Dozens of nonprofits depend on the city of Raleigh and its taxpayers for money – but the way the agencies get the funding is changing.
The city’s draft budget would tighten the budgets for several groups that rely heavily on taxpayer dollars, while Raleigh City Council members call for still more scrutiny.
The changes come in the wake of a 2013 scandal and criminal charges against a leader of the Raleigh Business and Technology Center, which was linked closely to city government.
The most significant reform would wean a few groups from relying too heavily on the city. Under the new rules, no nonprofit could collect more than 25 percent of its budget from city grants.
Southeast Raleigh Assembly, which aims to improve lives in low-income areas, will see its budget drop over several years from $207,000 to about $54,000, even as the overall budget for nonprofits grows.
The African-American Cultural Festival will go from $75,000 to about $35,000. The Hillsborough Street Community Services Corp. grant could shrink from $131,000 to about $104,000.
Council members raised no objections Thursday but didn’t decide how many years it would take to “step down” funding. The new budget also drops about $15,000 dollars from the budget of the Contemporary Art Foundation. Arts Commission members said the group had altered programs without notifying the city and had been late with reports. A spokeswoman wasn’t available for comment.
Finally, the new system requires all groups to submit grant applications, which some had not been required to complete before. Councilman Wayne Maiorano wants more oversight.
“I want to know exactly what you do,” he said after the meeting. Rather than relying on previous year’s funding numbers, he said, the city should look at each group’s current needs.
Councilman Bonner Gaylord agreed. “We’ve gotten ourselves into a situation where we have … no mechanism to monitor the outcome of these public dollars, and I’m concerned,” he said.
City policy has long required audits and financial information from groups, but there has been a push for better reviews since the 2013 scandal.