia opened in early December just before the nonprofit folded.
Structurally, it appears that Architecture for Humanity could not keep up with its expanding global footprint. The group had a more than $2 million budget deficit and had gone through several rounds of layoffs before it closed. According to the New York Times, that the group tried to cut costs by reducing its payroll and moving to smaller offices. However, by the end of the year, that was not enough to keep the company afloat, and it laid off its staff of almost 30 people.
There’s lingering tension between the volunteers, many of whom only found out the news through Sinclair’s news blast, and the larger parent organization. Even before the nonprofit shut down, some volunteers felt that the local work was not deemed as important as headline-grabbing projects in Haiti or elsewhere. "The comment thread has always been that the visibility always went to the disaster relief projects that headquarters was working on," Starobinsky says. "The chapters were not really highlighted or valued as much as they could have been. We all work for free—we work on our nights and weekends," she says. "We weren’t leveraged as much as we could have been."
Their work may continue, while the field offices abroad, like the rebuilding center in Port-au-Prince, Haiti, have been shut down. (Unlike chapters, these were funded and run by Architecture for Humanity, rather than registered as independent charities or run by volunteers.) That spells the end for most of Architecture for Humanity’s high-profile disaster relief work—like the rebuilding programs the nonprofit ran in Mississippi in the aftermath of Hurricane Katrina, in Haiti after the 2010 earthquake, and in northern Japan after the 2011 tsunami. But the organization's mission to bring better design to the underserved will likely survive through its wide network of volunteers.
"From the sounds of the 100+ emails between local and international chapter leaders since Friday, it seems that most chapters are ignited in continuing our work," Hilda Boyadjian, director of the Los Angeles chapter, told Co.Design in an email on Monday.
Contrary to the field offices, which were run by staffers hired by Architecture for Humanity to support the organization's disaster relief work, the international chapters in places like Barcelona, Vancouver, and Tokyo are each registered as independent charities, making it relatively simple for them to continue operating without their parent organization, (which some, like London, have already pledged to do). But the situation is a little murkier for the domestic chapters, registered as sub-chapters of the 501(c)3 organization based in San Francisco and run entirely by volunteers.
Operationally, the U.S. chapters were fairly removed from what went on at Architecture for Humanity's headquarters. They went about raising money, establishing local partnerships, and selecting and implementing projects on their own. Different chapters interacted with the San Francisco headquarters to varying degrees, but as long as a chapter's work met branding guidelines and hewed to the organization's mission statement, the nonprofit was essentially just a place to keep their money. Architecture for Humanity provided branding, back-end website support, general liability insurance, and a bank account. It occasionally co-signed grant applications, but didn't financially support the chapters.
Whether the chapters will be able to continue as a united network of volunteers under the same brand has yet to be determined. Furthermore, though the chapters did their own fundraising, their funds were held by Architecture for Humanity. There’s still confusion over whether the chapters will ever see that money again.
Boyadjian says she doesn't think any of the chapters will be able to retrieve their lost funds, while Veed and Rachel Starobinsky, managing director of the New York chapter, remain more hopeful. "We are all putting together documentation so we can hopefully retrieve some of those funds," Starobinsky says. The Chicago chapter plans to argue that the donations it raised were restricted funds, specifically earmarked for Chicago-based projects. But since the money was raised under the same 501(c)3 organization and kept in the same bank account, in some cases with the parent organization co-signing, it's unclear whether that will work. In the meantime, some ongoing projects will be tabled while Architecture for Humanity sorts out its bankruptcy filing. In New York, for instance, a planned exhibit on the future of libraries, scheduled for this summer, is in danger of being cancelled, since the money the chapter raised in the last quarter cannot be accessed. The chapter volunteers are not even sure what court jurisdiction the bankruptcy will be filed in.
However, some of the work the chapters have planned will go on, regardless of what happens financially. Much of the design services they provide, whether it’s planning a street scape for a local public school or doing preliminary designs for a new community arts center, come cheaply, and cost no more than a roll of paper and the time of their volunteers.
"We see a critical need in the design community to provide services for organizations that can’t necessarily afford them," Veed says. "And that’s not going anywhere."
Update: The board of directors for Architecture for Humanity released a statement Thursday afternoon announcing that they expect to file for Chapter 7 bankruptcy in the next two weeks. "Architecture for Humanity has had incredible partners and funders that made our work possible over the last 15 years but, like many charity organizations, we have had serious funding challenges," board chairman Matt Charney writes. "Our leadership worked to overcome the funding gaps to the best of their ability, but the deficit combined with budget overruns and an overall decrease in donations finally became an insurmountable situation."
The nonprofit's international chapters, the statement notes, are separate legal entities from Architecture for Humanity, and will continue operating. As for the fate of the domestic chapters, Charney writes that "those directors have vowed to continue the work of the organization, though it may be under a different name."
*The original version of this article stated that Cameron Sinclair left his position at Architecture for Humanity in April 2014. He departed the organization in October 2013.