Are City Donations To Private Charities Unlawful? (Updated 05/24/10)


A little over a year ago we first questioned why the Park Ridge City Council was simply giving away $187,000 of public funds to certain private community organizations (“Public Subsidies Demand Transparency,” 04/27/09).  The Council went on to raise that amount to $246,000 on May 18, 2009, which did its share to contribute to the past year’s multi-million dollar deficit. 

According to the published agenda and memo [pdf], at tonight’s Committee of the Whole (“COW”) meeting the Council will discuss the actual appropriation of the $190,080 to those various private community groups that was budgeted by the Council last month.  As you will recall, that’s one of the categories of expenditures that Mayor Dave Schmidt, in his veto message, suggested should be cut – a suggestion that got the silent treatment from every alderman except Joe Sweeney (1st). 

So we think it’s a good time to question why the Council is once again giving away indiscriminate sums of increasingly scarce public funds to private organizations, but this time with greater emphasis on the Council’s legal authority to make such donations – especially when those organizations can use the money however, and wherever, they choose with absolutely no strings attached and no requirement that they account to the City or its taxpayers for that use.
It seems as if our public officials – save, perhaps, for Mayor Dave Schmidt and Ald. Sweeney – believe they’ve got the authority to do whatever they want in this regard.  Either that, or they merely are blissfully ignorant of the legal scope of their authority altogether.  But we can’t find anything in the City Code that empowers the Council to donate public funds to anybody.  

And the Illinois Constitution seems to forbid such donations altogether by providing, in Article VIII, Sec. 1(a), that “[p]ublic funds, property or credit shall be used only for public purposes.”  

What specific “public purposes” are served by giving away City funds to these organizations without making darn certain that every penny is used solely for Park Ridge residents to provide specific, corresponding quid pro quo services for the money?  And where in the Illinois Constitution, the Illinois statutes, or the Park Ridge Code does it prescribe or even permit such donations? 

As we noted a year ago, the words of Congressman David S. “Davy” Crockett remain instructive on this point: “We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right so to appropriate a dollar of the public money.” 

Notably, in that same speech Crockett personally offered to donate one week’s pay to the charitable interest in question, and he encouraged his colleagues to do likewise so that the amount raised privately would compensate for, and even exceed, the public funds not being appropriated.  But, tellingly, after heeding Crockett’s words and voting down the private charitable appropriation, not one of those members of Congress who advocated donating public funds offered a dime from his own purse.  

As we’ve written before: If these private organizations can show that they provide essential City services and do so less expensively and/or more efficiently than the City can, then the City should be contracting with these organizations for specific services.  That way, these organizations could get fair value for the services they actually provide to Park Ridge residents; and Park Ridge taxpayers would finally get accountability for the money going to these private organizations. 

Why hasn’t the City Council ever done this?  

We can think of plenty of reasons, especially given the propensities of the majority of aldermen currently inhabiting the seats around The Horseshoe.  But this problem isn’t the creation of the current Council: it also was standard operating procedure for Councils past, although it escaped scrutiny because more favorable economic conditions and more of a “herd” mentality allowed past Councils to quietly ignore it. 

Even if these contributions are completely legal, however, we believe they are foolish and extremely bad public policy.  But the absence of any readily ascertainable legal authority for them makes their legality the more pressing issue. 

Will any public official have the nerve to question the legality of these donations, or will they continue to bury their heads in the sand while blithely giving away more public funds even as they cut truly “essential” City services?  

Update (05/25/10): A knowledgeable reader just directed us to a provision, (”CPS 6?)[pdf], of the City’s Policy Manual, which was only recently added to the City’s new website.

That provision permits use of public funds for private non-governmental organizations “in limited circumstances…when such organization provides a service that is deemed to be of substantial benefit to the community” – but only if the City first determines that: there is a “need for offered service(s); there will be a “benefit for [sic] such service(s)”; the level of “[p]rivate financial support for the service(s)”; and the extent of the “volunteer support for the service(s).”  

