In the wake of high-profile scandals involving nonprofit contractors, the mayor’s office says it’s going to reexamine how it spends city resources.
Mayor London Breed is expected to announce a series of reforms to the contracting process with nonprofit organizations, an effort by the city to boost transparency and ensure accountability for how grant money is used.
“Misconduct from those who would wrongfully take advantage of city resources has not been tolerated during my administration,” Breed said in a statement. “These new efforts expand on this commitment.”
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.
While being out of compliance with state law doesn’t mean the nonprofits were misusing funds, it does speak to the larger issue of transparency and accountability that has become a talking point in this year’s mayoral race, with opponents using it to criticize Breed. But the mayor’s office counters that it has implemented more than 60 anti-corruption reforms.
“[W]e have investigated such activity and have acted swiftly and decisively to bring to account bad actors,” Breed said.
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.