More Urban Species: Phallus Stinkhorn
Phallus Stinkhorn Phallus ravenelii
Attribute it to Nature's elegance, economy, or sense of humor. The phallus stinkhorn, like the dog stinkhorn discussed earlier, looks like it does because it gets the job done. That is, the job of elevating the green mass of sticky spores above the wet ground below. The phallus stinkhorn appears first as an egg-like object, similar in size and color to a small onion, but fleshy and gelatinous. When the rains pour down, the fungus absorbs the water and expands the spongy tissue of the fruiting body, raising the spore-bearing surface safely away from the water below.
The smell of the stinkhorn--of all stinkhorns--is an attractant to certain insects, who prefer stenches to aromas. An analog from the plant world is the tree of heaven, which produces male flowers whose objectionable odor has banned it from some cities. The insects (mostly flies, unsurprisingly) land on the sticky mass and then bring those spores to some other area which is probably moist and fertile and rotten. This arrangement allows the fungus to save energy by producing fewer spores than those species which simply cast their issue on the wind.
Stinkhorns are often encountered in decomposing wood chips. The fungus organism feeds on lignin, a complex polymer found in vascular plants, which is especially abundant in wood. For whatever reason, chipped and decomposing wood provides the best habitat for phallus stinkhorns, meaning that they can pop up around landscaping, ornamental gardens, and playgrounds. Phallus ravenelii is the most common phallus shaped stinkhorn in eastern North America; others include Phallus impudicus, which is not so choosy about where it grows, appearing in lawns and even reportedly pushing through building foundations (from old wood hidden under new concrete)!
Sources:
Mushrooms Demystified by David Arora, 1986 Ten Speed Press.
Mushrooms of Northeast North America by George Barron, 1999 Lone Pine.
Simon and Schuster's guide to Mushrooms by Giovanni Pacioni, 1981.
Also I looked at the wikipedia entry for lignin.