A San Francisco hearing officer on Wednesday ruled that Collective Impact, a Western Addition-based nonprofit that became embroiled in a major City Hall scandal last year, can receive public funding again. City officials had suspended it earlier this year over allegations of financial misconduct.
Hearing officer Andrea McGary issued the decision after holding four debarment hearings (opens in new tab) in August and September to consider whether the accusations disqualified the group from receiving the funds.
During the hearings, Collective Impact defended itself against allegations from the city attorney’s office that it helped a former city department head, Sheryl Davis, misuse city funds for personal use.
In a statement on Thursday, Collective Impact’s board of directors said they were “deeply gratified” by the decision, “which acknowledges that the accusations against Collective Impact were speculative and unsupported by the evidence.”
They also announced that James Spingola, the organization’s executive director, would be stepping away from his role, citing “intense strain” from the past months that has impacted his health.
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“Today’s decision brings mixed emotions,” the statement included. “While we are grateful to be vindicated, the process has taken a significant personal toll.”
The city attorney’s office said it would appeal the ruling.
“It is absurd anyone would think Collective Impact is a responsible contractor that can be trusted with public money when we have blatant evidence that Collective Impact paid for a City official’s personal endeavors and first-class travel, submitted false claims, and improperly spent taxpayer dollars meant to go to children,” spokesperson Jen Kwart wrote. “Not only was Collective Impact’s past misuse of City funds disqualifying, but its current leadership has taken no actions to ensure that City funds will not be misused again. This was a bizarre hearing process that led to an even more bizarre decision with no reasoning or analysis.”
In her 25-page ruling, McGary said the city attorney did not meet the burden of proof to show that Collective Impact had acted with intent to support the charge of willful misconduct. The city was seeking to bar the nonprofit from funding until 2030.
“Appellant Collective Impact is strongly encouraged to review the terms of its grant contracts, seek the assistance of agency administrators for each grant to come into compliance, and maintain compliance with all terms and conditions required by the City of San Francisco, as well as seek the assistance [of the] Citywide Nonprofit Monitoring and Capacity Building Program,” she wrote.
The ruling is a major victory for the nonprofit, which grew from a modest after-school program to an $8 million-a-year organization providing services such as workforce development and literacy programs in one of San Francisco’s historically Black neighborhoods. The group had previously said it risked ceasing operations if it could not access the funding.
“With this outcome, we can once again focus on what matters most: empowering San Francisco’s low-income youth and families to reach their full potential and to meet the challenges facing their communities head-on,” the board wrote in its statement.
The scandal began in September 2024, when The Standard reported that Davis had signed off on at least $1.5 million in contracts to Spingola’s nonprofit while the two shared a home and car together. The money came from the Dream Keeper Initiative, former Mayor London Breed’s signature program to inject tens of millions of dollars into Black communities. Davis, head of the city’s Human Rights Commission at the time, was charged with overseeing those funds.
Davis resigned shortly after her ties to Spingola became public and now faces a criminal investigation by the district attorney’s office. She has denied any wrongdoing.
In March, the city attorney’s office blocked Collective Impact from receiving public money after investigators uncovered new details alleging the nonprofit had paid for Davis’ son’s UCLA tuition and her podcast booking costs, among other expenses.
During this summer’s hearings, attorneys for Collective Impact challenged the city’s charges, calling them “factually flawed” and “legally unsupported.”
The group said that its closure would have an “injurious effect” on Western Addition youth and families. Since March, the nonprofit has relied on $2 million in private donations to cover programs previously financed by public funds.
Last month, a joint audit by the city attorney and controller’s offices alleged that Davis had improperly spent $4.6 million in public money over roughly half a decade. Some charges included $6,829 for a lecturer’s monthlong stay in a luxury hotel and $31,343 in alcohol.
Another audit, reviewing Collective Impact’s solicitation processes and grant compliance, is expected in the coming months. The controller’s City Performance Division is also set to publish an assessment of the Dream Keeper Initiative’s funding and performance metrics.