After Losing a Key Grant, a Social-Service Charity Winds Down Carefully

Family Services of Metro Orlando started diversifying its operations and sources of money a couple of years ago so it wouldn’t have to rely so heavily on the single state contract that paid for the bulk of its work coordinating child-welfare services in Central Florida.

It went from zero to 600 donors and, among other moves, took over a community-service center that provided food, clothing, and cash assistance to needy families. But the group was largely occupied with working on the state contract, and the last couple years have been rough ones for any charity trying to expand.

In October, Family Services lost the state contract. It closed in March.

“Losing that contract was a total shock, and we were just not yet at the point of being a stronger, independent organization that could survive that kind of jolt,” says Gregory J. Kurth, the group’s chief executive.

The organization was also not ready to close its doors immediately following word about the lost grant. Mr. Kurth says it needed time to transfer some of its non-state-supported programs, especially those that served families with adopted kids, and to carry out all the administrative duties of dissolving a charity. It still needed to complete the year’s informational tax return, conduct an audit, and help the workers who lost jobs find other positions and understand severance and benefit issues.

Family Services worked out a plan with the state to help pay for closing costs—which, including additional insurance for trustees, rose to as much as $400,000. The group may end up with extra money, though, depending on the outcome of the sale of the building it owns that housed the community-service center. If that happens, Mr. Kurth says, Family Services will set up an endowment, and some board members will continue in their roles for a few years to oversee its disbursement.

“You can’t just turn out the lights and it’s over,” Mr. Kurth says. “There are a lot of financial obligations, legal responsibilities, liability issues, risk management, and other things that need to be taken care of. And all that is in addition to dealing with making sure the people you serve will be taken care of and that your employees are OK.”