UPDATE: Channel 3 now knows why a local charity was not able to provide the Christmas assistance it has for three decades.

Foster families learned recently that Santa For All Seasons would not be available to assist with the cost of Christmas gifts this year. 

Channel 3 talked to a board member about the mix up that has launched a state investigation. 

Last week, foster families reached out to Channel 3 for answers. The Department of Children's Services could not tell Channel 3 why the funds were not available this year, or who made the decision.

Today we're learning more about the 35-year-old charity and its organizers who say this is all a misunderstanding. 

"It's kind of been a whirlwind, but we are very pleased with how the community has rallied around us as foster families and these kids and they're going to provide Christmas for them." 

Ladonna Ralston volunteers with Fostering Hope Kids Closet. The non-profit is now helping Hamilton County foster families who are in a pinch.

"Kids will be receiving two to three gifts each, which is wonderful," said Ralston. 

Those families are breathing a sigh of relief after Santa For All Seasons announced it would not be able to meet this year's need.

We now know why.

Board Chairman Lamar Selcer says this year DCS required the organization to provide gifts for all children in the region, not just children in Hamilton County.

"The board felt that due to the transition from responsibilities for Hamilton County foster children moving to regional, our financial capabilities would be compromised significantly," Selcer said in an email to Channel 3. 

Last week DCS launched an internal affairs investigation when Channel 3 reached out for information about the change in funding and found the organization's registration information linked back to a DCS employee.

DCS employees are prohibited from engaging in fund-raising activities. 

A DCS spokesperson told us today that DCS does have a long-running relationship with Santa For All Seasons, and the internal affairs investigation continues.

"The DCS internal affairs investigation into the listings on Secretary of State documents is still underway," said Rob Johnson, DCS Communications Director.

"Santa for All Seasons continues to have a long-running relationship with DCS, one that is now focused on programs such as extension of foster care for older youth. Because DCS employees are ordinarily prohibited by policy from engaging in fund-raising activities, we work hard to link our families and kids to helpful non-profits, churches, businesses and volunteers," added Johnson.

Selcer addressed the confusion over who operates the organization, saying, "The local state office building and liaison employee has been listed as the group's contact for over 30 years."

"This is a legal requirement because nonprofit organizations cannot have a P.O. box listed as an address. Also, SFAS cannot as a private organization have access to foster children and foster parents information."

Selcer also addressed the fact that Johnson was not aware of the organization's relationship with the Chattanooga DCS office when Channel 3 first reached out.

"Santa For All Seasons is a nonprofit 501C3 nonprofit auxiliary (support) organization to the TN Dept of Children's Services.  We support Foster children in DCS custody with gifts, funds the State does not furnish and many other needs.  It was very disturbing concerning the many inaccurate statements made about one of the oldest active and reputable nonprofit organizations in Hamilton County."

As for the foster parents at the center of the confusion, they're just grateful Christmas will still be bright. 

"God's faithful and we've been able to provide so far," said Ralston. 

The deadline to register for the Kids Closet Santa Shop, happening this weekend, is Wednesday, December 13 at 5:00 p.m. 

Santa For All Seasons launched a new website that is still under construction. Click here to learn more.

PREVIOUS STORY: An organization that helped foster parents pay for Christmas gifts abruptly shut down, leaving foster families in our area scrambling.

A Channel 3 investigation revealed the woman behind the cause, works for the Department of Children Services. Now she and her organization are the focus of a state investigation.

Foster families in need contacted Channel 3 for help. They claimed the state funds they received in the past were being cut. Turns out, those funds were not coming from the state. In fact, the Department of Children's Services had no idea money was being handed out from their Chattanooga office.

"It was a huge help in the past," said foster parent Ladonna Ralston. "I would only have to buy just a handful of things for each of the kids, in addition to what they provided for us. This year with it all being cut, it's a big financial burden when you're buying for 5-7 kids." 

Ladonna Ralston opens her home to kids who need it. Each Christmas she buys for children in foster care. In the past, Ralston has received financial assistance from an organization called "Santa for all Season," but this year the money never came. 

She's not alone, more than 100 other foster families are in the same boat.

"This year especially Christmas is very challenging in the past the state, DCS has provided us with its called "Santa of all Seasons" and this year all of that has been cut," said Ralston. 

The Department of Children Services tells Channel 3, there was no change to its budget. 

A spokesperson was also unfamiliar with the "Santa for all Seasons" fund.  

Channel 3 found that the organization is registered through the IRS as a charitable organization. The name, address and contact number on file link back to the Chattanooga DCS office and an employee who works there.

Channel 3 attempted to speak with her but were told she was unavailable. Our calls to the numbers listed were not returned. A spokesperson for DCS says it is now investigating how the organization was run. The Secretary of State's office is also investigating.

"It is news to me that she would have been listed as the owner and operator and that would be something we would want to take a look at in terms of making sure state law was followed," said Rob Johnson, DCS Director of Communications. 

State law prohibits a government organization from soliciting funds for any nonprofit. Officials say state employees are allowed to act as liaisons for charity groups, but nothing more. 

Ladonna Ralston, who also volunteers at the "Fostering Hope Kids Closet," cares most about the families who are now trying to figure out how to save Christmas.  

"As of today there's 116, but we're getting emails all the time for people wanting to register," said Ralston. 

DCS serves about 300 kids in Hamilton County, it's not clear how many families have received funds from "Santa for all Seasons" in the past. According to state records, the organization reported raising as much as $70,000 in a year. 

Every child in foster care receives a $75 dollar allowance for Christmas gifts by the state and state officials say that allowance will continue as it has nothing to do with the "Santa for all Seasons" fund. Many foster families in Hamilton County tell us, they're still waiting to receive that allowance. 

"Fostering Hope Kids Closet" volunteers are stepping in to bridge the gap, attempting to provide more than 100 families with Christmas gifts this year. They say it will be a challenge but families can still register to shop at the non-profit's Santa Shop Saturday, Dec. 16, noon to 4 p.m.

Volunteers with the Fostering Hope Santa Shop tell Channel 3, they're in desperate need of gifts for kids ages 13-17 and formula for medically fragile babies. To find out ways that you can help call (423) 933-5300. 

Families in need this Christmas can also contact the Forgotten Child Fund, which is taking applications until December 15.