City nonprofit policy ready for rollout

Nov. 29, 2013 @ 07:49 PM

The City Council will take a more hands-on approach in allocating one part of High Point’s budget in the coming months.
A new policy governing how the city funds nonprofit agencies gives the council more oversight of which arts groups and other organizations receive city funding.
It sets up a council committee to process nonprofit funding requests, which historically have come straight to City Manager Strib Boynton. Supporters of the new policy say it will allow for more accountability with public funds, because agencies will be subjected to closer scrutiny in justifying their requests and explaining how they use city funds once they’ve received them.
This fiscal year, the city is providing $338,563 in funding for nine nonprofit groups. It’s a small fraction of the city’s $342.8 million general fund budget, but nonprofit funding has become increasingly controversial in recent years.
A $32,000 allocation to the Friends of John Coltrane by a past council with no strings attached drew criticism, as has the council’s granting free use of the city-owned High Point Theatre to the N.C. Shakespeare Festival.
“It takes it out of (Boynton’s) hands and puts it in council’s hands, which is whose hands it should be in,” said Councilman Jason Ewing, who helped develop the new policy. “I think it’s a win for the citizens who pay taxes and a win for nonprofits. The process might take some getting used to, but I think all the applications moving forward will have a fairer chance at getting certain funding than in the past.”
The city’s past application process for nonprofits subjects requests to some degree of vetting, including submission of an audit or board-approved financial statement.
The new application process sets up a timeline under which requests are due by Jan. 6, 2014, with council committee reviews and funding recommendations to follow in March. The full council in April will make final recommendations for inclusion in the 2014-15 budget, which will be adopted in June. 
In addition to completing the 29-question application, agencies requesting funding must submit a copy of their current Internal Revenue Service 501(c) (3) nonprofit status certification letter, a list of the members of its board of directors and the most recent copy of an independently audited financial statement or an “internally conducted and board approved financial audit,” according to the new policy.
The committee will use a “score card” in evaluating requests that rates the quality of applicants’ programs and management, as well as its impact on the community.
The policy notes that all committee meetings and packet materials to review nonprofit requests will be public.
Councilwoman Becky Smothers said the council does not typically see the financial statements and other materials submitted by nonprofit agencies — but it will now.
“Rather than just having it presented to us having been researched and verified by staff, council has assumed that responsibility,” she said.
Under the policy, the committee “reserves the right” to require agencies to give a mid-budget-year report on how city funds have been or will be spent.
“It’s going to allow council to have a better understanding of what the organization is and whether there truly is a need to provide this money,” Ewing said.