East Palo Alto nonprofit admits oversight failures after investigation into spending of donated funds
By CBS Bay Area
The Ecumenical Hunger Program opened its doors more than 50 years ago in East Palo Alto, feeding and providing resources to the community.
But CBS News Bay Area investigated last month, uncovering public tax documents from 2023 to 2024 that show the nonprofit used more than donated funds for family members of the organization, as well as its employees and former employees.
We learned that the grant was a part of a pandemic assistance program, the Family Sustainability Program, that spent more than $1.2 million through grants.
Filings show part of the money, more than $331,000, was spent for things like mortgages, rent, tuition and car payments for people directly linked to the organization.
The day after CBS News Bay Area aired the story last month, officials with the program sent a letter, seen in full further down in this story, to their donors and stakeholders explaining that, due to the pandemic, they used unrestricted emergency grants to help the community.
CBS News Bay Area asked the nonprofit organization multiple times if they’d sit down for an interview, but a spokesperson sent the letter in response.
“If the organization is saying this is unrestricted funding, I’d be curious what the funding sources were. What the donors expectations were for those funds,” Brandon Philips, director of public policy programs at the McGeorge School of Law, told CBS News Bay Area. Philips formerly taught at Cal State East Bay, specializing in nonprofit oversight.
“Oftentimes, unrestricted funds typically come from private donors. But they do give funding in the expectation that it would be allocated in specific ways or go to specific services that they believe the organization is carrying out. So when you start mixing the business of the organization with family members, it starts to muddy the waters,” he added. “It creates suspicion and distrust with the community, with clients that are being served with funders.”
So, we sifted through pages of tax documents showing an itemized list of the more than one million dollars in grant spending as a part of the Family Sustainability Program. There were itemized costs, like “personal dental expenses” and “personal overdue utilities.”
For the purpose of the investigation, CBS News Bay Area focused on the specific itemized names, divided into “Payment of Personal Expenses” and more categorized costs that distinguish payments for those linked to the nonprofit.
We calculated the generically labeled costs of “payment of personal expenses” and averaged the grants to about $3,500. The other group, the more specific categorization, averaged more than $9,700.
Some of the higher spending included about $47,000 for the executive director’s sister and husband’s personal debts. Additionally, the nonprofit spent more than $46,000 for an employee’s personal expenses and a year of rent.
Read the program’s full letter below:
“For half a century, the Ecumenical Hunger Program (EHP) has been deeply committed to serving the East Palo Alto community and providing critical assistance to individuals and families in need. We are aware of the recent media coverage regarding our tax filings and the questions it may have raised. We want to address the concerns of our donors, partners, and community with complete clarity and transparency.
In the summer of 2021, when many, many Americans were suffering from the effects of the COVID-19 pandemic, EHP observed that a large number of its own community members were negatively affected by the pandemic shutdown and were in dire financial need. EHP worked quickly to develop and introduce its Family Sustainability Program. The proposed $2 million program was designed as a 2-year, Safety-Net Resource Distribution with the intent to assist as many people as possible and as quickly as possible. The program was to provide individualized resource distribution in many areas, including but not limited to housing, food resources for those with special needs, prescriptions, utilities, gasoline, vehicle repairs, critical home repairs, critical medical supplies not covered by insurance, essential school supplies for children, including technology, and more. A primary program goal was to target local families and individuals in need of critical emergency support while the country rebounded from the effects of COVID-19. Program funding would come from unrestricted donations received by EHP.
The Family Sustainability Program ultimately distributed $1,223,373 to 252 local individuals and families between 2022 and 2024. Emergency grants provided to applicants were used towards personal expenses, mortgages, rent, utilities, vehicle loans, traffic tickets, car repairs, medical bills, dental costs, past-due credit card balances, phone bills, unpaid debt, and numerous other items. Individuals and families seeking financial grants from EHP were required to submit an application. Program applicants included community members, but also included EHP employees and some family members of our Executive Director, Lesia Preston. All applications were subject to the same program standards, and all applications from Lesia’s family members were reviewed/approved by an independent Board member. Neither Lesia, nor any of her family members was involved in the decision-making process relating to grants issued to Lesia’s family members.
