Marin’s Spahr Center suspends operations

The Spahr Center, which supports Marin County’s LGBTQ+ community and people living with HIV, has suspended operations and laid off most of its employees.

“It is with a heavy heart that we share with you the news,” read an announcement issued Friday.

The nonprofit has been receiving about $450,000 a year in federal Ryan White Care Act funds to provide case management, mental health support, counseling and other services to people living with HIV in Marin. The Ryan White money accounts for about 25% of the agency’s $2.5 million budget.

The organization also sponsors support and discussion groups. Two Marin middle schools, Kent and Miller Creek, and eight high schools — Archie Williams, Novato, Redwood, San Andreas, San Marin, San Rafael, Tamalpais and Terra Linda — pay the nonprofit $5,000 a year to host “Q Groups” during school hours on school grounds.

In addition, the Spahr Center receives state funds to provide clean syringes, sterile glassware, and Narcan to people  struggling with drug addiction.

Joe Tuohy, who in May became the nonprofit’s fourth director since March 2022, said he is in talks with another Marin nonprofit about a possible merger of their agencies. He declined to identify the organization.

“If that is successful,” Tuohy said, “we would bring back all or most of our programs under this new merged entity.”

As for how many of Spahr’s laid off employees would be reinstated, he said, “That’s yet to be determined.”

Tuohy said the Spahr Center was forced to shut down due to a lack of funds. Some employees who left the nonprofit recently assert that poor management decisions led to the current crisis.

“At the end of fiscal 2023 (June 30, 2023) the agency had an accumulated deficit of over $300,000,” Tuohy wrote in an email Wednesday. “That along with the loss of a 340B Pharmacy program is what pushed the agency over the brink.”

The federal 340B Pharmacy program allows the Spahr Center to purchase HIV medications at a reduced price.

“The pharmacy that we partner with bills insurance at the full rate and it throws off revenue,” Tuohy said. “In fiscal year 2022, it threw off about $300,000 in profit for Spahr.”

Tuohy said that shortly after he became director revenue from the 340B program stopped flowing. He discovered that the government had terminated Spahr’s contract because his predecessor, Cindy Myers, had neglected to seek recertification.

Tuohy reapplied and Spahr’s contract was reinstated as of Jan. 1. So far this year, however, the program has generated no revenue.

“The estimate is that it will generate about half of what it used to because of attrition in our client list,” Tuohy said.

A week before the shutdown, Tuohy said in an announcement, “Over the last couple of months, we have realized that our financial footprint is not sustainable. I assure you that at this point in time, The Spahr Center remains open.”

In that statement, Tuohy also said, “We are in conversation with community partners and the county of Marin to collectively support The Spahr Center.”

Marin’s Department of Health and Human Services did not respond to a request for comment.

Spahr laid off three employees on Feb. 2, another eight on Feb. 15 and will terminate the remaining six employees on Friday. Tuohy will stay on as director.

Tuohy said that after he dispatched the first release, he learned that the Sierra Health Foundation was going to withhold a $50,000 grant payment that he was counting on. The total nearly $127,000 grant was to conduct an opioid prevention program for Marin’s “Two-spirit” community. “Two-spirit” is a term used by some Indigenous people to describe their sexual, gender and/or spiritual identity.

Tuohy said Sierra Health withheld the money because the Spahr Center couldn’t guarantee it could complete the project as planned.

Tuohy said when he took over as director, “We had little or no grant funding at all. We raised about a million dollars in the last nine months, but most of that is grants receivable. It’s not cash in the bank.”

Tuohy said Spahr received $300,000 in bridge funding from the Marin Community Foundation last fall.

“They were very generous and supportive,” he said. He added, however, “We had not received any money from them for at least three years prior.”

Tuohy said despite grassroots support within the community, Spahr has not received any large gifts from donors recently. The agency raised a little over $100,000 with its year-end fundraising campaign in 2023.

Some former employees, however, assert that Tuohy and his two immediate predecessors — Myers and Adrian Shanker — put the agency on an unsustainable trajectory by hiring too many managers.

Andy Fyne, who worked for the Spahr Center for 22 years before leaving in March 2023 after serving as director of harm reduction, said the center has operated for about the last eight years with a $100,000 structural deficit. On its most recently available 2021 Internal Revenue Form 990, the center reported a $104,618 deficit.

“It has never sunk the agency before,” Fyne said. “I would guess the reserve got spent down when the administration added a large number of relatively unfunded executives.”

Chris Brown, who filled Fyne’s spot as harm reduction director before resigning himself in October, expressed the same concern.

“A few of us wondered,” Brown said, “the hiring for the C-Suite seems to be far outpacing our fundraising, and they’re still talking about this budget issue, and those don’t add up.”

Jason Newman, who began work as Spahr’s new mental health director the last week of January before being laid off, said he was one of several employees hired shortly before the company announced the shutdown.

“There was a director for everything,” Newman said. “They had given a director title to a 24-year-old kid.”

Newman said he expressed concern to management about the effect that the abrupt closure would have on the individuals receiving mental health services from Spahr.

“We have an ethical code as marriage and family therapists,” Newman said. “You’re supposed to give someone three weeks notice before you close with them, and you need to provide them with three referrals.”

Tuohy said Spahr is currently in the process of transferring the clients it serves using Ryan White funds over to Marin County for continued care and support.

“The county is going to bring two of our Ryan White team over to the county on an expedited basis,” Tuohy said.

He estimated that Spahr is currently providing case management to about 170 clients living with HIV.