Broken Arrow's Gatesway Foundation Faces Financial Trouble
BROKEN ARROW, Oklahoma - Allegations of financial mismanagement involving The Gatesway Foundation are causing some to question the future of the long-standing non-profit.
Internal documents obtained by News On 6 show the Broken Arrow non-profit is millions of dollars in debt and clients are being cut in the hopes of getting Gatesway back in the black.
For decades, The Gatesway Balloon Festival lit up the sky across Green Country, bringing tens of thousands of people together to raise money for the Broken Arrow non-profit.
Founded in 1963, Gatesway Foundation helps care for adults with intellectual disabilities. People like Lester Carter.
"He's going to be 71 next week," said Lester’s sister Connie.
Through state funding and private donations, Gatesway provides things like job training, housing, and social skills necessary to help them become a vital part of their community.
But in recent years, Gatesway says statewide budget cuts hit it hard, putting the foundation into serious financial trouble, forcing the board to make tough decisions.
"It was such an amazing agency. Mrs. Gates built it from the ground up and worked so hard," said Connie.
She said he loved being a part of the Gatesway community for half a century.
But in the fall of 2017, Lester received an unexpected letter in the mail.
"They wanted us to find another agency," Connie said.
Internal documents obtained by News On 6 show the Gatesway Board of Trustees highlighted 16 out of its 250 clients it deemed unprofitable, forcing them to find other care.
One of them was Lester.
News On 6’s Meagan Farley: “What do you miss about it?
Lester: “Living there a long time ago.
Farley: “Had a good time? Nice people?
The urgency to stop spending more per client than the foundation gets from state funding and other revenue sources is evident in an email News On 6 obtained from April of this year.
It shows board president Greg Arend put a minimum profit margin of 20 percent on many of its nearly 250 clients moving forward.
He prioritized getting rid of some vehicles, saying Gatesway was down to only a few thousand dollars in the bank.
Just days earlier, Central Bank of Oklahoma sent Gatesway a Past Due notice, showing a loan debt of almost $2 million.
John Feary is a board member who said Arend is doing everything in his power to get the foundation out of the red.
"He's only been the president of the board since February. He's been helping us dig out of this hole for a year. Had it not been for Greg this organization probably would have shut the doors last year sometime," Feary said.
Previous board minutes blame Gatesway's financial trouble partly on "decisions made by previous management that were proven to be flawed in thinking and execution."
"Any decisions or things that were made that got the organization into the situation, they're all man-made decisions."
News On 6 asked Feary about whether Gatesway should've done more regarding the spending.
"The current board which is relatively young is in cleanup mode. So, we're not going to sit here and cast stones and blame people," Feary said.
The people who provided the documents to News On 6 say they just want to get Gatesway back on better financial footing, but Feary said that is only making it harder to help those in need.
"They're not helping the organization by airing a bunch of dirty laundry that leaves all this room for speculation," Feary said.
Gatesway announced last month it would be selling some of its assets to try to get out from underneath its millions of dollars of debt.
After all, 50 years ago Gatesway changed Lester's life and gave him an option when many people in similar situations were left with hardly any.
"This angel Mrs. Gates started Gatesway and she just felt so blessed that he got to go there,” Connie said.
The son of Gatesway founder Helen Gates released a statement saying in part, "I am confident the current board of trustees and staff have been and will continue to make prudent decisions to meet my mother's intended mission".