Because City policies don’t trump the Illinois Constitution or state statutes, however, we still believe the lawfulness of the City’s actions, and even this Policy provision itself, are in doubt.

Not only that, but over the past two years we have seen and heard nothing in the way of hard evidence, either from the organizations themselves or from the City, that establishes a specific “need” for, or a specific “benefit” from, any of the “services” purportedly provided by these organizations, much less any meaningful discussion of the “private financial support” and the “community volunteer support” for these organizations or their services.

In fact, we’d hazard a guess that none of those factors have been given serious consideration – and we don’t mean the “$8 of services for every $1 of City donation” idle speculation offered by Alds. Allegretti, Ryan and Wsol, among others – since this policy was last revised in 1991. 

But we thank our reader for providing this resource material.

18 comments so far

Sorry about putting this post here but the comments are turned off in the other thread. Mr. Mayor……with tree trimming every other option must be exhausted…..public safety issue?!?!?!?! What??? Gee, I bet the members of our police force are happy to hear that!!!!! You have no problem reducing staff on our police force bu god forbid we not trim the trees!

EDITOR’S NOTE:  We have adopted a new policy of cutting off comments on an old post when a new post is added.


As I believe you have pointed out to me before, this is your show and you can run it as you please. Having said that, I just do not get it. A very powerful part of a blog is the discussion. If you go back in youf own history on issues like the police station or PADS, there was lively discussion well after the next post. The reason I posted where I did is that I did not have a chance to see the Mayor’s post over the weekend. Either way, it is your show.

EDITOR’S NOTE:  Yes, it is our show, and this is the way we have decided to run it because, frankly, by the expiration of the second day of most posts (including PADS posts) what we tend to get is repetitive “grinding” that adds little-to-nothing new to the discussion.   

1151…the mayor’s veto message did mention the cuts to the police department staff in light of money for O’Hare and community groups as an example of the budget being “upside down.” I am surprised(?) you did not mention it.

And reinstating the police staffers is one more thing the mayor could not do through a line item veto.

It is interesting that as comments get more critical of the mayor, the comments policy changes. When are the people who run this site going to own up to the fact that they are simply the friends and campaign contributors of Mayor Schmidt?

That would be better than this phony “unbiased” commentary.

EDITOR’S NOTE:  We’ll offer our post “Show Trial An Affront To Park Ridge Residents” (11/04/09) as Exhibit A of our “unbiased” views toward Mayor Schmidt.  

The problem we have is that it’s hard to appear “unbiased” when, even on the days Schmidt brings less than his “A Game,” his positions on the issues still are notably better and more in the public interest than those taken by the disingenuous spendthrifts who surround him at The Horseshoe – the ones whose own less-than-“unbiased” approach to matters of public business appear rooted in their support and campaign contributions (Allegretti – $1,500; Bach – $400; Carey – $500; DiPietro – $565; and Ryan – $864.51) to their former puppet-master (and mayor) Howard P. Frimark and his “Let’s Make A Deal” style of “government.”  

But if that happens to be our little cross to bear, then we’ll bear it the best we can. 

Gee, if this whole thing is illegal maybe someone can sue the city!!! Why doesn’t someone give that guy who sued over Uptown a call.

EDITOR’S NOTE:  Gee, instead of suing the City maybe the mayor or an alderman can ask the City Attorney for an opinion on whether these donations are legal.  Of course, that would mean they might end up with an opinion they might need to act upon but won’t, like when the City Attorney recommended prosecution of former mayor Howard Frimark for violating the ethics ordinance by selling insurance to the City for the Uptown project. 

Dennis Byrne’s column in today’s Tribune could have been written about Park Ridge city government:

“But, this is how huge deficits are run up. Promising all comers benefits that can’t be delivered. Making a hash out of government programs that never should have been established in the first place. Exaggerating needs for political gain. Letting emotions dictate public policy. Letting ideology obscure reality.”

Money for O’Hare? Check. Money for community groups? Check.

