MONTPELIER -- An investigation into local food nonprofit Food Works has closed with a non-monetary settlement, according to a news release issued Thursday by Vermont Attorney General Bill Sorrell.
In August 2012, Sorrell's office received complaints of financial mismanagement, misrepresentation to donors and misappropriation of charitable funds.
The subsequent inquiry revealed intermingled funds, improper expenditures from restricted funds and poor bookkeeping. At no point did the AG's office uncover credible evidence of theft, embezzlement or unlawful gain, the release said.
In the course of an internal review prompted by the investigation, the nonprofit's board of directors determined Food Works was not financially viable.
The organization, dedicated to issues of "food justice," according to founder Joseph Kiefer, is now being dissolved. Several of its ongoing programs have been transferred to other organizations, and its historic Two Rivers Farm property is up for sale.
Kiefer said the purchase of the farm, long a dream of the organization's leaders, is part of what did Food Works in. The property required more reconstruction and the farmhouse more refurbishing than the organization realized, he said.
"I think it's the challenge in the nonprofit world," Kiefer said. "You can allow yourself to think that you'll continually get the grants. But a lot of the funding is seed funding. So you have to really think as an entrepreneur."
Food Works agreed to no longer solicit money, and only accept money to assist with the organization's dissolution. The settlement involves other restrictions and oversight of the group's activities.
If any violations of the agreement surface, Food Works will be penalized between $1,000 and $10,000 for each instance.
In his news release announcing the settlement, Sorrell credited Food Works and other nonprofits like it for their contributions to communities.
"(B)ut when an organization takes funds for a specific purpose and then spends them on something else, it is violating the public's trust."
He recommended that nonprofit board members review the terms of the Food Works settlement for guidance on the appropriate fiscal management of donated funds.