CharityWatch CEO, Laurie Styron, spoke with reporter Patrick Hauf about the taxpayer-funded Baltimore Children and Youth Fund (BCYF), which in 2022 granted $900,000 to Thrive Arts, a charity that subsequently folded without reporting how the funds were spent.

Styron noted that nonprofits are required to file annual tax forms as well as an additional tax form when they dissolve that details how their assets are distributed. There are no tax filings available for Thrive Arts in the IRS’s Tax Exempt Organization Search database, and its tax-exempt status was automatically revoked in 2024 due to failure to file. She questioned how Thrive Arts was able to secure the BCYF grant in the first place.

“‘Typically, to receive a grant of that size, the charity has to show some kind of a track record that it’s capable of overseeing those kinds of funds and responsibly spending them,’ Styron told Spotlight on Maryland. ‘Usually, this much taxpayer money doesn’t go to an untested organization that’s small and just getting started.'”

“‘A charity’s board of directors has a duty to provide proven oversight of its grantmaking activities,’ Styron told Spotlight on Maryland. ‘Part of that includes adequately vetting organizations to which it’s donating money. So for an organization to have only been in existence for 18 months to receive that size of donation, there should have been more follow through there to really ensure it was prepared to be able to spend that money according to the grant agreement.'”

Styron commented in a follow up article, saying that “maintaining public trust should be something charities are enthusiastic about, not something they begrudgingly participate in only when you force their hand.”

“’If Thrive Arts had filed its final tax filing with all the required schedules, we would be able to see if money was returned to BCYF and in what amount,’ she told Spotlight on Maryland.”

“Since it didn’t bother to file tax returns, the public has no way of verifying what happened to the taxpayer funds.”

Accountability Issues At Baltimore Children and Youth Fund

The granting organization, the Baltimore Children and Youth Fund, reports that it had no independent audit of its finances conducted by an outside accountant in 2022. The lack of an audit means that a qualified outside party has not subjected the charity’s financial reporting to auditing standards that would test the effectiveness of its internal controls and assess whether or not the charity’s financial information is fairly presented and free of material misstatements. 

In the IRS Form 990, Part XII, lines 2a & 2b, charities are asked to respond “Yes” or “No” to the following questions:

• “Were the organization’s financial statements compiled or reviewed by an independent accountant?”
• “Were the organization’s financial statements audited by an independent accountant?”

BCYF reports that its financial statements were not compiled, reviewed, or audited by an independent accountant in 2022.

An auditor follows Generally Accepted Auditing Standards (GAAS) to inspect a charity’s assets and examine its accounting records, including source documents (e.g., invoices, purchase orders, expense reports, credit memos, cancelled checks), journal entries, and ledgers (the aggregate set of records containing all of a charity’s accounts). Before expressing an opinion on a charity’s financial health and conformity (or nonconformity) with Generally Accepted Accounting Principles (GAAP), an independent CPA conducts analytical procedures to identify possible problems with its financial records and investigates them. Analytical procedures may include comparing different sets of operational and financial information, reviewing the consistency of historical relationships, and examining trends in financial ratios to identify any unexplained variances. 

Note: This article was originally published on February 28th, 2025 and was updated on March 3rd, 2025.

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