Unconvincing: defense of nonprofits disappoints

For the first time, local nonprofits are getting heat for their questionable relationship with the City of SJ. Even Mayor Liccardo recently said the quiet part out loud, expressing concern over how some nonprofits can be seen as unaccountable and underperforming. Some nonprofit leaders took to the pages of the Merc to defend their patch, but, to our way of thinking, came up short. The Opp Now team unpacks the arguments.

The nonprofit leaders' defense of their category in the Merc letter fails because it doesn't address the three big concerns residents have about how nonprofits function in San Jose. They are:

1.) Nonprofits unethically lobby local government while—at the same time—working for local government. This, of course, is an old union trick: work to get your boss elected, then you'll get a better deal. With the nonprofits, it's even sketchier, as many of the nonprofits are 501(c)(3)s, which means they are supposed to stay away from political endorsements and remain sharply focused on their particular line of work. But that doesn't happen, and in SJ, we get the phenomenon of environmental nonprofits actually lobbying the City for pro-labor redistricting maps and nonprofit leaders prominent in misleading and false campaigns against moderate candidates like Irene Smith.

2.) Nonprofits act as if they're a special extension of city government—but they're not. From the city's perspective, nonprofits should be viewed as vendors, contractors, who receive payment for work delivered on city projects. Just like anyone else. But check out how they position themselves. In a recent candidate forum hosted by nonprofits, the nonprofits refer to themselves as "co-creators" of city policy that have a "partnership" with the city.

3.) Nonprofits have a bias for ever-increasing city budgets—regardless of impact on city finances. As Liccardo points out in his letter, many nonprofits do not exhibit concerns for cost-effectiveness and success metrics that should be fundamental to good fiscal management at the municipal level. Once again, looking at the questions offered at the nonprofit candidate forum, questions inevitably push candidates towards discussion of more city spending (much of it going to nonprofits), rather than on prudent fiscal management.

In their defense, the nonprofit leaders say in their Merc letter: "Non profits adhere to strict regulations and are accountable for the funds they receive." And that many nonprofits deliver excellent services at modest cost. Fair enough: We're sure that's true for many—perhaps even most—local nonprofits. But that doesn't address Liccardo's (and other's) concerns is that there's no way of knowing because there are not systems within the City itself (as opposed to within the nonprofits themselves) that ensure transparent, reasonable and ethical fiscal management.

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