24
6 2000
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F a llin g
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We'd like to see
the queer community
come back and volunteer
and support us with donations
so we can continue
to do this good work.
—
Juav Watson
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Nonprofit filially collapses,
but services remain intact
by Jonathan Kipp
Photos by Marty Davis
m®
et it be known that Phoenix Rising
Foundation no longer exists. By vote
of the hoard of directors, the troubled
entity has been dissolved. But like the
mythical bird that inspired its name,
its legacy will last forever.
The nonprofit, once a beacon of hope and
help for sexual minorities— particularly low-
income folks in need of mental health services
and youth desperate for understanding and sup
port— was formed in 1979. Its mission was to
promote the common interests and well-being
of lesbian, gay, bisexual and transgendered peo
ple through mental health, education and
other support services. In addition to providing
counseling and programs for teens, the organi
zation reached out to senior citizens.
Phoenix Risings money troubles have been
widely reported in recent years. But the sting
from this announcement is no less painful.
“Personally, Pm sad to see the institution
gone," says M atthew Nelson, Equity Founda
tion executive director and a former Phoenix
Rising board of directors member. “Every time
we lose an organization, there is a piece o f our
identity that gets lost.”
Still, the news about the change is not all
bad. The organization, so dear to Portland gay
leaders and the community in general, might be
gone, but the services available for sexual
minorities remain intact and possibly are
stronger than ever.
What happened?
s managed care systems infiltrated the
mental and general health care business,
small service providers like Phoenix Rising
had an increasingly difficult time surviving.
T he nonprofit was forced to sacrifice full
A
autonomy and accept
help from a larger and
more stable organiza
tion: Network Behav
ioral HealthCare Inc.
T h e infrastructure
and overhead required
to support a managed care therapy program were
too complicated, says Judy Watson, who served
as Phoenix Risings executive director during its
final months. She also works as vice president in
charge of operations at Network.
A t the center o f the slow collapse was an
outdated sliding-scale fee schedule that
Phoenix Rising made available to its low-
income clients. Although some private prac
*# f
tice mental health practitioners still offer a
sliding scale to clients, most clinics no longer
can afford to do that.
Also contributing to Phoenix Risings finan
cial woes was the public’s lack of confidence in
its management, which resulted in dwindling
donor support. The organization’s fall from grace
came when former executive director Allanya
Guenther stumbled upon what she called “a
financial malfeasance.”
In July 1998, Phoenix Rising owed
$125,000 to the Internal Revenue
Service and others, and an additional
$40,000 was unaccounted for. The
chief financial officer was suspected
of embezzlement, and police were
alerted.
A full investigation followed.
Guenther and the board of directors
were exonerated of any wrongdoing.
But Dale Hunter was indicted
for white-collar crimes committed
at Phoenix Rising, according to a
spokesperson from the Portland
Police Bureau’s fraud division. He
has an outstanding
warrant for his arrest,
but authorities have
"Every time we lose
been unable to locate
an organization, there is a piece him.
T he embezzlement
of our identity that gets lost.
and financial misman
agement weren’t the
Matthew Nelson
only problems, howev
er. The foundation was averaging a $13,000-a-
month deficit during fiscal year 1999.
T h e average fee collected— about $51 —
didn’t come close to covering the $ 9 0 cost of
providing those services. “Phoenix Rising sim
ply cannot generate the cost o f doing busi
ness,” G uenther said in the Jan. 22, 1999, edi
tion o f Ju st O ut.
Som e community members felt betrayed
because o f the organization’s predicament,
while others were angered about the board’s
delay in notifying the public about the
mounting debts and financial misconduct. A
merger followed, and the services o f Phoenix
Rising were soon under the umbrella o f N et
work Behavioral H ealthCare Inc.
Initially, the network handled billing and
financial management. Phoenix Rising loyalists
insisted the organization would survive as they
fought for stabilization and for donors to return
with contributions.
Despite the assistance, the foundation still con
tinued to lose money. The fees that low-income
clients could afford did not cover staff expenses.
In addition, Phoenix Rising’s clinicians
weren’t trained to handle the complicated billing
paperwork required of managed care health orga
nizations. As a result, by November 1999 all
counseling services were folded into Network
and renamed Helios Counseling Services.
Even with the support o f N etwork,
Phoenix Rising continued to face a projected
deficit o f $ 4 0 ,0 0 0 during fiscal year 2001. “It
became apparent that costs associated with
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