Wednesday, September 02, 2009

Pulling Back Misused Non-profit Funds Is Only a First Step

CM Ronnie Steine and columnist Gail Kerr are high-fiving the Mayor's Office for motivating Steine to introduce a bill to pull back a big chunk of a non-profit "grant" (otherwise known as "subsidy") that Ujima House, a women's shelter, spent not on abused women but on absentee Director Ervina Jarrett's travel back to Nashville (her LinkedIn page has her residing now in Virginia), on her personal shopping sprees in another state (Virginia?), and almost $3,000 in unnamed "other items" (decorative appointments for her Virginia home?).

Bully for Metro in attempting to take back misappropriated funds that should have been spent on the public interest. However, this does not begin to address the problem of designating money for non-profits that could be going to public services, unless those earmarked victim intervention funds had been plowed into a Metro program that would use them broadly, like MNPD's Victim Intervention Program or other such programs designed both to support victims and to be directly accountable to the voters.

But CM Steine's bill, which passed first reading last night, simply redistributes Ujima House's share to the other non-profit agencies on the original bill. It works out to around an extra $1.40 per criminal offender for the victims groups who now enjoy preferred status in the list of agencies subsidized by local government. This is not the great stride in progress that Kerr editorializes. It is a baby step that basically continues council patronage of non-profit agencies.

Ujima House's problems go back to 2006, when it was singled out by the previous administration for failing to exercise oversight according to its by-laws. Those irregularities did not stop the council from passing a bill in 2007 that earmarked $9,500 for Ujima House (that $9,500 does not appear distinctly on the organization's financial report published at Giving Matters, so I would assume that it must have been part of the $45,000 Metro eventually awarded). It did not stop council from mandating that $7.00 of every $45.00 a criminal offender paid to Metro go to Ujima House. (In an interesting turn of events, former CM Brenda Gilmore co-sponsored the 2007 bill; her daughter and current District 19 CM Erica Gilmore co-sponsored the 2008 bill).

It seems to me that this problem could have been nipped in the bud had council members refused to approve any non-profit earmarks in the 2006-07 year. Back in June 2006 the Metro Council had the opportunity to plow $1.95 million in surplus property taxes collected from delinquent payers back into Metro services at a time when the economy was starting to recess and harsh Metro budget cuts loomed on the horizon. What did they do? First, they greedily divided up the surplus, promising to spend their rations on improvements in their districts, calling their initiative the "Reserve Council Infrastructure Program." By January, it was becoming clear that council was headed toward spending 80% of those funds on private non-profits (many of whom could help them politically), and the title "Nonprofit Grants and Council Initiatives Account" was added to the original name.

It seems now with Mayor Dean's move to place tighter restrictions on Metro grants to non-profits, any infrastructure need that might bubble up from the community through the council has been lopped off and private charitable organizations are the actual winners. The money that flows from Metro to non-profit coffers makes an impression on influential organization executives and prominent board members that could last until it is time to crank up the next election for Mayor and a new council. Privatization of public services translates to election season boon.

Metro's non-profit patrons may not be going out to spend grant money on their own personal travel or in faraway department stores. But you can bet that they will be working and mobilizing come election time to keep their government spigots open. In a Metro budget climate of diminishing returns for public services that's a net loss. Neither Steine nor Kerr should be crowing about that. But they do have a Mayor's Office to patronize.

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