Santa Clara County nonprofits say Meals on Wheels program is at risk

A group of prominent South Bay nonprofit leaders say a meals program that feeds hundreds of thousands of local seniors a year is at risk because of contract changes with nonprofit Sourcewise.

But Santa Clara-based Sourcewise, which was accused in 2016 by a county lawmaker of diverting federal funds meant for senior meals, denied accusations that the senior meals program will be discontinued.

The nonprofit leaders, which include top executives from The Health Trust, Catholic Charities of Santa Clara County and Avenidas, outlined concerns in a May 14 letter to Aneliza Del Pinal, CEO of Sourcewise. The leaders said Sourcewise intends to discontinue contracting with the county for the Senior Nutrition Meals on Wheels Program on July 1 to operate its own program in house.

“We are concerned that Sourcewise’s decision to discontinue funding the Senior Nutrition Program will needlessly hamper these efforts and reduce the amount of food available to those in need,” they wrote in the letter.

In a followup letter June 9, the nonprofit leaders said Sourcewise is making major changes without adequate preparations, transition time or public input. “Doing it this way, by choice, in the height of a global pandemic seems to invite disaster,” they wrote.

In an unusual arrangement specific to Santa Clara County that dates back decades, the private nonprofit Sourcewise receives federal funding for the meals program and gives that money to the county and other vendors for the actual meal production and delivery. Sourcewise also provides services and education for the county’s older adults.

In the current fiscal year, Sourcewise provided about a third of the Meals on Wheels program’s $2.25 million budget, which provides hundreds of thousands of meals a year to seniors.

The potential disruption comes at a particularly perilous time for seniors amid the COVID-19 pandemic. In April, a needs assessment found a countywide deficit of 20,000 meals a day, according to the letter, though Sourcewise officials said that figure reflects meals for everyone, not just those over the age of 60.

The Meals on Wheels program in Santa Clara County serves nutritious meals to homebound seniors who are 60 or older.

The leaders also asked Sourcewise to explain how it plans to use $3.3 million it received in federal CARES Act funding and demanded it be spent on senior meals and related supplies to fulfill an increasing demand.

“In the midst of a health crisis, this could produce a situation where those who need the food and are at special risk may not get it,” said Bob Brownstein, strategic adviser at Working Partnerships USA, one of the letter signers.

In an email to San José Spotlight, Sourcewise’s CEO said “all of our Meals on Wheels clients will see no change to their meal service moving forward.”

“A few administrative duties that we used to subcontract will now be brought in house to cut redundant costs and increase meal service efficiency, which is needed now more than ever before,” Del Pinal continued. “Everything that Sourcewise does is centered around the interests of older adults, this includes food security. All of our spending is under robust and welcomed state State oversight.”

In a May 20 letter in response to the nonprofit leaders, Del Pinal reiterated Sourcewise has no plans to discontinue the senior nutrition program and echoed the nonprofit leaders’ concerns over COVID-19’s effect on seniors. “The unprecedented pandemic we are experiencing has caused the most rapid spike in food insecurity we have experienced in our lifetime,” she wrote.

She said the contract changes, while confidential, will “reduce administrative costs and increase efficiencies, making more resources available for services.”

According to Sourcewise’s latest financial returns, in the fiscal year that started July 2017 and ended June 2018, it gave $347,000 to Catholic Charities, $138,000 to The Health Trust and $24,000 to Avenidas.

Other grants given out during that time include $2.8 million to Santa Clara County.

The nonprofit saw $11.37 million in total revenue. Almost all of that revenue came from contributions and grants, with about 68 percent from government grants. Sourcewise spent $11.93 million that fiscal year, 52 percent on salaries, compensation and employee benefits.

Sourcewise published a request for proposal on May 18—four days after the initial letter from the nonprofit leaders—to find a vendor to “make and deliver high-quality, cost-effective and nutrition meals to eligible homebound older adults in Santa Clara County.”

The contract is worth $1.6 million, less than the current program budget of $2.25 million, according to the leaders’ letter.

This isn’t the first time criticism of Sourcewise has become public. In 2016, county Supervisor Joe Simitian criticized the nonprofit for spending more than $3.5 million earmarked for senior meals on other things between 2010 and 2016.

Sourcewise’s CEO at the time, Steve Schmoll, told The Mercury News that the nonprofit transferred about 30 percent of federal nutrition funds to provide other needs for the elderly, allowable under state law. Sourcewise at the time found that county residents 60 or older had priorities above nutrition, including access to services and legal assistance.

“Considering the history on this point, it’s important to have some information that convinces people they’re going to be heard,” Brownstein said.

Contact Wade at [email protected] or follow him @WadeMillward on Twitter.