Dallas nonprofit CitySquare — for decades a leader in the battle against poverty and homelessness — has run out of money to do its work and will go out of business at year’s end.

In an interview Friday with its leaders, I learned CitySquare will devote the rest of 2024 to transferring its many programs, which serve 27,000 people annually, to other neighborhood providers.

CitySquare also expects to turn over its Opportunity Center campus, across Interstate 30 from downtown, to another operator as a hub for poverty-fighting organizations.

“We didn’t have the time we needed to really right the ship,” said CEO Annam Manthiram, who arrived in late August in hopes of creating a new identity for CitySquare. “We kept thinking fundraising would come back early this year and thought the brand was stronger than it was.”

CitySquare’s long-time visionary was Larry James, a champion of the poor who in 1994 became head of the fledgling Central Dallas Ministries, as the nonprofit was originally known.

James grew the operation into a powerhouse responsible for many good works in Dallas — permanent and temporary housing, food resources, health care and job creation. He also educated policymakers and led anti-poverty efforts at the behest of elected officials.

CitySquare was synonymous with James, perhaps too much so. Once he moved from his CEO job to a board seat in 2021, community members who long supported his work also began to move on.

Ongoing cuts in operating costs, staff and programming in the last year or so haven’t kept up with the “millions of dollars decline” in giving, said board chair Lewis Weinger.

Weinger and Manthiram told me CitySquare’s prospects were further hurt by a lack of financial transparency to the board and donors after James’ retirement and by “culture-workplace issues.” They said they could not provide details of those issues because of HR considerations.

This month, the leadership team and board decided the best outcome for the neighbors who rely on CitySquare’s services was to go public with plans to cease operations and enlist partners to take over the work at year’s end.

CitySquare’s main campus, on Malcolm X Boulevard just south of Interstate 30, provides services such as a food pantry, workforce training and a community resource center. Also on the site are 50 cottages that shelter a fraction of the 500 neighbors in its housing programs.

The best news in this grim moment is that local philanthropic foundations have CitySquare’s back and will provide funds to carry the nonprofit and its programs through the year.

Wayne White, president and CEO of the Communities Foundation of Texas, told me Friday he and others have met with CitySquare leaders to determine how best to ensure neighbors don’t lose services. He said his team “is committed to working with funders and nonprofits to address the gap that will exist once CitySquare winds down their work.”

When I profiled Manthiram in February, she had a sense of the financial problems, but she believed she would have three years to turn things around. “I didn’t anticipate as big of a budget shortfall as actually existed,” Manthiram said, “and the board didn’t know the budget deficit was as large as it was.”

For example, the board had been told the shortfall in CitySquare’s $39 million budget for 2022 was $1.6 million. Manthiram discovered the deficit was $3.2 million. Despite her cost-cutting after arriving in the last quarter of 2023, the nonprofit expects final numbers to show it finished last year with a $2 million deficit.

The previous CEO, John Siburt, took the job in January 2021 after serving as CitySquare president for five years. He left in December 2022 and is now president of Timberview Farmstead in Fort Worth. CitySquare’s chief financial officer and chief development officer at the time, both of whom had been on staff for only a couple of years, also left in 2022.

“There was no intentional hiding of the financial situation,” Siburt told me Saturday. He did not comment on the workplace-culture issues beyond saying “the need to change the CitySquare model created tension at times.”

In separate interviews, Siburt and James said CitySquare’s aggressive attempts to keep people housed during the pandemic triggered an unsustainable financial picture. “I took responsibility for overextending us during COVID,” Siburt said. He later chose to leave the organization “out of a belief that both CitySquare and I could benefit from a fresh start.”

James said the nonprofit many times tried to do too much. “We would see the need and we were sure filling that gap was the right thing to do.”

For example, with struggling residents further crippled by COVID, CitySquare paid the rents and mortgages of hundreds of people and operated 1,000 apartments as permanent supportive housing. Once pandemic-related funding dried up, the nonprofit continued the program with the misguided belief fundraising would catch up.

Weinger described it like this: “Larry could pick up the phone to a few very generous donors and say, ‘This is the check I need each of you to write.’ We didn’t have that path forward any more.”

After James’ departure, Weinger said, a lack of faith and mistrust developed. “It became sort of a Catch-22 that, once Annam was on board, didn’t give her the time to show what we could do.”

Manthiram didn’t uproot her two school-age sons and leave a good job running an Albuquerque homeless services agency to be part of closing down a venerable nonprofit in Dallas.

But with no other apparent choice, she is determined CitySquare’s programs stay in place and its 85-member staff continues its work — eventually under other nonprofits. “My goal now is putting together a transition team to figure out which community-based groups are the best for the neighbors,” Manthiram said. ”Perhaps community partners will even more effectively lift neighbors out of poverty and homelessness than we’ve been able to do in the last few years.”

The Opportunity Center property likely will become even more valuable once the proposed redesign and expansion of I-30 is complete. CitySquare leadership is adamant any new owner maintain the programming without gentrifying the neighborhood.

CitySquare could have sold the building and land to provide funding to get through this year, Weinger said. “But then what about next year?”

Manthiram is heartened that this transition will put neighbors first and avoid gaps in services. “A favorite verse of mine is ‘With God all things are possible,’” she said. “Right now this feels like the right decision.”