At the end of January, journalist Kevin Mooney published an article in The Daily Signal about the activities of the non-profit Rhode Island Foundation — which is generally understood to be a charitable organization — and its role advancing left-wing causes in the state. One small paragraph caught a bit of attention, because the foundation objects to it:
The state’s Office of the Health Insurance Commissioner has funneled about $600,000 to the foundation since 2013, government records show.
A few days after Mooney’s article appeared, WPRI reporter Ted Nesi tweeted as fact that “RI Foundation is just a pass-through on those OHIC/DBR grants shown in RI transparency portal. (From CSI-RI.),” citing the Foundation’s spokesman as his source. While it is understandable that, after a century in operation, the non-profit would have strong credibility with the local news media, the nature of these grants is not as clear as Nesi reported.
The concept of pass-through funding that does not financially benefit the on-paper recipient arises in government operations from time to time. For instance, public school departments receive funding from the state that goes directly toward textbooks for students from their districts who attend private schools. Although the amounts count under the district’s state aid, the actual departments, as organizations, do not gain by them.
However, pass-through funding implies a third organization that winds up with the money. A search of the GuideStar listing of non-profits for the Rhode Island Chronic Care Sustainability Initiative (CSI-RI) produces no results, and no organization under the name turns up on a search of the Secretary of State’s corporate database. A fact sheet available through the state Office of the Health Insurance Commissioner describes the initiative as a program, not an organization, administered by the Rhode Island Foundation.
Given long-standing interest in the state government’s trend of routing government activities, decision making, and activism through channels beyond the reach of voters and transparency laws, the Ocean State Current requested documents related to these grants late last year. The state forwarded a packet of invoices and contract details (click here for the PDF).
A review of the 75-page Access to Public Records Act (APRA) response does not leave the reader with the impression that the Rhode Island Foundation is simply a pass-through entity processing payments for some other organization. The official contract and invoice language acknowledges that the foundation is the sole fiduciary for the CSI-RI, but that fact is presented as a reason that the Foundation should be awarded a no bid contract. A “budget narrative” on PDF page 32, for example, explains:
Support for the CSI Initiative from the Rate Review III Grant is specified at $200/hr x 750 hours for a total of $150,000. Hours will support a variety of onboarding tasks including an initial meeting and media event, support for practices during the application process, application review, selection meetings, and kickoff meetings with successful applicants.
By the language of the agreement, these appear to be tasks for which the RI Foundation is being hired on behalf of the CSI-RI. Elsewhere, under “payment provisions” (PDF page 55), the agreement states: “By submission of an invoice, the Rhode Island Foundation certifies to OHIC that an objective resulting from the specific, detailed activities to be performed by the Rhode Island Foundation under the Agreement has been completed” (emphasis added).
Starting on PDF page 58, the packet provides invoices with lists of the specific tasks that the foundation performed in order to receive the grants, such as:
- Develop a contract for UMASS project
- Facilitate execution of a contract
- Provide space and furnishings to CSI project team at One Union Station (RI Foundation headquarters)
- Establish a restricted account for CSI funds
These are described as “RIF Activities” for which the foundation is invoicing the state. As noted parenthetically in this space, money is fungible, meaning that all revenue ultimately supports all of an organization’s activities to the extent that the revenue exceeds the costs for a particular project. Readers can judge whether the listed “RIF activities” are sufficiently extensive to have left the foundation merely breaking even with hundreds of thousands of dollars in revenue, but even then, it would not be a “pass through,” but an occupation.