Courage House got the good news from the Governor’s Office of Emergency Services on June 17: a $60,808 grant had been approved to help fund services at the Northern California home for young sex-trafficking victims.
“Congratulations!” read the OES greeting to then-program director Melissa Herrmann, announcing the award.
What the state agency didn’t know at the time was that the Courage House outside Sacramento had closed three days earlier, shuttling the four remaining girls off to other providers amid a rash of citations from regulators, including allegations of inadequate staffing and repeat violations of clients’ rights.
Over the summer, Courage Worldwide Inc. emailed OES at least eight times without divulging the local facility’s status. While the Rocklin-based nonprofit was laying off much of its staff, a remaining worker was asking OES for advice on the forms and submitting documents for reimbursement, according to emails provided by OES.
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Like several other Courage House benefactors, Cal OES did not learn of the organization’s decision to “pause” its Northern California operation until The Sacramento Bee published an Aug. 20 report revealing the difficulties the group home was facing.
The secrecy surrounding the June 14 closure, and the fallout it created, have raised questions about the future of an organization that has billed itself as one of the nation’s premier groups in the fight against child sex trafficking.
In recent years, Courage Worldwide Inc. and its charismatic founder, Jenny Williamson of Granite Bay, have captured the fascination of Sacramento’s philanthropic community, collecting millions in donations while promoting a grandiose vision of local and global expansion.
At fundraisers and public events, Williamson and other Courage Worldwide executives have described lengthy waiting lists for their rescue services for girls ages 11 to 17, and detailed elaborate plans to grow the Northern California operation from six beds to 60. At various points, they also have discussed efforts to open additional Courage House facilities in Hawaii, Texas, Mississippi and India, among other locations.
Along the way, bolstered by an aggressive marketing campaign, Courage Worldwide Inc. has evolved from a small Bay Area nonprofit with no paid employees to a million-dollar-plus enterprise based in Rocklin with corporate executives, a board of directors and, until recently, two corporate offices.
But even as the group enjoys a steady stream of government funds and charitable donations, it has struggled to deliver on its vision. Five years after its debut on 52 acres of rolling countryside north of Sacramento, Courage House Northern California sits empty. Former employees describe the months leading up to the closure as chaotic, peppered with staff firings and resignations, unfilled vacancies, police reports and state censures.
The group’s other home, in the east African country of Tanzania, remains open – but is serving just six girls, half its capacity, according to organization officials.
Even so, the group’s promotion and fundraising activities continue.
Williamson told employees in a June 6 memo that Courage House was closing through the end of the year, but the organization made no public announcement for more than two months. During that time it held a string of public events, and continued accepting donations from fundraising benefits around the region. It sent out its own invitations in August for a $5,000-a-table “Urban Safari Gala” set for Oct. 1.
These events included a June 11 “Courage Run” in Granite Bay and an event at Knee Deep Brewing Co. in Auburn on the same day. In July, Williamson traveled to Mississippi to speak at two church services, sign copies of her 2015 self-help book and hold an orientation on sex trafficking.
Over the summer, her group announced it had been selected as the recipient of funds from a charity golf tournament; participated in an Amazon Prime fundraising drive; promoted an Aug. 27 charity triathlon; accepted a donation from an Elk Grove real estate office that held a fundraiser during its grand opening; and advertised on Facebook for a Sept. 17 “Uniting for Courage” dinner aimed at raising $50,000.
Since word of the closure became public, OES and at least three other major donors that had pledged more than $600,000 to Courage Worldwide have curtailed or withheld their contributions.
Terence J. Pitre is an associate professor of accounting at California State University, Sacramento, with expertise in financial disclosure issues. Pitre said a nonprofit’s failure to disclose its operating status is, at minimum, an ethical breach.
“There’s just something that doesn’t taste right about that – collecting funds, knowing you’re not operating,” Pitre said. “You have an obligation to tell your potential donors your situation.”
Williamson and other Courage House board members would not agree to an interview about the status of their operations, saying in an email that The Bee’s coverage of the organization’s difficulties has been unfair.
But in an emailed response to a list of written questions, officials defended their actions, saying they intend to reopen the Northern California home by year’s end and initially believed the closure in June would last only for weeks.
