A Bismarck nonprofit that for more than half a century has operated group homes for foster care youth is ending its program, citing a shift in industry philosophy, the coronavirus pandemic and a lack of support from the state.
Charles Hall Youth & Family Services on Saturday is shutting down its residential treatment program that involved three neighborhood group homes for troubled and at-risk youth. Many of the 40 mostly full-time staff members have already been laid off, and the four youth that were being cared for have been placed in other facilities.
"The heartache -- besides the kids and families -- for us as leaders, is we are standing on the shoulders of so many that have gone before us," said Gayla Sherman, who has shared executive director duties with her husband, Gayle Klopp, since 2005. "We've served over 5,000 kids in the last 50 years ... we have phenomenal memories of these kids."
The head of the Children and Family Services Division of North Dakota's Department of Human Services said Charles Hall "had to make a business decision" in the face of industry changes aimed at improving care for youth. The shutdown will not impact the overall state system, which still has plenty of beds available for children who need them, Cory Pedersen said.
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The nonprofit is named for a 19th century Congregational missionary who worked with Native Americans. It was founded in 1965 as a mission of the United Church of Christ, and first served as a boarding school for youth from the Fort Berthold Indian Reservation.
Children who receive treatment at the group homes are wards of the state and arrive there through the court system. Some come from backgrounds of abuse or neglect, while others have gotten into trouble with the law.
The move by Charles Hall to shut down its program is part of a larger trend that resulted in two other residential treatment facilities in North Dakota shutting down earlier this year -- Prairie Learning Center near Flasher and Hope Home in Bismarck, Sherman said. After this week, the only remaining providers in North Dakota will be Home on the Range in Beach, and the Dakota Boys and Girls Ranch in Minot and Fargo.
The trend is tied to the Family First Prevention Services Act of 2018, which overhauled federal child welfare financing and emphasized family foster homes over congregate care for at-risk youth, according to the National Conference of State Legislatures.
Sherman said the intention of the law "is extremely good" but that it also was a major shift implemented in a short period of time and "caught the child welfare system off guard."
North Dakota made the switch in October 2019, sooner than many other states.
"How the state looked at it was this was the first time historically we could use federal money to prevent removals and placing kids in facilities," Pedersen said.
"If we can prevent that, that's the best approach for kids and families," he said. "They're kept safe in their own communities, with services wrapped around them."
The change required residential facilities to include treatment options, not just housing. In May 2019, before the shift, there were close to 10 agencies overseeing 157 residential beds in North Dakota. After Charles Hall ends its program, there will be just two providers overseeing 76 beds. About one-third of them will be open, according to Pedersen.
"We have capacity for kids if we need it," he said.
But the shift meant a dramatic change for Charles Hall.
"Revenue for us is the number of kids we're able to serve. With the Family First push to get kids to stay with foster families, the number of kids placed in congregate care has gone down, which means our revenue has gone down," Sherman said.
Charles Hall reduced its licensed beds from 27 to 16 because state rates are lower for facilities whose occupancy drops below 75%. The nonprofit saw its annual budget -- about 90% of which comes from the state and the rest from private donors -- drop from $2.7 million to $2 million. Still, "We thought we could make it," Sherman said.
Then coronavirus hit.
"COVID-19 just made it more than we as a small agency can bear," she said.
Staff who contracted the disease or were close contacts had to isolate, and the number of children Charles Hall could care for dropped by about half, according to Sherman. Because of the nature of the work -- caring for youth -- "the majority of our staff can't work remotely," she said.
Charles Hall received more than $300,000 in federal aid through the Paycheck Protection Program, a federal stimulus effort to help businesses keep workers on the payroll, but "within three months it was gone," Sherman said.
"It's been very tough times, and COVID had sped things up," she said. "With personal protective equipment, we have had to pay for everything on our own. We've requested funding and not gotten it. We did work with the (state) health department and got some resources, but most of the stuff we bought. Thank goodness for donors."
Charles Hall sought state aid to help pay for additional staff for six months to compensate for workers lost due to COVID-19, according to Sherman and Klopp.
"We reached out to the state of North Dakota for support ... but the Department of Human Services has not agreed to give us additional support during this time," Sherman said. "We've also reached out to the governor, appealed for hazard pay. At each appeal we have been met with no, the state does not have the money to support us at this time."
The governor's office referred a request for comment to Human Services.
Pedersen said the department did not provide any agency-supported facility with additional money due to the pandemic, and noted that Charles Hall like other businesses and nonprofits had access to the federal PPP money.
North Dakota received $1.25 billion in federal CARES Act coronavirus relief aid, but Charles Hall was unable to tap into it.
Pedersen said "all of that money has to be prioritized," and that only 3% of youth in foster care in North Dakota are in residential facilities.
"I think it's just a priority that the department had to make," he said. "There are 1,600 kids in foster care in North Dakota on any given day, and 95% are in a family setting."
Sherman said state payments have not only been reduced but also delayed, due to technological issues related to the state's recent shift from county-run social services to mostly multicounty human service zones. That led to cash flow problems, she said.
"In the end it's the children and families we worry about suffering because we're not meeting their needs," she said. "Family First does have good intentions, but the implementation is a totally different story. We can't do it alone. We need the state because we're serving the state's kids."
Pedersen said he is not aware of any issues with delayed payments to providers.
He also said Charles Hall did not notify the state of its decision to shut down its program until Monday, providing less than a week to move the four children in the nonprofit's care.
"That puts a lot of stress on kids, to move in such a short period of time," he said.
Sherman and Klopp said they told the state last Friday that they were considering closing but needed to meet with the board of directors over the weekend first.
"Kids are our No. 1 concern," Sherman said. "If we do not have the financial means to continue, in this business we're in, it's overnight."
Sherman said she and her husband are not bitter about what has happened but are sad that "we're not a member of the team" helping foster youth in the state.
"We believe there is an opportunity in this state to do really good things," she said. At some point "there's going to be a need for us, and we're not going to be there."
Pedersen said a Williston-based agency that once housed foster children has transitioned to treating youth with addiction problems.
"I think there are ways businesses can reinvent themselves under Family First," he said.
Charles Hall is keeping a skeletal staff of fewer than half a dozen people to figure out if the nonprofit has any type of future.
"The agency itself is not closing yet. We're trying to decide as to whether we have some other opportunities in the community to make a difference and fill the needs, because there are so many needs right now," Sherman said, citing issues such as homelessness, substance abuse and the pandemic.
The nonprofit over the next month will be figuring out what do with its houses and administrative office and "what to do with all of our other stuff collected over 50-some years," such as furniture and clothing, Sherman said. "We have a lot of work ahead."
Reach Blake Nicholson at 701-250-8266 or firstname.lastname@example.org.