Oakland Artists Say Fiscal Sponsor Emptied Their Account, Leaving Them Without Pay

A social justice–focused arts initiative in Oakland has accused its fiscal sponsor of misappropriating its budget, leaving its staff without pay since August and without health insurance since September.

Artist and curator Ashara Ekundayo leads Artist As First Responder, which organizes exhibits and events that support Black and Indigenous artists and other artists of color in Oakland, with a focus on community healing. Her organization is fiscally sponsored by Marcus Foster Education Institute (MFEI), a renowned nonprofit founded 50 years ago by the Oakland Unified School District’s first Black superintendent, that gives out student scholarships and sponsors philanthropic initiatives.

As fiscal sponsor, MFEI takes on accounting and administrative duties for Artist As First Responder for a fee, a common arrangement in the nonprofit world that allows Artist As First Responder to apply for grants without forming a 501(c)(3). The purpose is to free up Artist As First Responder’s small team — consisting of Ekundayo and her sons, artists and community organizers Christian Walker and Ietef Vita, and two independent contractors — to work on cultural programming. Ekundayo raises money for Artist As First Responder, and MFEI is required to keep that money separate from their own operating budget and pay Artist As First Responder staff as employees.

After five years of fiscal sponsorship, the arrangement came to an abrupt halt in early September when Ekundayo discovered that a $25,000 grant hadn’t been disbursed to Vita. Ekundayo said she made calls to MFEI Executive Director Alicia Dixon and Finance Manager Meiko McDonald, who told her that they no longer worked at the organization, and that the remainder of Artist As First Responder’s approximately $375,000 annual budget was gone.

Ekundayo believes that MFEI knowingly misappropriated restricted funds intended for Artist As First Responder and violated their fiscal sponsorship contract. And her lawyer, Brooke Oliver, said the situation suggests more widespread financial mismanagement at MFEI, and could mean that MFEI violated California nonprofit public benefit corporation law.

“It is an absolute scandal,” said Ekundayo in a recent interview.

MFEI has spent this year celebrating its 50th anniversary with events and an exhibition, and Ekundayo said it didn’t communicate with her about its financial troubles until her team’s checks stopped coming.

“The truth of the matter is we do not yet know what’s happened,” reads a statement from the MFEI board of directors, which Board Chair Biff Clark emailed to KQED in response to an interview request. “At the end of August, the Board became aware that financial reports provided to the Board were inconsistent with bank balances. In a preponderance of care, upon learning of financial issues with the organization, the Board took swift action, relieving staff of its duties and putting together a team to lead an internal investigation.”

In a Sept. 13 letter to MFEI’s community partners, reviewed by KQED, Clark added further context, claiming that MFEI is in an $800,000 deficit “as a result of the egregious activity that included comingled restricted and unrestricted funds by the MFEI staff members without authorization, knowledge, or review by the Board of Directors.”

Dixon and McDonald did not respond to KQED’s requests for comment. A spokesperson for the law firm representing MFEI, Tyson & Mendes, declined to comment, citing an ongoing matter.

While Clark’s letter said that the board only learned of MFEI’s financial crisis in August, publicly available tax filings reveal that MFEI has operated at a deficit almost every year since 2015. In 2018 and 2019, the organization reported a deficit of over $700,000 to the IRS. And IRS records show that the organization lost its 501(c)(3) status in 2022. It was reinstated earlier this year.

“The hiding of this huge problem for so long and continuing to take money when they know they’re insolvent,” said Oliver, Ekundayo’s lawyer, “is one of the most egregious violations of public trust I’ve ever seen.”

“It’s very difficult for me as someone who loves Black people and Black culture, and has committed my curatorial practice to lifting up the labor and creativity of Black people, to say, ‘This is this is a big betrayal,’” said Ekundayo.

MFEI is still accepting donations on its website, which greets visitors with a note that says that MFEI “remains at the forefront” of supporting educators, scholars and families. The site doesn’t address the organization’s financial crisis, but says the board is “undertaking a comprehensive evaluation and reorganization.”

“This is particularly troubling within the nonprofit sector, it sends chills to everybody — to foundations, to funders,” Oliver said. “People trust that nonprofits are going to be doing the charitable work that they represent themselves to be doing.”

“We don’t know if there was any kind of personal misuse of funds. There could well have been,” Oliver added.

Oliver sent several requests for mediation — four to the board and one to MFEI’s lawyer, Kevin Barrett — which so far have not been accepted.

Clark did not answer KQED’s emailed questions about how many other organizations are currently fiscally sponsored by MFEI, and now many people’s livelihoods are affected. In their statement to KQED, MFEI’s board said an internal investigation is ongoing.

“We hope to gain a better understanding of what led to this situation so we can move forward, take the appropriate steps necessary to resume the critical work so that the scholars, partners, school districts and communities we serve will continue benefiting from our critical services, as we have for the past 50 years,” the statement said.

Without a resolution in sight, Artist As First Responder staff are carrying on their programming as volunteers while feeling the repercussions of more than two months without pay. While Ekundayo looks for a new fiscal sponsor, she continues to curate shows and organize events: Two exhibitions she curated are on view through December at St. Joseph’s Arts Society in San Francisco, and she’s an honoree at the November event series Throughline, which celebrates Black women change-makers.

Christian Walker, Artist As First Responder’s social economies director, continues to run his Men’s Wellness Fellowship support group and other projects. “Not being paid — we live in Northern California, and it’s crazy expensive here. That’s unacceptable,” he said. “The work was bigger than my paycheck to me, so it’s still gonna get done regardless. It’s just unfortunate that Marcus Foster ended up tanking because of their inabilities or incompetence.”