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Announcing bloody new cuts to the city budget last Thursday, Mayor Bloomberg spoke of lots of ways to raise revenue, from tax increases to productivity gains. But there’s one budget-filler the mayor failed to mention: City officials are also looking to raise serious cash from corporate, foundation and individual donors.

The Conflicts of Interest Board, the mayor-appointed body that interprets and enforces City Charter ethics laws, is now revisiting rules restricting the ability of city officials to raise private money for nonprofit organizations–including groups whose mission it is to supplement the work of their own public agencies.

“The board is going through a fairly exhaustive, quasi-public review of fundraising by elected officials,” said Wayne Hawley, general counsel for the board. “In tough economic times, the city reaches out to the private sector.” The board is aiming to issue what it calls a “major, major advisory opinion” within the next three months. “Like the mayor says about finances,” added Hawley, “everything’s on the table, within reason.”

The board is already reconsidering a series of its own opinions, issued throughout the 1990s, that bar elected officials from what it calls “active fundraising”–making calls and sending letters. Such solicitations, the board wrote in 1993, “could easily create a perception…that those who seek to do business with the official are expected, or would be well-advised, to make a contribution in order to secure access or favorable treatment.” In a 1998 opinion, it clarified that “elected officials and high-level public servants may not write to local merchants or individuals asking them to contribute to a not-for-profit organization.”

Yet that’s exactly what Brooklyn Borough President Marty Markowitz did recently, following a verbal consultation with board staff. In an October 30 letter to members of the Brooklyn Chamber of Commerce, Markowitz asked merchants to make a financial contribution or run a toy drive on behalf of Best of Brooklyn, Inc., a new nonprofit established by the borough president “supporting culture, social services, health education and tourism, and most important, our youth.”

“The bottom line is, during the foreseeable future, we will be dealing with budgets cut to the bone,” said Markowitz spokesperson Andy Ross, “and public-private partnerships are essential.” The beep, he noted, had his entire $1 million discretionary fund eliminated in this year’s budget. Ross adds that the nonprofit will support such programs as a sleepaway camp and a teen summer jobs initiative.

Many city agencies, including the Department for the Aging, the Administration for Children’s Services and the City Comptroller, are affiliated with nonprofits that fundraise for special projects. The Department of Education recently hired Caroline Kennedy Schlossberg to head up its Office of Strategic Partnerships, with a mission to expand efforts that already net tens of millions to aid the schools. The Fund for Public Advocacy, set up by Public Advocate Betsy Gotbaum, has raised $201,830 since it was established in January, including a grant from the Sloan Foundation for a disaster preparedness education project. General Counsel Suzanne Lynn says her boss is eager to get permission to move into active fundraising. “It doesn’t make sense for public officials to set up not-for-profits and then not allow them to fundraise,” said Lynn. “A lot of people will be upset if they don’t allow it.”

Barbara Bryan, executive director of New York Regional Association of Grantmakers, said that while some of her member foundations have a history of funding innovative government programs, others will not be so eager to lend City Hall a hand. Nonprofits, she noted, are facing big cuts in their own city contracts to provide social services, even while many are seeing an increasing number of clients turning to them for aid. Said Bryan, “We’re certainly not going to get out of the city budget crunch by turning to private foundations.”

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