Two sides offer vastly different interpretations of expenses and nonprofit’s accomplishments
The Santa Clarita Veterans Services Collaborative is disputing the allegations by former board members that the nonprofit organization has mishandled its finances while spending the majority of its funds on overhead and payments to board member Jeff Stabile.
“The resigning board members alleged that approximately 90% of the organization’s $300,000 in revenue since 2019 was spent on overhead rather than veteran services. However, the organization’s tax returns tell a dramatically different story,” said a news release issued by the organization last week in response to the resignations.
When initially reached by The Signal on Sept. 26 for comment on the board members’ resignations earlier that week, Stabile referred comment to the organization’s chairman Philip Solomon, but said he did not have Solomon’s phone number. Before additional questions could be asked, he immediately hung up the phone.
The collaborative issued its news release on Oct. 2.
“Since 2019, SCVSC reported an average of 55% in direct program service expenses. This directly contradicts claims that only minimal amounts were spent on veteran programs,” the news release said. “Over the six-year period in question, the organization has consistently allocated substantial resources to direct veteran services, with program expenditures totaling over $123,000 across the documented years. These expenditures do not include the various veteran support services provided by the collaborative, which are free to veterans, and have no direct costs to the organization.”
Public records available on the IRS website show that the organization had its tax-exempt status revoked in 2020 after failing to file its taxes for three consecutive years. The tax-exempt status was restored in 2021.
The collaborative’s IRS Forms 990 for 2021, 2022 and 2023 — the only years for which the organization’s tax records are available on the IRS website — show that its reserves dwindled from $143,888 at the beginning of 2021 to $8,859 at the end of 2023.
In that three-year period, the organization’s expenses outstripped its revenue each year, with the deficit spending shored up by dipping into reserves. The deficits were $28,792 for 2021, $50,208 for 2022 and $35,986 for 2023.
Overhead expenses during those three years for payments to contractors — including Stabile — and rent, utilities, maintenance, etc., accounted for 47% of expenses in 2021, 71% of expenses in 2022 and 82% of expenses in 2023.
The Form 990 for 2021 did not specify whether Stabile received any of the $18,631 paid in fees to independent contractors. In 2022 and 2023, the forms note that Stabile was paid $24,000 each year, which accounted for 31.5% of expenses in 2022 and 36% of expenses in 2023.
The collaborative has touted itself as being a 100% volunteer driven organization, which led the resigning board members to question why one of the organization’s board members was receiving compensation, particularly at a level that accounted for a large percentage of its revenues.
In its news release responding to the resignations, the collaborative said it was forced by circumstances to temporarily step away from the all-volunteer model.
“Unfortunately, due to a significant reduction in volunteerism between 2019-2024, the collaborative was faced with the unenviable decision to either: (1) shut the doors of the center where the veteran community meets, interacts, and gains valuable resources; or, (2) pay an experienced, dedicated member of the organization to serve the veterans, and keep the center open five days per week,” the collaborative’s release said. “The board of directors unanimously chose the second option to continue serving its mission.”
According to a copy of board meeting minutes provided by one of the former board members, the board authorized payments of $1,000 per month to Stabile starting in August 2019, which should have totaled $5,000 for that year.
There is no Form 990 on the IRS website to show how much was actually paid. However, a copy of the organization’s 2019 income and expense statement provided by the former board member shows $13,500 in payments to Pegasus Two Consulting. According to his LinkedIn page, Stabile is the managing director of Pegasus Two Consulting.
The statement shows $45,606 in revenue for 2019, and $28,569 in expenses, of which 47% went to Stabile’s Pegasus Two.
In 2021, according to the former board member, “(Stabile) produced a contract that stated $2,000/month ($24,000/year). This suggests either (1) payments were made but classified as ‘expenses’ elsewhere, or (2) the compensation wasn’t disclosed in the 990 filings, which would be a compliance issue.”
In the filings for 2022 and 2023, the stated amount on the Form 990 filings reflects that $2,000-per-month arrangement.
The former board member said this matters because “IRS Form 990s require reporting all compensation to officers, directors and key employees. If returns for 2020-2021 show zero compensation, but bank records prove otherwise, that means the returns were either: filed incorrectly (misclassification), or filed deceptively (intentionally omitting compensation).”
This year the collaborative has touted itself as a 100% volunteer organization.
“We are incredibly proud to be a 100% volunteer organization,” Dennis Sugasawara, the organization’s chair and director of business and community relations, said in a news release promoting its “Marching On” fundraiser held Sept. 13. “That means every single dollar raised goes directly toward programs that change the lives of our local veterans. ‘Marching On’ is more than an event — it’s a community coming together in gratitude and action.”
The Oct. 2 news release said the organization had “returned” to an all-volunteer model this year, arguing that “the assertion that $130,500 was paid to a single individual is grossly inflated. Actual compensation across all documented years totals approximately $68,500, and notably, in 2024, officer compensation was reduced to zero as the organization returned to a fully volunteer leadership model.”
