Raleigh makes sound move to tighten oversight of grants

The painful unfolding of a 2013 scandal involving a Raleigh nonprofit “business incubator” reflected on more than the poor leadership of the Raleigh Business and Technology Center in Southeast Raleigh.

It raised questions about how such a center was allowed to continue receiving public money without delivering much in return. City officials seemed defensive about it at first, but now criminal charges have been filed against a leader.

Now the Raleigh City Council wants to prevent such looseness by tightening oversight and reducing funding amounts for several nonprofit organizations. Many of them have good missions and committed leaders, but how they spend their money will get better scrutiny.

The city’s draft budget intends to reduce in some cases the percentage of nonprofits’ budgets that comes from public funds. That’s appropriate. Groups that do good in their communities need to draw more support from their private supporters. And the city has an obligation to make sure its share is spent wisely.

In one case, the Southeast Raleigh Assembly, which works in that area to help low-income residents, is going to see a budget drop from over $200,000 to $54,000. The Hillsborough Street Community Services Corporation grant will be $104,000, down from $131,000. And the African American Cultural Festival will get $35,000, down from $75,000.

The problem has been that some organizations haven’t kept the council posted on what they’re doing. And the city hasn’t kept its own headlights on.

“We’ve gotten ourselves into a situation where we have ... no mechanism to monitor the outcome of these public dollars, and I’m concerned,” said council member Bonner Gaylord.

He’s right. And the council is right to tighten its financing for nonprofits.

This story was originally published April 5, 2015 at 4:00 PM with the headline "Raleigh makes sound move to tighten oversight of grants."