On a cool Friday night in early June, more than 100 intellectually disabled soccer players gathered at Portland’s Providence Park for the Summer Soccer Invitational.
It was a pivotal moment for Special Olympics of Oregon. A year ago, the non-profit had fallen into financial chaos. It was too broke to stage competitions. Lenders and vendors, some that hadn’t been paid in a year, were clamoring for their money. Insolvency and bankruptcy loomed over the organization like the blade of a guillotine.
But Special Olympics did not fade away thanks to a new management team that refused to give up — and the unexpected kindness of deep-pocketed strangers. The last 12 months included wrenching cutbacks, countless public apologies, last-ditch rescues and a dramatic deathbed decision that could prove the organization’s deliverance.
And the June soccer tournament with its 150 corporate sponsors was the most public evidence to date that Special Olympics of Oregon is back.
“It felt like closing the door on the past,” said Britt Carlson Oase, chief executive officer of Special Olympics Oregon. “Are we back? No, not entirely. It will take us another two to three years to really get there. But we’re going to redefine the Special Olympics.”
Oase arrived last June in Portland from Minneapolis, where she had worked in a variety of roles for the NFL Vikings and NBA Timberwolves
She knew not to expect big-league luxury. But the news she got from Lori Van Dyke, the group’s new chief financial officer, left her stunned: The nonprofit owed $1.5 million to vendors. A $1 million line of credit was in default. No cash coming in.
“I knew there were challenges, you could see that from the financial statements,” said Oase, but there was “not a feeling that the organization was in trouble.”
Oase immediately went into full cost-cutting mode. The organization moved out of its swanky downtown office and squeezed into a smaller, donated space. In a heartbreaking move for her — and hundreds of athletes — she cancelled the Special Olympics’ premiere event, the Summer Games.
Board members held their breath fearing that Oase and her new team would walk out.
“Britt moved here to find there was no money and that her position was probably at risk, that the entire organization was probably at risk,” said former-Governor Barbara Roberts. “That was not a fun arrival party.”
Signs of support
Oase’s fear and frustration spilled out in a meeting late in the month at Nike’s headquarters.
She had driven out to pick up a donation intended for just one use — the Nike Youth Games in September. But Oase admitted to Kerry Sobol and the other company officials that Special Olympics was in critical condition. She begged them to let her cash the check immediately and use it for daily expenses.
After a brief huddle, Nike officials not only agreed to let her use the donation however she saw fit, they also vowed the Swoosh’s continued support.
But the hard times weren’t over.
Oase and Van Dyke cut their own salaries by 10 percent. Then Oase made a hard decision, laying off 13 of the non-profit’s 23 employees.
With just three weeks notice, they informed the athletes and families and coaches the Summer Games were off. Oase and Mark Hanken, Special Olympics chief operating officer, faced the music when they hosted town hall meetings in 11 cities.
The crowds were vocal, often hostile, and furious that the competitions had been cancelled. The Special Olympics competition was for many athletes the highlight of their year. Audience attitudes didn’t get any better when Oase and Hanken warned them that additional events would also be cancelled.
Ed Ray, Oregon State University president and a Special Olympics of Oregon director, called it “the disappointment tour.”
A new era of inclusion is changing the lives of the intellectually disabled. Nowhere is that more evident than at high schools all over Oregon, which now run “unified” sports operations that team disabled athletes with the non-disabled. Still, the traditional Special Olympics events remain crucial to thousands of disabled athletes.
They “tend to be an invisible population,” said Cindy Miguel, the mother of a 21-year-old with autism and a track coach herself.
“The competitions are a huge part of their lives,” she said. “It’s not just a fun social activity. It recognizes them as real athletes. It connects them with people from all over the state.”
Where’s the money?
Like many other parents, Miguel couldn’t believe her ears.
“I was in shock,” she said. “What happened to the money?”
It was a question Oase and Hanken heard repeatedly. Some of their own board members were mystified. “Everybody on the board seemed to be caught completely by surprise,” Gov. Roberts said. “It seemed like overnight we were in deep trouble.”
Some of the problems were strictly external. The financial scandal at Aequitas Capital played into the non-profit’s sudden pinch. Bob Jesenik, Aequitas CEO, was on the Special Olympics of Oregon board and had been a major donor. That relationship ended after Aequitas’ 2016 collapse, which set off an ongoing criminal investigation.
A bigger problem was fundraising. “For 15 years during my tenure we had built the program from an organization that was about to go out of business to a respected statewide non-profit. ” said Margaret Hunt, the woman who preceded Oase. “We grew quickly and we didn’t turn people away. But then Special Olympics of Oregon “experienced two particularly difficult fundraising years, to my deep dismay.”
Hunt retired in May. She credited “Oregon’s philanthropic community who stepped forward and, once again, to meet the challenge.”
Oase, reluctant to criticize former management, said the organization lost fundraising momentum and expense control, a deadly combination.
“When revenues decline and expenses increase – and year over year the mission is funded on debt – it simply isn’t sustainable,” Oase said. “I am not comfortable speculating about what happened prior to our arrival – the numbers tell the story. We inherited what we did, and we played the cards we were dealt.”
Ray admitted he was “blissfully unaware” of the non-profit’s deteriorating financial condition. But for him, finding the truth was particularly important. Oase and a group of influential donors had asked him to become chair of the board.
Ray demanded that a forensic audit be conducted before he would consider the position. “We were in a $2 million ditch,” Ray said. “I needed to know how we got there.”
The audit took months and in the end, found no malfeasance by the former management team.
