Sunstone Way is a nonprofit shelter provider in Portland which, as of 2024, was the 11th largest contractor in Multnomah County. Yesteray, the nonprofit announce it was closing for good.
After coming under fire over a lawsuit alleging financial mismanagement, Sunstone Way — a nonprofit that manages more than 400 shelter beds in Multnomah County and Portland — will shut its doors by the end of June.
The announcement of the closure came after the nonprofit’s former finance director filed a $4.5 million lawsuit against Sunstone Way a month ago, alleging mismanagement and the wasting of public dollars by the organization’s top executives…
It operates three shelters in the county with a total of 223 shelter units, which may include multiple beds per unit. Those county shelters are Market Street with 120 units, Delta Park Motel Shelter with 61 units and Rockwood Bridge Motel with 42 units.
Signs of trouble at Sunstone first became public back in 2022:
The nonprofit, formerly known as All Good Northwest, was flagged for unallowed expenses in 2022 after the county auditor’s office substantiated a hotline report made against the organization.
Despite the issue, the Joint Office of Homeless Services — now known as the Homeless Services Department — continued to work with the nonprofit, which rebranded as Sunstone in 2024.
But the last straw for Sunstone was the whistleblower lawsuit filed last month by a former finance manager.
Kate Fulton joined Sunstone Way as finance manager on Oct. 2, 2023. She was promoted to director of finance in early 2024, giving her a bird’s eye view of the nonprofit’s books.
“By July 2024, it became apparent to plaintiff that Sunstone Way was being mismanaged financially,” the complaint says. “That month, the organization nearly failed to make payroll for its employees and was able to do so only through plaintiff’s negotiation with Sunstone Way’s bank to avoid a default.”…
Among the first signs of trouble for Fulton, according to the complaint, was chief executive Andy Goebel’s decision in mid-2024 to move Sunstone Way’s offices from the repurposed Washington High School to more expensive space across the river on Southwest Naito Parkway “despite the lease not having expired on the previous offices.”…
Among the largest accounting errors Fulton found, according to the complaint, was $210,000 in overbilling by Our Streets PDX, a nonprofit that provides food to shelters. Fulton flagged the overpayment to Goebel, who told her not to alert JOHS because he had “made a deal” with Our Streets PDX. Goebel and Our Streets’ leaders are personal friends, the complaint says.
There’s more to the story including claims that the chief executive and the female chief operating officer were having some kind of relationship and the nonprofit was paying for them in at least one instance to have private nights away together.
A few months later Fulton was fired. Now she’s filed the lawsuit. The city was paying this group more than $1 million per month to manage about 400 shelter beds. It’s just one of several similar groups that provide homeless services to the city. The fact that the city had a hint of this four years ago and continued to fund this operation may help explain why the people running it weren’t very concerned about how they managed funds.
If not for this lawsuit by a former employee, this nonprofit wouldn’t have gotten the negative attention and probably wouldn’t be closing this week. It makes you wonder how many more poorly run nonprofits are out there in cities up and down the west coast. So long as they aren’t making headlines, there’s no real reason for blue cities to look too closely into where the money is going.
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