“Had we known the pause in services was going to be longer than first anticipated, we would have communicated to our donors and stakeholders shortly after our temporary closure,” Courage Worldwide board member Gil Stieglitz, a pastor at Bayside Church in Roseville, said in the statement. “However, that wasn’t clear to us until well into August.”
Williamson has said the board decided to temporarily “pause” the Northern California operation to train and recruit staff in preparation for new state licensing regulations that take effect next year. Williamson told The Bee in an Aug. 17 interview that caring for highly traumatized children who “require a lot of supervision” wasn’t feasible while also preparing for the state licensing changes.
The decision was strategic, Williamson said, and not influenced by a string of state regulatory citations leveled against the facility in the first six months of 2016. Between January and June, the Department of Social Services, which oversees licensed group homes, issued 16 citations against Courage House for various violations, the organization’s worst record in five years of operation.
In September, the state dismissed three of the 16 citations on appeal and reduced the severity level of a fourth, but licensing officials warned the group it would be “referred to the state’s legal department for further review” if it couldn’t comply in the future with state regulations. Courage House remains closed while the organization presses its appeals.
What God has called me to do is absolutely impossible. I might as well say I’m going to cure world hunger.
Jenny Williamson, Courage House founder and CEO
Some financial supporters say they were caught off-guard by the closure.
Cal OES spokeswoman Monica Vargas said in a Sept. 23 email to The Bee that her agency first learned of the closure from the newspaper’s Aug. 20 report and sent two staff members to investigate.
In an Aug. 26 meeting with Williamson, OES reported in an internal email, Williamson said “she neglected to notify Cal OES of this closure because she and her administrative staff did not intend to charge funds to their (grant) beyond mid-June since they stopped providing services to clients and intended to simply stop billing, submit reporting documents and close their grant.”
“She apologized for her oversight in notifying Cal OES,” the email stated.
The $60,808 grant was intended to cover various expenses from March 1 through Aug. 31, Cal OES records state. Courage Worldwide eventually submitted a request for $39,000 in reimbursements for services up to the date it closed, but didn’t have the documentation to back up that amount, Vargas said. OES ultimately reimbursed Courage Worldwide for $19,819.
Courage House officials did not respond directly to a question about why OES was not notified of the closure, saying that it submitted requests for reimbursement only for the time it was open.
“We subsequently have met with OES and are in good standing with them,” Herrmann, the former Courage House executive and program director, wrote in an email.
The organization lost two high-profile backers after The Bee’s initial investigation, when the Rotary Club of Sacramento and Dignity Health both said they were holding back on substantial commitments.
Another major donor – Capitol Network, a nonpartisan group of Capitol staffers, lobbyists and others who raise funds for women and children’s groups through an annual golf tournament – also changed course following The Bee’s report. The group had named Courage House as a beneficiary for its Sept. 26 golf tournament at Del Paso Country Club, according to a July 9 announcement Courage House made on its Facebook page. Tournament tickets ranged from $250 to $2,500.
On Aug. 24, Capitol Network emailed its members that it had decided to direct its funds elsewhere.
“In light of new information about Courage Worldwide, our board of directors has determined it is best to direct this year’s golf tournament proceeds to another deserving nonprofit organization,” said the email signed by tournament co-chairs Erin Norwood and Lauren Greenwood. The email said the new recipient would be New Day for Children, a Bay Area group that also provides services for victims of sex trafficking.
“While we continue to believe in Courage Worldwide’s mission … we also believe it is important to ensure the money raised through the golf tournament directly supports an operational program,” the email stated.
Norwood and Greenwood did not respond to requests for comment.
Mounting the crusade
The controversy marks a radical turn of events for Williamson, 55, Courage Worldwide’s founder, board chairman and chief executive officer.
For years, Williamson has enjoyed a geyser of positive publicity as she traveled across the country, speaking about child sex trafficking and pitching her 2015 motivational book, “Do You Have the Courage To Be You?”
Diverse individuals and businesses have lined up to volunteer or raise money for Courage House, including prison inmates, police officers, area churches and supporters ranging from William Jessup University to the Sacramento Metropolitan Chamber of Commerce.
According to the group’s Facebook page, one donor walked into Williamson’s Rocklin office in April and dropped off a wrapped package containing $12,173 that the woman had collected from co-workers after “God asked her to raise money for our organization.”
