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The Standard Top 25: The Nonprofits Getting the Most From SF’s $668M Homelessness Budget
Friday, May 20, 2022

The Standard Top 25: The Nonprofits Getting the Most From SF’s $668M Homelessness Budget

Despite massive investments, San Francisco has struggled to find lasting solutions for the thousands of unsheltered people sleeping on the city’s streets each year. 

In July 2016, the city launched the Department of Homelessness and Supportive Housing to help consolidate solutions for the problem. With a budget of $667.8 million in the current fiscal year, the department delivers most of its core services through nonprofit service providers, some of whom have longstanding relationships with the city. 

This week, Mayor London Breed and the mayors of ten other California cities asked Gov. Gavin Newsom and the state legislature for $3 billion over three years to address homelessness. San Francisco would receive roughly $45 to $50 million in flexible homelessness funding per year, according to Breed’s spokesperson, Jeff Cretan.

Since 2018, the department has made more than $1 billion in payments to nonprofits, including $268 million in the current fiscal year, according to a database maintained by the controller’s office. Operators of supportive housing, navigation centers and shelter-in-place hotels came in as the largest recipients of funds. An investigation by the Chronicle found widespread problems with safety, sanitation and a high rate of death among residents of supportive housing sites; an earlier story by The Standard found similar results at one site, The Granada Hotel.

The top-paid nonprofit, Episcopal Community Services, manages a mix of 45 contracts with the homelessness department for a sum of $44 million in fiscal 2022. It has received more than $175 million in the past five years from the department, according to the Controller. 

The Tenderloin Housing Clinic ranks second on the list, has ten contracts to run permanent supportive housing sites which have accounted for $33 million in spending so far this year.  The Tenderloin Housing Clinic manages a total of 25 buildings

See Also

HSH has spent $8 million so far this year on the nonprofit Urban Alchemy, which did not receive any funding from the homelessness department in 2018 but has quickly risen to the eighth highest-paid spot on the list.  In 2018, the city began paying Urban Alchemy to manage public bathrooms, and the nonprofit now maintains a myriad of contracts to perform security, case management and shelter services. In February, the Board of Supervisors awarded an $18.7 million, three-year contract to run a 250-person homeless shelter in Lower Nob Hill. 

Other top-paid nonprofits are a mix of housing and service providers. Also on the list are Tides Center, which describes itself as a “nonprofit accelerator,” and Heluna Health, a provider of health-related services.  

David Sjostedt can be reached at [email protected].
Maryann Jones Thompson can be reached at [email protected].
  • Are the financial reports from these nonprofits available to the public? Are their reports required to be reviewed by a CPA as is required of for profit corporations? Are their Board of Directors (BOD) meeting open to the public as City Agencies are? Has anyone wondered why SF farms out so much work to non-profits? San Francisco spends far more on non-profits than any other city in America, much more than New York or Chicago despite being a faction of their size. Why is that???

  • Can’t speak for all of them, but know that for at least one of these organizations, they staff and administer programs that the city would otherwise have to fill with city workers at a much greater cost. Pay and benefits from some of these entities pales in comparison to the city’s.

  • Hi Michael,

    Here are some answers to your questions:

    Are the financial reports from these nonprofits available to the public? – Yes. they are available online. Just google the name of the non-profit you are interested in and ask for the 990 (the organization’s equivalent of a tax return).

    Are their reports required to be reviewed by a CPA as is required of for profit corporations? – Yes, they are all audited by the same accounting firms that audit for-profit corporations.

    Are their Board of Directors (BOD) meeting open to the public as City Agencies are? – Yes

    Has anyone wondered why SF farms out so much work to non-profits? – The most obvious reason is that non-profits do a much better job than government entities at providing services. They also pay a LOT less and generally have fewer benefits (e.g. retirement) than city workers. If SF didn’t farm this out, the cost of providing these services would be a lot higher.

    San Francisco spends far more on non-profits than any other city in America, much more than New York or Chicago despite being a faction of their size. Why is that??? – I have not seen whatever data you have that leads you to this conclusion, so don’t have an answer for you on this.

  • What are these nonprofits doing to ensure that any homeless person who was not born in the City or who did not formerly own property here is given a bus ticket back to their home state? We cannot keep giving taxpayer dollars to homeless migrants entering the City as that will continue to incentivize the migration of the homeless here.

  • Any non-profit that does not support mandatory conservatorship (i.e., removal of homeless criminals and other from the streets) should not be allowed to function or receive even one taxpayer dollar.

  • Catholic Charities? So an organization (the Roman Catholic hierarchy) that supports the policies causing homelessness (unplanned childbirth, lack of access to contraception, family planning, abortion, and adoption, overpopulation and poverty, discrimination and abandonment of gay and transgender children, child abuse and neglect) is being given taxpayer dollars to work on homelessness? What’s next? Funneling our tax dollars to Vladimir Putin to support the rebuilding of Ukraine?

  • You can look any non-profit tax returns form 990 on the internet. And you can learn to understand the story they tell if you just like a little time. I’ve been doing it for years as a hobby.

  • Every patronage scandal seems to involve City non-profit funding. “The most obvious reason is that non-profits do a much better job than government entities at providing services. ” Maybe this oft-repeated fallacy serves, in this context (providing homeless services), only to justify the dolling out of public funds to political insiders and the “results” are an afterthought. Seriously – is there any difference to the taxpayer between a city employee standing on the corner staring at his phone and 4 Urban Alchemy vested-guys doing exactly the same thing (nothing)? So what if the pay for 4 equals the pay and benefits of 1. Can there be a lower bar?

  • Keith,

    I don’t think that a nonprofits’ BOD meetings are readily open to the public like the commissions of city agencies. Few, if any, post their BOD meeting dates, time and location on their websites. One can, of course, ask to attend. And while 990s can be found online, they don’t contain a lot of financial information that may be of interest. But, they do list top salaries and $ amount spent on top salaries, programs and fundraising. I have found it illuminating to see how much the top nonprofit leaders make in annual compensation. On a separate, but related point, I find Kositsky of Urban Alchemy interesting. After being the head of the HSH for several years and clearly not making progress on homelessness, he’s now the head of Urban Alchemy, #8 on the list of HSH contracts. I guess his former employees think their former boss’ agency is doing a good job.

  • It’s a complex problem however Is it possible that we may have just identified the major factor that has thus far guaranteed no end in sight to San Francisco’s homeless problem?
    Listed here are the major players in what has become SF’s Homeless Industrial Complex and seems that each of these non profit ‘service providers’ have the same overall mission statement: to provide services to the homeless at a better cost than if those same services were provided by city agency.
    Crazy.
    A cursory look reveals many of the services provided by these orgs are not even directly reaching the community and would more accurately be defined as ‘homeless crisis management services’, as is the case with Urban Alchemy.
    Without a single, measurable, shared, stated goal that’s agreed upon by SF taxpayers, donors, the Mayor, the city council, and the service providers themselves which directs focus toward fixing the problem while providing strict accountability benchmarks, this disaster will only get worse.
    The goal needs to be something akin to ‘putting an end to chronic homelessness in SF by 2025’ with clearly defined KPI’s to measure performance, otherwise this burgeoning cottage industry will only continue on its path of explosive growth as will the underlying challenges without which the funding ceases to flow.

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