In a letter to parents and coaches, Oase said the auditors found shortcomings in prior management’s financial oversight and reporting. But it determined that no money had been taken out of the organization inappropriately.
Special Olympics gave the auditor’s report to the Oregon Department of Justice, which continues to review the matter.
Oase went to the national Special Olympics organization for help. She was informed that it wasn’t in the bailout business. Oase and her team were on their own in a city that Oase didn’t know.
“I was fresh to Oregon,” she said. “I didn’t have a rolodex.”
There was one obvious person to contact.
Ken Austin had for years been a major backer of Special Olympics. He appreciated the athletes’ joy at competing. In 2011, the group had moved its Summer Games to Newberg, where Austin lived and built his dental equipment business company. At the opening ceremonies that year, Austin spoke after the parade of athletes into the Newberg High School football field.
“I hereby proclaim Newberg to be “Smile City USA,” he said.
But before he made another major commitment to the cause, Austin asked Brett Baker, one of his senior executives, to help develop a plan. Baker, in turn, enlisted Max Williams, head of the Oregon Community Foundation, to help him work out the fine points.
Special Olympics managed to make payroll in July and August only because two families, both of whom requested anonymity, contributed sufficient funds.
September was a different story. No family stepped forward. Oase drove out to the Nike campus on Saturday, Sept. 28 to attend the Nike Youth Games. She feared the end was near. Payroll was due Monday and the non-profit didn’t have enough money to pay for it.
As she drove into the Nike parking lot, her phone rang. It was Baker, Ken Austin’s lieutenant. The donor group had finally worked out the details. It would be sending a monthly allowance to Special Olympics as the non-profit got back on its feet.
She later learned that Ray had run into Baker, Austin’s lieutenant, at the Pendleton Roundup. Both were about to participate in the event’s big parade, Ray on horseback, Baker in a horse-drawn buckboard.
Their talk quickly turned to the Special Olympics.
“As far as I can tell, this thing is dead in the water if we don’t get it back in order,” Baker said to Ray.
They reached an informal understanding: Baker said he and Austin would continue to support the non-profit if Ray finally agreed to chair the organization’s board
Austin’s support primed the pump for other large donations. A who’s-who of the donor class got involved.
Williams, director of the Oregon Community Foundation, agreed to set up a new foundation dedicated to salvaging Special Olympics. The M.J. Murdock Charitable Trust agreed to give the new foundation more than $300,000. The six-figure gifts came rolling in from Columbia Sportswear CEO Tim Boyle, from real estate developer Joe Weston, from Pat Reser of Reser’s Foods, and from former Hyster executive Hank Swigert.
At last, Oase didn’t have to worry about making payroll.
All in at 37 degrees
Despite the new flow of money, Oase and Van Dyke determined they still couldn’t afford to stage competitions. The nonprofit still owed $1 million to First Interstate Bank of Montana, which was demanding repayment.
They cancelled volleyball, bowling
, and bocce events scheduled in the fall and winter. They called off its popular Winter Games at Mt. Bachelor. The austerity drive saved more than $1.4 million. But with each cancellation, Oase and her team feared, awareness of the group sank lower and lower.
By winter 2019, Oase and her team felt that they needed to do something to let the athletes and the public know they still existed. They decided to go ahead with the annual Polar Plunge, which involves participants diving into the Columbia River and several other bodies of water around the state in the dead of winter.
They crossed their fingers and hoped the world hadn’t forgotten them.
A record 2,700 people took part. Oase, Hanken and Van Dyke were among them. Miguel remembers Oase, soaked and shivering on the beach after dunking in the 37-degree Columbia.
“It was so cold” Miguel recalled, “and there’s Britt talking to people and taking selfies.”
The event raised more than $350,000 for Special Olympics.
A final stroke
By April, it was clear the organization had returned from the financial graveyard.
Van Dyke managed to negotiate settlements with many of the creditors, some of whom agreed to forgive much of the $1.5 million they were owed.
But there was still the matter of the $1 million bank debt. First Interstate showed great restraint. Special Olympics had defaulted on the loan in 2016 and hadn’t made a payment in months.
The bank was now out of patience. And the non-profit didn’t have the money.
Once again, Oase turned to Austin.
By then, Austin was 87 and his health had failed. Baker briefed Austin on the non-profit’s dilemma.
Austin made the bank a proposition: If they forgave half the $1 million loan, Austin would pay off the balance. The bank accepted. Instead of owing $1 million to a bank nearly 900 miles away, Special Olympics owed $490,000 to Austin, the non-profit’s most enthusiastic supporter.
But Austin, whose health continued to decline, wasn’t done.
“I recommended he forgive the note,” Baker said. “There was no hesitation. He knew he didn’t have long. And he just loved Special Olympics.”
On April 18, Austin agreed to forgive the $490,000 debt. Twelve days later, he died.
“It was an incredible gesture,” Oase said. “It goes without saying that he has left his imprint on Special Olympics of Oregon forever.”
The frosting on the cake came in late June when, in the last days of its tumultuous 2019 session, the Oregon Legislature and Gov. Kate Brown agreed to send $500,000 to the organization.
The influx of philanthropic and public money sets the stage for the organization to resume a regular schedule of competitions starting in the fall. Thanks to donors’ generosity, Oase said, the nonprofit is no longer digging out of a hole. They’re building.
“We are not celebrating yet,” Oase said. “We haven’t crossed the finish line until we have the athletes back on the basketball and bocce courts, golf courses, running tracks and swimming pools.”