Federal law defines a child sex-trafficking victim as any minor who is recruited, transported or used for sex acts for commercial gain. While some envision scores of foreign-born youth arriving on America’s shores in airless shipping containers, ready to be sold for sex, the reality is rooted closer to home. Research shows that in the United States victims typically come from poor, minority populations. Many have extensive histories of abuse and neglect, and have been in the child welfare system.
The shocking reality of these children resonated, spawning nationwide task forces and scores of new funding streams in the past decade.
Courage Worldwide rode the wave of outrage.
Founded by Williamson in 2005 under the name Courage To Be You Inc., with a vague social mission of empowering people to “fulfill their God-given purpose,” the organization refocused its mission in 2008 to sex trafficking. That year, the organization had 15 volunteers, according to its IRS Form 990. By 2015, Courage Worldwide was reporting 1,667 volunteers who had “logged over 10,000 hours worth over $500,000.”
Today, Courage Worldwide lists 26 prominent business partners on its web page – from Newman’s Own Foundation to Morgan Stanley. Williamson has been photographed alongside actresses Eva Longoria and Julianne Moore, former Giants pitcher Jeremy Affeldt and Mississippi Gov. Phil Bryant.
A former life coach and motivational speaker, Williamson appears at ease on stage or at the pulpit, speaking in a homespun Mississippi drawl that lingers after 25 years in California. She often prays at Courage House events and, in chats with guests or journalists, has described her work as a calling that amounts to spiritual warfare.
In recent years, Williamson has been accompanied at many Courage House events by her informally adopted “daughter” Liz, a self-described sex-trafficking victim and also a former employee. At venues across the country, the 29-year-old woman has repeated her shocking story of being sold into the sex trade at age 6 by her family and being trafficked in 48 states and 22 countries.
The money poured in.
Revenue for the organization went from $107,000 in 2008 to more than $1.7 million in 2015, according to The Bee’s review of 10 years of IRS filings. Of that amount, the government delivered $514,000 last year, or about a third of the total.
The majority of Courage House girls are placed by county social workers or probation officers and qualify for government support. This year, Courage House received about $9,100 per girl per month through the California Department of Social Services, which classified it as a Level 12 group home. That classification system is being phased out next year, and if Courage House is approved under the new rules, it will be eligible for about $12,000 a month per girl, according to a department spokesman.
The big thing to me is how the expenses grew, but they still served the same number of clients. What were the additional expenses for?
Terence J. Pitre, associate professor of accounting, CSU Sacramento
Details about how Courage Worldwide spends its money are not altogether clear from the returns, and the group declined to release a budget to The Bee.
As recently as last December, the board was actively discussing the benefits of opening an “international headquarters” in Texas, noting that Courage Worldwide “could gain national exposure faster there than in Sacramento,” according to minutes of the Dec. 3, 2015, meeting. The minutes reflect that the board intended to maintain a “regional office” in Northern California.
At that same meeting, the board agreed to raise Williamson’s annual compensation to $125,000 “with intent to review during 2016 if increased projections develop.” Stieglitz, the board member and Bayside pastor, said because of cash-flow issues and the pause in operations, the raise has not been funded and that Williamson likely would make less this year than her 2015 salary of $90,000.
The group’s IRS forms reflect an organization with steadily rising expenses. Between 2012 (the first full year of operation) and 2015, costs for advertising and promotion more than doubled to $52,000. Office expenses were up more than fivefold. Travel expenses rose by 50 percent.
Overall, fundraising costs were up about 152 percent during that period. Management and general expenses grew by 65 percent. Program service expenses, meanwhile, rose 16 percent.
What did not increase substantially was the number of girls who could be served. More money came in each year, but capacity at the homes remained essentially the same.
The California home is licensed for six girls but has not always been full, according to public documents and interviews with former employees. The Tanzania capacity was expanded to 12 but is currently serving six, the organization said.
Overall, Courage House says it has housed 41 residents at its Northern California home since 2011, and 25 in Tanzania.
“The big thing to me is how the expenses grew, but they still served the same number of clients,” said Pitre, director of Sacramento State’s Master of Science in Accountancy program. “What were the additional expenses for?”
Dreams and realities
In interviews with 16 former staff members, volunteers and business associates, many complained about what they described as Williamson’s lack of specialized training and her preoccupation with publicity and fundraising. They said the money flowing into the organization did not necessarily translate into improvements for the girls.
Several described budgetary constraints as a source of friction between staff and corporate execs. On at least two occasions in 2013, employees said, they were told their paychecks were being delayed because of cash-flow problems.
