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AIDS Walk grants cut


Facing a budget gap of $750,000 next year, the San Francisco AIDS Foundation has decided not to distribute grants to partners in this year's AIDS Walk, set for July 21.

The AIDS foundation, the largest HIV/AIDS-related nonprofit in the city, has been the primary beneficiary of the annual AIDS Walk San Francisco for over 20 years. But MZA Events, which produces the walk, announced late last year that it's switching to another nonprofit, Project Inform, in 2014. This year will be SFAF's last year as the walk's lead agency.

SFAF will maintain its community partners program, which encourages teams to raise money on their own and generally provides more funds than the smaller grants. Agencies that responded to the Bay Area Reporter 's inquiries about the change indicated it's not a huge concern for them. Last year, SFAF distributed about $250,000 through the grants program.

"We're facing a significant hole in next year's fiscal budget," said James Loduca, the AIDS foundation's vice president for philanthropy and public affairs. The foundation, which has a budget of about $25 million, shared months ago that it would take a big hit from losing the AIDS Walk.

"We've had a lot of conversations" about how to fill the gap "and ensure that none of the services we provide the community that are so important go uninterrupted," Loduca said.

The AIDS foundation provides testing, counseling, and numerous other services.

"Our top priority is making sure the services we provide to thousands of people in the community for free aren't harmed because MZA selected a new beneficiary for the walk," he said.

With the community partnership program, there's no limit on what groups can raise. All of the money each team raises passes through SFAF and goes directly to each organization. Normally, about 30 groups apply.

The AIDS foundation absorbs costs such as credit card and bank fees, which can amount to 6 percent of every dollar raised, so that those expenses aren't passed on to community partners.

"We thought long and hard about this," Loduca said. "We thought the appropriate balance to strike was to keep the program that has limitless revenue potential for community partners."

SFAF, which is paying MZA Events $212,000 this year, expects to raise about $3 million from the 2013 AIDS Walk.

Loduca attributed the deficit solely to MZA Events taking the AIDS Walk away. He said it isn't related to the health center the agency is developing in the Castro neighborhood. That project, which will combine three of SFAF's programs at one site, has a cost estimate of $8 million to $10 million, up from the initial estimate of roughly $7.9 million.

Filling the gap

After cutting the grants, a budget gap of about $500,000 remains. Loduca said that the AIDS Walk Revenue Replacement Committee, which is comprised of staff, board members, and top participants from fundraisers like the AIDS Walk and AIDS LifeCycle, has been appointed to look at options for replacing revenue from the walk.

"Nothing's been decided yet," he said.

Among the possibilities are expanding existing platforms, such as the AIDS/LifeCycle, the annual bike ride from San Francisco to Los Angeles, or SFAF launching a walk of its own.

The 2013-14 fiscal year budget is due to be presented to SFAF's board in June.

"That's when a final decision would be made," Loduca said.

Salary cuts are "not something that we're looking at," he said.

According to tax documents covering the 2011-12 fiscal year, AIDS Foundation CEO Neil Giuliano's total compensation was about $270,000. Loduca's was approximately $167,000, the records say. Several other people at the agency also made more than $100,000.

"We are committed to our staff," Loduca said. "They're some of the best staff that we think exist in the HIV/AIDS space, and they work very, very hard to ensure the services we provide are there for the community. ... It wouldn't be fair to balance our budget on their backs because MZA Events selected a new beneficiary."

He said "it's too soon to speculate" about layoffs.

Since Giuliano joined the agency in 2010, several strides have been made to increase efficiency. Among other changes, two vice president-level positions have been eliminated in recent years.

'Diminishing commitment'

In response to emailed questions, MZA Events CEO and President Craig R. Miller, who founded the AIDS Walk, made no attempt to mask his feelings for the AIDS foundation.

SFAF "has shown a diminishing commitment in recent years to supporting the work of other AIDS organizations," Miller said. "So the sad and unfortunate decision that the foundation just announced ... I think really speaks volumes to the validity of our decision to make the move to Project Inform beginning with the 2014 event."

Miller added it's "really important" to note that he first let Giuliano know of MZA's intention in 2011.

"It appears that Neil and James are content to attribute all of the foundation's current difficulties to the decision of the AIDS Walk San Francisco organizers to shift our focus to other organizations," Miller said. "That is simply not accurate." He indicated the blame should go to internal problems at SFAF.

Dealing with cuts

Some of the agencies that participate in the AIDS Walk suggested the cuts wouldn't cause much turmoil.

Last year, Rainbow Community Center of Contra Costa County got a grant of $20,000 from the AIDS Walk, and its team raised about $10,000.

Jimmy Gale, the center's outreach coordinator and HIV prevention and education specialist, said in an email that the AIDS Walk grant has allowed him to reach more people and allowed his agency to begin programming in Richmond.

"We will be able to keep going" without the grant, Gale said. "The community support here in Contra Costa has been amazing."

The center plans to build a team again this year.

AIDS Walk funds help support the nonprofit's food and home visitor program for people with HIV/AIDS, weekly HIV testing clinics, and several other services.

The agency has a budget of about $1.2 million. Of that, about $300,000 consists of pass-through funding for other community organizations for which the center acts as the fiscal agent.

North of San Francisco, Andy Fyne, client and community relations manager for Marin AIDS Project, said the nonprofit's grant last year was $7,500. The impact of losing it "wouldn't be significant," he said.

However, Fyne, whose agency's budget is less than $900,000, said, "The walk is extremely important to us." In 2012, the group's team raised about $43,000 through the community partners program.

The AIDS foundation "has been more than generous by allowing us to fundraise under their banner," he said.

In an email, Project Inform Executive Director Dana Van Gorder said his agency, which does HIV/AIDS advocacy and education work, "has committed to the 40 HIV/AIDS organizations that rely on the walk for support that we will make direct grants in 2014 and every year we are lucky enough to lead it. We will also continue the community partners program." He added his agency would work to increase the amount of support going to HIV/AIDS services.

In an interview, Van Gorder said Project Inform, which has a budget of almost $1.6 million, received a grant of $10,000 last year. The nonprofit's team raised about $23,000.

Losing the grant "obviously represents a little hole in our budget for next year, but we, unlike the other partners, also are inheriting a lot," he said. "That will have revenue implications on us not so much in the coming fiscal year, but certainly in the following one."

Van Gorder estimated the 2014 AIDS Walk would cost his agency about $1.5 million, which would go to MZA Events and ultimately comes from money generated by AIDS Walk income like sponsorships. Project Inform will pay MZA Events $162,000.

He said in the last couple years, the walk has grossed approximately $3 million.

"We'd like to see about $3.2 million, and we're putting our creative juices into how to do that," Van Gorder said.

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Information in this article was accurate in May 9, 2013. The state of the art may have changed since the publication date. This material is designed to support, not replace, the relationship that exists between you and your doctor. Always discuss treatment options with a doctor who specializes in treating HIV.