“And where in the Illinois Constitution, the Illinois statutes, or the Park Ridge Code does it prescribe or even permit such donations?”

I am far from an expert on th Illinois constitution but please!!! I swear you must live in a bubble. I am not saying that this makes it right but you act as if these idiots in the council made up this idea to give money to private organizations in complete violation of the law. Have you looked around Chicago or the rest of the state (not to mention the federal government). Tax payer money to private organizations for donations or “outsourcing”. have you even heard of blackwater?? How about over 5 Bil in the budget to fight aids in africa?? Any private organizations involved there?? On a more local level, what about IDHS. Your state dollars go to fund homeles shelters and food programs and homeless youth programs and alcohol and drug programs and mental health programs. Do you think a few of these programs involve third parties. Of course not, none of our money went to private organizations prior to the city council. I agree that there should be more accountability and I agree that our elected officials should be watching these organizations much more closely.

EDITOR’S NOTE:  We claim no expertise in Illinois constitutional law, and we didn’t call the people on the Council “idiots” – you did, although as a courtesy to you we will not object.  But we can find no evidence that anybody on this Council or Councils past has ever questioned the legality of these giveaways, or even have attempted to follow the City’s four criteria for them.

We also would point out that there is a world of difference between “donations” and “outsourcing,” which is why we repeatedly have stated that we favor “outsourcing” – with all the formalities it normally entails, such as the identification of the specific services that will be provided, a fixed cost per unit of service, and a legally binding contract committing both parties to the deal. That’s where the “accountability” would come from, and the lack of those details and contracts is why we currently have no “accountability” but, instead, indiscriminate amounts of money being given to these private organizations with no strings attached for them to do whatever they want.  


“It seems as if our public officials – save, perhaps, for Mayor Dave Schmidt and Ald. Sweeney – believe they’ve got the authority to do whatever they want in this regard”.

Just thought it was worth pointing out that the Mayor (a very reputable lawyer) was an alderman while all of these “donations” were being made and never, even as of today to my knowledge, has mentioned the legality of these donations being an issue. If you are somehow implying (as you seem to be) that Schmidt now feels that there are legal issues and that there is no authority, howon earth was he willing to do nothing in the past? More games!!

EDITOR’S NOTE:  We are not “implying” anything about what Schmidt “now feels” about the legality of those contributions: whether he believes the legality of those donations is a legitimate issue or not is his call. 

And, yes, as an alderman he went along with the other aldermen in approving the budgeting and appropriation of public funds for these private organizations, just like he went along with them in passing deficit budgets and appropriating the money that produced multi-million dollar operating deficits in each of his two years on the Council.  The difference between Schmidt and a majority of the other aldermen, as we’ve pointed out before, is that Schmidt seems willing to admit his mistakes and learn from them, unlike the rest of the guys around The Horseshoe who keep on making them and seem darn proud of themselves for doing so.

Are yo seriously suggesting that the City take on the role of in house, or choosing the “outsource” of social services? That the “City” is qualified to take on the daily ins & outs of what’s involved with directing a social service agency? That the City has better judgement, experience, and general know how than say the Center of Concern, or Maine mental health Center?

Are you freaking kidding me?!

Just the weeding out process of who is really in need and who is a master of playing the system takes the kind of knowledge that I’m sure the “City” isn’t even close to being equipped to do, let alone the best judge of who is.

Although I am sure that there are enough “community volunteers” who would be more than happy to “assist” the city in giving direction, and suggestions as to whom to help and how.

EDITOR’S NOTE:  “Yo” to you, too; and, no, we aren’t “freaking kidding [you]” – we’d never “freaking kid” anybody who appears so intent on advocating for the unaccountable giving away of Park Ridge public funds to private organizations that claim they are doing something/anything “for the community,” irrespective of what that something/anything might be and irrespective of for whom it’s being done. 

