Texas Chapter Sues Habitat International in Disputes Over Affiliates’ Autonomy

The San Antonio branch of Habitat for Humanity International has sued the housing organization, alleging that a new agreement that all chapters are being asked to sign undercuts local control and could reduce the number of houses it builds locally.

Habitat for Humanity of San Antonio contends that the agreement gives the parent organization control over the chapter’s assets and the authority to change its policies and increase its fees.

The chapter is seeking a ruling that would allow it to keep the Habitat name without signing the agreement.

The Texas group is one of 400 chapters that have not signed the document, according to officials of Habitat for Humanity International, in Americus, Ga.

Approximately 1,200 affiliates have signed the agreement or applied for a short-term extension, which in most cases runs until January 31.

Officials of the San Antonio chapter say the organization’s fund raising could be hurt under the new agreement, because they would no longer be able to assure donors that all of their contributions will go to help families in San Antonio.

They say they would also be required to provide a bigger share of their fund-raising dollars to Habitat for Humanity International.

“We’re here to serve families in San Antonio, and we feel that we have the best information to determine policies and procedures and how we can do our work locally,” said Stephanie Wiese, vice president of development and communications at the San Antonio group, which is the oldest Habitat for Humanity affiliate. “What works best in San Antonio might be entirely different from what works best in New York or Michigan.”

Raising Money

Jonathan Reckford, chief executive officer of Habitat for Humanity International, said that the notion that chapters could lose control of their money or policies was based on a false reading of the agreement.

“We have no intent of taking assets away from affiliates,” he said. “We’ve for years been providing additional assets to affiliates, and in the past two years have tripled our direct financial support of U.S. affiliates.”

Local chapters receive corporate and government grants, and other benefits, from the headquarters office.

In 2007, affiliates were awarded about $140-million, compared with $56-million in cash and product donations in 2005.

Mr. Reckford, who has led the organization since 2005, said that officials at the headquarters office have been contacting affiliates that have not yet signed the agreement. He said that he “fully expects” the remaining charities to sign.

The document was drawn up at the request of the group’s Board of Directors and is needed to ensure the quality and effectiveness of all affiliates and protect the charity’s trademark, Mr. Reckford said.

“The work of Habitat for Humanity is very complex,” he said. “A local affiliate has to raise funds, be a developer, a construction company, and a mortgage lender. We want to make sure that we have the highest possible standards.”

Local chapters are free to end their relationship with Habitat International and take their assets with them if they don’t want to sign the agreement, he said. “We have made that clear.”

Founder’s Concerns

Internal dissent has plagued Habitat for Humanity International since January 2005, when the Board of Directors fired Millard Fuller, the organization’s founder, after allegations that he’d engaged in inappropriate contact with a female employee. Mr. Fuller denied any wrongdoing.

Mr. Fuller has since started another charity that raises money for Habitat affiliates and other housing groups. He said Habitat for Humanity International’s new leadership has been too preoccupied with protecting the Habitat name.

“They’re interested in promoting their brand,” he said. “Helping poor people is secondary.”

The majority of affiliates, meanwhile, have raised no objection to the new agreement. Like Mr. Reckford, they see it as necessary to ensure good governance, and don’t believe it undermines autonomy.

“We feel it provides for minimum standards of performance,” said Phillip Kilbridge, executive director of Habitat for Humanity San Francisco.

He also said that he was pleased with the process that Habitat for Humanity International went through in formulating the agreement. “Our affiliate provided input multiple times, and we felt like our feedback was listened to,” he said.