City Activities Fund is an expensive black box we’re all paying for | Editorial

The activities of the Philadelphia Activities Fund, a secretive, nonprofit set up by the city to dole out $2.5 million in public money annually with little or no public oversight, are in dire need of a formal review. Monday’s story by Inquirer reporter Claudia Vargas detailed a jaw-dropping absence of detail in an opaque process that entrusts 10 district members of City Council with about $220,000 each in taxpayer money to divvy up among local recipients of their own choosing.

Recent choices have included what sound like worthy neighborhood sports programs as well as more problematic selections, including clowns, other entertainers, and even for-profit enterprises, such as a boxing gym and a job-training business. While a four-page application exists on paper, it’s difficult to ascertain what if any due diligence happens before or after checks get cut. Worse, a semi-independent board tasked with overseeing the fund has met so sporadically that no one noticed that the Internal Revenue Service revoked the group’s nonprofit status nine years ago.

Meanwhile, council and the recreation department each seem under the impression it’s the other’s job to mind who does — and gets — what, Vargas reported. And this being Philadelphia, it gets worse: A recipient called the Burke Community Fund, established by Councilman Mark Squilla well before his election, has since 2014 at his direction gotten $23,000 in Activities Fund grants for various, vaguely described recreation-related activities or events.

Public partnerships with nonprofit charitable organizations can be useful tools for delivering much-needed services. But in Philadelphia, these arrangements are especially vulnerable to abuse. Consider the recent history of the Mayor’s Fund, from which former City Representative Desiree Peterkin Bell was charged last year with stealing and misusing $250,000. Or, in the last decade, the separate convictions of former U.S. Rep. Chaka Fattah (D., Philadelphia) and former state Sen. Vincent Fumo, also a city Democrat, on corruption charges related in part to their misuse of nonprofits under their control.

The slapdash approach to spending $2.5 million in Activities Fund dollars annually in a city where thousands of homeowners have faced enormous property tax hikes in the last two years is unconscionable. Worse, though, without clear guidelines or transparency, this fund is especially troubling because Council members doling out favors to select constituents — or needy but unqualified applicants — can provide a huge advantage when election season rolls around.

Theoretically at least, this mess seems relatively easy to remedy without abolishing such partnerships, or prohibiting Council members from having at least some say in how certain public money is spent in their districts. The Pennsylvania Association of Nonprofit Organizations helps such organizations as the Activities Fund adhere to ethical and operational standards. One immediate step should be to reconstruct the board to include some taxpayers. It’s our money; we should have some say in how it is spent — and on whom.

City Controller Rebecca Rhynhart said her office may audit not only the Activities Fund, but the Mayor’s Fund and the Cultural Fund as well. We hope that happens sooner, rather than later.