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Spiraling Down

Phil Grosse
Janet Orsi

Stormy waters: Polly Klaas Foundation Vice President Phil Grosse advises people not to discount the agency's tenacity. But detractors contend that the Petaluma-based organization has squandered its funds and is floundering under a self-serving board of directors.

Polly Klaas Foundation riddled with fiscal problems

By Paula Harris

Wracked by infighting and caught in dire fiscal straits, the Petaluma-based Polly Klaas Foundation is facing its biggest challenge since the ill-fated search two and a half years ago that spawned the high-profile child-find agency. The problems come even as the foundation helps in the search for missing Mendocino County teen Raina Shirley and the murder trial of ex-state parolee Richard Allen Davis, accused of the 1993 homicide of Polly Klaas, is set to begin in San Jose.

In recent weeks, executive director Gary Kinley has resigned with no explanation, and the beleaguered organization--which Marc Klaas, father of slain schoolgirl Polly Klaas, once vowed would be his daughter's legacy--has moved to a smaller, less costly office in downtown Petaluma. Klaas, who now fronts a rival child-find agency of his own, the Sausalito-based Marc Klaas Foundation for Children, is in direct competition for the slim grant dollars that once found their way to the Polly Klaas Foundation.

"We're not at death's door, but we're aware we've got to learn how to fundraise," acknowledges Polly Klaas Foundation Vice President Phil Grosse.

He confides that the non-profit has "less than $50,000" in the bank, down from a one-time high of more than $504,000. In addition, the $250,000 annual operating budget recently has been slashed to $83,000 as financial support continues to slip.

What became of all the donations showered on the foundation by the community after it first sprang up in response to the 1993 kidnap and murder of the westside Petaluma 12-year-old?

"To say the money was frittered away is the harshest possible interpretation," muses Grosse during an interview at the organization's downsized office on Western Avenue in Petaluma.

"Salaries, rent, and learning ate up a lot--and bills for the search for Polly, people at the time saying, 'take what you need, we'll bill you later.'"

Funds also were gobbled up in auditing, insurance, and trademark registration expenses, he adds. "Then there was $100,000 just for postage for Polly, and phone bills of $20,000 per month."

"There's been a period of growing pains as we've been struggling to find our true mission," he says.

But detractors say the problem isn't just the high cost of the ill-fated search. Indeed, in 1994, the foundation under interim executive director Brad Morrison spent up to $1,000 a day, oftentimes on seemingly frivolous business expenses. A rule of thumb for non-profts dictates that no more than 25 percent of an agency's budget should be spent on salaries and other operating expenses, with the lion's share going to services. Until recently, the Polly Klaas Foundation spent 44 percent of its budget on salaries and rent alone. "They were far too extravagant for their time and place as a new business," concludes Liz Ecke, a former Polly Klaas Foundation and Marc Klaas Foundation volunteer.

She blasts the board of directors at the Polly Klaas Foundation for renting the pricey office space on Mc--Dowell Boulevard after she'd found cheaper alternatives. "Everyone just thought it was too beneath them to look at any of these, so they ended up paying $3,600 a month for the Mc-Dowell space," she explains. "That was way too high on the hog for them."

By comparison, the new headquarters cost $417 per month.

But critics cite runaway spending, including the hiring of high-priced consultants and lawyers; the purchase of first-class airplane tickets, hotel accommodations, and limousines; and exceedingly high phone bills.

Resources were further drained when the board hired an executive director and a development director, with a combined salary of $80,000 per year. Their efforts resulted in few of the promised school and community education programs.

During its infancy, the foundation seemed to take on a life of its own, attracting both "masses and moolah," Ecke adds. "The money came because everyone fell in love with Polly, and I think the foundation represented this virtual spirit of goodness or something," she recalls. "It was the next best thing to touching God."

But not everyone was drawn for the same reasons. As one former longtime volunteer, who asked not to be named, bluntly puts it: "It attracted gobs of weirdos. Most board members were unemployed and saw it as a career steppingstone. Once they saw the publicity, they just wanted to latch onto it. It became so ego-oriented.

"It was never about children for those guys."

Lynn Mills, another former volunteer, concurs. "All the board members got into it with their minds and their hearts in the right place, but then it became, like, 'Gee, wouldn't this look good on my résumé.' They were all trying to make a name for themselves. It just got out of hand and people lost their focus."

But board members defend their actions. "The pace was moving so fast, so quick, you just didn't know what to do all the time," recalls former board member Adele Calkin. "The board learned a lot."

Gary Judd, newly elected foundation president, says the board always had the best intentions. "We had a Cadillac operation to service a nation," he says. "The biggest expenses were the res-ponse element and the 800-number. The office space was larger than we needed, but hindsight is always 20-20.

"The heart and efforts shown by the volunteers is an international legacy to the town of Peta-luma, and a tribute to the impact the community made on a national issue," he adds.

During a recent shakeup, two board positions were eliminated and four longtime volunteers, including a Petaluma child-care center operator and a Sonoma State University student, were appointed as board members. Former board president Gary French is now treasurer, and Eve Nichol, Polly's mother, also remains. One position is open. Volunteers take calls from families or law enforcement personnel, then fill out missing-child reports and start a case file. The foundation handled 563 cases in 1994 and 699 in 1995, and has handled 80 so far this year.

"The Polly Klaas Foundation is in a place it should be right now, considering what it's able to accomplish and where it's able to go," says Marc Klaas, who was ousted from that foundation's board in December 1994 after a bitter struggle over spending policies. "They have Polly's name, but we have Polly's work we're doing," he adds.

Former volunteer Lynn Mills predicts the Polly Klaas Foundation soon "will fold," once it runs out of money.

Grosse, a blonde and bespectacled man whose tall, jean-clad frame dominates the tiny headquarters, disagrees. "We're confident we're going to be here for a long time," he says. "We're starting to learn how to fundraise and are determined to provide every bit of service and more at the cheapest possible cost.

And when the volunteers at the Polly Klaas Foundation get determined to do something--watch out!"

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From the March 28-April 3, 1996 issue of the Sonoma Independent

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