With more than a billion dollars of city money going to nonprofit organizations, and with a number of high-profile corruption cases that have landed people in jail, San Francisco elected leaders are making another attempt to rein in the vast network of nonprofit organizations that receive money to help execute city objectives. Last week, San Francisco Mayor London Breed issued an executive directive laying out some changes to the city’s processes for dealing with the many recipients of public grants and strengthening guiderails on use of public funds, awarding of grants and contracts, and increased oversight. And this week, the Board of Supervisors will consider new legislation tightening restrictions on recipient organizations.
The mayor’s order includes increased attention to screening for conflicts of interest, including ensuring that “City employees and third parties who serve on grant selection panels have no financial connection to the organizations seeking the grants, do not serve on the board of directors or advisory board of any such organizations, and have no relationships that would prevent them from exercising fair and impartial judgment.”
In addition, the city controller will be required to adopt standards for dealing with nonprofits that include performance measurements, monitoring, financial and performance information reporting, and other guidance. Breed’s directive also includes direction on improved documentation and record keeping.
City Attorney David Chiu welcomed the efforts by the mayor and controller to reform the system. “Those who undermine our contracting processes and exploit public resources are not welcome to do business with our city and will be held accountable,” Chiu said.
For her part, Mayor Breed said “Misconduct from those that would wrongfully take advantage of city resources has not been tolerated during my administration, and these new efforts expand on this commitment. With the city attorney’s office and the controller’s office, we have investigated such activity and have acted swiftly and decisively to bring to account bad actors through enforcing existing laws and regulations and creating new and stricter rules to prevent such abuses. Now, we are putting stronger protections in place and expanding the guidance of our departments to strengthen the public trust and improve accountability in how our government operates.”
District 2 Supervisor Catherine Stefani, who is also seeking a seat in the State Assembly in this fall’s election, has long pushed for increased oversight of nonprofits receiving portions of the $1.7 billion the city doles out and has introduced legislation to that effect. In 2021, she said, “The ongoing local and federal investigations have made clear that we need more accountability from city departments.”
In a release from the mayor’s office announcing the new directive, Stefani said, “San Franciscans deserve a city government that responsibly manages their tax dollars and ensures that city services are delivered effectively and reliably. I’m proud to have authored key reforms to our nonprofit contracting system, codified fair and transparent grant processes, and to now stand with Mayor Breed in advancing these additional good governance policies. This executive directive is a crucial step toward restoring and strengthening the public’s trust in our city government.”
On Sept. 10, Supervisor Stefani is expected to introduce “Comprehensive Contract Reform” legislation, which has the aim of preventing city contractors from using their city funds for political activities, ban businesses and nonprofits from receiving contracts or grants if they circumvent the city’s competitive selection process, and prohibits contractors from using city funds to “affirmatively litigate against the city and allow the city to take steps to bar future contracts for entities that do so.”