Former therapist DeAnne Brining said her requests for decent furniture in the group-therapy room were repeatedly rejected. The small room at the house had awkward seating for only four, so staff had to drag in wooden kitchen chairs to accommodate seven in group therapy, she said.
“It was ridiculous,” said Brining, who resigned in August 2015. “There was enough money for them to furnish two corporate offices, but not enough money to give furniture to the girls for therapy.”
Linda Fiore, the former group home administrator who was laid off after the closure, said she grew frustrated at her inability to get approval for basic fixes and amenities: a damaged fence that was injuring horses used in the home’s therapy program, cushions missing from patio chairs, a broken and unsafe trampoline, bicycles for the girls.
Arlicia Lorentty, a former social worker/case manager at the home in 2015, said she sometimes struggled to stretch a $125 clothing allowance per quarter for each girl, some of whom arrived with “absolutely nothing.”
Lorentty said she and other staff members grew alarmed when several girls gained significant weight due to the starchy diet being served “to save on the budget.” The home received a regular donation from an area merchant of leftover breads and sweets, and staff also got supplies from a local food bank, but there often weren’t enough fresh fruits and vegetables, Lorentty said.
Kelsie Montaño, a former child-care worker at the home, shared Lorentty’s concern about the girls’ weight gain, especially given they were routinely exercising. “We were feeding them noodles and rice – not enough healthy foods,” she said.
Courage House officials conceded that budget issues sometimes required cuts in discretionary expenditures, but said the organization always had adequate funding for food, clothing, spending money and outings for the girls.
“Even when Courage House is at capacity – six residents – the state funding allocated per resident has never covered the entire Courage House budget,” Herrmann, the former Courage House program director, wrote in an email. “That is why we have events throughout the year as well as fundraise.
“With regard to food, we do utilize the food bank, which has delicious fresh vegetables and fruits,” she wrote. “We have 28 fruit trees on campus at Courage House Nor Cal as well as a large vegetable garden. We have a nutritionist to prepare our menus but you can’t force anyone to eat healthy. That is the resident’s choice.”
Montaño, Lorentty and Brining were among at least 11 workers who resigned or were fired from Courage House in 2015, according to Bee research and licensing documents. Several former employees described this period as tense and punctuated by conflict.
“The instability was creating volatility with the girls,” said Danielle Garcia, a former child care worker who left in August 2015. “It just became a really unhealthy environment.”
It was ridiculous. There was enough money for them to furnish two corporate offices, but not enough money to give furniture to the girls for therapy.
Former Courage House therapist DeAnne Brining
By 2016, life inside Courage House was increasingly chaotic, Fiore said. Four new girls had come aboard, and the facility was grappling with staff vacancies and inexperienced workers. Williamson acknowledged in her August interview with The Bee that her client mix at the end had been challenging, with several girls unsuited for the program.
In the first half of this year, law enforcement officers were called to the home eight times, according to Sheriff’s Department records. The calls included threats by one girl against staff, fights between clients, runaways, property destruction and suicidal thinking, according to state records.
Besides law enforcement officers, state licensing inspectors also visited. Of the 16 citations the state issued in the first half of 2016, 10 were considered “Type A,” or serious enough to pose an immediate risk for clients’ health, safety or personal rights, according to records kept by Community Care Licensing, a division of the Department of Social Services.
Ten of those citations accused the facility of violating the children’s personal rights, including confiscating their cellphones and other personal property and posting identifiable images of the girls on social media.
The cellphone matter has become a rallying cry for Williamson and her supporters, who have blasted the state’s rules that allow clients’ access to cellphones in California’s group homes. At Courage House, all girls were denied cellphones, which Williamson has repeatedly likened to dangerous “weapons” when placed in the hands of sex-trafficking victims.
The state counters that its problem was with Courage House’s “blanket policy” of denying cellphones and other personal property to clients. Regulators recently told Courage Worldwide they would consider allowing a ban for the girls on a case-by-case basis.
Fiore, the former administrator, supported the cellphone ban, but said the issues facing the home were more extensive.
“I loved working there. Jenny’s dream – I believed in that,” said Fiore, who started in 2012 as line staff.
“Toward the end there,” she said, “I knew it was falling apart.”
‘1,000 homes in 100 countries’
Williamson was talking about expansion even before the first Courage House doors opened.
