Questions Surround Nonprofit's $5M Gift to USM Facility

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A nonprofit organization that receives a majority of its budget from taxpayer dollars intended to help people out of poverty, provided most of the funding for a $7 million volleyball center through an upfront five-year sublease agreement with the University of Southern Mississippi's athletic foundation, and some are questioning why.

As reported by Mississippi Today, the Mississippi Community Education Center paid $5 million in cash toward the state-of-the-art facility, located in Hattiesburg, a college town of 46,500 people with a poverty rate almost double the state average.

“How in the world is the volleyball court going to help struggling families? How does that help them get the job training they need?” said Oleta Fitzgerald, longtime director of the Children Defense Fund’s Southern Regional Office. “They didn’t even make a good attempt to connect this money to the needs of these families.”

The nonprofit's owner, Nancy New, sat on the USM athletic foundation’s board. The university modified plans to the facility, called the Wellness Center, so that it would include office space for the organization.

Under the 2017 lease agreement, obtained by Mississippi Today, the Mississippi Community Education Center rented all university athletic facilities “for various activities that benefit the area's underserved population," but one former employee said that never happened. The nonprofit, under ongoing investigation in connection with the largest public embezzlement scheme in state history, has now closed its offices.

New’s nonprofit did not give direct assistance to working people, but offered parenting and fatherhood classes, motivational speaking events with retired athletes, and health and wellness programs such as boot camp-style fitness classes run by Paul Lacoste. The nonprofit contracted with another of New’s companies, New Learning Resources Online, to provide online diploma programs to its partners, such as Phoenix Project.

In early February, agents from the Mississippi auditor’s office arrested John Davis, a longtime Mississippi Department of Human Services official who became the agency’s director in 2016, New and four others in connection with a conspiracy to steal more than $4 million in grant funds meant to serve the poor. They’ve pleaded not guilty.

Most of the Mississippi Community Education Center's money came from a federal welfare program called Temporary Assistance for Needy Families, which the federal government provides each state through a block grant for them to use as they wish — with few strings attached. Out of $135 million in 2018, Mississippi spent just 5 percent, or $7.3 million, on direct cash assistance to poor families.

University explanation has been slow in coming. In a statement, USM spokesperson James Coll said only that individual donors — including NFL Hall of Famer Brett Favre, who played football at USM and whose daughter plays sand volleyball there — contributed to the construction beyond the $5 million donation from the nonprofit.

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