As word began to spread about financial irregularities at Strong City Baltimore, which managed the finances of foundation-funded grassroots projects, some of those funders quietly halted their dealings with the troubled nonprofit.

After the story broke publicly in August 2020, their leaders began meeting in private to craft a response.

Hearing nothing from them, the mostly Black-led groups harmed by Strong City’s mismanagement urged the powerful foundations in town to find their voices, help them recover and fix a flawed system.

Now three years after the problems were exposed – and days before Strong City’s former CEO was indicted on federal corruption charges – comes the first tangible benefit from that effort.

“We are pleased to announce the launch of the Baltimore Fiscal Projects Stability Fund,” project manager Tara Huffman wrote in a July 31 “Dear partners” email.

Grants of as much as $25,000, Huffman wrote, may be awarded to applicants “that can demonstrate that they were financially harmed as a result of their fiscal sponsorship agreement with Strong City.”

The modest gesture at reparations didn’t impress one former Strong City client, who was forced to shut down his project because Strong City wouldn’t release his grant funds.

He told The Brew that he still feels bitter towards a philanthropic community that, in his view, turned a blind eye for too long to a debacle that cost Baltimore grassroots groups millions of dollars, crushed their leaders’ spirits and squelched their worthy community efforts.

“There’s a lot of distrust for me of that space,” said the former project leader, who asked not to be identified because of the “severe blowback” he received from speaking out about Strong City in the past.

“They knew about all these things that were happening at Strong City and never did anything about them”  – Former Strong City client.

“Here it is, three years later, and now here they are? They knew about all these things that were happening at Strong City and never did anything about them,” the former client said, describing himself as emotionally traumatized as well as financially stung by his experience.

Comments he had made about Strong City in 2020 received validation when federal prosecutors announced wire fraud and money laundering charges against former CEO Reginald Davis.

But the one-time client said his outspokenness also got him “blackballed in Baltimore,” forcing him to get out of the business of seeking foundation funding altogether.

“It got very dark for me for some time,” he said. “I’m still processing it.”

“Reggie took the fall”

On Wednesday, or almost three years to the day after The Brew first disclosed SCB’s mishandling of fiscal clients’ accounts, Davis was arrested and entered the courthouse in Baltimore in handcuffs. He pleaded “not guilty” to the charges.

Prosecutors said Davis fraudulently obtained more than $1.4 million in Payroll Protection Program (PPP) loans during the Covid-19 pandemic, which he used to replenish money that Strong City had misappropriated from groups, starting as early as September 2015.

The former project leader praised the indictment for bringing “some semblance of justice,” but wondered why other executives at Strong City were not named as well.

“Unfortunately, it was all about Reggie,” he said. “Reggie took the fall.”

According to the indictment, “Davis and others known and unknown to the grand jury (emphasis added) devised and intended to devise a scheme to defraud Bank 1 by means of materially false and fraudulent pretenses, representations, promises and material omissions.”

These “other parties” to the scheme are not named in the indictment.

The former project leader said many other group leaders felt that the matter was being “swept under the rug.”

A complaint had been filed with the Baltimore’s Inspector General after the initial Brew story, but months – then years – passed as Strong City promised to improve its financial controls.

Meanwhile, the grassroots groups continued to suffer without the funds they believed Strong City was withholding, with some groups unable to make payroll, pay their personal expenses or pay rent on the spaces they used for activities.

Projects “impacting tens of thousands of people, including youth, parents, homeless people, survivors of violence and other vulnerable populations” were either hobbled or had to shut down, a coalition of Strong City’s clients said.

A lawsuit filed in December by seven groups outlined many of these financial, emotional and reputational harms.

Board Resignations

As observers now wait for the civil litigation and federal criminal prosecution to play out, Strong City itself is reeling under the latest blow.

Employees have vacated the charity’s new offices in the renovated A. Hoen & Co. Lithograph building in East Baltimore and, sources say, the board of directors is debating whether to dissolve the organization altogether.

“It’s kind of falling apart,” a person with knowledge of the organization said, noting that several board members have already resigned.

Strong City ended its fiscal sponsorship work in 2021, but has continued to operate an Adult Learning Center and the Club at Collington Square, an after-school and summer program.

Its CEO and board chair, Washington attorney Anwar Young, has not responded to questions and a request for comment from The Brew.

“Unsustainable Business Practices”

Meanwhile, the city’s philanthropic leaders are beginning to roll out their response.

The “Stability Fund,” Huffman said, springs from recommendations in a report completed in 2021 that was commissioned by the Open Society Institute Baltimore and the Annie E. Casey Foundation.

Among the conclusions of “Mapping Baltimore’s Fiscal Leadership Landscape” was that the city’s “fragile and overextended” array of fiscal sponsorship organizations creates “an increased potential for unsustainable and/or unethical business practices.”

The stability fund “is just one part of our effort to make this better” for people and groups “that were really terribly harmed,” Huffman said, adding that other upcoming initiatives are intended “to make sure Strong City Baltimore doesn’t happen again and to strengthen the whole fiscal sponsorship ecosystem.”

A top goal of the stability fund and other initiatives upcoming: “To make sure Strong City Baltimore doesn’t happen again.”

The $360,000 pot of money in the fund, provided by OSI Baltimore, “will prioritize applicants whose board and staff are 60% or more Black, Indigenous, or Persons of Color (BIPOC),” Huffman’s email said.

So far, about a dozen applications have come in for the program, which opened on July 31 and will close on September 8. (To apply go here or contact Huffman at theadvocateassistant@gmail.com)

In promoting the initiative, Huffman took pains to stress that the Stability Fund, to be managed by The Fund for Educational Excellence, is not affiliated with Strong City. Distrust after the Strong City affair is understandable, she indicated, as are feelings that the new grant program is an inadequate gesture.

“It’s a very small fund that doesn’t come close to covering all the financial and other damage that was done, but it’s a start,” she said. “There’s that saying about not letting the perfect be the enemy of the good.”

• To reach a reporter: fern.shen@baltimorebrew.com

• Full Brew coverage: Strong City