At an Easter service in April 2011 – four months before the two facilities began operating – Bayside Church raised more than $300,000 to kick-start an ambitious building project on the site north of Sacramento.
According to the group’s website, a team of 20 architects, designers and engineers volunteered in May 2009 to begin developing plans for 10 new cottages for 60 girls, plus a dining hall, activities building, chapel, founder’s cottage and a “Wall of Courage” with encouraging messages – a project the group has estimated would cost $15 million.
Seven years later, no ground has been broken.
Williamson and her board have announced numerous start dates for the cottages – and numerous reasons for delays: Reliance on volunteer planners. The need for a new well. A burdensome permitting process.
In a recent update posted online, Williamson acknowledged the expansion “has taken much longer than we anticipated.” But she said the group is “near the finish line, having completed 96 of the 103 revisions to the permitting process.”
The cottages have been a cornerstone of Williamson’s local fundraising efforts, but she frequently tells audiences she envisions a worldwide operation.
“What God has called me to do is absolutely impossible,” she told a Mississippi congregation in July. “I might as well say I’m going to cure world hunger. We’re going to engage a million people to build 1,000 homes in 100 countries in the next 10 years.”
So far, many of her dreams have failed to materialize.
Since 2011, Courage Worldwide has talked of opening “Courage Cafes” in each city with a house. The cafes were envisioned as outlets to generate money and promote awareness.
In September 2015, the group boasted on its Facebook page that $60,000 had been obtained “to open our very first Courage Cafe in downtown Sacramento.” The money for the effort was raised by the 2015 Leadership Sacramento class, a program of the Sacramento Metropolitan Chamber of Commerce.
“At the time, the funds were to be applied to a café the organization hoped to open to help victims get real work experience,” Holly Harper, the class chair, said in an email to The Bee. The class also helped Courage Worldwide with a new website, social media and building contractor services, among other contributions.
In October 2015, Courage Worldwide announced the cafe would open near the state Capitol. “This dream is becoming a reality,” the group wrote in an Oct. 5 Facebook post.
As of February, the group was still saying on Facebook the cafe would open “early this year.”
Williamson said in her emailed response that “efforts, not promises” were made about Courage Cafe in downtown Sacramento. “We looked at over 7 properties and wrote three letters of intent during the past 18 months,” she wrote. “We engaged architects and a commercial real estate agent.”
The efforts were stymied by rising property costs near the new Golden 1 Center, she said, and for now have been put on hold.
We have 50 organizations and individuals who are literally waiting on a prototype. They want to open all around the world.
Jenny Williamson, Courage House founder and CEO
On a broader scale, Williamson and other organization officials have described plans to expand Courage House into other states, according to a review of media reports, news releases, broadcast interviews and the group’s website and Facebook pages. Some have involved fundraising.
To date, no expansion has occurred.
In Mississippi, Williamson told a reporter for the Clarion-Ledger in October 2015 that she had been planning a Mississippi Courage House for eight years and hoped to open there by June 2016. She was quoted as saying that it would take “around $1 million” to start a Courage House in Mississippi, and that she wanted to find a place with “50 acres so we can expand.”
A December 2015 blog post on the Courage Worldwide website said “80 acres and a home” had been secured in Mississippi and another home identified in Texas.
“We have begun the licensing process in both states, interviewing staff and beginning our fundraising efforts to open these strategic homes in the Southwest and Southeast for children who are recovered by law enforcement but have no safe place to begin their journey of healing,” the post said.
Williamson downplayed those projects in her August interview with The Bee, saying we’re “just in conversations.” One concept, she said, is to make money in such out-of-state ventures by treating Courage House like a franchise in which the organization licenses the name and provides programming and consulting but doesn’t do the actual fundraising.
“We have 50 organizations and individuals who are literally waiting on a prototype. They want to open all around the world,” Williamson said.
For now, the organization is facing more immediate challenges. As Courage House continues to work on its appeals and licensing – and without any government support for clients – fundraising must continue, Williamson said.
“We have a mortgage at the house, we have utilities,” she told The Bee in August.
In the email response last month, Williamson said they now hope to reopen by Christmas, but that the timing “is contingent on us hiring the right people and having the money to fund the house.”
The group’s next big fundraiser, the Elk Grove Turkey Trot, is set for Thanksgiving Day.