logo
  • Nonprofit News
  • Management
    • Boards and Governance
    • Communication
      • Framing & Narratives
    • Ethics
    • Financial Management
    • Fund Development
    • Leadership
    • Technology
  • Philanthropy
    • Corporate Social Responsibility
    • Donor-Advised Funds
    • Foundations
    • Impact Investing
    • Research
    • Workplace Giving
  • Policy
    • Education
    • Healthcare
    • Housing
    • Government
    • Taxes
  • Economic Justice
    • Economy Remix
    • Economy Webinars
    • Community Benefits
    • Economic Democracy
    • Environmental Justice
    • Fair Finance
    • Housing Rights
    • Land Justice
    • Poor People’s Rights
    • Tax Fairness
  • Racial Equity
  • Social Movements
    • Community Development
    • Community Organizing
    • Culture Change
    • Education
    • Environment
    • Gender Equality
    • Immigrant Rights
    • Indigenous Rights
    • Labor
    • LGBTQ+
    • Racial Justice
    • Youth Activism
  • About Us
  • Log in
  • CONTENT TYPES
  • Webinars
    • Leading Edge Membership
    • Sponsored Webinars
    • Economic Justice
  • Tiny Spark Podcast
  • Magazine
    • Magazine
    • Leading Edge Membership
Donate
Financial Management, Management

After Growth Plan Fails, a YMCA Files for Bankruptcy

Rob Meiksins
June 6, 2014
Share3
Tweet
Share
Email
3 Shares

 

Bomb

June 4, 2014;Milwaukee Business Journal

The YMCA in Milwaukee has filed for Chapter 11 bankruptcy to allow for restructuring of the organization. According to the bankruptcy petition, the organization has amassed $29 million in debt and has deemed operations to be unsustainable. The filing is intended to allow the organization to maintain operations, pay salaries, and stop creditors from suing for payment.

The YMCA in Milwaukee had been on a pattern of growth and building of new facilities. One of the most visible was the creation of a new facility in a redeveloped downtown structure known as the Grand Avenue Mall. Once a high-end mall, it had fallen on hard times recently, and the YMCA’s residency was seen as a critical component of the redevelopment of the facility. Other recent high visibility additions had been a central city facility including the Young Leaders Academy, a charter school and a suburban facility that became known for its aquatics program.

All of this expansion was financed through loans. Those loans have been refinanced with bonds issued by the city of Milwaukee and held by US Bank, which is by far the largest creditor involved in the filing with more than $24 million owed. The press release from the YMCA states that the debt to EBIDA (Earnings Before Interest, Depreciation and Amortization) ratio is an unmanageable 30 to 1.

The plan is for the YMCA to become a smaller, more focused entity. Facilities and programs throughout the suburban areas are to be sold to other Y’s or related entities. With several agreements already in place, it appears there is a genuine attempt to maintain the programs and services that are currently in place. The vision being promoted as the silver lining in this dark cloud is to emerge as a leaner organization more focused on the needs of clients in or near Milwaukee’s central city.

However, two high-profile central city projects are on the sale block, or already gone. The Young Leaders Academy is being sold for $6 million to the Milwaukee College Preparatory charter network. The building will be managed by the high performing charter organization, with gym facilities leased back to the Y, allowing current members to maintain access to the facilities.

The Y has also announced that it will look to sell its facilities in the downtown mall, which could cause some issues for the latest attempt to revitalize that facility. A group of local investors have made a proposal to purchase the facility on the west side of Milwaukee’s downtown. If the investors had been counting on the Y’s tenancy in the building as an anchor for their plans, this could be a problem.

Other issues have plagued the Y recently, including the shocking accusations of child enticement and the subsequent suicide of the founder of the Young Leaders Academy and the sudden closure of a central city youth center in 2008 for budget reasons. All of this is being overseen by the first female leader of the Milwaukee YMCA, Julie Tolan, who is known locally as a powerhouse fundraiser.

Although the depth of the Y’s problem comes as a shock, it should not have come as a surprise. The indicators of the problem have been visible internally for quite some time. So we have to wonder what the Board Directors were or were not looking at and why steps were not taken before this dire moment. The impact of the local Y shrinking like this is unclear. The loss of what has up to now been an anchor program on the west side of Milwaukee’s downtown could be devastating.—Rob Meiksins

Share3
Tweet
Share
Email
3 Shares

About The Author
Rob Meiksins

Rob has served in the nonprofit sector for over 30 years in roles ranging from intern to program manager, executive director to board director, and consultant. Starting out in professional theatre in New York City, Rob moved to Milwaukee to work with Milwaukee Rep as the dramaturg. Later, he started to work more and more helping people and organizations in the nonprofit sector articulate, and then take the next step towards their vision. Currently he is working on a new effort to establish an intentional process for nonprofits to identify their capacity-building needs and then learn about and implement the tools that will help. Ideally this is a partnership between nonprofits, consultants, and the philanthropic community to strengthen the sector we all see as critical.

Related
Should Your Nonprofit Build an Endowment?
By Mark Hager
December 10, 2019
Organizational Slack (or Goldilocks and the Three Budgets)
By Woods Bowman
November 26, 2019
From Small to Scale: Three Trade-offs for Smaller Nonprofits Trying to Get Big
By Peter Kim, Suzanne Tollerud and Gail Perreault
October 9, 2019
Why Funding Overhead Is Not the Real Issue: The Case to Cover Full Costs
By Claire Knowlton
September 10, 2019
Maximizing Nonprofit Internal Controls: An Essential Guide for Even the Most Pure
By The Editors and Hilda H. Polanco
August 14, 2019
Creating High-Functioning Nonprofits: Who Should Have What Financial Information?
By The Editors and Hilda H. Polanco
July 31, 2019
other posts by The Author
Be Careful Who Your Friends (and Consultants) Are
By Rob Meiksins
December 9, 2019
The Good, Bad, and Not-Sure-What-to-Think about Giving in...
By Rob Meiksins
December 3, 2019
US Health and Human Services Dept. Seeks to Rolls Back LGBTQ...
By Rob Meiksins
November 11, 2019
A Series on Sensemaking Organizations
The Sensemaking Organization: Designing for Complexity
The Sensemaking Mindset: Improvisation over Strategy
Structuring for Sensemaking: The Power of Small Segments
logo
Donate
  • About
  • Contact
  • Newsletters
  • Write for NPQ
  • Advertise
  • Writers
  • Funders
  • Copyright Policy
  • Privacy Policy

Subscribe to View Webinars

We are using cookies to give you the best experience on our website.

 

Non Profit News | Nonprofit Quarterly
Powered by GDPR plugin
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.