We also wonder where you get the idea these private organizations even attempt any “weeding out process”?  Using Center of Concern as an example, it’s home page states: “The Center offers services to all adults in the community who seek counseling and support as they look for solutions to their problems.” [Emphasis added]  That doesn’t sound like there’s any “weeding out” going on there, and there’s no way we can tell from going through its entire website and its outdated Form 990s available on Guidestar – because CofC apparently chooses not to soil its own website with such tawdry financial information – how much of the $55,000 from the City of Park Ridge actually is used for services for the Park Ridge “community,” as opposed to the Des Plaines “community” or the unincorporated Maine Twp. “community” from whom CofC also gets funding, albeit far less than it gets from Park Ridge.

If CofC or any of these other organizations are doing so darn much for the Park Ridge “community” that they really believe they deserve the public funding they’re getting, why don’t they leap at the chance to disclose all the details, especially the financial details, about the value they are conferring on the Park Ridge “community” by their services; and how much they are saving the Park Ridge taxpayers by doing what they do? 

PD Said: The City’s Policy Manual. . . permits the use of public funds for private non-governmental organizations “in limited circumstances…when such organization provides a service that is deemed to be of substantial benefit to the community” – but only if the City first determines that: there is a “need for offered service(s); there will be a “benefit for [sic] such service(s)”; the level of “[p]rivate financial support for the service(s)”; and the extent of the “volunteer support for the service(s).”

So, what should have happened last night is some sort of request for information from each private non-government group that addresses the above requirements as they relate to our city.

What is the need? What are the benefits? How much private funding? How many volunteers? Did anyone request that information? Or was it another case of City Hall posturing and politicking?

I would bet that most of the community groups can put together a quick page or two spelling this stuff out. After City Hall gets the information there should be a debate as to the amount to spend if any. Then a vote. Then a veto (if desired). Then an override (if desired).

Only after this all happens has EVERYONE on the Horseshoe done their jobs as well as they could.

EDITOR’S NOTE:  We believe the threshold inquiry needs to go to the City Attorney to determine whether donations of this kind are legal.  Only after that inquiry is answered in the affirmative should the second level inquiry – is the service “of substantial benefit to the community and…not in conflict or duplicative of services provided by any other governmental body having jurisdiction within the City” [e.g., Cook County, Maine Twp., etc] be undertaken, considering factors A-D of Paragraph 3 of the policy.

A “quick page or two” is not what this calls for, unless you’re a fan of smoke up the skirt.  Not one of the representatives of the private organizations that showed up and spoke at the Council’s budget workshop on Saturday, March 20th, came anywhere close to reasonably satisfying the requirements of Council Policy No. 6 – unless a bunch of grandiose, factually-unsubstantiated puffery is acceptable for those requirements. 

Even Center of Concern’s Mary Schurder was tossing around numbers so vague and implausible they sounded like they were being made up on the spot, like: “7324 [Park Ridge] residents contacted [CofC] for help” in 2009 – that’s almost 20% of the entire Park Ridge population!  To borrow a quote from a previous commentator: “Are you freaking kidding [us]?”  Needless to say, Mary didn’t identify what kind(s) of “help” was requested, or what CofC actually did for those people, or what the cost was to provide those services, or offer to provide any documentation of that.  And  that kind of information doesn’t show up on the CofC’s dated Form 990 on Guidestar.

During the Homeless shelter issue, CoC was continually used as a model for and of what a true social service agency consists of. Which I believed to include but not be limited to, actual assessments and the “weeding” of potential cases.
This opinion was shared among the community, including this thread. Has that opinion NOW changed? Was the CoC USED as a convenient way to thwart off the big bad homeless shelter? Or do they possess the value you once believed them to?

30+ years of service is no fly by night agency, who frivolously hands out services via cash assistance or other, without careful assessment and hard work.

But hey… Government control over social service issues…..g-r-e-a-t! Good luck with that! Perhaps we need to set up a social service commission, cause I’m sure they could come up with real responsible ways to spent “budgeted tax payer money”. 

