The NAACP is cutting about 40 percent of the staff positions at its Baltimore headquarters and plans to temporarily close its seven regional offices to cover three years of budget shortfalls.
Dennis C. Hayes, the NAACP's interim president and chief executive officer, said yesterday that the organization's 119-member staff would be reduced to 70 through layoffs and attrition.
Hayes, who would not say how many people would be laid off, called the cuts necessary to prevent the organization from dipping further into its diminishing reserves.
"We are right-sizing our organization to meet present circumstances," Hayes, who is also the NAACP's general counsel, said in an interview yesterday.
"We had the unexpected departure of our CEO at a time when we were already without a chief development officer. So, understandably, we have to regenerate our revenue machine, our fundraising machine, to get us to where we should have been."
For the past three years, Hayes said, the NAACP has used about $10 million in reserve funds to cover shortfalls. He would not say how much is left in the rainy-day fund.
There is no single reason for the budget troubles, he said.
"Gas is more expensive, the cost of living is higher, people are not giving as much as they used to," Hayes said. "And membership, we always need more members. ... Our impression is we can improve and enhance the way we do things."
The reductions are being made this month at a crossroads for the National Association for the Advancement of Colored People, a 98-year-old civil rights organization struggling to build membership and remain relevant.
In March, Bruce S. Gordon, resigned abruptly as the NAACP's president and CEO after 19 months at the helm.
At the time, the NAACP was in the midst of major membership drive and a fundraising effort to move the organization's headquarters from Northwest Baltimore to the nation's capital.
Last month, the NAACP leadership announced that it would have to hold off on the $20 million relocation because of weak fundraising and an inability to secure a buyer for its property on Mount Hope Drive in Baltimore.
Some board members have blamed the current fiscal problems - and the NAACP's postponed move to Washington - on Gordon's tenure, saying the retired Verizon executive came to the NAACP with a promise to jump-start fundraising but failed to meet projections.
Yesterday, Gordon responded to critics, saying in an interview with The Sun that the organization was struggling financially before he became CEO.
"Annual revenues had been on the decline for five or six years, and its ability to balance its budget had been an issue for three to four years," he said.
Gordon said he began a capital campaign - lining up several corporate donors - with the goal of raising $100 million by 2009, the NAACP's centennial.
"There has never been a capital campaign, there were no real estate consultants, there was no incentive package to move to Washington until I arrived at the NAACP," he said. "I can only tell you that I believe from a fundraising standpoint that we were developing incredible momentum."
In recent months, Gordon has said that he left the NAACP because he and its 64-member board had ideological differences.
The board favored traditional civil rights advocacy, and he wanted more programs devoted to social justice, Gordon said.
Yesterday, Gordon hinted that he and the board also differed on how to raise money.
"The board is not as effective as it could be by a long stretch in terms of being a fundraising arm for the organization," he said. "And there are some who think it is not their responsibility."
Nevertheless, Gordon said, the financial problems are cyclical and will not hurt the image or the purpose of the NAACP.
"I'm a believer that the NAACP is an important institution, and there needs to be a healthy NAACP," he said. "Anything that sets it back is a terrible concern, a real concern to me."
NAACP Chairman Julian Bond bristled yesterday at Gordon's comments, saying that when previous presidents departed, they made a point of not speaking negatively of the organization.
"That has hurt our fundraising tremendously," Bond said. "What he said when he left really poisoned the well that we drink from."
This is not the first time in recent history that the NAACP has had budget troubles.
In 2005, the NAACP used reserve funds to cover a $4.7 million budget shortfall and asked a dozen employees at its Baltimore headquarters to take lower-paying positions.
Before that, the NAACP had several million dollars in cash reserves and had recovered from a fiscal crisis in the mid-1990s, when it was about $3.2 million in the red and was reeling from accusations of financial mismanagement.
Hayes said the organization hopes to streamline its activities, depending more on the Internet and other technology to be more efficient.
He said board members have begun a campaign to raise $1 million by the end of the year and that the organization's programs and activities to fight discrimination would remain intact.
Nevertheless, some close to the NAACP expressed concern over the newest financial troubles.
A former employee, who asked to remain anonymous for fear of jeopardizing his relationship with the NAACP, characterized the organization's financial status as "serious trouble."
"You have corporations hesitant to invest in an organization that appears to be in disarray and financially challenged," the source said.
Worse, the source said, is the elimination of the regional offices, which provide a vital link between the organization's more than 2,200 grassroots branches and the headquarters in Baltimore.
"When you look at the NAACP, what makes it different ... is our branches, our tentacles into the community," the source said. "The strength of the organization is at the state and local level. When you eliminate those offices, you eliminate the capacity to strengthen the strongest part of the organization."
The cutbacks have hurt morale at headquarters, the source said, and some staffers have questioned why the organization is planning numerous expensive receptions during its annual convention, scheduled for next month in Detroit.
Hayes said the convention plans have been scaled back to cut costs. He said the regional offices would be eliminated in name only and that their services will continue to be provided by the Baltimore headquarters.
"We have a structure that is somewhat archaic, and our satellite offices have little technology as it is," he said. "In order to be good stewards of our money, we want to modernize. ... Overall, our employees are very committed to our mission."