There are indications but still no full explanation of the causes of financial problems that caused Sheltered Aid to Families in Emergencies (SAFE) Inc. to cease operations today.

Delays in grant funding created a financial shortfall too large for the private, nonprofit to overcome, said Sandy Sheppard, chairman of SAFE’s six-member board on Wednesday. The closure was announced to SAFE staff on Tuesday.

“We don’t know why it was delayed, but we have depleted what we have,” said Sheppard. “We have struggled for some time” financially. “It waxes and wanes, but we have had delays in (grant) funding to the point where it is not recoverable.”

Sheppard didn’t share any additional financial information.

SAFE received funds from United Way of Wilkes for many years, but the agency hasn’t received anything from United Way since $28,500 in 2017.

Clara Hickman, Wilkes United Way executive director and chief financial officer, said by email Wednesday that SAFE “did not submit a grant request last year” so it wasn’t budgeted funds from United Way.

Nan Sanseverino, director of communications for the N.C. Department of Administration, said SAFE “is experiencing key compliance issues.”

SAFE’s financial problems appear to partly be related to the agency’s charitable solicitation licensure from the N.C. Department of the Secretary of State expiring in January 2017. Liz Proctor, media spokesman for that department, said charitable organizations not exempt for certain listed reasons need this license to solicit funds from many non-government sources.

Records of the Secretary of State’s Charitable Solicitation Licensing Division show SAFE Executive Director and Chief Financial Officer Compton Fortuna unsuccessfully applied for restoration of the charitable solicitation licensure at least twice—last month and in January 2018.

A letter from the division to Compton dated Wednesday said the most recent request was denied because SAFE failed to file required financial information for the immediate preceding fiscal year using one of the following forms: IRS Form 990 or 990-EZ, audited financial statement or annual financial report form provided by the state. The division’s records show restoration of the licensure was denied in January 2018 for the same reason.

A March 29, 2018, letter from the division to Fortuna said SAFE was given another 30 days to submit the information missing from the application for renewing its charitable solicitation license and failed to do so.

The denial in January 2018 also resulted from SAFE not paying a $325 fee assessed for filing the application after a Jan. 15, 2017, deadline.

The Wilkes Journal-Patriot was told by multiple sources that SAFE’s financial problems were related to “improper documentation.”

SAFE’s most recent Internal Revenue Form 990 on the Secretary of State’s website is for the fiscal year ending June 30, 2018. This IRS Form 990 and also SAFE’s Form 990 for the fiscal year ending June 30, 2017, are both signed by Sheppard and dated Jan. 7, 2020, indicating they both were delinquent when submitted.

A Form 990 is an informational tax form that most tax-exempt organizations must file annually to provide the IRS an overview of the organization’s activities, governance and detailed financial information. A person familiar with financial reporting requirements for nonprofits said filing a Form 990 late or not at all could cause a state or federal agency to withhold grant funds.  

SAFE’s Form 990 for the fiscal year ending June 30, 2017, listed a total of $478,500 in contributions to SAFE and expenses totaling $466,850.

The contributions listed include $150,438 from the N.C. Department of Crime Control and Public Safety, $126,422 from the N.C. Council for Women, $50,000 from the Health Foundation, $14,000 from the Kulynych Family Foundation, $11,866 from Wilkes County government, $10,000 from the Winston-Salem Foundation and $115,774 from other sources.

SAFE’s federal and state funding must be matched with 20% in local funding.

In addition to Sheppard, SAFE’s board members are Randall Parsons (treasurer), Terrie Stackhouse, Karen Roberts, Nancy Scroggs and Lynette Bang.

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