Youth Homelessness Nonprofit YouthCare Shuts Down Services, Fires Executive Director

The 50-year-old agency, which provides housing, shelter, and services to homeless youth and young adults, is facing a long-brewing financial crisis.

Rendering of YouthCare's planned Constellation Center, a workforce training and service hub that's supposed to open alongside a new Community Roots-owned apartment building in 2027

By Erica C. Barnett

Youthcare, Seattle's largest housing and shelter provider for youth and young people experiencing homelessness, has shut down programs, laid off at least a quarter of its staff, and redirected resources from housing and shelter to address a budget crisis that has been building for many months. In recent weeks, the agency has announced plans to shutter a shelter for homeless refugee children, shut down a free GED program, and scale back services at a transitional housing program for LGBTQ+ youth.

On Thursday, YouthCare's board chair, Becka Johnson-Poppe, announced the resignation of YouthCare's embattled leader, Degale Cooper.

"We recognize that this is a time of uncertainty, and we want to acknowledge the concerns many of you have raised--particularly around our financial picture," the email to staff said. "The Board is fully engaged and committed to securing YouthCare's financial health and long-term sustainability. We are actively developing a plan to stabilize our operations and align our programs with the evolving needs of youth in our region."

For months, current and former Youthcare staff have been raising concerns about how Cooper has managed Youthcare's finances, programming, and staff.

They say the organization, founded more than 50 years ago with a mission to end youth homelessness, has largely abandoned that mission to focus single-mindedly on a workforce training and education hub on Capitol Hill called the Constellation Center, which is supposed to open in 2027 along with a planned new Community Roots Housing affordable housing project that will include 15 beds for formerly homeless youth.

Staff began publicly calling for Cooper's resignation last month. In early June, about three-quarters of of Youthcare's remaining staff signed a petition calling for Cooper's ouster. The petition also demanded that Youthcare "provide accurate and transparent information about the agency’s financial solvency, with a coherent explanation of how we’ve come to our current state."

"Having recently undergone layoffs to establish long-term financial stability, we yet again find ourselves in financial crisis," the petition read.

Former staffers said YouthCare has been plagued with financial issues for years. In December 2023, an audit found "significant deficiencies" in Youthcare's internal financial controls, meaning that their internal financial checks and balances do "not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, [financial] misstatements on a timely basis."

The issues with financial compliance have been compounded, according to former finance staffers, by the fact that the agency has struggled to retain high-level finance staff, including a chief financial officer, for more than a few months at a time, and fired at least one staffer who raised whistleblower concerns about Youthcare's financial practices.

In recent months, dozens of staffers have received layoff notices, and several executive-level staff have quit or been fired, leaving only Cooper and Chief People and Culture Officer William Wiggins at the top of the agency's org chart.

The cuts to services and housing come one year after Youthcare announced it was closing down two transitional housing programs for youth along with its youth shelters in the University District and South Seattle. Then, as now, YouthCare said it was "consolidating services" to secure the nonprofit's financial future.

YouthCare's cost-saving measures have impacted workers' ability to do their jobs, former staffers say.

Earlier this year, for example, employees' cell phones were cut off, reportedly because Youthcare hadn't paid their cell phone provider. Then, on a Friday afternoon a couple of months ago, YouthCare abruptly shut off the credit cards frontline staffers used to pay for their clients' basic needs, leaving them unable to pay expenses that typically amounted to somewhere between $30,000 and $60,000 a month.

"They just got cut off with no explanation, and the staff were left to tell the people they worked with, 'Sorry, I just can't get that for you," Office and Professional Employees International Union (OPEIU) 8 representative Phoebe Feldsher said. "It created a lot of hardship for the clients and staff."

Other staffers say Youthcare fell behind on the rent payments that keep many clients in affordable housing, holding on to rent checks instead of paying them promptly. "People are going to get evicted," Feldsher said.

PubliCola sent a list of questions to Cooper on Monday morning. She referred us to a consultant at the Fearey Group, a crisis communications and public relations firm, which provided responses from the board on Thursday afternoon.

In an email, the board said they were aware of the disruption to staffers' cell phone services but did not know whether it was intentional or due to nonpayment. They attributed the credit card freeze to concern over how much staffers were charging on their cards and whether they were accounting for it appropriately.

"At this point we are not aware, or have received any evidence, that clients have gone without payment for rent and other essential needs. We do believe the restrictions in the use of credit cards probably affected how client assistance was provided," the board wrote.

