Life360’s nonprofit arm remains in good standing after state scrutiny

Ted Cederblom: LCS salaries were approved in advance by its board and state regulators.

During the COVID-19 pandemic, many in southwest Missouri witnessed quarter-mile car lines to pick up boxes of groceries from various locations of Life360 Community Services, the nonprofit outreach of Life360 Church of the Assemblies of God.

To date, LCS has fed more than 12.1 million meals in the state of Missouri under the federally reimbursed Child and Adult Care Food Program and the Summer Food Service Program, according to nonprofit leaders.

An article published July 23 in the St. Louis Post-Dispatch reported on reviews of those meal programs conducted 2020-22 by the Missouri Department of Health and Senior Services Bureau of Community Food and Nutrition Assistance. “Seriously deficient” was the agency’s assessment in a July 22, 2022, letter.

Post-Dispatch reporter Jacob Barker requested numerous public records through Missouri’s Sunshine Law, some of which he posted on the newspaper’s website, including the corrective action plan which LCS officials tell Springfield Business Journal they’ve followed to return to good standing with the state agency.

LCS was the largest feeding program in the state, according to the Missouri Department of Health and Senior Services. Twenty of its churches across southern Missouri served as a  distribution network to more than 100 schools.

From 2020 through 2022, Barker reported, LCS claimed nearly $43.8 million in reimbursement through the two nutrition programs. Its operating budget for southwest Missouri was $19 million in 2022 and $10 million in 2021.

Chief among the DHSS findings in 2021 and 2022 was a critique of salaries paid to top LCS professionals.

“Per cost documentation submitted, the administrative personnel salaries appear to be above a reasonable amount paid to administrative staff in Missouri,” a November 2021 review states. It adds that more documentation is needed to verify that salaries above $45 per hour are reasonable.

The letter cites employment website ZipRecruiter to determine the average salary for a nonprofit CEO in Missouri is $46 per hour – an annual salary of about $95,680.

The letter states LCS President and CEO Ted Cederblom earned as high as $85 per hour from LCS, not counting the pay he received in a separate function as lead pastor of Life360 Church.

The Post-Dispatch article cites program budget records obtained from the state showing Cederblom was to be paid $165,000 per year with $30,000 in benefits in 2021 and 2022. In an interview with SBJ, Cederblom said he did receive that amount in one of the two years, 2021, and for nine years running the nonprofit – including the current year – he received no salary.

He said his salary at Life360 Church, now $75,000, was reduced significantly during the years of the pandemic where he shifted his efforts to running the nonprofit’s feeding services and the board approved executive salaries based on comparable southwest Missouri nonprofits.

The pastor’s two brothers also received six-figure compensations. Tom Cederblom, LCS chief financial officer, was to be paid $140,000 in the 2021 budget with $29,000 in benefits. Tim Cederblom was listed as executive coach with a 2021 salary budgeted at $130,000.

Also on the payroll, but with salaries under six figures, were Ted Cederblom’s wife, son and two sisters-in-law.

Jeremy Hahn, LCS’s former executive vice president, who left the organization early this year, was paid $144,000 in 2021 after earning under $36,000 in 2019.

When reached by SBJ, Hahn declined to comment about his or others’ salaries, noting, “I’m proud of the work we did to feed kids.”

The review required action steps for each of its findings; for salaries, the steps include providing information on duties performed by staff receiving more than $45 per hour and documenting that they work more than eight hours per day every day, and explaining why the administrative salaries are necessary, reasonable and allowable, in keeping with the Code of Federal Regulations.

DHSS also required LCS to provide documentation that reimbursement was being used solely for operation of Missouri nutrition programs; LCS also offers nutrition aid in Arkansas and Kansas, and those administrative expenses are not permitted to be reimbursed with Missouri funds.

News hits
Ted Cederblom founded LCS 13 years ago and has been its president and CEO since it began. The nonprofit is supported by Life360 Church and its members, Cederblom said, noting in its biggest giving year, 2021, the church gave LCS more than $4 million in in-kind donations through community partners, as well as more than $600,000 in cash.

“Those numbers do not account for additional donations from the parishioners of Life360 Church and its staff who also give personally to LCS,” said Miles Ross, a contracted public relations consultant for the church.

