Opinion Page: Stop The Misguided Attacks on Nonprofits

The Bay Area Nonprofits that Made the Biggest Difference in 2020

From BeyondChron (San Francisco), March 27, 2023

Wrongly Blaming Nonprofits Helping the Poor

There’s a lot of nonprofit bashing going on these days. And most of it is unfair.  Recent criticism of specific nonprofit wrongdoers—such as San Francisco’s TODCO and Los Angeles’s AIDS Healthcare Foundation— is clearly justified. But associating specific nonprofit wrongdoing with the entire industry is not.  I was particularly struck by response to a SF Chronicle story about the $5.8 billion in San Francisco contracts. That’s over 40% of the city budget going to nonprofits. A housing policy person tweeted, “That’s how much of San Francisco’s budget is being transferred to contractors instead of directly funding public initiatives. Something is profoundly broken here.”  Where did he get the idea that nonprofit contractors aren’t serving the public?

What is “profoundly broken here” is people’s understanding of why San Francisco contracts out so many services to nonprofits. And how this strategy has brought high quality nonprofit services at a fraction of the alternative price.

Nonprofits Save San Francisco Billions

San Francisco’s nonprofit spending exploded in the early 1980’s for two reasons: AIDS and Homelessness. The city’s workforce had no experience dealing with either. There was a political consensus that nonprofit groups had the knowledge, skills and cultural competency to rapidly and effectively provide services in both areas. Nonprofits could also hire and get staff on board a lot faster than under the city’s hiring processes. Left unsaid was another key reason for using nonprofit workers: they were massively cheaper. San Francisco was a union town but nobody challenged the city’s massive contracting out of AIDS and homeless services.

The contracting out of services to nonprofits has saved San Francisco billions of dollars. Billions. Salaries for virtually every nonprofit position are far lower than comparable city jobs. It’s not just lower nonprofit salaries. Unlike city workers, nonprofit staff get no pensions or lifetime health benefits. While the past two decades has seen a rise in unionized nonprofits, these workers are not part of the city’s master labor contracts. City agencies whose workers get pension benefits do not fund pensions for their nonprofit contractors.

Many do not understand this. Nonprofit workers do not get the same pensions as city workers because city agencies that fund nonprofits refuse to provide funding. It’s part of the city’s larger strategy to save money by contracting out.  There’s a reason many nonprofit workers leave for city jobs—they seek better salaries and benefits. How many city workers leave for similar positions in nonprofits? Not many.

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darryll jones