A venerable San Francisco charity recently investigated by The Chronicle must repay the public tens of thousands of dollars after misleading city officials — a rare rebuke that follows a significant internal shakeup at Helpers Community Inc.

The 60-year-old nonprofit, founded to assist people with developmental disabilities, has removed its longtime executive director from the board, slashed her salary by one-fifth, and is debating a partnership with another organization or perhaps shutting down completely.

The changes address questionable practices revealed by the newspaper in December: For years, Helpers had deceived donors, spending scant funds on its stated mission of supporting residential care for people with developmental disabilities while paying an outsize salary to its director, Joy Venturini Bianchi. As the driving force behind Helpers, Bianchi became a prominent figure on San Francisco’s fashion and social scenes, with little attention paid to her business practices.

This month the San Francisco Office of the Assessor-Recorder decided Helpers would have to pay about $31,000 in back taxes, after determining the charity received several years of tax exemptions by misrepresenting the use of properties it owns along Golden Gate Park, city officials said.

The assessor’s action should raise questions among state and federal regulatory agencies about Helpers’ legitimacy as a nonprofit, according to nonprofit experts.

“These changes point to the realization on all parts that the organization suffered from serious shortcomings,” said Brian Mittendorf, an accounting professor at the Fisher College of Business at Ohio State University who specializes in nonprofits. “They also signal the seriousness with which the city and the board take the concerns raised.”

Bianchi, 78, and the Helpers board have spent the past decade shifting the $6 million organization away from providing residential care for adults with developmental disabilities to raising money for that population through high-fashion resale boutiques. They have denied any wrongdoing in their operations.

In a December letter to Helpers’ supporters, Bianchi said the paper’s report on the charity “does not reveal the depths of my soul nor the intentions of my heart.”

“I can unequivocally state that I have never mishandled funds or donations of any kind for my personal use,” she wrote. “You believed in us and we hold that trust sacred.”

Yet within days of The Chronicle’s report, the Helpers board began a significant overhaul, slashing Bianchi’s salary by about $40,000 and removing her from the board. The board also initiated formal discussions about whether Helpers should continue to exist.

“The facts are obvious that the foundation has outlived its mission,” said Marie Lipman, whose aunt, Sister Miriam Auxilium O’Gara, founded Helpers in 1953 to house and serve adults with Down syndrome. “I certainly was surprised and offended to learn that Helpers was still functioning even though its residents had been moved out long ago and no longer received any kind of support.”

Helpers Community Inc. — known as Helpers of the Mentally Retarded until 2015 — long housed people with developmental disabilities in homes it operated in the Richmond District. Since the group ended its residential services in 2002, however, it has done little charitable work while amassing millions of dollars in assets and donations and handsomely compensating Bianchi as she traveled to red-carpet galas, according to Helpers’ annual public filings to the Internal Revenue Service.

For 13 years, Helpers gave nothing to residential programs. And between 2003 to 2008, the group gave nothing to any charitable cause at all, financial records showed. Most donations in recent years have gone to a group that repairs facial deformities in children overseas.

Yet with a 2015 base compensation of $193,828, Bianchi earned roughly $100,000 more annually than the directors of similarly sized San Francisco nonprofits.

Helpers’ IRS filings show that Bianchi’s annual compensation package has been larger than the group’s total charitable giving in every year since the homes were closed. And her dual role as a paid employee and voting member of the Helpers board of directors represented a conflict of interest, critics noted.

The Chronicle’s investigation also raised questions about the four Fulton Street homes the charity used for housing and activity programs. Although Helpers has not offered direct services for disabled residents for more than a decade, the organization continued to apply for, and receive, annual property tax exemptions amounting to about $100,000 for providing those programs.

The houses — three of which are chock-full of designer gowns, handbags and fancy footwear — are instead being used for storage and for the charity’s nationally known boutique, Helpers House of Couture, city officials found.

As a result, the assessor-recorder’s office has denied Helpers property tax exemptions for 2017, estimated at $8,000, and also is seeking four years of unpaid taxes from 2013 to 2016, worth about $31,000. Under state law, the office can only seek back taxes from the previous four years.

