Up With People
Broomfield, Colo.—The board of directors of Up with People has voted to cease the current operations of the 35-year old organization. The company plans to complete scheduled activities for the remainder of the year but will not resume normal activities in January.
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According to Chairman of the Board Tom Badciong, the decision was made based on exhaustive reviews of the not-for-profit organization and its inability to financially sustain its operation.
"Clearly, we can no longer continue to operate as we have been," he said. "In order to resume regular operations in the future, it will require significant restructuring. We will be considering all options."
The board has authorized selling headquarters land and building in Interlocken to reduce overall debt and provide cash for interim operations.
Currently, 655 students are enrolled in the program and are concluding tours in Massachusetts, Denmark, New York, Japan and France.
According to Lisa Limoges, vice president for international student programs, students are in the process of adjourning for a three-week winter holiday or completing their year in the program.
"We are ensuring that all students who are currently on the road with our program have made adequate travel plans to return home, and we are in the process of notifying these students and their parents of the suspension of all Up with People tour activities in 200l, " she said.
John Wetherington, chief financial officer and executive vice president has been acting as head of the organization since the president, Bill Lively, left in June. According to Wetherington, the decision to suspend operations was made with a unanimous vote of board members attending a specially called meeting Wed., Dec. 6. Currently, there are 42 board members, including representatives from Japan, North America and Europe.
In operating Up with People’s programs worldwide in Fiscal Year 2000, the company incurred $31,556,000 in expenses and generated $28,358,000 in revenue, including in-kind support, resulting in a deficit of $3.2 million. In Fiscal Year 1999, losses amounted to $870,000.
Up with People, which is dedicated to providing a multi-cultural leadership program for young people from countries around the world, is reporting bank debt and leasing commitments totaling an estimated $7.3 million. Audited numbers are not yet available.
"As we have reported to the board of directors and to other stakeholders through our public documents over the last several years, Up with People has experienced consistent declines in revenues. In Fiscal Year 2000, gift income declined nearly $.5 million and is expected to fall substantially since the end of the fiscal year in June.
"At the same time, costs have increased more than $2 million over the previous year. That money has been invested to create innovative programs, such as Communities of Peace; increase the quality of management talent; update our current show; and create new tools for revenue improvement. We have been unable to see significant improvements in our ability to generate income," he said.
Current endowment funds, totaling more than $10 million, are being reviewed with attorneys for restrictions in usage.
Nearly 180 new students selected to participate in the program next year and are due to arrive in Denver for six weeks of training beginning Jan. 13 will also be notified that the program has been suspended.
All of the 262 worldwide employees of Up with People are being notified that their current jobs have been eliminated, including the 66 office staff who work out of Broomfield. Some of those employees will be working over several months to maintain minimal operations and review opportunities to restructure the operation. Termination dates for employees, severance packages and benefits continuation are being determined by Up with People’s human resource department and executive management, along with outside consultants.
Up with People has nearly 20,000 alumni living around the world who have participated in the program whose hallmarks are on-stage musical performance, community service, international travel and host family living.
"The board’s decision in no way minimizes the current and historical impact of the Up with People program which has helped create generations of new leaders. There is tremendous awareness of the organization, its songs and good works," said Badciong.
During 2000, students performed its musical, "A Common Beat," in 520 cities around the globe, completed more than 100,000 hours of community service and were hosted by 27,000 families in 24 countries. Highlights of the year included the world premier in Detroit, Mich., performances at World Youth Day in Rome, a seven city tour in Mexico and presentation of an innovative violence prevention program in Denver, San Antonio and Boston.
In addition to its Colorado headquarters, Up with People has 9 worldwide offices, national offices and regional offices including a European headquarters in Brussels, Belgium; an Asian headquarters in Tokyo, Japan; regional European offices in Bonn, Germany and Stockholm, Sweden; and National offices in Switzerland, Denmark, Portugal, Italy, and Mexico.
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