The city of San Francisco has outsourced much of its governance to an army of nongovernmental organizations. The structure of this arrangement has become so complex and convoluted that San Francisco can’t even keep track of where money is going and who is actually benefiting from it.
The city has opened an investigation into San Francisco Parks Alliance, which describes itself as “the only city-wide parks nonprofit in San Francisco.” SF Parks Alliance allegedly used $3.8 million in donor money to cover operating expenses, and Mayor Daniel Lurie paused over $1 million worth of contracts delegated to the nonprofit organization. The group has still not provided an audit due in 2024, handing in a draft version and thereby avoiding being placed on a watchlist by the city.
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The story hits every note of NGO and city corruption. Top executives got big bonuses on top of their six-figure salaries, even as the group was running a $4.6 million budget deficit and spending more on fundraising events than it was bringing in, to the tune of $250,000. That includes a “party like no other,” according to SF Parks Alliance, a lavish gala the group hosts every year with a “cocktail reception” and “buffet dinner.” Attendees include current and former San Francisco government officials and members of the state legislature, including the execrable state Sen. Scott Wiener.
Parks Alliance avoided being placed on the watchlist for “increased risk to public funds and client services due to serious fiscal or programmatic concerns” by slow rolling its audit, but it was discovered in 2020 that the group was being used by former Public Works Director Mohammed Nuru to influence contract decisions. Nuru used Parks Alliance as a slush fund (the nonprofit group avoided federal charges) and was sentenced to seven years in prison.
There are still two organizations in the process of being audited – five years later – stemming from Nuru’s crimes, and Parks Alliance managed to avoid that while following in Nuru’s footsteps to allegedly use itself as a slush fund. The city attorney’s office is now looking into whether Parks Alliance was misusing city money on top of the misuses of donations, meaning that the city isn’t even sure how Parks Alliance was spending taxpayer money that the city was allocating to it.
It is the latest nonprofit scandal in a long list of them in San Francisco. Take, for example, the San Francisco Pretrial Diversion Project. In fiscal 2020, the San Francisco Sheriff’s Office allocated $5.8 million to its “Pretrial Incarceration Alternatives” program, which SF Pretrial was entrusted with running. On its page, the group counts among its supporters the sheriff’s office, the district attorney’s office, San Francisco Superior Court, San Francisco’s Human Services Agency, and even the U.S. Department of Justice through the Bureau of Justice Assistance.
Just two months before the opening of the investigation into Parks Alliance, the CEO of SF Pretrial told employees the nonprofit group had not been making contributions to their retirement funds for the past eight months. He boasted that there was “no evidence of malfeasance or egregious spending.” The group simply took money out of the paychecks for employees that it said would go to their retirement, and was putting it toward things other than their retirement. At least one employee has already filed a complaint with the Department of Labor.
That same month, San Francisco’s city attorney initiated disbarment proceedings against Collective Impact, a nonprofit group that, according to the city attorney’s office, provides “programming for vulnerable youth and families in San Francisco.” The nonprofit group received “more than $27 million in City grants since 2021.”
Now, the city alleges that Collective Impact spent tens of thousands of dollars on the personal business ventures and travel of Sheryl Davis, as well as on her son’s education. Davis was the executive director of Collective Impact before jumping into San Francisco’s government as the director of its Human Rights Commission. Collective Impact has received funding from the Human Rights Commission every year since 2019. Davis also lives with and shares a car with the current director of the nonprofit group, with neither disclosing their relationship despite them “signing seven agreements between HRC and Collective Impact that awarded millions of dollars to the nonprofit.”
Flashback to last May, and it was a homelessness nonprofit group that was the target of a city attorney investigation. Providence Foundation was accused of submitting invoices for more than $100,000 in 2022 for work on the Oasis Hotel homeless shelter that was never done. Just a month before that, it was another homelessness nonprofit group, HomeRise, that auditors at OpenTheBooks determined had “violated rules by using city dollars for fundraising, paying staff bonuses, and providing staff with lunches and gifts,” according to our Washington Examiner reporting at the time. The watchdog group said HomeRise was “careless and irresponsible” with $240 million in taxpayer dollars.
That same summer, the San Francisco district attorney charged the former director of SF Safe with 34 felony charges over the embezzlement of $700,000. The 48-year-old nonprofit group had since shut down.
San Francisco relies on so many nonprofit groups that it apparently can’t even keep track of who runs them. Dwayne Jones was charged with multiple felonies in 2023 for allegedly bribing the director of San Francisco’s Community Challenge Grants Program. Entities affiliated with Jones were suspended from bidding on city contracts or receiving grants, and city departments were mandated to terminate relationships with any of those groups.
And yet one of Jones’s groups, Urban Ed Academy, was allowed to continue operating. The city’s Human Rights Commission and the Office of Economic and Workforce Development both funneled money to the group and received gifts in exchange. Sheryl Davis made an appearance in this scandal as well; she received a $5,500 portrait from Urban Ed Academy in December 2023 and gave the nonprofit group a $270,000 contract the very next month. This came out around the same time it was revealed that the Human Rights Commission was approving stipends to members of its “Dream Keeper Initiative” without authority from the city’s Board of Supervisors. One group receiving funds from that initiative? The aforementioned Collective Impact.
In all, San Francisco spends roughly $1.4 billion on nonprofit groups, and yet didn’t decide until last year to place “measurable performance goals” in city contracts. This came after years of both the homelessness crisis and the drug crisis in the city getting worse. San Francisco spent years shoveling billions of taxpayer dollars to these nonprofit groups with little appetite to even figure out whether this government by nonprofits was working, leaving the district and city attorneys to run around trying to clean up messes that the city never bothered to monitor.
San Francisco has spent the last few years trying to clean up messes the city itself created on crime, homelessness, and education. The web of nonprofit groups that run the city is the final boss of San Francisco’s problems. The nonprofit government structure has become so convoluted and so widespread that the city is far too dependent on making sure it succeeds, even as the city and its taxpayers get ripped off time and time again.