EDITOR’S NOTE:  We did then, and still do, support CofC’s stable-site paradigm for temporary homeless shelter as being far superior to the ridiculous hop-skip-and-jump approach of PADS.  However, at that time we never looked into exactly how well or efficiently CofC was managed.  Only now that we have looked more closely at its finances and funding and noticed how it seems to work at avoiding disclosure and scrutiny have we come to question exactly what the taxpayers of Park Ridge are actually getting for the City’s annual unrestricted donation of $55,000.

Too bad all the current and former City of Park Ridge officials on the CofC board (former aldermen Sue Beaumont, John Kerin and Jim Radermacher) and on the CofC advisory board (current City Clerk Betty Henneman, former mayor and alderman Mike Marous, former City Treasurer Carl Brauweiler, and former aldermen Andrea Rundblad Bateman, Frank J. DePaul, Nancy L. Stuercke and Maureen Strauts) can’t, or won’t, persuade Ms. Schurder to give the City chapter and verse of what CofC does for the residents of Park Ridge and what it costs.    

I am all for more information, but I get the feeling that no matter what information they give it will not be enough. Let’s say that they provide a document that says they received w calls from PR and that resulted in x “visits” at a cost of y per visit for a total cost of z. Are you not telling me that you or others will not poke holes in that?? I mean anyone can arm chair quarterback. I am guilty of it myself. Are you or is someone going to say prove it?? I mean do you expect them to release the names of people who have come to them for counceling, homeless services or crisis services? I would never expect or want them to do that. As long as they release just numbers one of you can always say that they numbers are unrealistic or made up. For example, the 7324 number you reference. I am not sure where that came from but just as an example if that number represented total Park Ridge calls and not unique clients then it makes perfect sense. If each unique case generated 10 calls from the client or family that would mean 732 PR clients, not an unrealistically high number.

EDITOR’S NOTE:  No, you’re not.  Otherwise, you wouldn’t be hiding behind the “you’ll never be satisfied…so you’re getting nothing” defense.  Lame, but convenient. 

If this operated the way we believe it should – under City contract at $X per service unit (however that would be defined) – then CofC, and any other of these private community groups, would have to furnish the City with a quarterly and annual accounting of which Park Ridge residents were served, how, and how often.  In the absence of legally enforceable privacy rights that prevent the City from receiving name, rank and serial number for the recipients of the services the taxpayers are funding, that information is (and deserves to be) no more private than if the City itself were providing the services – which it effectively is, through the private service provider. 

And the check and balance on CofC’s (or other organizations’) making up numbers would be that doing so in connection with a government contract might be criminal fraud, the prosecution and penalty for which tends to restrain the larcenous impulses of all but the truly incorrigible.

“Too bad all the current and former City of Park Ridge officials . . . can’t, or won’t, persuade Ms. Schurder to give the City chapter and verse of what CofC does for the residents of Park Ridge and what it costs.”

Here is the problem with that line of thinking: No one with any authority to grant or debate current city funds is publically asking any of these groups to give this specific information, not to mention any follow up questions if they feel they are getting smoke blown up their skirts. I would bet that these organizations would be happy to publically answer questions from the mayor and/or council about what they do. Unfortunately our elected officials are not willing to ask these questions before they decide on whether or not to make or deny the contributions.

Releasing this information at the behest of a blogger who has a history of hostility and a propensity to cherry pick out-of-context details and suspect the worst about almost everyone may not be in an organization’s best interest.

EDITOR’S NOTE:  “[A] history of hostility”?  If you mean hostility to lies, deceit, self-dealing, incompetence and breach of the public trust, then we admit to being guilty as charged.  But we actually suspect the best out of most people, just not out of public officials: living in Illinois for awhile does that to anybody who is not terminally naive.  As for cherry-picking “out-of-context details,” we have no idea what you’re talking about, but if you can give us chapter and verse we’ll gladly respond.

Now getting to the substantive issue: This might be a foreign concept to you and the folks who run these private community groups that shamelessly feed at the public trough but chafe at the idea of being accountable to the taxpayers who fill that trough, but why don’t they release all that financial simply because it’s the right thing to do?  Why do they need public officials demanding it?  What are their “good” reasons for not doing it? 

