‘City Pages’: Northwest Area Fund

June 12, 2003 | Read Time: 2 minutes

The past six years at the Northwest Area Foundation have been “mystifying,” says City Pages, a weekly newspaper in Minneapolis.

City Pages says the foundation has been slowing down its spending on grants while increasing the amount it pays in administrative costs.

The newspaper says that in 2000-1, the foundation told the Internal Revenue Service it spent $4-million on charitable pursuits, but that less than $3-million of that was for grants to nonprofit groups.

Spending on salaries and benefits have jumped by 70 percent in the past four years and the foundation’s travel expenses have doubled over the same time. The foundation is also paying $250,000 a year to rent its recently renovated offices on the west side of St. Paul, the newspaper says.

The slowdown in grant making came as the foundation announced in 1997 that it was overhauling its programs to focus its spending on efforts to help fight poverty. The fund said it would identify at least 12 locations where it would spend a total of $150-million, but so far it has gotten only four projects off the ground, City Pages says.

The foundation attracted attention in November when farmworkers in Washington State sued it for pulling out of a planned poverty-fighting project in Yakima County (The Chronicle, December 12, 2002). The foundation says it decided that Yakima County residents were too divided to collaborate successfully in a regional antipoverty effort. It is contesting the lawsuit in court.

Now the foundation “faces a second legal battle stemming from the Yakima project,” writes City Pages. Mario Vargas, who worked on the Washington State effort, says he was fired in March and is charging the foundation with discriminating against him because he is Hispanic.

Karl Stauber, the foundation’s president, says Mr. Vargas was fired because of poor performance.

In spite of criticisms of the foundation, Mr. Stauber says it is pressing ahead and focusing on a project to stem poverty in Minneapolis.

“We think we saw a community that was close to the tipping point,” he told City Pages, “where if a number of things can go right, then we believe that north Minneapolis is well positioned to be a national model for how a challenged troubled community has turned around.”