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Children's Express burst on the scene at the 1976 Democratic National Convention, when a 13-year-old reporter scooped the national media with Jimmy Carter's choice of Walter F. Mondale as his running mate.

And in 1988, it was an 11-year-old Children's Express reporter who discomfited Dan Quayle with a question about whether a girl raped by her father should be able to get an abortion. That year, the group's campaign coverage won an Emmy and a Peabody Award.

But after 26 years of giving young people ages 8 to 18 a voice in public affairs, Children's Express has run out of money for its news bureaus in New York; Washington; Marquette, Mich.; and Tokyo, and is closing.

The group is $2.4 million in debt, said Ed Jones Jr., vice chairman of the board, who is investigating what went wrong.

"We learned in March that there was a potential shortfall, and authorized management to lay people off," Jones said. "We took out a $400,000 line of credit that we had to use to keep operations going. We tried to seek additional funding to operate Children's Express, but we were unsuccessful. So on June 30th, the board of trustees voted to cease bureau operations."

The collapse of Children's Express has left the foundations that financed the group, and the staff and children involved, trying to figure out just how the group ran through millions of dollars of grant money -- and whether the collapse was a matter of bad decision-making or simply the end of the line for a group that, like many nonprofit operations, has always had to scramble for money.

Children's Express' troubles highlight a predictable crisis in the life cycle of promising nonprofit groups: the death or departure of a strongly committed founder, and the passing of the organization to a new generation of leaders who try to leave their own mark.

"We call it the founder syndrome," said Eugene R. Tempel, executive director of Indiana University's Center on Philanthropy. "Typically, these groups are founded by a person with a great deal of passion for an idea, who gathers supportive people to serve on his board. Often, the founder is stronger than the whole board, and he fails to institutionalize the organization so that it can carry on after he's gone."

At Children's Express, it was Robert Clampitt, a former Wall Street lawyer, who founded the organization in New York City in 1975, drawing in young people and making them feel that they could be journalists.

"I remember the first story I did, interviewing the ASPCA about abuse of animals," said Nicole Harrow, 16, a four-year veteran of Children's Express' New York bureau, which produced stories for The Amsterdam News and The New York Post's Web site. "I thought, 'This is really cool. I'm 12 and I have the power to ask these questions and get the answers.' "

Clampitt died on the eve of the 1996 Republican convention, where Children's Express reporters produced daily news feeds and tabloid inserts for newspaper clients.

The board hired Eric Graham as its president, and those close to the organization said that while the board decided the group had to grow and globalize to attract new financing, its plans were always short on specifics.

As the first step in an effort to "rebrand" Children's Express, Graham paid a consulting firm nearly $30,000 to choose a new name for the group -- a move that sparked widespread protests from the young reporters.

"With the death of Bob, and the new management, the whole organization changed dramatically," said Lynn Sygiel, who headed the Indianapolis bureau, which broke off from Children's Express in 1999 and now operates as Y-Press. "It was no longer the kid-driven group I'd been associated with for 20 years. They were letting funding drive the whole process, and they didn't really have a plan."

Others who worked for Children's Express say Graham increased hiring and spending at the Washington headquarters, with new titles, new consultants, new assistants, raises and Palm Pilots all around.

"Instead of support for the kids and the programs, there was excessive hiring of top management in the national office," said Cliff Hahn, the former head of the New York bureau, who received his Palm Pilot as a Christmas bonus. "How do you go through that kind of money?"

Graham said his spending was part of the effort to raise support for an organization that had been struggling financially for years.

Children's Express was kept alive mostly through foundation grants. When they ended, the group had no significant source of income.

In the fiscal year that ended in June 1999, the latest for which reports are available, Children's Express had revenues of $745,431 and expenses of $1,261,200. In recent years, the group's budget was from $1 million to $2 million.

Vice Chairman Jones said it was too soon to say what happened to the money and whether funds were used for purposes other than those for which they were intended.

"All the pieces of the puzzle are not there yet," he said. "We haven't seen all the American Express bills, which I gather were used to charge all kinds of things."

But so far, he said, it seemed that the problem stemmed from a lack of accounting and imprudent financial decisions.

Efforts are under way to keep the young journalists working: The Marquette bureau is hoping to become a program of the local children's museum, and in New York, parents and staff are trying to make arrangements with the YMCA or the Greenwich Village Youth Council. The Tokyo bureau, too, is exploring alternatives.

Meanwhile, bitterness grows.

"This organization has meant so much to me, I almost can't believe this is happening," said Amanda Thieroff, 16, a Children's Express reporter in New York. "Some incompetent adults in Washington were doing stuff that wasn't in the best interests of the program."

"With the death of Bob (Clampitt), and the new management, the whole organization changed dramatically. It was no longer the kid-driven group I'd been associated with for 20 years. They were letting funding drive the whole process, and they didn't really have a plan."

Lynn Sygiel, former head of the Indianapolis bureau, which broke off from Children's Express in 1999 and now operates as Y-Press