You want a quarterly and annual accounting of which Park Ridge residents were served, how, and how often??? You are out of your mind. If federal health privacy laws wouldn’t prevent CofC from releasing that information then other privacy laws probably would. You are out of your mind.

EDITOR’S NOTE:  We don’t want anything for ourselves – we want those accountings for the City as the taxpayers’ representative and guardian of the public purse.  And what part of the “[i]n the absence of legally enforceable privacy rights” qualification in our prior note do you not understand?  Is transparency and accountability that difficult for you to grasp, or is it that you just crave “red herring”?

What you don’t understand are privacy rights or you don’t have any regard for people’s privacy. You said- for the recipients of the services the taxpayers are funding, that information is (and deserves to be) no more private than if the City itself were providing the services – which it effectively is, through the private service provider. You clearly have no respect for privacy rights and you said recipients of the services should not expect their information to be private. There is no reason anyone in the City has to know who is being helped because they are having problems. The previous comment also stated no one with any authority is even asking. You are out of your mind or you are some kind of control freak.

EDITOR’S NOTE:  Time to switch to decaf, pal. 

We have said that the recipients of public-funded services – whether supplied by the City or by private third-parties funded by the City – are entitled to whatever privacy rights the law accords them.  If the current laws aren’t secretive enough for you, “Mr./Ms. Cheney,” then work to change them.  Who knows: Maybe the Star Chamber is an idea whose time has come again.

Time for you to get some air, pal. What you said you wanted for the City even though no one in the City is asking for it is a quarterly and annual accounting of which Park Ridge residents were served, how, and how often. You want to invade people’s personal health and financial privacy and have their names and the nature of the services they get and how often they get services provided to the City for no other reason than you want it because the City gives money to the CofC. You are out of your mind.

EDITOR’S NOTE:  Mr./Ms. Cujo, your foam is showing. 

The only foaming dog here is you, pal. You think you have a right to people’s private information because some pittance of the taxes you pay goes to a service agency providing services to people having problems. You have said you don’t trust public officials because you live in Illinois. What that would seem to mean is you wouldn’t trust the public officials of the City to make good judgements even if the quarterly and annual accounting of which Park Ridge residents were served, how, and how often that you think should go to the City as the taxpayers’ representative and guardian of the public purse were provided to City officials. Then that must mean it is you who would want to review the personal private health and financial information provided to the City. You are out of your mind.

EDITOR’S NOTE:  One last time, Cujo: We are unaware of any law that makes the specific number of Park Ridge residents CofC (or any other private organization getting public funds) serves, the specific nature of each such service, the frequency of that service, and the cost of that service “private information.”  

But if you’re happy about the City having no idea exactly what it’s getting for the $55,000 it throws at CofC annually (or the rest of the $130,000 the Council budgeted for the community groups), then you qualify for the office of Park Ridge alderman.  Congratulations!   


PD: “Why do they [charitable organizations] need public officials demanding it [information]? What are their “good” reasons for not doing it?”

Because they answer to, among others, public officials who debate and decide on thier funding, not to bloggers. Because it may not have occurred to them to compile exactly what you would like to see and post it for public knowledge. Because it may be a difficult thing to negotiate legally. Because the funds look like they are coming without it. Because the only entity asking for this information is one that has publically and anonymously come out against the funding, and may just be fishing for data to paint the organization in a negative light.

How about these questions: What are the “good” reasons that our officials aren’t asking for this information? Where is our mayor, the champion of transparency, to ask these questions? Is he too busy playing political football again?

EDITOR’S NOTE:  We’re only fishing for the truth about what the taxpayers of Park Ridge are getting for their donation to CofC; and how much more of whatever Park Ridge is getting for its $55,000 donation than Des Plaines is getting for its $8,500 donation.  Apparently neither you nor CofC can handle the truth.