A northeast Wisconsin anti-poverty nonprofit plans to close later this year amid serious financial challenges and the loss of a government contract.

For more than 50 years, Newcap has operated in 10 counties, including Florence, Marinette and Forest in the region. It serves low-income residents and is funded primarily through state and federal grants.

The agency served more than 25,000 people in 2022. Its programs range from employment and job training to educational support, financial coaching, health and food assistance, housing services, home repair and case management, according to an annual report.

Housing advocates say Newcap’s closure could lead to northeast Wisconsin losing more than $2.7 million in federal funding and leave more than 100 households at risk of losing housing.

In a statement, Newcap interim Executive Director Deb Barlament said the organization has faced “significant financial challenges” in recent months and has implemented staffing reductions and other cost-saving measures in response.

“At this time, the organization anticipates closing its doors sometime this year,” Barlament stated. “A more specific timeline will be determined as we work through existing grant obligations and funder requirements.”

Barlament’s statement says the organization hopes to “responsibly wind down operations” and is “actively collaborating with other organizations and funders to help ensure that services continue to be available to the communities we serve.”

It comes after a 2025 financial audit by accounting firm Baker Tilly found the organization had a more than $2 million deficit in 2024. The audit raised “substantial doubt about the Organization’s ability to continue operating,” citing recurring deficits, negative cash flow and reduced liquidity.

The state is conducting “enhanced financial monitoring” of the nonprofit, which includes comprehensive financial and program reviews, as well as reviews of financial documentation.

In a statement, the Wisconsin Department of Administration said the state has been working with Newcap to address their use and repayment of Weatherization Assistance Program funds for the 2025-26 program year. The program provides home weatherization assistance to low-income individuals.

The audit shows that in 2024 Newcap spent about $5.1 million for weatherization programs.

“Approximately 28% and 26% of the Organization’s grants revenue and grants receivable, respectively, were generated by weatherization and emergency furnace programs funded by the Wisconsin Department of Administration,” the audit states.

On March 13, the DOA informed Newcap that it “could not in good faith” renew the nonprofit’s weatherization contract for the next program year “given the current financial situation at Newcap and outstanding funds the agency must repay,” according to the statement.

The statement does not specify why the agency needs to repay the funds, or the specific dollar amount of that repayment.

“Working with our federal partners to administer grant programs requires DOA to assess potential risks of grantees,” the statement read. “Though Newcap has recently taken steps to address overhead costs and operating cash flow, Newcap’s financial viability remains uncertain.”

The Department of Administration says it is working with Wiscap, a statewide network of anti-poverty nonprofits, and other agencies to ensure services continue to be provided in northeast Wisconsin.

Wiscap did not respond to requests for comment about what happens when a Community Action Program, or CAP, agency — like Newcap — closes.

Carrie Poser is executive director of the Wisconsin Balance of State Continuum of Care, a nonprofit that coordinates housing and supportive services for individuals and families experiencing homelessness across 69 of Wisconsin’s 72 counties.

She said Newcap administers four U.S. Department of Housing and Urban Development grants that provide support services to 134 households across its 10-county service area, with 84 of those in Brown County.

Poser said local service groups want to take over those federal housing grants. But she said HUD officials in Milwaukee and Washington, D.C. have told her they are not processing grant transfers.

That puts the 134 households currently using those programs at risk of losing their housing and becoming homeless, she said.

“We have humans that, for no fault of their own, look at returning to homelessness that we can prevent,” she said. “It’s not because we don’t have agencies. It’s not because we don’t have the ability to do the work.”

If those grants aren’t transferred, she said more than $2.7 million — including more than $1.6 million in federal funding to Brown County — could be permanently lost from the 10 counties Newcap serves.

“It will be harder for those communities to ever get new money in this way again,” Poser said. “It’s just harder to get a grant once you’ve lost one by HUD.”

She said Wisconsin Balance of State Continuum of Care plans to move forward with filing paperwork with the federal government necessary to transfer the grants, but she isn’t sure if they’ll be successful.

The U.S. Department of Housing and Urban Development did not respond to questions about the potential loss of federal funding to northeast Wisconsin.

Laurie Styron is executive director of CharityWatch, a Chicago-based independent charity watchdog. She said Newcap serves a large geographic area, so its closure is likely to put more strain on other area nonprofits and agencies that provide similar services.

“Help that someone in need may have received from Newcap could become fragmented and require people who are already struggling to seek out services from different agencies, rather than just one,” she said. “The remaining providers in the area could see longer wait lists and reduced quality of care.”

Newcap is also closing three year-round homeless shelters, two in Green Bay and one in Shawano, by March 31, Barlament said via email.

Tara Prahl is chair of the Brown County Homeless and Housing Coalition and director of social services for the nonprofit Ecumenical Partnership for Housing. She said Newcap’s closure, including the loss of two homeless shelters in Green Bay, could have “a significant impact to our community,” especially if the government funding Newcap was receiving doesn’t remain in the area.

“All of our homeless service providers are at capacity,” she said. “This is only going to hit a little bit harder for those that are already feeling this.”

Prahl also said Newcap’s closure makes it more important for the Brown County community to take steps to address homelessness and its housing shortage.

In Shawano, Newcap provided one of only two homeless shelters in the community. Shawano Area Matthew 25, or Sam25, provided the other.

Kendra Brusewitz, executive director of Sam25, said her shelter is only open from mid-October to mid-May as an overnight emergency shelter. She also said Sam25 has often partnered with Newcap.

“They help service the homeless families in our community year-round, so if we were full we could connect with them and get (people) services over there, or vice versa,” Brusewitz said. “Not having that partnership is a concern.”

Newcap’s announced closure also comes after the organization placed former CEO Cheryl Detrick on administrative leave in February.

A Newcap official confirmed via email that Detrick is no longer employed by the organization. Of the 15 CAP agencies in Wisconsin with executive salaries listed in tax filings, Detrick had the highest compensation at $239,641 in 2024.

Detrick was placed on leave amid reports from WLUK-TV alleging the organization misused taxpayer dollars.

Two Democratic Green Bay-area state lawmakers issued statements last month calling for an investigation into the organization’s use of taxpayer funds.

In Barlament’s statement, she said Newcap is aware of “questions regarding accountability for what has occurred” at the nonprofit. She said the organization is “committed to doing everything we can to address the situation and move forward responsibly.”

U.S. Reps. Tony Wied, R-De Pere, and Bryan Steil, R-Janesville, sent a letter March 12 to the secretary of the U.S. Department of Housing and Urban Development calling for a federal investigation into Newcap.

“Money that should have gone towards helping Wisconsinites find safe and stable housing may have instead padded executive salaries and funded staff outings,” the federal lawmakers wrote.

Poser said she’s contacted Wied and Steil’s offices for help getting HUD funding transferred from Newcap to different nonprofits but has not received a response.

She said she’s reached out to the rest of Wisconsin’s Congressional delegation for assistance in persuading HUD to allow for the transfers.

“We absolutely need a nonpartisan show of support around this issue,” she said. “Folks in need are in need, regardless of what political party they belong to.”