Helpers board President Peggy Bachecki said the group properly reported the change in use to the assessor and made the properties available for inspection. “We are unaware of any allegation (or any factual basis for any allegation) that the Assessor’s Office was misled,” Bachecki wrote in a letter to The Chronicle.

San Francisco Assessor-Recorder Carmen Chu has said the agency relies on nonprofits “to truthfully declare any changes and to reaffirm their eligibility for exemption under penalty of perjury.”

“We don’t take these decisions lightly,” she said of the move to deny Helpers’ exemptions.

As organizations classified to benefit the public, nonprofits like Helpers can receive federal, state and local tax breaks. The assessor’s decision about Helpers’ property tax exemption does not affect the group’s eligibility to operate as a charity or to solicit donations in California; that status is regulated by the IRS and the state attorney general’s office.

Officials with the state attorney general’s office and the IRS declined to comment.

But experts said the assessor’s action should serve as a strong indication to those authorities that there may be legal issues with Helpers’ overall standing as a charitable nonprofit.

“Should the AG’s office and the IRS look further into Helpers? Absolutely,” said Laura Otten, executive director of the Nonprofit Center at La Salle University, which provides training and consulting to charities. “In general, when one oversight body makes the determination that an organization no longer qualifies as being tax-exempt in its eyes, that should be cause for other oversight bodies to take another look.”

Since coming under scrutiny, Helpers has pledged to become more transparent and distribute more donations to people with disabilities.

Bianchi’s salary has been cut 20 percent and a sample job description for a new executive director has been drafted, according to sources familiar with the organization’s recent board meetings.

Responding to concerns that she had raised millions of dollars but failed to adequately distribute it, Bianchi said in an interview in October that after Helpers closed its residences, she spent years traveling around the country seeking suitable organizations to fund, without success.

Helpers board members have since visited a number of service providers for people with developmental disabilities in and around San Francisco. The board has reached out for the first time to the region’s leading nonprofit provider for such adults, the Arc San Francisco, for example, which serves 800 people in San Francisco, San Mateo and Marin counties.

Last week, Bachecki revealed that Helpers has revised its bylaws to exclude Bianchi from the board and is looking into partnering with another nonprofit or distributing its assets.

Bachecki said those efforts had begun “long before” the newspaper’s inquiries but simultaneously stated those discussions were “still in their initial stages.”

Bachecki also said Helpers may pursue an administrative challenge or litigation in response to the assessor’s decision to end its property tax exemptions. City officials said Helpers must pay its tax bill before contesting the decision.

For some who have worked or volunteered for Helpers over the years, the changes and new level of scrutiny represent a welcome shift for a charity that has long troubled them.

“I’m very happy with the developments, and I hope that Helpers and whoever they partner with can quickly take some action so that they are actually giving the money and distributing the assets to people who are really in need, because there are so many people who really could benefit,” said Amy Zierath, an Oakland resident who volunteered for Helpers in 2009.

Zierath, whose brother was born with cerebral palsy, said she was initially enthusiastic about working with the group. But Zierath said the more time she spent at Helpers events, the more questions she had about where the donations were going.

“Things weren’t adding up to me,” she said. “I was very uncomfortable with the organization and disgusted with the way they were using this cause to raise money.”

Bryan Blumenfeld, who worked for Helpers as an office assistant from 2013 to 2015, called the recent changes “long-overdue justice.” He questioned, however, how the organization could allow Bianchi to remain as its executive director.

“She continues to discredit the organization by acting as their executive director,” Blumenfeld said. “She hasn’t issued an apology to San Francisco taxpayers, to Helpers funders and donors, to her employees and former employees, to all the volunteers, and most importantly to the developmentally disabled people who could have been helped in so many more ways if the organization had been run with integrity.”

Cynthia Dizikes, Carolyne Zinko and Karen de Sá are San Francisco Chronicle staff writers. Email: cdizikes@sfchronicle.com, czinko@sfchronicle.com, kdesa@sfchronicle.com Twitter: @CarolyneZinko, @cdizikes