The president of the Baltimore City Council called Sunday for an audit of the city's involvement with a little-known nonprofit foundation, after a Baltimore Sun investigation detailed questionable transactions by city employees using foundation money.
Saying donations to the Baltimore City Foundation must be used for charitable purposes only, City Council President Stephanie C. Rawlings-Blake added that when donors contribute funds through city agencies to help the needy, they "have a right to know how their contributions are ultimately spent."
"If there is no confidence that money is being spent properly, donors will stop giving, which will only hurt those in need," she said.
The newspaper's investigation revealed that some of the funds go to projects having little or nothing to do with the foundation's purposes, a potential violation of Internal Revenue Service rules, legal and nonprofit experts say.
At public events Sunday, Mayor Sheila Dixon said the city "probably" should review the way the foundation operates. She defended her administration's use of the private charitable group, including spending from the organization's treasury for her inaugural events. But she said she endorsed the proposal for a separate audit.
Dixon said she had been instructed by the city that some businesses preferred making donations for inaugural events to the nonprofit foundation instead of to her inaugural committee. She declined to say who had advised her about the contributions.
The only apparent advantage is that contributions to the foundation are tax-deductible, unlike contributions to the inaugural fund.
"I don't know if it's the tax write-off or not," Dixon said Sunday.
The foundation - a private nonprofit formed in 1981 to raise money, primarily to benefit city programs for the underprivileged - helps pay for projects such as a summer jobs program for youths and funeral expenses for homicide victims.
City officials tap into foundation accounts with almost no oversight, however. In doing so, they exercise broad discretion over how the money is spent, and the foundation asks few questions.
Foundation accounts also serve as a repository through which money for city projects can accumulate and be spent without typical public scrutiny, and it appears that some of the money was spent for political purposes.
