The fate of a fund-raising company that pioneered the AIDS bike ride and three-day breast cancer walks remained up in the air Monday after the Los Angeles-based firm closed its doors.
Pallotta TeamWorks announced over the weekend that it was suspending operations and laying off 250 employees. The shutdown followed months of wrangling between the company and sponsors of events it stages over the cost of the fund-raisers.
Dan Pallotta, who revolutionized charity moneymaking by creating the first AIDS benefit bicycle ride in 1994, told workers that a trio of three-day walks to raise money for breast cancer research scheduled for later this year will continue.
And some of the laid-off fund-raisers may be rehired, said company spokeswoman Janna Sidley, who was among those laid off.
"We were furloughed. Their intention is to continue the season and bring us back," she said.
Officials of the Avon Foundation, a public charity that allocates funds raised by the breast cancer walks, sought Monday to assure participants that October events scheduled for Los Angeles, New York and Atlanta will go on as planned. Three-day walks have already been completed in 10 other cities this year.
"Avon looks forward to TeamWorks' full cooperation and shared determination to make the remaining three 2002 events safe and successful for all participants," said Kathleen Walas, president of the Avon Foundation, which has raised some $235 million for breast cancer causes since 1992.
Pallotta TeamWorks executives did not return telephone calls Monday. Earlier, Sidley told Associated Press that the furloughs were designed to save money and to ensure that events the firm organizes go on as planned.
The for-profit company's strategy of staging weeklong bike rides between such places as San Francisco and Los Angeles has been heavily criticized in recent years by some AIDS activists who contended that Pallotta TeamWorks' overhead was too high.
About 52% of the $11 million raised in the 2001 AIDS Ride went to the Los Angeles Gay & Lesbian Center and the San Francisco AIDS Foundation. In earlier years, about 35 cents of every dollar contributed by riders' individual sponsors was used to stage the event. Last year's 2,300 riders each paid an $85 entry fee and then contributed a minimum of $2,700 in donations to take part.
Late last year, the Gay & Lesbian Center and the AIDS Foundation announced they were severing ties with Pallotta and would conduct their own AIDS/LifeCycle ride this year.
Pallotta promptly picked a major new beneficiary, AIDS Project Los Angeles, and sued his new competitors to stop them. But a Superior Court judge ruled in January that the rival fund-raiser could take place.
In May, about $4.4 million was raised by 670 riders in the AIDS/LifeCycle Ride. A month later, 715 AIDS Ride participants raised $2.7 million.
The San Francisco-Los Angeles flap wasn't the only bump in the bike-ride road experienced this year by Pallotta--who contends that his events have netted $222 million for AIDS and breast cancer organizations over the last nine years.
In July, Pallotta TeamWorks announced that it was ending its production of the annual "Heartland AIDS Ride" between Minnesota's Twin Cities and Chicago after seven years. Three major beneficiaries of that annual event, which attracted 1,100 riders, said they planned to stage their own fund-raising events.
Critics complained that Pallotta's firm was charging too much to organize and run the often-emotional bike rides. They also said that Pallotta did too much "cross-promotion" of breast cancer walks and other company events during the bike rides.
"Obviously, for the people who lost their jobs, it's a sad day," said Michael Weinstein, head of Hollywood-based AIDS Healthcare Foundation, which is not involved with either of the bike rides.
"But in bigger terms, what was lost the last couple of years was a degree of innocence on the part of donors and participants in these events. There not only needs to be greater scrutiny of nonprofit organizations, but also for-profit fund-raisers."
More angry was Wayne Turner of the Washington, D.C., chapter of the AIDS activist group Act Up, who condemned results of this year's AIDS Ride there. Expenses ate up at least 86% of the $3.6 million raised, the Washington Post reported today.
If riders hadn't raised much more than the minimum required, the event might even have lost money, according to the Post.
"People are beginning to wake up to the fact these AIDS rides are not about raising money at all. They are all about building Dan Pallotta's empire, which is now crumbling," Turner said.