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July 15, 2016

Suit Claims ‘Looting’ of Donations at Defunct Design Charity

A court-appointed trustee responsible for recovering assets from bankrupt nonprofit Architecture for Humanity has filed suit seeking $3 million from the organization’s founders and board, according to Fast Company. The court complaint alleges that Architecture for Humanity conducted “wholesale looting” of restricted donations to keep operating amid financial struggles.

The San Francisco-based charity, which designed sustainable homes, schools, and shelters for areas hit by conflicts and natural disasters, abruptly closed and declared bankruptcy in January 2015, citing untenable deficits. According to the lawsuit, the nonprofit, experiencing rapid growth, used funds earmarked by donors for projects in the field to cover overhead costs.

The suit seeks funds to repay creditors from Architecture for Humanity co-founders Cameron Sinclair and Kate Stohr and 10 volunteer board members, including prominent architects and Silicon Valley executives. The bankruptcy trustee contends charity leaders had been warned by legal counsel about the alleged misspending but kept operating, draining assets from $3 million in early 2014 to $200,000 when the organization shut down.