In 2024, the EHP Board reviewed its Family Sustainability Program. Results were not dissimilar to other Covid-era financial assistance programs (i.e., PPP, SBA EIDL, etc.) in this country. In their haste to quickly provide relief, programs experienced weakness in oversight and internal controls. The EHP Board decided not to renew the Family Sustainability Program and instead focus EHP resources on the foundational programs traditionally offered by EHP (i.e., food resources, clothing, household essentials, holiday distributions, back-to-school distributions, etc.). EHP’s Family Sustainability Program weaknesses are reflected in the organization’s financial statements and tax filings.
As an organization dedicated to service, EHP is always learning and striving to improve our governance. We acknowledge that the urgency of the pandemic led us to move as swiftly as possible to prevent our community members from falling through the cracks. However, in retrospect, more research should have been done before implementing the Family Sustainability Program, and more parameters should have been put in place before implementing this program.
We take our fiduciary responsibilities seriously and are using this moment to strengthen our internal controls and effectiveness. We remain fully dedicated to our 50-year mission of fighting hunger and poverty, and we are deeply grateful for the community’s continued trust and support.
EHP helps everyone!”
CBS News Bay Area reached out to all board members for comment, but a different spokesperson responded with this statement below:
“When East Palo Alto became one of the communities most severely impacted by the COVID-19 pandemic, EHP responded quickly to help residents facing extraordinary financial hardship.
The emergency relief fund was established to provide assistance during an unprecedented crisis. Funding decisions were made through an independent review process that EHP believed was fair, objective, and focused on the needs of applicants, including eligible employees of the organization.
The primary consideration was demonstrated financial need, with particular attention given to helping individuals and families remain in their homes by supporting rent and mortgage obligations.
We remain proud of the work that was accomplished during one of the most challenging moments in our community’s history. The fund helped provide critical assistance to residents when it was needed most, and we stand behind the process that guided those decisions.
Should East Palo Alto ever face a similar crisis again, EHP would not hesitate to work with our community and partners to establish another emergency relief effort to support those in need.”
East Palo Alto Mayor Webster Lincoln also sent a note to stakeholders and donors, stating that he fully supports the nonprofit as a cornerstone of the community:
“For fifty years, the Ecumenical Hunger Program has been a cornerstone of the safety net in East Palo Alto. Long before I was Mayor, EHP was the place our neighbors turned to when things got hard, for food, for clothing, for furniture, for a hand up when there was nowhere else to turn. That track record, and the thousands of families who can point to a moment EHP helped them get through, matters, and it shouldn’t be lost in a single news cycle. I’ve seen this week’s reporting on EHP’s tax filings, and I understand why it raised questions in our community. I’ve also seen EHP’s response to its community, explaining that the expenditures in question were part of a COVID-era Family Sustainability Program, a program built quickly, under real pressure, to get emergency help to local families during the worst of the pandemic. EHP’s Board has acknowledged that program’s design and oversight fell short of what it should have been, has discontinued it, and has said it is continuing to review the matter. I take that acknowledgment, and that ongoing review, seriously, and I expect EHP to follow through on it with full transparency to its donors and this community.
What I don’t want to see is EHP’s full history, and the people it serves every day, get erased by questions about one discontinued program. EHP’s core work, the work that has fed and clothed East Palo Alto families for half a century, continues, and our community continues to need it. Especially right now, with so many of our residents facing real economic pressure and real fear in this political moment, an organization like EHP is not a luxury, it’s essential infrastructure for
this city. I support EHP’s stated commitment to strengthening its internal controls and governance. I also want to be clear: accountability and support are not in conflict. Holding EHP to a high standard and continuing to stand behind its mission are both things East Palo Alto can do at the same time, and both are the right thing to do.
EHP has shown up for this city for fifty years. I’m not going to stop showing up for them now.”
For Philips, he said nonprofits need to be held accountable and there should be more oversight.
“We do need more oversight, to prevent these types of things from happening. The need right now in government is so large for things that are having to be picked up by the state level that was previously handled by the federal level,” Philips said.
It’s a fixture of East Palo Alto for half a century, vowing to do better moving forward.
