L.A. nonprofit with ties to Garcetti fires CEO amid financial upheaval

Over the past decade, the Hollywood-based nonprofit organization known as the Youth Policy Institute has drawn accolades from an array of politicians — and tens of millions of dollars to carry out federal education and anti-poverty initiatives.

The group played an instrumental role in 2014 in designating part of Los Angeles as a federal Promise Zone, an area set up to provide some of the city’s neediest families with concentrated services and support. Three years later, Mayor Eric Garcetti heralded the group’s success in securing $30 million in federal funding for tutors, counseling and other services for students in Hollywood and Pico-Union.

But in recent months, the nonprofit’s financial situation has grown increasingly precarious. Last week, the group’s board of directors fired its high-profile chief executive, Dixon Slingerland, a well-known Democratic Party fundraiser with long-standing ties to Garcetti.

Dan Grunfeld, the group’s new interim CEO, said board members lost faith in Slingerland’s ability to lead the nonprofit, which he ran for more than two decades and transformed from a minor player into a regional powerhouse.

The group missed critical deadlines for paying taxes and submitting audits. It laid off roughly two dozen employees in May. And last month, the group was so short on cash that it took out a $2-million loan from another nonprofit organization to cover its bills.

“For the organization to need a bridge loan, for the organization to not pay its payroll taxes, that’s a big deal,” Grunfeld said in an interview. “That’s a fundamental issue with management.”

Grunfeld said board members also were troubled by the preliminary findings of a forthcoming third-party audit. He would not provide any specifics, saying the audit is expected next month.

Slingerland, who earned around $400,000 annually in recent years, blamed much of the group’s woes on the Trump administration. In an emailed statement, Slingerland said federal officials had cut $3.3 million from one education initiative and “put up roadblocks” to prevent the organization from securing another $5 million.

“The Promise Neighborhood initiative and all of YPI’s efforts have worked towards breaking the inter-generational cycle of poverty,” he said. “While the Trump administration made significant cuts in funding, YPI did everything possible to keep critical services going at 122 program sites and in more than 100 public schools.”

Officials in the U.S. Department of Education could not be reached Friday afternoon. Grunfeld had no comment on Slingerland’s statement, saying he cannot discuss personnel matters.

The ouster represents a remarkable turnaround for Slingerland, who built a reputation both as a skilled campaign fundraiser for Democratic Party candidates and a politically connected figure, making numerous trips to the White House during the Obama administration.

When Garcetti first ran for mayor in 2013, Slingerland was named as a co-host of at least six fundraising events, according to records filed with the Ethics Commission. Since 2002, Slingerland has personally contributed more than $60,000 to politicians at City Hall and the Los Angeles Unified School District, which oversee many of his group’s programs, records show.

Last year, Slingerland contributed $5,000 to a national committee set up by Garcetti to support congressional candidates in the 2018 midterm election. In December, he co-hosted a fundraiser at his Studio City home for school board candidate Heather Repenning, a longtime Garcetti ally who lost in May to former board member Jackie Goldberg.

Youth Policy Institute provides a wide array of government-funded services, including college prep programs, job training, tax preparation and computer literacy classes. Garcetti’s team was working last week to gather information on all of the city services provided by the group.

“Our focus is on making sure these programs continue to positively impact our community, and that there is no lapse in the delivery of our services to the children and families of Los Angelenos,” said Garcetti spokesman Alex Comisar.

The nonprofit has also canceled its fundraising gala, which was scheduled for next month. In a recent email to its staff, the group’s leaders said they will be “redefining” the group’s “vision for the future.”

Slingerland took over the nonprofit organization in 1996, moving it from Washington to L.A. and turning it into a community organization with a special focus on the San Fernando Valley community of Pacoima. The group also opened charter schools, which are now operated by a separate nonprofit, Grunfeld said.

Under Slingerland’s leadership, the group has grown rapidly, said Antonia Hernandez, president and CEO of the California Community Foundation, which provided the $2-million bridge loan. These days, the nonprofit has an annual budget of roughly $47 million and offers services at more than 100 locations across the county.

“It went from a good, small organization to a large organization serving thousands of people,” Hernandez said.

One person familiar with the nonprofit’s financial woes argued that it grew too quickly, and became too reliant on government funding. Without other revenue sources, the group did not have sufficient funds to cover basic overhead costs, the person said.

Slingerland, in response, said he understood that perspective but “felt obligated to pursue all available funding that could benefit the families” served by his organization.

Youth Policy Institute has faced other setbacks.

In March, the group missed a critical deadline for submitting its yearly audit to City Hall, which is required by the federal government. Because those audits have not been received, two city agencies — one dealing with housing, another with economic development — have withheld a combined $1.5 million, city officials said.

For now, Grunfeld said he does not think it is inevitable that the group will reduce services. But he noted that the group’s future will be clearer once the outside audit is completed.

“We will take whatever steps we need to make this organization do its mission as it was intended,” he said.

Times staff writer Dakota Smith contributed to this report.