An embattled nonprofit representing neighborhood associations in Southwest Portland has been again denied the city money it needs to stay afloat.
Southwest Neighbors, Inc. (SWNI), which oversees 16 neighborhood associations, lost city funding in 2021 after mounting concerns with how the organization was using taxpayer dollars.
Despite a pitch from the group to regain that revenue stream, city leaders have decided to withhold funds while they transition to a new government structure.
SWNI leaders said they are disappointed with the decision, which came in an April 13 letter from the Office of Community and Civic Life, the city agency that oversees neighborhood associations and district coalitions.
“SWNI has been a real service to the neighbors of Southwest Portland for over 40 years,” said Steve Mullinax, president of the SWNI board. “It’s painful to see that be diminished.”
Until 2021, SWNI was one of seven district coalitions in Portland that represent a subsection of the city’s neighborhood associations, which are regional groups that help coordinate neighborhood events and keep residents informed of city issues that may impact them. Those coalitions all receive annual grant funding from the Office of Community and Civic Life to pay staff salaries, help host neighborhood events, provide bookkeeping services to neighborhood associations, and offer other structural support to neighborhood groups.
In 2019, 91% of SWNI’s $323,700 budget came from the Office of Community and Civic Life.
In 2020, a blistering audit of SWNI raised alarm bells at City Hall – especially the report’s findings that a SWNI director waited years to report an employee theft of $174,000 to authorities. Then-City Commissioner Jo Ann Hardesty, who oversaw the Office of Community and Civic Life at the time, also expressed concern that SWNI had applied for a paycheck protection loan, which was meant for small businesses that were struggling during the COVID-19 pandemic. Hardesty felt these loans weren’t appropriate for SWNI to tap into, especially since the nonprofit continued to receive full funding from the city.
Hardesty decided to withhold city dollars from SWNI until the nonprofit could show greater fiscal responsibility. In the interim, she assigned city staff to help Southwest neighborhood associations with the tasks SWNI had provided.
SWNI had hoped to win back the city’s support, and money, this year.
In March, the SWNI board sent the Office of Community and Civic Life a proposal on how the nonprofit would responsibly operate if given city funds. This included promises to provide quarterly financial reports and update internal procedures to ensure compliance with federal and local finance laws. Members were hopeful that the new commissioner overseeing the Office of Community and Civic Life, Commissioner Dan Ryan, would be receptive.
Yet Office of Community and Civic Life acting director T.J. McHugh rejected the plan earlier this month. In his letter to SWNI, McHugh said his office wanted to wait to make any changes to the city’s neighborhood model until after the city’s new district lines are established. In November 2022, Portland voters approved a plan to split the city into four geographic districts that would each be represented by three elected officials. Those district maps won’t be finalized until September.
“We want to ensure that any changes to the neighborhood coalitions are made with a clear understanding of how they will fit within the four new district boundaries,” McHugh wrote.
This news could shrink an already bare-bones operation. In 2021, SWNI reported an annual budget of $38,000 – an eighth the size of what it had with city support. These funds come solely from private and business donations. And the nonprofit’s budget primarily goes toward paying the monthly $998 rent for an office at the Multnomah Arts Center, paying a contracted bookkeeper, and producing a monthly newsletter.
SWNI’s board met Wednesday evening to discuss how the city’s continued lack of funding could impact the nonprofit’s work. The board voted unanimously to stop paying rent on its office space – instead taking an anonymous donor up on the offer to cover the rent for them. The group also pledged to slash expenses to no more than $1,500 monthly. That money will largely be spent on insurance fees, newsletter editing costs, and basic administrative services.
Mullinax said he responded to McHugh’s letter with a request for a small amount of funding to keep basic services afloat. Mullinax is meeting with McHugh next week to discuss further.
“I remain hopeful,” Mullinax told the SWNI board. “But what we have to assume is that we will not get funding.”
Mullinax said the expected cuts put Southwest neighbors at a disadvantage. Before losing city funds, he said SWNI’s five staff members were working as liaisons between neighborhood associations and the city – and were critical in helping neighborhood associations coordinate messages to Portland City Council.
“It’s a lot harder to organize when we don’t have staff,” Mullinax said. “They knew their way around the city bureaucracy in ways us volunteers don’t.”
Without that structural support, Mullinax said, “that muffles our voice to some extent.”
The city staff assigned to help Southwest neighborhood associations in SWNI’s absence aren’t allowed to advocate for neighborhoods in the same way an independent coalition like SWNI can, Mullinax added.
Not all Southwest Portland neighbors are disappointed with the city’s decision to keep withholding funds.
Marie Tyvoll, a former chair of the Hillsdale Neighborhood Association in Southwest Portland, said she believes McHugh’s decision to halt funding to SWNI is “entirely appropriate.”
Tyvoll previously served on SWNI’s board. She brought a lawsuit against SWNI in 2020 after the nonprofit failed to provide her with public records regarding its finances. Tyvoll said she hasn’t seen anything from SWNI in the past two years to indicate that the group’s remaining leaders have learned from their financial mistakes or transparency shortfalls.
“I’ve seen no commitment to transparency and accountability in the past years,” Tyvoll said. “At the same time, I would have liked to see a more clear reason why [McHugh] chose to defund them. We need that on the record.”
Tyvoll believes district coalitions won’t necessarily be needed under the city’s remade governance structure, because residents will be able to go directly to their district representative’s office to be heard. The Office of Community and Civic Life has not indicated that district coalitions are at risk with the government overhaul, yet neighborhood associations have raised concerns that the district lines may impact their groups’ boundaries.