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April 2, 2012; Source: Mercury News (Santa Cruz Sentinel)

Earlier this year, the collapse of the International Humanities Center (IHC) left as many as 200 organizations high and dry, without access to whatever donations the IHC might have collected on their behalf. NPQ broke this story earlier this year with a two-part investigative series (see here and here for the full story).

Some people looked at the IHC collapse as small change—a bunch of tiny, frequently not even incorporated social change organizations that lost small amounts of money. NPQ found information suggesting a loss of perhaps $1 million total, including approximately $400,000 that had been held for a group building and running hospitals for Afghan refugees in Pakistan and Afghanistan. Most of the groups impacted that even had a sense of how much money IHC had held for them estimated losses in four-figure or low five-figure amounts. For many groups that are largely volunteer-based, foregoing even those modest sums is devastating, as evidenced by the Santa Cruz Sentinel’s recent report on a program operated by a San Jose City College environmental professor that lost all of the money it had banked with the IHC.

The Center for Farmworker Families (CFF) offers tutoring programs to migrant workers in California’s Pajaro Valley, sending volunteers to work with families at the Buena Vista Migrant Center; it also works in Jalisco, Mexico—where many of the Pajaro Valley farmworkers come from—to establish organic agriculture and ecotourism ventures. The founder of the Center for Farmworker Families, Ana Lopez, turned to IHC to handle the organization’s donation and accounting services.

What did CFF lose? Lopez knows of approximately $5,000 in donations and a $6,000 grant that evaporated with the collapse of the IHC. Small change to you? Lopez says, “It’s been absolute devastation, the fallout from this.” Without the IHC’s nonprofit status, Lopez’s Center can’t qualify for the insurance it needs to expand its farmworker tutoring programs to migrant labor camps in the Watsonville, Calif. area. It also loses a grant that would have supported a videographer to film its story in Mexico. Lacking a 501(c)(3), Lopez’s Center is trying to raise more money but cannot offer donors a charitable tax deduction.

The IHC collapse didn’t cost the nonprofit sector tens of millions of dollars, but it cost some small, volunteer-oriented groups like this much of their lifeblood.—Rick Cohen