John W. Barry

Poughkeepsie Journal

As it operates in the red and relies on a loan and a line of credit to cover costs, the Beacon-based environmental organization Clearwater is battling systemic financial challenges and is in danger of shutting down.

“If we don’t start bringing in money this month and next month, we could literally have to shut our doors,” Clearwater Treasurer Stephen Smith said.

Smith made his comments during a Clearwater board of directors meeting Wednesday night in Beacon.

Earlier that evening, Clearwater Executive Director Peter Gross told the Journal that Clearwater will not stage its annual festival in June.

The festival dates back to the launch of the organization in 1966 by Pete Seeger, the late Dutchess Junction resident, folk singer and environmental activist. The Clearwater organization and its iconic sloop were both at the forefront of the modern environmental movement.

Pete Seeger

As Clearwater begins its 50th anniversary year, it maintains a financial struggle that, according to Annie Osborn, president of Clearwater’s board of directors, dates back to when Seeger began raising money to build the sloop Clearwater. His strategy revolved around battling pollution in the Hudson River by generating interest in the waterway.

“Clearwater has always been a day late and a dollar short,” Osborn said Thursday. “It’s systemic.”

Comments made at the meeting on Wednesday and a review of the organization’s 990 form, which non-profit organizations like Clearwater are required to file with the Internal Revenue Service, offer a sketch of Clearwater’s ongoing financial challenges.

Additionally:

One of Clearwater’s primary revenue sources — the festival — has been eliminated for this year.

Another primary source of revenue — membership — typically got a boost from the festival.

A third source of revenue, the sloop Clearwater, is in the midst of an $850,000 U.S. Coast Guard-mandated restoration. The state is covering $340,000 of that cost. Clearwater must cover the balance.

According to the 990 form, the group ended the fiscal year ending Nov. 30, 2014 with a deficit of $114,293 and revenue dropped to $2,262,823 from $2,288,005 the previous year.

According to Osborn, the normal operating expenses for Clearwater are $70,000 per month.

Osborn said the restoration project cost the Clearwater one month of hosting sails in 2015 and will cost it two more months — April and May — before the ship’s scheduled return to the river in June.

“Without any one of those three income streams, we’re without a rudder,” Smith said at Wednesday’s meeting. “We’re in very deep trouble ... We’re trying to save this organization. You’re in a situation where we can die and we’re trying to save it.”

Osborn remains optimistic and defiant.

Regarding Smith’s comments on Clearwater being in a dire financial condition, Osborn on Thursday said, “someone is glass half-full and someone is glass half-empty. Letting the membership know how really on the brink we are always engages them.”

Asked if Clearwater will cease to operate, she said, “Not on my watch.”

For the fiscal year ending Nov. 30, 2014, contributions and grants dropped to $827,102, from $1,116,495 the previous year, according to the 990 form. At the same time, program service revenue increased, from $1,118,645 to $1,403,476.

The somewhat conflicting financial picture painted by the 990 is reflected in comments from different Clearwater officials.

Shortly before Smith Wednesday evening told a room full of about 75 people that Clearwater may have to “shut our doors,” Gross used the word “challenged” to describe the financial state of the organization.

Asked if Clearwater was in danger of filing for bankruptcy, Gross said, “I don’t believe it is.”

At the same meeting where Smith spoke, Roger D’Aquino, Clearwater’s former finance director, addressed the audience and said that Clearwater is $1,200 in the red so far for its fiscal year, which began Dec. 1, 2015. Last year at this time, Clearwater was $54,000 in the black.

“Last year compared to this year, we are pretty much in a hole,” D’Aquino said, “a very big hole.”

D’Aquino said the festival over the last six years averaged a net income of $162,000 annually. That topped out at $279,000, but the 2015 festival earned just $31,000.

D’Aquino said Clearwater has refinanced its debt, secured a $100,000 line of credit from Ulster Savings Bank — after getting turned down by its own bank — and received a $50,000 loan from the Dyson Foundation.

“It’s not looking very pretty in March, April,” D’Aquino said. “I hope we get there.”

Gross said Clearwater canceled the festival — which costs about $900,000 to stage — because the group can’t “risk money on a festival.”

The possibility that Clearwater could have lost money on the festival, he said, was “not out of the question. Last year the rain was really detrimental to us, in terms of the amount of profit we ended up with, which was quite small.”

The festival had been held at Croton Point Park, in Westchester County, which offers sweeping views of the Hudson River. Osborn said Clearwater paid $50,000 to use the property in 2015.

Clearwater plans to host a series of concerts throughout the year to raise money, with a a two-day event possible in Beacon later this year. And Osborn said the announcement that the festival will not be held has spurred donations.

Both Gross and Osborn said Clearwater’s focus is on getting the sloop back on the river.

Gross said he expects the festival to return in 2017.

“It’s hard to imagine it won’t be held again,” he said.

John W. Barry: jobarry@poughkeepsiejournal.com, 845-437-4822, Twitter: @JohnBarryPoJo