Denver council members fret over Caring for Denver spending, oversight after critical audit

Caring for Denver, a foundation that spends and distributes more than $40 million a year from city taxpayers, told City Council members on Wednesday it would stop reimbursing its employees for alcohol purchases following a critical audit last week.

Even members who are supportive of Caring for Denver expressed concerns about the audit that found the organization can’t prove its grants for drug treatment and mental health services are effective or spent solely on Denver residents as required.

Lorez Meinhold, the executive director of Caring for Denver, presented a briefing to the Denver council’s Health and Safety committee on Wednesday. She ended her presentation by acknowledging the audit’s findings and adding that they would stop reimbursing alcohol, even though it made up a small portion of their annual $2.5 million administrative budget.

“But we also recognize that when we're entrusted with public funds, no matter how large, even small symbolic contradictions matter,” said Meinhold. “We are also changing our policy going forward, that we'll not be reimbursing any alcohol.”

Several council members praised Caring for Denver for funding critical programs in mental and behavioral health and violence prevention, but expressed concerns about issues identified in the audit.

Councilmember Jamie Torres said she had “a healthy amount of discomfort” about how programs like Caring for Denver are structured, with limited oversight by the city. She added that the council is in the process of reviewing the three private nonprofits that distribute tax dollars, including Caring for Denver. 

“When your sole source is tax dollars, sales tax dollars that we've collected, that we've transmitted to you, in my eyes, it creates a different kind of relationship. And so I wasn't put at ease with some of the responses to the auditor's findings,” said Torres.

In recent years, Denver voters have been supportive of tax initiatives that largely bypass city government and funnel taxpayer money through not-for-profit organizations like Caring for Denver.

A 2024 CPR News investigation found that some community nonprofits funded by Caring for Denver had leaders with extensive violent criminal records, no history or licensure to provide services and had falsified relationships with city and state agencies in grant applications.

The Denver Auditor released its report on Caring for Denver last week, and the findings closely matched what CPR News uncovered. The auditor’s office also discovered, when looking at Caring for Denver’s administrative expenses, that the organization was reimbursing alcohol at high-priced restaurants like Death & Co.

Caring for Denver disagreed with many of the auditor’s recommendations last week, including around strengthening due diligence of grantees, something Councilmember Kevin Flynn said stood out to him. He asked if Caring for Denver should be doing background checks on grantees.

“These background checks aren't required in city grant making,” said Meinhold. “The city doesn't do background checks, neither does the state, nor federal government or other private grant makers. And so I think we were just trying to lift up that this is not a common or best practice that we've seen.”

Council members did not seem mollified by Meinhold’s defense.

“I also share a lot of my colleagues’ concerns,” said Councilmember Flor Alvidrez. “I really appreciate you just naming the alcohol thing, especially when we're trying to help people with substance abuse issues. I think that was a disappointing thing to see.”

Councilmember Sarah Parady indicated she is worried that some of the grants Caring for Denver made to itself to support other grantees may not align with the voter-approved ordinance that established Caring for Denver to fund specific things, like drug treatment and mental health resources.

“I want to make sure council and Caring for Denver sort of put our minds to figuring out if the language of the ordinance is actually ambiguous enough in any way that there's a risk in some context of a court actually disallowing some of what's been funded. And if so, maybe we do need to think about that a little sooner,” said Parady.

Parady took issue with the auditor’s findings related to accusations of criminal behavior by leaders of nonprofits that receive city money. That is not a problem to her.

“Of course, you guys are giving grant money to organizations that have people that work at them that have felony convictions,” said Parady. “You should be doing that. Please continue doing that, because that's where, I mean, we want people to be able to have a conviction, start doing something that they have expertise on in the community productively, do a good job of it and be able to benefit from this fund.”

Still, Parady asked Meinhold to provide copies of Caring for Denver’s policies related to due diligence. “Of course, we wouldn't want any risk that we were funding someone that was actively engaging in their professional conduct in some kind of violence.”

One of the grantees, Heavy Hands Heavy Hearts Foundation, was run by Lumumba Sayers, who is scheduled to stand trial in April for the murder of a man in a crowded parking lot at a family water park.

The CPR News report found that other grantees had little to show for the programs they promised Caring they would provide with taxpayer money, and granted executive directors large pay increases once the Caring money was received. 

City council members said the meeting didn’t provide them enough time to ask all the questions they wanted to related to Caring for Denver. Three members (Flynn, Torres and Sandoval) said they had private meetings set up with Meinhold to continue discussing their concerns.

“Appreciate that and look forward to, I mean, this is a continued partnership and we're committed to that,” said Meinhold.