[Baltimore Sun] FOX45: Baltimore taxpayers send millions to a youth fund. How much actually makes it to kids?
Read Time:4 Minute, 29 Second
A Baltimore fund intended to deliver grants to youth-oriented organizations is spending less than two-thirds of the money it receives from City Hall on direct grantmaking.
The Baltimore Children & Youth Fund was enshrined into the city’s charter in 2016 through a ballot measure. As a result, Baltimore City must cut a check for BCYF every year based on a calculation tied to the city’s total property value. The funding never sunsets, and there is no routine city auditing of the money sent to BCYF.
The primary purpose of BCYF is to distribute grants to youth-oriented nonprofits throughout Baltimore. But a FOX45 review of BCYF’s IRS filings found many of the taxpayer dollars provided to the fund are not distributed as grants.
In fiscal year 2022, Baltimore City provided $14.8 million to BCYF. Of that total, just 62% was used for grants. The remaining 38%, which comes out to $5.6 million, went toward administrative expenses, salaries and management fees. That figure also includes hundreds of thousands of dollars for accounting, benefits, IT, travel and legal costs.
A significant portion of that $5.6 million went toward “program service expenses” for “management.” Program service expenses include payments for any “activities that further the organization’s [tax-]exempt purposes,” according to the IRS.
Alysia Lee, the CEO of BCYF, is paid a $172,033 annual salary by taxpayers. She is one of 20 employees listed on the BCYF website, which includes positions like “Creative Assets Manager” and “Vice President of Operations & Culture.”
Baltimore Inspector General Isabel Mercedes Cumming, whose job is to monitor city government for waste, fraud and abuse, said BCYF’s expenses seem “excessive.”
“My office has 18 personnel and our budget is less than $2 million for salaries — so it does seem excessive that it is almost $3 million more for salaries and management costs with just 2 more people,” Cumming wrote in response to an email from FOX45.
A spokesperson for Baltimore Comptroller Bill Henry, the city’s fiscal watchdog, declined to comment when reached about BCYF’s non-grantmaking costs. City lawmakers, including the Baltimore City Council and state legislators, did not respond to a similar inquiry.
Sen. Mary Washington, a Baltimore City Democrat, previously told FOX45 that taxpayer-backed funds should not be stood up as nonprofits outside city government, citing accountability and transparency concerns. She specifically pointed to BCYF as a fund run by an “outside operative.”
BCYF’s spending on salaries and employee benefits ballooned tenfold between its two most recent tax filings. In fiscal year 2021, BCYF spent just $180,955 on such expenses. That figure was close to $2 million for fiscal year 2022. BCYF’s strategic plan, which maps out the fund’s goals through 2026, makes no mention of increased staffing, nor does its 2022 annual report.
David Williams, the president of the non-partisan Taxpayers Protection Alliance, said BCYF needs to streamline its operations to “spend less on salaries and more on kids.”
“Every dollar that goes towards salaries and expenses is a dollar NOT spent on helping children,” Williams said. “Officials at the Youth Fund should be using the donations to help children, not themselves.”
Other nonprofit experts told FOX45 many of the expenses listed on BCYF’s most recent tax filing aren’t considered administrative expenses, making it unclear whether or not its spending is appropriate or not.
“In my view, that is not something that can be assessed externally without a lot more information and analysis of the organization’s activities,” said Kate Barr, the president and CEO of Propel Nonprofits. “It falls in the general answer of ‘it depends.’”
Laurie Styron, the executive director of CharityWatch, pointed back to the lack of routine, independent performance auditing of the fund as a major cause for concern.
“This means the public is left to simply take the charity’s word for it that money is being spent the way they say it is and is going where they say it is going,” Styron said. “There is too much public money involved here to expect taxpayers and other stakeholders to be ok with this.”
BCYF has previously claimed to be audited, but there is no structure where the city regularly audits its performance, unlike city agencies, which are subject to biennial performance audits. BCYF uses a certified public accountant to conduct financial statement audits, which provide no insight into the organization’s program outcomes, operations and whether funds are being used effectively.
Those financial statement audits were only added to the BCYF website after a FOX45 News report about Baltimore City failing to regularly audit the fund.
On Oct. 2, FOX45 filed a public records request for documents relating to BCYF’s operations. After initially pledging to deliver those documents by Nov. 13, the fund now says the documents won’t be available until Jan. 7, 2025.
A spokesperson for BCYF did not reply to several inquiries about its non-grantmaking costs. The fund has also opted not to respond to other recent inquires from about its operations and finances.
BCYF has not yet released its annual report for 2023.
This story is part of an ongoing investigation into taxpayer money going to nonprofits and how that money is spent. Have a news tip? Contact Julian Baron via email at jtbaron@sbgtv.com.
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