The City Council unanimously approved a motion to conduct a comprehensive study of how the city recognizes and funds neighborhood organizations, potentially reshaping a program that has operated for decades.
The council voted 7-0 to direct staff to schedule a study session by Sept. 30, to examine options for reforming the conditions under which community organizations receive official city status and participate in the Neighborhood Association Grant Program.
The motion, introduced by Councilmembers Dan Hall, Ellis Raskin and Mayor Pro Tempore Caroline Torosis, calls for a sweeping review that includes examining federal tax compliance for all officially recognized community organizations over the past 25 years and exploring requirements for annual officer elections and term limits.
Hall said he introduced the item because he has a problem with giving taxpayer dollars to organizations that actively lobby the city. He said that while the public money had been used to help build membership for the groups in the past, that membership was now being targeted with political endorsements.
“What I care about is ensuring that we are giving special privileges and official recognition to nonpartisan organizations and that we are not spending taxpayer dollars to quietly subsidize partisan political activity,” he said.
The issue grew out of the City’s recent budget discussions where Hall voted against distributing money to the local organizations. Hall was joined by several other councilmembers who questioned the funding.
Councilmember Jesse Zwick framed the issue in stark terms.
“I’m supporting this item because you can engage in whatever protected political activity you want, but not on taxpayer dollars, and you can make that choice as an organization,” he said. “Am I gonna take city money and engage in community building and other activities that help inform, you know, the public about what’s going on at the city and, you know, build community and do all sorts of things, or I’m going to be a political lobbying organization.”
However, Mayor Lana Negrete expressed reservations about the investigation, even while voting for it. She said it didn’t feel like good governance and worried about policing civic engagement when we should be uplifting it. She noted that 501(c)(4) organizations can lawfully receive grant money from the city as long as funds aren’t used for political endorsements.
The proposed study would examine the legal differences between various nonprofit designations, including 501(c)(3) public charities, 501(c)(4) social welfare organizations, and 501(c)(6) member benefit organizations. It would also explore alternative models for city engagement with residents outside the neighborhood association structure.
Public reaction to the proposal has been sharply divided. Supporters argue the reforms will increase transparency and accountability in the use of taxpayer funds.
Opposition came primarily from neighborhood organization leaders and longtime residents who view the study as retaliation for political endorsements some groups made in recent elections. Tony Huizar, chair of the Pico Neighborhood Association, called the motion “a dangerous and deeply cynical attempt to defund community voices under the guise of ‘transparency’ and ‘governance reform.’”
The neighborhood organizations have operated for decades, with some dating back to the 1970s. They typically hold monthly meetings featuring city staff and elected officials, distribute newsletters, and organize community events. Organizations are required to provide detailed accounting of grant expenditures and submit receipts for city approval.
The study session will examine whether violations of proposed new requirements could result in loss of official recognition and associated benefits, including reduced fees for public building rentals and formal consultation roles in city planning processes.
City staff will coordinate with the City Attorney’s office to present policy options to the council by the September deadline.
Santa Monica’s neighborhood associations are volunteer-led, city-recognized groups that serve as key advocates for community interests and civic engagement. These organizations represent residents across diverse neighborhoods and help shape local policies through active participation in city planning processes, including land use, zoning and development proposals.
Santa Monica currently recognizes seven neighborhood organizations that receive annual grants totaling approximately $49,000, with individual groups receiving about $7,000 each. The organizations include the North of Montana Association, North East Neighbors, Mid City, Friends of Sunset Park, Pico Neighborhood Association, Ocean Park Association and the Wilshire Montana Neighborhood Coalition.
The associations collaborate regularly with city officials, hosting community meetings where staff and council members engage directly with residents on local programs and issues. They organize events ranging from block parties and free concerts to National Night Out gatherings, fostering community bonding and crime prevention awareness.
The groups address local concerns including housing, traffic, parking and park improvements, often partnering with city agencies to find solutions. By providing forums for discussion, sharing information on city agendas and mobilizing residents, these organizations boost civic engagement and ensure community voices are heard in local government decisions.
During recent election cycles they have worked to hold candidate forums and some have made official endorsements of council candidates.
The recent motion also directs the city to suspend distribution of funds to the Neighborhood Association Grant Program until a new policy framework is adopted, except for continuing funding to 501(c)(3) organizations for community-building events like block parties.
maaz@smdp.com