High personnel costs and no revenue from major courtroom victories have left Disability Rights Oregon with nearly a half million dollar budget deficit, according to the organization’s most recent tax filing.
For four decades, the nonprofit has provided powerful legal advocacy, winning lawsuits that have led to improved infrastructure, wages and benefits for disabled Oregonians.
But the advocacy is costing them. Between Oct. 1, 2017 and Sept. 30, 2018, the nonprofit brought in $1.9 million, close to what it spent on employee salaries and benefits. The organization ended the fiscal year with a $453,000 deficit.
The nonprofit’s tax form for 2018 is not yet available, but it’s unlikely the numbers have changed substantially. The group depends on major cash infusions awarded by the court after attorneys win a significant lawsuit, and it has not received such a boon since the filing. Meanwhile, the number of employees has remained at 27.
That is, until this month, when eight employees at Disability Rights Oregon received lay off notices.
With nearly a third of its staff scheduled to leave by the end of November, the departures raise questions about how the group’s statewide advocacy work will be impacted and whether the cuts will be enough to stabilize DRO’s finances.
These questions went unanswered by DRO’s board president Jan Campbell, who did not respond to repeated interview requests by OPB. In a statement, Campbell said that layoffs were “necessary to continue Disability Rights Oregon’s strong financial standing, which will allow us to protect and promote the rights of 950,000 Oregonians with disabilities for many more years.”
The layoffs occurred at the same time as a newly-formed union at DRO was negotiating its contracts with management, leading members to suspect the layoffs were a form of retaliation. Seven of the eight employees who were laid off were part of the union. Ten union members remain.
But, according to the union, management has held that the staff cuts were the results of a “fiscal emergency.”
“They said, ‘We're having a financial crisis, we need to make those layoffs now,’” recalled Matthew Denney, a staff attorney at the organization who has acted as the union’s bargaining team leader. Denney was one of the staff members who were laid off on Oct. 21.
Mikayla Robinson, a regional organizer with the National Organization of Legal Service Workers who has been assisting with contract negotiations, said DRO management told the union the organization needed to find a way to save roughly $400,000.
Robinson said the union urged the nonprofit in a meeting this week to reduce the number of layoffs and tackle its financial troubles instead through a hiring freeze or mandatory furloughs. Union members have maintained that management’s current strategy will critically short-staff the organization, which will be down two attorneys, four advocates, one manager, and a social security benefits expert.
“The proposed reorganization disproportionately affects advocacy services for people with intellectual and developmental disabilities, including the areas of employment, special education, protection from financial abuse, Medicaid-funded supports, and voting rights,” read a statement from the union issued over the weekend. “The organization is proposing major restructuring without a strategic plan.”
The 19 employees left at DRO include seven attorneys, two advocates, and five social security benefit experts.
The layoffs aren’t the only belt tightening measure made in recent months. Since former Washington Sen. Patty Murray aide Jake Cornett replaced the longtime DRO head Bob Joondeph this year, Robinson said the organization has cut back on library database subscriptions, supplies and transportation expenses.
Joondeph, who was at the helm of the organization for three decades, said the layoffs were not on the table when he left the position in March. Shortfalls in revenue were not unusual for a legal advocacy nonprofit like DRO, he said, which depends largely on the attorney fees awarded by the court after they win a lawsuit.
“We’re kind of like a snake. Every so often, we come across a small rodent, and we earn some attorney fees,” Joondeph said. “And it took us a while to digest it, and we’d spend that money over a period of time in the hopes you’d find another rodent, so there's always a sense of uncertainty.”
Depending on these sporadic bursts of revenue means “there’s always been financial challenges,” he said.
“And so the task is to try to guess and anticipate as best you can,” he said. “It is something of a roller coaster … There's a lot of different factors that go into how much risk one is comfortable with.”