The Baby in the Bath Water – Further Fallout from New York City Council’s Use of Nonprofits

We previously blogged about ongoing investigations into the funding of various nonprofits by the New York City Council.  The New York Post, which broke the original story about Council members using fictitious groups to store funds in order to avoid budget procedures, reports that the freeze subsequently imposed by the New York City Comptroller on all accounts tied to “member items” has left at least two apparently legitimate nonprofits short of funds.  Both the Incarcerated Veterans Consortium and the AIDS Community Research Initiative of America (ACRIA) reported that hundreds of thousands of dollars they had been expecting are caught in the freeze.  ACRIA’s executive director stated that the group has already spent $650,000 of its own funds in anticipation of receiving a $1 million council grant that is now on hold and so faces a financial crisis, leading him to invoke the “throw out the baby with the bath water” metaphor.

LHM