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After the union representing Youthcare staff, OPEIU 8, published the petition calling for Cooper's resignation in June, Youthcare set up a virtual town hall to discuss employee concerns. But when staffers displayed Zoom backgrounds that read "Save Youthcare, Fire Degale," Youthcare management ended the meeting early, reportedly after muting some staffers who were trying to speak out about their concerns; a second town hall was scheduled, then canceled, and former staffers say they were left in the dark.

"The decision was made in May or June to start consolidating our sites because we were not utilizing our financial planning in a way that would have sustained any of our operations for quite some time," one former staffer said. "When I was there, it was always, 'How are we going to get another $20,000 in here to meet payroll?'"

Shortly after the petition went online, non-unionized staffers, including program managers, signed an open letter addressed to YouthCare's board, expressing dismay about the program closures and a lack of confidence in Cooper, who replaced Melinda Giovengo as CEO in 2022.

"Instead of taking responsibility, Degale Cooper and others have placed the blame on front-line staff for procedural errors, such as coding receipts, despite the fact that we have been operating without current or accurate financial information for months," the staffers wrote. "This is not leadership. This is mismanagement. And it is our staff and clients who are paying the price."

In a June 15 email to staff, Cooper said the open letter did not represent the views of YouthCare "leadership" and contained "multiple inaccuracies, distorted facts, and harmful speculation, and it was not shared in the spirit of care, collaboration, or truth." Cooper then promised to answer any questions staff might have about "what is changing, why, and what it means" at the upcoming virtual town hall.

"We recognize that moments of change are hard. They raise real questions and emotions," Cooper wrote. "As the CEO, I want to make sure your questions are answered by those accountable for this organization, not by anonymous sources or rumors."

Multiple people who attended that town hall said the meeting left them with more questions than answers about how Youthcare planned to address its financial crisis. Among other questions, they wanted to know why Youthcare was shutting down programs, whether the agency planned to cut more of their jobs, and whether Youthcare had a plan for the future.

"They kept muting participants," one former staffer said. "And [staffers] were like, 'hey, if you’re going to call a town hall and then mute us, it doesn't serve any purpose.'"

The programs that are slated for closure, reductions, or consolidation into other YouthCare programs include:

• Casa de los Amigos, a shelter for undocumented immigrant youth who arrive in the US without adult guardians, which will shut down at the end of August. Although Cooper told staff the program is closing because of "uncertainty" about federal funding (and only has one current client), former staffers said the program has full funding through this year, so shutting it down and laying off its 29 staff won't save Youthcare any money.

"That was a great program, and yeah, it was hard to administer, because you need a bilingual staff, but we did really good work and 99 percent of kids received placements," Youthcare's former director Melinda Giovengo said.

Although the program is serving just one unaccompanied minor, federal rules require it to be staffed for full capacity. "The [federal] Office of Refugee Resettlement funds you for maximum capacity, and they don’t want those [staffers] to leave, because there may be a need for that capacity in the future," a former high-level Youthcare finance staffer said.

• YouthCare's GED classroom, which provided GED training and tests for young adults without a high-school diploma. Feldsher said Youthcare has said they're closing the GED program as part of a "strategic realignment," rather than to save money.

In a list of internal "messaging" points about the program's closure, YouthCare's Director of Employee Experience, Stacey Fernandez, said the agency's "decision to close the GED program was not due to funding issues," but added later that current funds "do not fully cover the operational costs of an internally run GED program."

• The ISIS transitional housing program, a 12-bed residential program for LGBTQ+ youth. According to a June 26 email from Cooper to Youthcare staff, the agency plans to "relocate" the program from its historic location, known as Ravenna House, and "make some staffing changes." Former staffers familiar with the program expressed concern that it will become "independent living" apartments without full-time case management, which they called an inadequate level of care for traumatized homeless youth.

"Most of the people we served in that program were pretty traumatized. They were kicked out for coming out," Giovengo said.

In response to PubliCola's question about changes to the ISIS program, the board said YouthCare was "restructuring" the program but that it was too soon to discuss specific changes. "We do know that many of our clients are looking for more of an independent living situation, similar to the environment our clients have at James Place," a studio apartment building Youthcare operates, the board wrote. "We want to ensure we can continue providing services to our clients at Isis rather than shutting the program down, and will evolve the model to do so."