Ross noted that following the July 22, 2022, letter, LCS responded promptly with a detailed proposed corrective action plan to mitigate deficiencies. In September 2022, DHSS offered tentative acceptance, and on June 6, DHSS advised LCS its action plan had been deemed adequate and that LCS was in good standing. This assessment was reiterated in a July 25 email from Tanya Harvey, senior public health program specialist at the Missouri Department of Health & Senior Services, forwarded to SBJ by Ross.

Jennifer Broderson, LCS’s general legal counsel at Rooney McBride & Smith LLC, noted the salaries offered to the nonprofit’s administration were all approved in advance by the state with supporting documentation submitted.

She added that correspondence sent in response to findings was deemed adequate.

“Life360 is presently in good standing with the state,” Broderson said. “There was never a time that Life360 was not considered in good standing despite having received a letter.”

Ted Cederblom said he was at peace about the salary he has drawn through LCS.

“That article kind of had it like maybe we were really raking in the money or whatever, but for nine of the 13 years as president, I’ve had no salary for Life360 Community Services, and currently I’m not making a salary,” he said.

Of the four years he was compensated, he said from 2019 to 2022, he earned $18,000, $165,000, $100,000 and $75,000.

“As far as the optics on it, I’m very comfortable to know in my heart and in the board’s heart and the leadership, I think it’s absolutely appropriate for those levels,” he said.

He said the LCS board’s salary recommendations were OK’d by DHSS in budgets submitted for prior approval.

For comparison, SBJ reviewed the 2021 Form 990s for two other Springfield-based agencies that serve hunger needs. For Ozarks Food Harvest Inc., which distributes food through 132 regional agencies and had $51 million in expenses in 2021, President and CEO Bart Brown’s salary was $164,000 plus $16,000 in other compensation. Hal Donaldson, the president and CEO of Convoy of Hope, which distributes food and other relief nationally and internationally and has had $364 million in expenditures, earned $391,000 plus $77,000 in other compensation.

LCS’s Form 990 from 2021 shows expenses of $22.5 million in 2021.

Other findings
In addition to salaries, in a 2021 review, DHSS raised concern about documentation of reimbursements.

“The (sponsoring organization) had expenses that were difficult to reconcile,” the report stated, adding, “There were costs labeled ‘management fees’ with no explanation.”

An audit of 2020 finances found LCS had paid Life360 Church $700,000 in rent and $742,000 in management and payroll reimbursement fees. In 2021, LCS paid the church $81,000 in rent and $103,000 in management fees – a difference of nearly $1.3 million year over year.

Ross said during the COVID-19 crisis, LCS leased space from Life360 Church. At the time, heightened sanitation was needed to maintain feeding sites.

“Because of the importance of protecting the people LCS serves, the CDC’s sanitation guidelines were considered minimum requirements,” Ross said. “Thankfully, the result of the heightened sanitation measures was that LCS was able to continuously operate its feeding programs during the COVID crisis.”

A December 2020 audit letter looks at costs versus reimbursements submitted for June and July of that year. In June, the amount spent by LCS was $758,000, while reimbursement was $1.9 million. In July, the cost was reported as $815,000 and reimbursement was $1.7 million. The agency ordered that LCS maintain documentation to verify that reimbursement is used solely for operation of federal food programs.

Bill Hennessy, who was hired as executive director of operations for LCS last year, noted the regulatory environment throughout the COVID period was constantly shifting.

“Trying to keep up with that – it was changing very, very rapidly,” he said.

DHSS reviews had additional findings:

• LCS failed to maintain adequate records and to operate the program in conformance with performance standards.
• A missing fiscal year audit report was noted.
• Bonuses were paid to employees without prior approval from DHSS.
• Some meals were missing required nutritional components, such as shortages of milk at distribution sites, and a lack of variety of food was noted.
• Errors were noted in daily meal counts.
• Monitoring visits were not conducted as required.

Cederblom pointed out that LCS has served millions of meals valued at tens of millions of dollars over its eight years, and errors in accounting have amounted to only a few hundred dollars.

“I mean, that’s a high accuracy rate,” he said. “We stand with it. It’s, I think, the best of any organization, in my opinion.”

Broderson agreed.

“Really, the margin of error is very low when you consider the size,” she said.

Cederblom noted fewer people are being served by LCS than during the pandemic, in part due to federal program rule changes that limit schools’ ability to accommodate nutrition services beyond school hours. At present, 1,500 students receive nutrition services from LCS – down from 27,000 before the rule change. LCS is looking for ways to expand, he said.

“We’re committed to continuing what we’re doing,” he said. “Where there’s need, we’re going to try to fill it.”