Just one day after laying off dozens of employees and shuttering four clinics, officials from Golden Gate Community Health issued an ultimatum — give us money, or else we’re gone for good.
“After thoroughly researching and examining our options, we made the difficult decision to close our health centers,” said Therese Wilson, GGCH’s president and CEO in a news release Tuesday. “The Board of Trustees will work to obtain financing in the hopes of reopening as soon as possible.”
With $800,000, board members said GGCH could immediately reopen for several more weeks. With an extra $1.2 million, board members said the organization could reopen for the long term.
But clinic officials are not optimistic.
“I think that chance is extremely slim, because we’ve been in trouble for months,” said Andrea Porter, GGCH’s hired attorney. “We’ve gone out to the community and the money is just not there.” If last-ditch fundraising efforts don’t work, the organization expects to file Chapter 11 bankruptcy in a matter of weeks, Porter said.
The appeal for funds and the clinic closures come after the organization lost the right to use the Planned Parenthood name in August, and after many major donors began migrating to nearby affiliates in support of expanding into GGCH’s territories.
Under former CEO Dian Harrison, the organization lost $2.8 million during the 2008-2009 tax year and had not broken even since 2005-2006.
After the disaffiliation, the organization renamed itself Golden Gate Community Health and hired forensic accountants to examine its books. They found evidence of financial mismanagement, Wilson said. In response, the organization changed its accounting practices and reduced operating costs by 33 percent, or $600,000 per month. Then it launched a campaign to raise $1.5 million by the end of 2010.
But donations to GGCH continued to drop, while contributions to nearby Planned Parenthood affiliates nearly doubled.
“We normally raise a couple million dollars a year in private donations,” said Heather Estes, president of Planned Parenthood Shasta Pacific. “Since the disaffiliation, we’ve had a significant increase in fundraising. Year to date, since July, it’s about $1.3 million. Roughly double.”
The donations allowed the affiliates to expand more quickly into GGCH service areas.
A Planned Parenthood Shasta Pacific clinic opened Monday in Mill Valley, joining other locations in Concord, San Francisco, Marin, Mendocino and Sonoma counties. Planned Parenthood Mar Monte, based in San Jose, took over Alameda and San Mateo counties.
Despite the diminished support, Porter said GGCH had begun to break even on day-to-day operating expenses. But the organization still owes about $2 million to vendors and about $12 million in mortgage payments on clinic properties in Oakland, San Rafael, San Mateo and San Francisco. Just a week ago, the organization hosted an open house for donors.
“I think they were doing their best to reach out to their donors,” Estes said. “I would suspect that many donors simply wanted to move on.”
Delays in state patient reimbursements furthered the financial problems. By the end of February, officials realized they did not have enough money to continue paying staff into the month of March.