SF starts cracking down on fiscally corrupt nonprofits

Image by the Granger Collection, New York

San Francisco spends over $1 bn/yr on contracted nonprofits. Recent investigations raise concern as to where all this dough’s really going (see: $700k “misused” by now-felon charged SF SAFE director). SF Standard reports, below, that Mayor Breed’s now mandating nonprofits do additional spending documentation and screening for conflicts of interest.

San Francisco spends more than $1 billion a year on contracts with hundreds of nonprofit organizations that provide job training, housing, food, medical care, small-business development, and other services. The city has lost millions in the last few years to organizations caught misusing grant funds, seeking reimbursement for improper activities, and failing to compensate workers. In July, the former director of San Francisco SAFE, a San Francisco Police Department-affiliated group, was arrested and charged with misusing $700,000 in public funds. 

The city has blacklisted a dozen nonprofits and individuals with problematic behaviors. But that may be the tip of the iceberg. While a statement from the mayor’s office said “a small minority of City grantees” misused funds, a 2023 investigation by The Standard discovered that 140 nonprofits contracting with the city were barred by the state from receiving or spending funds. …

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In partnership with City Attorney David Chiu and the controller’s office, Breed will issue an executive directive to city departments, providing more clarity on how to comply with laws, such as requiring spending documentation and screening for conflicts of interest. The mayor’s proposed changes are similar to a law proposed in March by Supervisor Catherine Stefani and passed to combat nonprofit corruption. Stefani is a co-sponsor of Breed’s upcoming legislation. 

Breed will also introduce legislation at the Board of Supervisors’ meeting next week to crack down on nonprofits using city money for political activities, to ensure a competitive and open bidding process, and to prohibit nonprofits from using grant money for lobbying or lawsuits. 

Read the whole thing here.

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