Millions In Debt, International Medical Charity Suspends Operations

International Aid, a relief charity in Spring Lake, Mich., is suspending its operations after nearly three decades of work helping poor people abroad.

Board members of the Christian charity voted unanimously last week to close the organization, a move that has affected 40 staff members in the United States and 32 in Honduras and the Philippines. Financial problems had caused the organization to lay off roughly 40 people in 2008.

Gordon Loux, International Aid’s acting chief executive, said the charity had accumulated more than $4-million in debt over the past three years, in part because of investments in new water programs and the lack of any big natural disaster that attracted significant donations.

The recession and the particularly tough economic climate in West Michigan made that debt burden impossible to overcome, he said.

“There is no one thing we can point to and say, This is the cause of why we’re in this financial crisis,” said Mr. Loux.

In the fiscal year ending in June 2008, the charity received about $5.5-million in cash and $68-million in products, according to its most recent informational tax return.

The charity is now in touch with other organizations to see if they might acquire some or all of its programs. Mr. Loux said he has discussed the possibility with at least five nonprofit groups that do similar work.

“Our goal has to be helping the children and the poor of the world, whether under the name of International Aid or some other organization,” he said.

Five employees of International Aid are still receiving salaries — and a few others will be brought back temporarily — to help deliver supplies already committed to the charity, Mr. Loux said. The employees are also examining appeal letters to see how the charity might handle money contributed to specific funds.

“My goal is, at the end of the day, we will have met all the expectations of our donors and their donor intent and we have paid off all the financial obligations we have incurred,” said Mr. Loux.

Officials of other relief charities said the Michigan group had strong programs that filled several important niches, including the refurbishment of medical supplies.

“They provided much-needed services to the international relief community by being one of the few organizations in the U.S. that dealt in the provision of those kinds of materials,” said Jim Prosser, spokesman for Direct Relief International, which had worked with International Aid in the past.

His charity, in Santa Barbara, Calif., has been approached by International Aid but has not decided whether it might take over any of the charity’s programs, Mr. Prosser said.

Mr. Loux was brought in to lead International Aid in April, following the resignation of Myles Fish, the organization’s long-time chief executive. An adviser to donors and founder of the Gordon Loux Company, Mr. Loux said his predecessor’s departure was a “mutual decision” by the former chief executive and charity trustees, but declined to provide details, citing his recent arrival at the organization.

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The Chronicle is keeping track of charities that close or merge during the recession. If you have a tip, send a message to editor@philanthropy.com