By Kayode Crown
Alabama YMCAs are addressing post COVID-19 pandemic financial challenges in different ways.
While one went the route of bankruptcy protection, another sold its property and now has a very low operational cost.
Huntsville YMCA sought bankruptcy protection in August when more than $15 million in loan repayment came due.
“We need to be profitable, and we need to have surpluses because we need to be able to take care of our facilities and to provide for services, but a lot of times, it does not happen that way,” Jeff Collen, Huntsville YMCA interim CEO, said. “It’s the life of the nonprofit world.”
This financial pressure isn’t unique to Huntsville.
Y without walls
Coosa Valley YMCA in Gadsdenrecently recorded back-to-back losses. First, it had a deficit of nearly $100,000 in 2021, and then, in 2022, it had the largest deficit in the past decade— almost $250,000.
That chapter took a drastic step to stop the bleeding.
“We actually sold our building in 2023,” said Coosa Valley YMCA CEO Heidi Darbo, who points directly to the COVID-19 pandemic’s effect on the chapter’s fortunes.
Instead, they use community centers and gyms for afterschool care services and community pools for lifeguard training, keeping operating expenses “near zero.”
“So, our model is very different,” Darbo said. “And some of that is because we’re trying to make sure that we are financially sound and can move forward with a new building down the road… when that time comes and we’re able to sustain it.”
“We are Y without walls,” she added. “We are serving more kids than we’ve ever served before right now.”
Selling off property
While Coosa Valley found success in selling its building, the Huntsville YMCA’s property decisions came under different circumstances. Currently undergoing bankruptcy proceedings, the chapter, this month, received federal court approval to sell two properties: a 62-acre lakeside campsite and an undeveloped 26-acre parcel.
Coosa Valley and Huntsville aren’t alone in leveraging property assets — the YMCA of South Alabama, recently sold properties to address its financial challenges.
The chapter sold one location in 2022 and another in 2023, South Alabama CEO Gwen Sommer told AL.com.
Those sales have put the branch’s finances on the right footing. “We’re in a much better financial position,” Sommer said.
From a loss of $151,263 in 2022, more than $1.6 million from asset sales put South Alabama at $1.3 million in profits for 2023.
But selling assets has long been Birmingham YMCA’s strategy to stay ahead of financial challenges, Birmingham CEO Dan Pile told AL.com.
“The Birmingham YMCA has been proactive in planning for the future, including refinancing our debt when rates were favorable and selling underperforming assets,” Pile wrote in an email.
The chapter recorded more than $2 million in asset sales in 2021, its largest in the last decade.
“The proceeds from these efforts are earmarked for reinvestment into our facilities and communities, as well as to create reserves that protect us from economic challenges,” Pile explained.
He noted that “aggressive cost controls” is another tactic the chapter employs to deal with the “uniquely challenging” COVID-19 pandemic.
Other strategies
Like other chapters coming out of the pandemic, Tuscaloosa YMCA aims to put that difficult period behind it, according to CEO Jeff Knox.
“I didn’t get here until late 2020, just as they were reopening from COVID, so for us, it’s just been — like everyone — an uphill battle to get back to an equilibrium,” Knox told AL.com.
“And so that’s what we’ve spent the last four years doing and are finally in a place where we’re looking at a sustainable financial model moving forward, where we can meet our obligations as well as deliver on our mission.”
Not all YMCAs have reached such stability. Brewton YMCA, serving a small town, is looking at millions of dollars in long-overdue maintenance.
Brewton YMCA CEO Rob Kirkland said in a statement to AL.com that their 34-year-old building needs more than $5 million “in repairs, renovations, and replacements,” and there is a need to make “facilities functional, safe and efficient.”
“This list ranges from preschool vans (ours are over 20 years old with hundreds of thousands of miles on them each) to a new roof to failing plumbing and 25-year-old HVAC systems,” he said.
Rather than wait for such issues to accumulate, Prattville YMCA CEO David Lewis emphasizes the importance of having reserves.
“In the event that we encounter a tough situation or tough year with unexpected expenses or events and we have to have reserves to fall back on to continue to sustain our operations it is important that we replenish our reserve for future events that could occur and also to reinvest in our facilities and our programs to be able to have long term sustainability,” he added.
“And as an independent nonprofit, our ability to sustain our operations is entirely dependent upon our ability to weather whatever situation we encounter, whether it’s positive or negative.”
That YMCA currently has no debt, but that may soon change because of significant facility needs. “So that may be something we have to look at in the future,” Lewis said.
While YMCAs grapple with these financial decisions, Meghan Cochrane, vice president for communications for Montgomery YMCA, emphasizes a broader perspective.
“It’s imperative to acknowledge that YMCA of Greater Montgomery’s CEO, AJ Hernandez’s leadership began in June 2024,” she wrote in an email. “And since then, our primary focus has been on serving our community, regardless of whether our financial statements show a profit or a loss.”
