The saga isn't over for the failed design nonprofit—in fact, for many of its former leaders, it's just beginning.
If you thought we'd heard the last about the Architecture for Humanity—the sprawling design nonprofit that suddenly declared bankruptcy in January, 2015, and subsequently closed—you thought wrong. Because with bankruptcy comes a court-appointed trustee who is responsible for recovering as much money as possible. And as first reported Monday evening by Architectural Record, that trustee has now filed a lawsuit designed to do just that—by seeking $3 million in damages from its founders and board of directors.
Here's the critical part. As the so-called "looting" was beginning, Architecture for Humanity was warned that it was doing something wrong by its legal counsel. If it had heeded those warnings and shut down in early 2014, it could have taken the $3 million it had left in its coffers and redistributed that money to the donors who gave it. Instead, AFH kept operating, even going after new donations, until it declared bankruptcy a year later. When it shuttered, it had only $200,000 left. That's seemingly where the lawsuit gets its price tag—it's the amount of money that the nonprofit had left when it was warned that it was committing "gross negligence." If the suit is decided against them, that money will be distributed to a long list of 170 different creditors, including Nike and Amazon.
In short, Architecture for Humanity should have shut down a year before it actually did, as it grew too fast and took on too many projects to manage.
"From my time at Architecture for Humanity, I know there are many lessons to be learned from small problems and how they were or were not addressed," said Garrett Jacobs, a former fellow and the current director of the Open Architecture Collaborative, the organization that grew out of the shuttered nonprofit. Jacobs, who was a design fellow during the period mentioned in the complaint, has made it his mission not to repeat the mistakes of AFH, focusing instead of minimizing overheard and staff while bolstering grassroots volunteer networks. He declined to talk about the details of the lawsuit, but added over email that he trusts "the legal process will bring them to light so we may continuously improve on delivering our mission."
It's still unclear how involved or knowledgable the volunteer board members were in the management of funds.
....