Important note: Information in this article was accurate in 2004. The state of the art may have changed since the publication date.
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San Francisco Examiner - September 23, 2004
Adriel Hampton, Staff Writer
City officials are again closely examining the oversight for the hundreds of millions in city dollars paid to nonprofit groups, concerned that taxpayers aren't getting what they're paying for.
Prompted by two high-profile investigations into groups tied to politically powerful members of San Francisco's Chinese-American community, Supervisor Fiona Ma has scheduled hearings for next month to get a better handle on the situation.
In the past month a neighborhood resource center came under investigation by local, state, and federal agencies over allegations it laundered a state grant for political donations; a Chinatown booster group accused the outgoing board of misspending funds; and a nonprofit city beautification group announced it was broke after a ban on city funding due to electioneering. All have received substantial city funding.
The nonprofit sector represents a major wing of city government, with hundreds of organizations winning city dollars each year. A 2001 survey found the city contracts $315 million for health and human services. Those dollars help leverage state, federal and private funds for programs such as drug treatment, homeless shelters and transitional housing and care for AIDS patients.
Randy Shaw, director of the Tenderloin Housing Clinic, said monitoring often isn't the issue.
"The problem is, grants are administered by elected officials," Shaw said, pointing out that underperforming nonprofits can avoid cuts by allying with a mayor or pleading to the supervisors during the annual budget process. "I don't know how you avoid that in a democracy."
In a high-profile current case, Julie Lee, an influential political donor and mayoral ally, on Tuesday defended the use of city funds by a nonprofit she helped found. The San Francisco Neighborhood Resource Center, subject to investigation in connection to donations to Secretary of State Kevin Shelley's campaign, had until recently operated a call referral center and won city grants of $50,000 a year.
In a second controversy, the Chinatown Community Development Center earlier this month returned a $140,000 payment after the new board of a city-funded Chinatown booster group criticized the payment by the old board. The center repaid the money "to promote more peace" in Chinatown, said director Gordon Chin.
The incoming board is also investigating $275,000 paid by a private developer to meet a city mandate for open space in Chinatown. The payment instead funded beautification programs, spending which the outgoing board president defended.
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