As the Illinois Attorney General’s office demands financial records from Miss Carly’s Inc., the Rockford charity continues to face backlash online.

Donations to the organization have fallen as former employees, volunteers and others, take to social media to hammer co-founder Carly Rice and the charity as a lack of clear financial reporting has led to suspicion and accusations.

Rice says she is the victim of a smear campaign orchestrated by folks with an axe to grind following a failed attempt last year to seize control over the charity.

But Rockford resident and former volunteer Maggie Watson said that as the charity grew in 2021, she grew frustrated by a lack of financial transparency. Watson said her friendship with Rice ended in 2022 when she began asking too many questions about how the charity's money was being spent.

"I used to be friends with Carly," Watson said. "She did my wedding photography. I donated food and clothes and diapers. I got my dad's union to donate stuff to her. I wanted to believe what she was doing was altruistic, and I wanted to help."

Watson said she filed a complaint with the Attorney General's Charitable Trusts Bureau over a lack financial reporting.

In early May, the Bureau sent a warning letter to Miss Carly’s Inc. seeking required financial reports by May 27.

More: Attorney says city treating Rockford nonprofit like a 'high-end east side restaurant'

'It was insane'

A non-traditional Fifth Avenue charity, Miss Carly’s started when Rice and her partner, Jacob Rush, opened their home — a former Buddhist temple — to the homeless and needy about five years ago.

They offered hope of a better life over thick slices of lasagna.

Soon, residents enamored with their story were volunteering to help. Some wanted to cook. Others weaved blankets. Some donated tents and clothes and cash.

Fervent supporters went to City Hall in 2019 to support giving Miss Carly's special use permit needed to keep the operation running.

What was originally meant to be an informal way to help those in need was on its way toward becoming a formalized charity — complete with the kind of rules, paperwork and red tape that Miss Carly's tended to avoid.

Donations and visits to Miss Carly's skyrocketed as other organizations shut down their in-person services in 2020 during the COVID-19 pandemic. Rice said she was serving 1,000 brown bag lunches a day and had weeks when the charity sent a dozen people to alcohol and drug addiction treatment.

She went from operating a small kitchen-table charity to collecting $1.4 million in 2021.

“We filled the gaps in services,” Rice said. “It was insane what we did during COVID. How many people we fed. How many people we helped. Everything else was inaccessible to our people.”

'We were helping'

Former treasurer of the Miss Carly's board, Glory Boersma said she volunteered at Miss Carly’s for four years.

"We were doing a lot of good," Boersma said. "We were helping people."

Boersma said a new executive director was hired in April 2023 to complete a required annual audit and represent the charity to the city as it demanded compliance with city codes. Financial discrepancies were found in the books, and Boersma said Rice was asked to produce receipts to show how money was spent.

Their suspicions that donations to the charity were being spent on personal expenses were reported to authorities, Boersma said.

No legal action was taken.

Boersma said she resigned when board members were reluctant to remove Rice.

"We weren't sure if it was just carelessness or if there was an intent," Boersma said.

Rice disputes Boersma's version of what happened. She said Boersma was part of a group that wanted to take over the charity, change its name to "815 Outreach" and redefine its mission.

Accountants were asked to conduct an informal audit of the charity’s books. Rice said she turned over boxes full of receipts and that a review found no money was missing.

Rice said, if anything, the organization owed her money after she had in lean times dipped into her own pocket to pay for clients to go to alcohol and drug treatment.

Social media campaign

Although she has no connection to Miss Carly's, Rockton resident Kelly Kulak is vocal on social media, demanding financial transparency. Kulak recorded herself Monday calling the Attorney General's Office to ask about Miss Carly's charity registration status, claiming to be a prospective donor.

Kulak said she saw messages a year ago on Reddit raising concerns about Miss Carly's. She said with the amount of money being donated, there should be more protection for local donors.

"Carly got really big during COVID, and I will not for one moment say that Carly didn't do some good," Kulak said. "If you are receiving millions of dollars in donations from hardworking people in your community you should be very transparent about what you are doing."

A change.org online petition called "Demand Financial Transparency & Stricter Code Enforcement from Carly Rice" has garnered 860 electronic, anonymous "signatures."

It, in part, takes issue with donations collected by the charity to purchase the former Ellida Lodge next to the charity two years ago. The charity had intended to make the building its new headquarters, but it remains vacant as a dispute with the city drags on.

"Over the past three years, Miss Carly Rice has received millions of dollars in funding, including $400,000 raised specifically to bring her building up to code," the petition reads. "Despite this substantial financial support, her building remains non-compliant with city codes and the money seems to have vanished without any explanation."

Rice argues no money has vanished.

Rice said the charity has money for upgrades to the new building, but she said that it cannot be spent on repairs at the current building.

"We've always done what we said we were going to do," Rice said. "The building fund still has money in it. But that is for the other building — the new building. They are confusing two different things. This is what they do. They twist and distort information."

Who will help?

Rice said she treats the homeless, the downtrodden, sex workers, people with alcohol and drug addictions and people who have burned other bridges with respect. The idea is to build personal relationships and convince people to improve their lives.

If the charity is eventually shuttered, Rice wonders what will happen to the people Miss Carly's serves.

"Who is going to help all these people we send to treatment?" Rice said. "Who is going to pass out all the Narcan to people? I have personally given 27 people CPR and Narcan. Who is going to give these people CPR and Narcan? Who is going to give trafficked women condoms? They aren't going to walk to the health department to get them. And who is going to be hurt by that? The general public."

Jeff Kolkey writes about government, economic development and other issues for the Rockford Register Star. He can be reached at  (815) 987-1374, via email at jkolkey@rrstar.com and on X @jeffkolkey.

This article originally appeared on Rockford Register Star: Group tried to take over Rockford's Miss Carly's, change name