East Biloxi nonprofit selling houses to raise money for mission

Sun Herald (Biloxi, MS), 2014-08-27


Aug. 27 -- BILOXI -- A nonprofit agency in East Biloxi is developing real estate in other communities to raise money as post-Hurricane Katrina grant funding dries up, the agency's response to a critical Secretary of State's report says.

Hope Community Development Agency sent a 27-page response Monday to Secretary of State Delbert Hosemann , including copies of receipts and other records requested, Hope Executive Director Bill Stallworth said. Stallworth gave the Sun Herald a copy of Hope's response. He said Biloxi attorney Ron Peresich is advising Hope CDA on the secretary of state's examination of the agency.

"We made the deadline," Stallworth said Tuesday. "We answered, we think, everything to their satisfaction."

The state findings, obtained by the newspaper, concluded Hope appears to be renovating and selling homes for a profit rather than operating as a charity.

Hope's response says it would be "fiscally irresponsible" of the agency to ignore opportunities for raising money, especially because donations are down.

Any revenue gained from sales, Hope says, goes to

ward the agency's charitable mission.

The secretary of state also said Hope has strayed from its intended purpose, but the agency says its community-development activities have been noted in annual filings with Hosemann's office. Hope says it supports distribution of book bags, summer camps for children, youth internships and Young Men of Color, a mentoring program funded by the W.K. Kellogg Foundation .

Hope also provided receipts for meals, travel and other expenses the secretary of state requested, but noted some documentation could not be located. In those cases, the response said, the purpose of the expense was listed.

Hope said it has allowed other nonprofits to use office space rent-free, a practice the secretary of state criticized. Hope rents its offices on Division Street in East Biloxi .

Hope disagreed that its board provides too little oversight, another question the secretary of state raised. As an example, the examination cited Hope's move out of East Biloxi to sell houses in other areas for profit and lines of credit established to cover expenses.

The majority of Hope grant funding has gone to build or renovate homes for low-income residents. When homes are built, Hope says, the lines of credit provide partial financing until construction is complete and buyers secure mortgages.

Hope also explained how it tracks income from various funding sources.

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