In their open letter, the non-unionized staffers said closing these programs and focusing Youthcare's energy on the Constellation Center, which includes no shelter or housing, represented an abandonment of YouthCare's core mission of ending youth homelessness by providing shelter and housing. "We cannot end youth homelessness by dismantling the very programs that serve our most vulnerable young people," they wrote. YouthCare currently operates one 12-bed shelter for youth and a 20-bed shelter for young people over 18 at its flagship Orion Center.

In a statement posted on YouthCare's website, Cooper blamed "federal funding challenges" for the program closures, and said other programs, like the ISIS program, are "evolving" to "preserve core services and reinforce our long-term sustainability." Cooper also said the Constellation Center, "our flagship initiative," is on track to open in 2027.

YouthCare will offer case management and other services at the Constellation Center, but will contract with other nonprofits, such as Farestart, for workforce training and education programs., the board confirmed. YouthCare will also rent out some of its vacant buildings, raising concerns among former staffers that the onetime shelter and housing provider will be little more than a landlord to other service providers.

"We will continue to provide case management and client support, as well as our own training programs within the center," the board wrote. "We feel that partnering with existing entities is much more efficient than duplicating services already created."

"I don't know why you would put all your eggs in the Constellation Center," former Youthcare director Giovengo said. "The whole intent of it was to provide education and employment opportunities to people living in our housing."

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One former staffer has been unusually outspoken about the changes at YouthCare. Daniel Lugo, until recently YouthCare's government relations director, sent a series of emails in mid-June to Youthcare staff in June raising alarms about what he described as a financial and leadership crisis at the agency.

In one widely distrubted email, which bore the subject line, "YouthCare in Crisis. At this rate, I give the organization 1 to 2 years," Lugo accused Cooper of cutting staff to avoid dealing with ongoing issues "Our financial problems are the result of many chronic issues at YouthCare. It is shameful how our organization pursues cuts as a solution," Lugo wrote.

After he sent the email and posted it on social media, Lugo was placed on administrative leave for distributing the letter (PubliCola reviewed an email from Fernandez that confirms this), and subsequently fired.

"The reason I came out to the community with this issue is that we've been trying so long to address it internally and we have been met with retaliatory firings," Lugo told PubliCola last week..

Two months before he was fired, Lugo said, he secured $8.4 million toward the Constellation Center's capital campaign. "What's really insulting about this whole ordeal is that Degale was platforming my lived experience of foster care and homelessness and using it to help raise the money for the Constellation Center, and as soon as I got the money for the building, she pushed me right out," Lugo said.

YouthcCare's finances had been shaky for a long time, former staffers said, but the problems were worsened by several factors: High turnover among financial staff, a lack of transparency about the state of the agency's finances, and administrative costs that consumed more than 30 percent of the agency's operating budget. (In its email, the board said it "continues to work with management to lower our administrative costs. Much of the down-sizing last year was directed to doing just that.")

As money grew scarce, it became tough for YouthCare to make payroll, several former staffers say. One former financial staffer says they began raising concerns about YouthCare's cash flow last December, and then, in April, it "fell off a cliff," as corporate and individual donations dried up. "We depleted our reserve, and that's when the discussions started about, do we reach into our endowment, which is highly inappropriate to fund general operating activities, or do we restructure and consolidate some of these sites?" the former staffer said.

The board denied that YouthCare ever used its endowment to pay for salaries. They said they did take $3.6 million from the endowment to close a construction loan on the Constellation Center in December, and said the endowment is not dedicated to any specific purpose. The board said a "lack of public funding has drawn down our reserves. However, we have an Endowment of approximately $6.5 million"—a number that stood at more than $9 million at the beginning of last year, according to publicly available tax information.

"The board has established a Financial Task Force to figure out how YC can continue to serve its clients and support its current programs, while maintaining financial stability," the board wrote.

Because YouthCare leadership refused to provide clear financial records to show where all the money was going, former staffers said, it was hard to know how much financial trouble the agency was actually in.

In an email announcing her resignation to staff last month, YouthCare Housing Resources Director Gabrielle Darcuiel—whose last day will be next week—wrote that during a meeting that was supposed to focus on "program sustainability," housing staffers "were never provided with a clear directive on how much we needed to cut or what changes were required to ensure programs could continue operating effectively."

The former high-level financial staffer said they believe Cooper's departure may come too late to address financial problems that have been building for years. The other former staffer agreed, saying the agency has announced too many unexplained "restructures" to inspire public trust. At some point, "the community is going to stop believing us when we keep telling them everything's fine," they said.