Former Board Members’ Objections
Nine board members have resigned from the collaborative this year. Six board members remain, according to the collaborative’s website. Stabile, who was listed as a board member as recently as May 29, is no longer listed as a board member.
In September, five board members sent a joint letter of resignation to the collaborative citing financial management issues that they described as a pattern of “unsustainable, ethically questionable, and damaging practices,” which they said failed its mission to serve veterans.
The letter was provided to The Signal by Dr. Harleen Grewal, a local dentist who was one of the five who resigned via that letter. Jonathan Hatami, Brandi Heter, Missy Carter and Capt. Brandon Barclay of the Santa Clarita Valley Sheriff’s Station were the other board members who formally resigned. Other members who have resigned on their own include Denise Lite, Leon Cristobal, Darlene Gandara and RJ Kelly.
According to the five-member letter, since 2019 the organization’s $300,000 in revenue was disproportionately spent on overhead, with 90% of all revenue going toward operational costs.
The letter stated that $130,000, or 44% of the organization’s revenue, was paid to Stabile, $135,000 was spent on rent, and $90,000 was used for utilities and overhead.
Which set of numbers is correct from 2019 onward — those provided by the collaborative, or those provided by the former board members — is difficult to verify with certainty due to the fact that IRS Form 990s are not available for 2019 or 2020.
Contributions to Non-Veteran-Specific Organizations
Hatami, a deputy district attorney who was one of the five board members who resigned together in September, raised concerns about the collaborative spending some of its dwindling funds on contributions to PFLAG and the NAACP, organizations that are not specifically geared toward veterans.
“I don’t think we should give money raised for veterans to non-veteran groups. I also think all money raised for veterans should be given back to veterans. For those reasons, I chose to resign my position on the board,” Hatami said on Sept. 26.
Stabile and his wife, Peggy, are the founders of the local chapter of PFLAG, which supports the LGBTQ community and family members. PFLAG’s website has a page listing a scholarship named for the Stabiles.
The collaborative’s Oct. 2 release defended those contributions: “SCVSC’s board noted that many veterans are members of diverse communities, and supporting inclusive community partnerships enhances the ability to serve all veterans effectively. Moreover, absent from the resignation statement was the fact that SCVSC’s ‘contributions’ to these organizations were payments of shared vendor fees, to reduce operational costs, and provide the most efficient services possible. Importantly, the SCVSC is a non-political organization, and does not deny or alter its services based upon its clients’ political beliefs or affiliations.”
Differing Views of Collaborative’s Accomplishments
The former board members who resigned contend that the collaborative had devolved into a center that provides literature and refers veterans to other agencies for actual services, along with a food pantry providing donated food.
“The overwhelming majority of funds have gone to administrative overhead and one individual’s compensation, rather than to programs that directly benefit veterans. Rent, utilities, and Mr. Stabile together account for well over 100% of the organization’s revenue, meaning this nonprofit has been running on deficits, relying on event fundraising and rollover balances, with almost no money left to support veterans directly,” said the letter from the five board members who resigned in unison.
“What we have become is not a service provider, but a resource referral center, and we must ask ourselves: Is that truly worth the money being spent?”
The letter added: “This is not just about numbers. It is about trust. Donors contribute to this nonprofit because they want to see veterans supported, housed, fed and cared for. Veterans and their families expect that when they hear about this organization, there are programs, services and support systems in place to meet their needs. Instead, what we have are books that show funds drained away by overhead and personal payments.”
The collaborative, in its Oct. 2 news release, pushed back against that characterization.
“Since 2019, SCVSC reported an average of 55% in direct program service expenses. This directly contradicts claims that only minimal amounts were spent on veteran programs,” the release said. “Over the six-year period in question, the organization has consistently allocated substantial resources to direct veteran services, with program expenditures totaling over $123,000 across the documented years. These expenditures do not include the various veteran support services provided by the collaborative, which are free to veterans, and have no direct costs to the organization.”
The release added: “This allegation ignores the comprehensive support system that SCVSC has built and maintains daily. Specifically, the Veterans Center currently serves 40-43 visitors per week — approximately 2,064 veterans and their families annually. These are not just numbers; they represent real people receiving real help when they need it most. The services provided by the center include disability claims assistance, referrals for medical treatment (including alternative treatment options), housing support, food pantry access, transportation assistance, wellness programs, and crisis intervention, among many other critical programs.”
The release did not indicate how many of those 2,064 annual visitors are repeat visitors versus unique visitors. It also did not specify whether every visitor receives services.
The release described examples of the organization’s accomplishments.
“Recent examples of the collaborative’s mission in action include arranging temporary housing for homeless veterans awaiting voucher approval, securing an RV for a veteran during his transition period, providing hotel accommodations for a veteran and his service dog, transitioning a veteran with dementia into assisted living, and offering after-hours crisis support for veterans and their families.”
The release added: “While the board is disappointed with the very public departure of these board members and the manner of their exit, the remaining board members continue to focus on the SCVSC mission. The center is committed to transparency, fiscal responsibility, and most importantly, serving the veterans who have sacrificed so much for our country.”
