The Tennessean

NASHVILLE, Tenn. (AP) _ International shoe charity Soles4Souls hired a new CEO, recruited heavy hitters to its board of directors and launched a marketing plan that moved a once-understated enterprise to the forefront.

And today, the Nashville-area nonprofit is announcing a 43 percent increase in net assets last fiscal year and the end of a two-year financial slide _ which came after media reports about questionable financial dealings, its founder’s large salary and donors unhappy with what they considered a lack of transparency.

Soles4Souls’ leaders were so willing to do what it took to turn things around, Chief Operations Officer David Graben _ one of a handful of employees who survived the housecleaning _ found himself pushing a lawn mower outside his own Old Hickory headquarters last year after letting the landscaping service go. CEO Buddy Teaster left his presidency of a Dallas holding company to come aboard the charity for an annual salary of $235,000, in line with the median for charities that size, according to giving guide Charity Navigator.

Founder and former CEO Wayne Elsey’s compensation of $533,000 in 2011 _ which included a $200,000 bonus even though the charity’s expenses were millions over its revenues that year _ was among the nonprofit sector’s highest.

When Teaster came aboard in 2012, he was hearing words like “betrayed” to describe donors’ feelings about the charity, he said. For two years, expenses well outpaced revenues. “We acknowledge what happened, here’s what we’re doing now, we invite you back to see,” Teaster said. “Relationships have come back. We took our licks.”

Elsey now runs a competing, for-profit business out of Florida called Funds2Orgs, which encourages small nonprofits to earn money through collecting used shoes, clothes and handbags. He also consults with nonprofits and is working on a book _ and said in an email he won’t offer any critiques of his successor’s work: “Since I resigned in early 2012, there is a new sheriff in town with new strategies. Buddy undoubtedly feels similarly.”

There’s something intensely personal about putting a pair of shoes on someone’s feet, different from ladling soup at a homeless shelter or painting a poor family’s new house. It’s an intimate kind of charity.

With a committed base of volunteers and former shoe company executive Elsey’s charisma and industry connections, Soles4Souls grew from a mere vision in 2004 to a charity with $76 million in revenues six years later. Elsey had donors doing as little as dropping tattered Cons in a collection box and as much as dropping thousands of dollars to muck their way through Third World slums, handing out shoes.

Some things haven’t changed, particularly the attraction of putting a pair of shoes on a person in need. Nashville got a close look at how that works after Soles4Souls invited volunteers to outfit more than 200 children at Whitsitt Elementary in Nashville. It was part of an effort that gave 19,000 pairs of Skechers Bobs to Nashville kids in May, an example of the charity’s new-shoes side that takes donations from corporations and gives them away for free.

About 30 chairs in sets of two faced each other, one for the volunteer, one for the student, back-up helpers running to grab larger sizes off tables covered in Bobs. Some of the children already wore nice shoes. Others kicked off worn pairs, their toes crunched against the fronts.

And while solid-black Bobs aren’t the height of grade-school fashion, most kids snatched them up with gusto. “I’m going to wear them when I go to the beach,” said second-grader Johnny Bernhal.

Trainer Kerry Wilbar leaned over his feet, feeling the scene’s familiarity, having put shoes on Tanzanian orphans with Soles4Souls on a trip last year with Vanderbilt University athletes. “It’s nice to do something directly with people getting the help,” she said. “We got to be with people, changing their lives with a pair of shoes.”

The charity’s other side is less visible and, before a 2011 Tennessean investigation that explained it, was discussed relatively little. Instead, used shoes are sorted in a large Wadley, Ala., warehouse and sold to wholesalers vetted by the charity, who then sell the used shoes to microentrepreneurs in Third World countries. Even the rattiest donations are sold to a Pakistan company that grinds the soles for reuse.

The idea of the microenterprise effort is to create jobs and prop up those economies rather than flooding them with free shoes, plus Soles4Souls gets cash to support its more limited, free giveaways in the United States and abroad. A few of the new shoes are put into the program, but large shoe companies generally want them given away, not sold, said Steven Silvers, a spokesman for the nonprofit.

In Soles4Souls’ latest Form 990 IRS filing for nonprofits, it showed $2.2 million came from the sales of used shoes, money that helps fund the charity’s operations.

The nonprofit recently expanded into Moldova, a nation wedged between Romania and the Ukraine and so poor that one of its most well-known exports is women, sold into the international sex trade. A wholesaler puts used shoes in thrift shops there, stores that help fund the nation’s foster care system and where women can work once they’re too old for foster care.

The Form 990 also shows a growing segment in its apparel side, branded Clothes4Souls, which works like the shoe side _ new coats and other clothing given away, used clothes put into microenterprise efforts overseas.

Expanding Soles4Souls’ mission and reach meant recruiting different kinds of board members over the past two years. Elsey concedes he had a specific strategy in mind with the original board. “When I started Soles4Souls from nothing, I recruited people I could rely on and was proud to associate with the charity,” he wrote.

Today, the charity’s board of directors includes influential leaders in the fundraising, legal and footwear and apparel industries. The only original board members are brothers Paul and Nelson Wilson, a minister and a dentist, respectively.

Teaster said he asked about the board’s makeup early in the interview process. “I looked at the board, and there were no industry folks on it,” he said. “That seemed odd.”

The new CEO tightened up the bylaws and term limits and had tough conversations about rethinking Soles4Souls and moving it forward with a solid reputation. The former board, for instance, had allowed Elsey to take a series of loans from the Changing the World Foundation, a sister charity to Soles4Souls, and refinance his Florida condos.

For new members, Teaster sought diversity in professional background, race and gender. One of the newest is Nancy Youssef, vice president, international, for Nashville-based specialty footwear retailer Genesco Inc. She said in an emailed statement that she agreed to join Soles4Souls because “its management team has done so much over the last two years to repair the problems they inherited,” and it became clear that the microenterprise model could change poor people’s lives.

COO Graben said another difference is Teaster’s approach to doing business, which is more collaborative than Elsey’s.

Elsey concurs that he used the “stay in your lane” approach with employees, but contends it was necessary to grow Soles4Souls from an effort in his spare bedroom to distributing more than 21 million pairs of shoes by the time he left.

He said life after achieving nonprofit superstardom is fulfilling. “Personally, I am doing awesome, I have a beautiful 10-month-old granddaughter, traveling a lot less, lost 35 pounds and super healthy, finally,” he wrote.

“I miss Nashville but love living in Florida where I have my focus on being CEO of Wayne Elsey Enterprises that has doubled in size the last 12 months.”