Fred Sherburn-Zimmer spent all day Thursday knocking on politicians’ office doors. Her nonprofit, the Housing Rights Committee of San Francisco, needed to be paid. Now.
More than 30 nonprofits allege that they have not been paid for months of work by the city because their contracts have been delayed, according to a joint statement released late Friday afternoon.
This curtailment of funds, for work already performed, has led some to consider hiring freezes, staff cuts, and closing programs altogether.
“Although these contracts were finalized during City budget negotiations last June, the Mayor has still not released the funds allocated to reimburse the nonprofits for work already performed, nor given any reason for this delay,” reads the statement from the Budget Justice Coalition, a group of dozens of city organizations working across housing, health, education, and other areas.
The contract delay could affect hundreds of thousands of dollars in funds, but the total number is unclear. While some nonprofits have gone public with the situation, the full range of affected nonprofits is not immediately clear.
Some $900,000 was allotted jointly to Housing Rights Committee San Francisco and Anti-Displacement Coalition, two of the nonprofits alleging delays, for tenants right clinics and eviction prevention, according to Sherburn-Zimmer. Those two groups were supposed to receive their funding by July, she said.
A few days ago, it was unclear whether the Housing Rights Committee would make payroll for its 27 staff, so the organization’s executive director started pounding on politicians’ doors. (The Housing Rights Committee will make payroll, Sherburn-Zimmer says — for now.)
“It wasn’t as dire today as it was yesterday,” she admitted, though the money still hasn’t come. “But it’s still terrifying. There was some questions of, ‘How long can we go without our grants being signed?’”
City reviews taking longer and longer
Because many nonprofits are small and have marginal cash flow, they rely on receiving city reimbursements or grant funding “as a substantial amount of their support,” explained Debbi Lerman, the director of the San Francisco Human Services Network, which works with several nonprofits that are still awaiting contract approval and money.
What’s the impact? “You’re going to have a hard time with your payroll, and the services of your organization,” Lerman said. “I mean, if you’re not being paid for three months, you can imagine that kind of impact that has.” For instance, one group has left a role for an Arabic translator unfilled because the organization couldn’t front the money, Sherburn-Zimmer said.
It is unclear what is holding up the contracts, and which exactly are at risk; issues with contracts have occurred before this year, Lerman said. But this year, for some reason, sign-offs from the city appear to be taking longer, Sherburn-Zimmer and Lerman said.
The Budget Justice Coalition’s statement alleges that Mayor London Breed could fix the issue with “a stroke of the pen,” while others peg the issues to the City Attorney.
Lerman, for her part, did not blame the contract debacle on any one person or party. She noted that some nonprofit contracts appear to be held up at the City Attorney’s Office, which approves contracts, though she did not name any specifically.
“At least some of those contracts appear to be stalled right now; we don’t know specific details for each contract. But we have been told that the city attorney is doing a stringent review, and things are taking longer,” Lerman said.
A statement from the mayor’s office confirmed that “it is ensuring “grant agreements…are in compliance” and that “new regulations implemented this year at the City and State level have resulted in a longer compliance process.” The office recently approved 35 nonprofit grants from the housing department, and “additional MOHCD grants submitted last week are working through the process.”
Some policy changes potentially delaying the overall process occurred at the City Controller’s Office, which require departments to confirm nonprofits are current in filings with the State Attorney General.
Anne Stanley, a spokesperson for the Mayor’s Office of Housing and Community Development, said in a statement that “contracts may be delayed due to a more extensive legal review process.” She was aware of about 100 contracts still within the City Attorney’s office, and 35 contracts as of Monday that reached the mayor’s desk that expected to be signed by the end of the week.
Delays affecting client services
Part of that review could be the result of recent scandals by city-contracted nonprofits, after two were accused of mismanaging funds, Lerman added. Supervisor Catherine Stefani has floated changes to how nonprofit contracts are formed in the city, including vowing for more accountability.
Mission Local reached out to the City Attorney’s Office. This will be updated if and when they respond.
Delayed payment could also affect clients, Sherburn-Zimmer argued. Just last week, the Housing Rights Committee received 50 calls in Spanish for eviction prevention help, she said, saying this work could be endangered if the organization cannot make payroll.
“Frankly, people’s lives are at stake here,” Sherburn-Zimmer said. “If someone can’t answer the phone when your landlord says you’re evicted, you’re not going to have a place to live.”
Theresa Imperial, a Planning Commissioner and the executive director of the Bill Sorro Housing Program, another affected nonprofit, said the lack of funds meant freezing hiring. As a result, tenant services and tenant education may be delayed, too. “That puts a lot of stress on different communities where we are supposed to be their first responders,” Imperial said in the press release.
Despite Sherburn-Zimmer’s efforts, it is unclear when the contracts will be signed and money starts flowing. The Budget Justice Coalition and the Housing Rights Committee are holding a rally on Tuesday, Sept. 26, at City Hall to urge “the City to rectify the contract procedures making it harder for nonprofits to do their crucial work.”
This story was updated Sept. 26, 2023, with comments from the mayor’s press office and the Mayor’s Office of Housing and Community Development.